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An Eye on next Week…

With an eye on next week, market structure projection generally shows weak bias early in the week with potential for a reversal starting around the Tuesday AM session and into early the following week - so, the following week's Monday AM session. It is not without merit to anecdotally mention that it is very common for significant ECB/Greek announcements to be made on a Sunday. If such were to occur now, it would most likely be also coming together with factors and emotions that can create exhaustion.

As, mentioned before in the "January Effect" article published earlier on these pages. Among the best timing for a reversal for this long-term market-structure occurs in June. I encourage to you look at the statistics and also the companion article: "Drama on the Market Seas".

June 5th, 2015 Daily & Weekly Market Structure Projections

June 5th, 2015 Daily & Weekly Market Structure Projections

Market Structure Discussion & Probabilities Today

Market structure projections favor approximately 6:00 AM +/- lows to 1:30 PM high time windows. This is subject to a potential for 1:00 PM lows if 6:00 AM turns out, as a relatively lower probability but still possible outcome, to be a bounce high. As the Daily Market structure favors a positive bias into tomorrow...seems like overall probability reinforces the early morning lows.

May 28th. 2015 Intraday Market Structure Projectionsa

May 28th. 2015 Intraday Market Structure Projections

May 28, 2015 Daily & Weekly market structure Projections

May 28, 2015 Daily & Weekly market structure Projections

 

Rediculous…Daily Market Structure Pushes to the limit

I do not think any words of further content are required...

May 27, 2015 Daily & Weekly Market Structure Projection Update

May 27, 2015 Daily & Weekly Market Structure Projection Update

Tick Tools Stop Run Potential Triggered in timing window

We are in a timing window as posted earlier. These windows have +/- 1 hour usually. e-Tick Tools just generated a Stop-Run Potential Trigger that suggests a lot of shorts are trapped and that we may get a break over the BUY EXTREME that triggered 20 minutes ago and then pullback. Things to keep in mind... timing area for a high poses risk for further upside. Confirmed Buy Extreme suggests some capitulation on the part of buyers. However, the condition for a stop run are in pace and suggest that if we pop higher could be unpleasant for shorts...till better exhaustion occurs. Sell extreme currently in place is at 2119 and a key level at this moment.

Note, the CYAN line on the price chart is the Accumulation Index and it is making new highs as the market is consolidating - could be another indication of pressure could emerge on near-term short risks.

This is a pretty good, in my opinion, example of using Market Facts/eMotion analysis to support technical analysis.

e-Tick-Tools Stop Run Potential Trigger

e-Tick-Tools Stop Run Potential Trigger

Some market structure review and analysis for today…

Below are the current MS (market structure) projections as of today. Daily and Weekly are below. These shows turn pressure from upward to downward on the Weekly (Magenta line) and very nice tracking up till today for the daily (thick white line). Tuesday to Wednesday AM projected moderately up biased from yesterday morning - looks like it could be a challenge. Nonetheless, we have learned not to ignore their potential because they have been prescient. For a many reasons, today's reaction out of yesterday's low could be a relatively sizable move.

May 27, 2015 Daily & Weekly Market Structure Projection

May 27, 2015 Daily & Weekly Market Structure Projection

Below is more granular view of the shorter term options for market structure. There is sizeable potential for a morning high and afternoon weakness, however the most probable market structure appears to be inverted QE showing in cyan. If strength continues into the 8:00 am area then its probable that we get a consolidation retrace with probability for something like a 1:00 pm high.

Keep in mind THIS IS NOT TRADING ADVICE - these tools are a representation of algorithmic analysis of past market facts and metrics distilled into structure and then referenced against today.

May 27, 2015 Intraday Market Structure Projection

May 27, 2015 Intraday Market Structure Projection

Drama in the Market Seas – a revealing look via the MCM Market Indexes

This article goes into detail regarding some diagnostics of the market that are not easily or often seen and most importantly are most often inaccurate as publicly they are presented. We go into some considerable detail to see what is happening under the hood of the market. The surprising discovery is that most investors are most likely not doing very well.

Drama on the Market Seas

Drama on the Market Seas

MCM DAY INDEX & MCM CLOSE INDEX

For the day trader - the day session performance has been under-performing for a very long time over all. However, if one were trading the opening and/or the close session - for the last 6 months performance has been especially challenging. Despite all the headlines regarding new highs in the markets every other day:

The most surprising discovery is that most investors are most likely not doing very well. For the day trader,  market day session performance has been under-performing market direction substantially for a very long time. However, if one were trading the opening and/or the close session, for the last 6 months performance has been especially challenging.

