Posts

MCM Newsletter – Outlook for Week 21-25 August

Last week was very spectacular and continued with even higher volatility than 2 weeks ago. After gaping up and moving higher into Wednesday, Thursday was again a bad omen for the markets (just like 2 weeks ago) and saw a big 30+ points decline in a single day. The market did break the low from 2 weeks ago, which means that something (i.e.an impulse wave) did finish at the ATH, despite it’s strange shape. The retrace of the first move lower from the ATH was quite big (more than 70%) and so far this looks like only 3 waves from there, so we are still in no position to scream “the top is in”. The action was certainly very bearish with the market apparently restarting to take the stairs up and the elevator down, as 3 days of slow up action were reversed in a single day, which also saw the previous weeks’ lows taken out. So it’s worth noting this change in character. From an EWT stand point there are too many options on the table right now to make a clear call. If the market stops here or a bit lower (2410-2420 is important support), then it could be just an a-b-c down, with new ATH to follow. If this is indeed the start of something more bearish, then this wave should continue significantly lower. Monday’s action looks to be key for the intermediate trend.
On the weekly cycles, ES is testing the mcm-MA directly, so bulls may try to defend this level again.

Weekly Cycles

The daily cycles also are directly on the support levels. ES triggered support at the lows from 2 weeks ago and is now working on breaking below. While YM is back-testing the previously broken resistance level. Both indexes have consecutive LREs (lower risk entries) for longs.

Daily Cycles

The 288 and 480min cycles    
You need to be authorized or upgrade to see this content. Please go to http://mcm-ct.com/membership-signup-dev-2/ to sign up.

S&P500 Expert Lounge Update – March 13, 2017

Good morning everyone,

These are key timing for today: N/A

These are key MA levels:  5EMA 2368, 10DMA 2371,  20DMA 2359, 50DMA 2309, 100DMA 2250, 200DMA 2196

These are key Fib Levels: 2388, 2384, 2358

These are key primary and intermediate: 2401(intermediate minor), 2359 (intermediate minor), 2275(intermediate minor), 2254(intermediate minor)

Here is today's market look at the S&P 500 for Monday, March 13, 2017

Good morning everyone.  We have a super light data load this morning with only the Labor Market Conditions Index at 10:00AMEST.  With the markets successful backtest of broken resistance we should see a larger retrace of the drop from the all time high if not having that level exceeded.  The current challenge for buyers is regaining the 10DEMA and then after that the important area between 2384 and 2388 will be the next potential turn area.  We have also established two new intermediate minor levels at the all time high and below at 2359 near last weeks pivot low level.  With that, price has areas of interest both above and below current levels that has the potential to define a continued trading range and choppiness.  Good luck today!

Primary and Intermediate Levels

MCM Newsletter – Outlook for the 1st Week of 2017

Happy New Year!
The market action in the last week of 2016 was on the bearish side. After attempting to continue the pre-Christmas bounce when the market reopened on Tuesday, the market declined on all remaining trading days for an almost 40 points decline from Tuesday’s high to Friday’s low. The pattern of higher lows and lower highs which we were noticing a while back was broken to the downside.
The market’s decline was enough to finally trigger a resistance level on the weekly YM cycle. That is a big deal and an important line in the sand going forward. The normal expectation is for downside from here, especially since ES also came back below its previously triggered resistance which was a bit whipsawed at first.

Weekly Cycles

The daily cycles are in up impulses, however the directionality tool turned down and made it to the lowest level. Watching for a bearish retrace (BR) support to trigger and the market’s reaction to that would be important. If the market continues its decline it will be also important to see how it behaves when ES will back-test the break-out level at 2212.

Daily Cycles

The 288 and 480min cycles    
You need to be authorized or upgrade to see this content. Please go to http://mcm-ct.com/membership-signup-dev-2/ to sign up.

MCM Newsletter – Outlook for last Week of 2016

Happy Holidays to everyone! The market action in the pre-holiday week was what one would expect. It looked like many participants decided to spend time shopping for presents instead of trading the market, which is why no real conviction was present to push the prices one way or another. The action was mainly sideways with the Friday close being 1 point away from Monday’s close. The higher lows and lower highs formations which we were mentioning last week are still intact and the wedge is getting smaller so resolution is expected shortly.
Considering the lack of direction, it is no surprise that there is nothing new to report on the weekly cycles. Market is still whipsawing the resistance level on ES, while YM is yet to trigger a resistance.

Weekly Cycles

No drastic change on the daily cycles either. The only notable change is that the directionality tool on both ES and YM started to move lower. It would be important to see if it makes it to the lowest level and how it reacts from there.

Daily Cycles

The 288 and 480min cycles    
You need to be authorized or upgrade to see this content. Please go to http://mcm-ct.com/membership-signup-dev-2/ to sign up.

MCM Newsletter – Outlook for Week 14 – 18 Nov

What a week! It’s hard to keep the exclamations away in a week that saw an intra-day drop of more than ES 100 points to reach a limit down suspension and then a full reversal to come back, open the cash session only slightly in the red and keep rallying to close the day green. It was a Brexit type event, except it was faster. After Brexit we had a big drop, a dead-cat bounce and then the next day the markets made a new low. Now we never got that. Market bottomed in the overnight and then never looked back. People who were short in cash instruments must’ve had a really bad day, seeing the market 100+ ES points down and then opening nearly flat. Which proves once again that a large part of the action has moved outside the regular trading hours. The mcm tools caught the bottom quite nicely, signaling the exact low with a sell X Xtick on v-tick tools and then despite what looked like (and was) a huge bounce, it never triggered a buy Xtreme until the RTH started.
But as always the big question is what now. The weekly cycles put in a very large candle, with a LRE (lower risk entry) for longs at the bottom of it. Both ES and YM spiked below support, but recovered it and we are now looking for resistances to trigger higher. Once that happens, that would be a strong sign that another correction is coming. ES is still in an up impulse which would likely be over once an END resistance triggers. So reaction in the opposite direction could be strong.

Weekly Cycles

Weekly Cycles

Zooming in to the daily cycles, these also spiked below supports and then recovered them strongly. So we have the the same expectation as for the weekly - watching for a resistance level to trigger. We did get some LRE (lower risk entries) for shorts, however the mcm-MA just recently changed bearish (red color) and we can see from such past events that in this case, the LREs are not very reliable. The directionality tool is moving upward and has been doing so for a while, actually since before the “Trump-win” Brexit like event. It will be important to see when it peaks and starts moving down.

Daily Cycles

Daily Cycles

The 288 and 480min cycles both    
You need to be authorized or upgrade to see this content. Please go to http://mcm-ct.com/membership-signup-dev-2/ to sign up.

MCM Newsletter – Outlook for Week 21 – 25 Nov

Compared to the election week Brexit type event, last week saw things calming down. Although the intra-day swings in ES were 20+ points in the first 2 trading days and then 15 points in the last 3, that felt like no volatility at all. The market managed to continue to grind higher although the high from the election week was barely overtaken by 5 points.
Considering the absence of major swings, it is no wonder that the weekly cycles saw no major developments. The directionality tool finally bounced from it’s minimum level confirming the ongoing bounce. As previously stated, the cycles now need resistances to come up which would be a strong signal that the bounce is coming to an end. Of course, to anticipate where these might trigger we have to look at the shorter timeframe cycles.

Weekly Cycles

Weekly Cycles

Zooming in to the daily cycles, these also spiked below supports and then recovered them strongly. So we have the the same expectation as for the weekly - watching for a resistance level to trigger. We did get some LRE (lower risk entries) for shorts, however the mcm-MA just recently changed bearish (red color) and we can see from such past events that in this case, the LREs are not very reliable. The directionality tool is moving upward and has been doing so for a while, actually since before the “Trump-win” Brexit like event. It will be important to see when it peaks and starts moving down.