To summarize, despite all the headlines regarding new highs in the markets every other day:

  • For the closing session long traders, the market is an absolute disaster and likely would lead to egregious losses taking account balances back very near 2009 levels.
  • For opening session long traders, the market is not quite a horrible with account balances presently approaching Oct 2008 levels.

MCM Indexes and MCM Smart Money Indexes

MCM Indexes and MCM Smart Money Indexes

MCM GAP INDEX

There is one area of performance that has been remarkably good.

Much better than at any point in history that we have examined.

 From what it seems - quite probably "too good".

Evidence of central bank cooperation and intervention abound. We have discovered quite a few Central Bank driven "market structures" that have been very strong. Interestingly, it appears that central bank money printing and money amplification efforts via asset interventions and appreciation have been in place for a very, very long time. These market structures go back in history to the 70's and 80's. What seems clear, market crashes notwithstanding, is that central banks are operating and have been operating to increase and amplify the quantity of money via asset markets for a significant duration. Regardless, however, the levels central bank participation of the last years have been unprecedented. , there we have it, the best performance in the markets has been in the areas where the central banks get the most "bang for the buck". The thinly traded and easily influenced overnight session.

Result: The best and pretty much only performance in the markets since 2009 has been in the areas where the central banks get the most "bang for the buck". The thinly traded and easily influenced overnight session.

Currently, from a cursory appearance, there seems to be somewhat of a panic going on. hThe GAP INDEX is now dramatically outperforming prices...while at the same time market are dramatically underperforming during the high liquidity sessions. The question that comes to mind is:

"What happens if the overnight session levitation and performance starts to fail?"

This question can be answered in context: If it were not for the overnight session performance over the last nine months, the markets would be in an all out bear market and most probably crash.

SMART MONEY INDEX

The SMART MONEY INDEX is often touted and bandied about on the internet and TV. However, rarely can a more unviable and distorted index - being highly aberrantly calculated and on its face flawed - be so mispresented.

For this reason, we calculate a reasonable, viable and thorough version of the concept that uses sophisticated synthetics for the dramatic consequences of the ultra slow open of the S&P500 and highly distorted opening prices. As with our GAP index, we use a combination of futures and other ETF 's to synthesize the cash opening prices. This leads to a very high accuracy using our methods of calculation as opposed to the what we normally see published. For the record, it is our opinion that is usually best to ignore any general reference to the SMART MONEY INDEX. Though the SMART MONEY INDEX concept sounds nice - sexy even, as it is calculated it is statistically distorted to the point of being useless.

Using a reliable methodology, however, valuable data can be gleaned from the SMART MONEY INDEX concept. We call our version that the MCM SMART MONEY INDEX. What this tool shows in the included chart in the article via the green line - is a collapse in the "SMART MONEY" investor commitment.

Keep in mind that with overnight Central Bank activity at record highs, the impact of a dramatic fall off in institutional participation may have different impacts than expected. However, it seems that the case for a sudden collapse in the markets due to the absence of professional money may be increasing.

 

 

 

Intraday projection review

This morning well before the open, intraday market structure was posted with key time windows as derived from our projection databases and algorithms. As it turned out, timing and direction for the day tracked very closely and led to anticipated selling into the close.

The markets are reflecting the shifts going on the in the weekly structures which is, as posted Monday, at a considerable inflection point. After hours some bearish activity unlike predominant after hours activity took place. However, it fits well with two possible scenarios:

  • Market low in place at 7:00 pm biases higher into 7:00 am to 8:00 am followed by weakness for the majority of the day session
  • Market drops into 5 or 6:00 am and then reverses in a decent upward bias for the majority of the session.

As a color to this - it is important to note that this May's projection for performance by Day of the Week tends to be: strongest on Mondays and weakest on Thursdays most of the month. So, a weak day session would not be surprising at all.

May 20, 2015 intraday market structure postmortem

Intrady Market Structure Update – Inverted Probabilities increasing

Earlier today, the inverted market structure was not tracking but as evidenced on this chart below, has now begun tracking and the overnight action may be in the end a form of running consolidation rather than pullback. If markets aim for and make a 10:30 to 11:30 am low then odds will dramatically increase for a strong close.

Some other anecdotal structure would indicate May highs preferring to occur between the 15th to 19th as shown in the projection chart. Weekly highs often occur today for this period as well. Therefore, if market makes a high today that would align with daily pressures as well.

Till this occurs, the probabilities still favor the 20-year dataset (RED) market structure projection which would suggest a bounce into the 11 am area....selling into 11 am is a sign the more bullish day session reaction may be occuring.

2015-05-19 Intraday- inverted market structure probabilities increasing

2015-05-19 Intraday- inverted market structure probabilities increasing