Daily Cycles

Daily Cycles

The 288 and 480min cycles show    
You need to be authorized or upgrade to see this content. Please go to http://mcm-ct.com/membership-signup-dev-2/ to sign up.

mcm Market Update For Week 38

The FED week was a good omen for the bulls and the market finally managed a small break-out above the choppy range in which it was stuck for a few weeks already. We had several short term cycles break into up impulses on mcm, which provided early clues about this ramp.

Coming back to the big picture, the weekly cycles show a dangerous development for bears. The back-test of the 2105 break-out level appears to have held. The market bounced from there and if it will continue to go higher that will be a situation in which shorts would have to be patient for quite a while. YM continues to underperform, however it bounced when it met the mcm-MA and now managed to get above the broken resistance also. The bears do have one more chance and that would be to reverse this bounce rather directly. The fact that the directionality tool is still heading down is also a sign that the back-test is not decided just yet.

Weekly Cycles

Weekly Cycles

The daily cycles are the reason why we are not fully in the bullish side just yet. They unwinded the big up impulses started back in March. YM completed that unwind (with a 3rd END resistance), while ES only had a 2nd END and could still (theoretically) get a 3rd END. In the mean time, they broke below support and actually started down impulses, although now the price came back above that support. So bears have 2 options here. One would be a direct reversal, which would mean the back-test of the previously broken support held and the down impulses are confirmed. That would be very bearish. The 2nd option is for the market to go higher and reverse after ES triggers the 3rd END resistance. As we can see on YM, that 3rd END doesn’t necessarily require a lot of upside to trigger. Once that happens, reaction to that resistance will be critical. If the bullish scenario on the weekly is to be confirmed the market could break into a nested impulse on the daily. But the normal expectation is for downside from there. As always, the shorter term cycles will provide early clues into which scenario will play out.

Daily Cycles

Daily Cycles

The Elliott Wave projection of the NYSE is also pointing to a crossroads with regards to market direction.  With minimum expectations of the structure being met, waves one and four overlapping, the market is free to do as it sees fit from here.  The duration of the fourth wave seems to be lacking taking into consideration that from a seasonal perspective, most bottoms aren't put in place till sometime on or after the second week of October.  While the projected paths are very insightful as far as targets and bias is concerned, the fact that markets don't go in a straight line as the projections do makes for a challenge.  Keeping that in mind, although we've bounced in what appears to be the final leg up to new all time highs, there is a very good potential this is just a counter trend move that has the potential to bottom at 'or 2' into the month of October.  Best to your trading this week.

NYSE Composite

NYSE Composite

mcm Weekly Wrap_Week 36

After being range bound for quite a while the market finally broke out, or better said broke down. The brutality of the decline was surprising, the market losing approximately 80 points in just 2 days. As the readers of the mcm Weekly Newsletter know, we have been expecting a back-test of the 2105 level for a few weeks now and the market delivered just that, although a bit abruptly. Coinciding with the Weekly Newsletter, the Technical Analysis Lab weekly update has been noting since the start of August to expect weakness coming into the beginning of prime trading season with decade, presidential, and historical seasonality all aligning for the early fall season.

The weekly cycles show why the 2105 level is so important. It was a resistance level above which the market broke out and it became an impulse up on ES (after the mcm-MA also broke above that level). And usually, after an impulse is confirmed the market comes back to back-test the break-out level. An interesting fact is that YM has under-performed significantly on the rally and, although it also broke out above the resistance level, it was nowhere close to confirm the up impulse. Also, YM sliced right back below the resistance level on Friday's drop. The current back-test on ES is very important. Holding it and bouncing would be very bullish, while breaking back below would reverse the up impulse and cancel the bullish momentum.

Weekly Cycles

Weekly Cycles

The daily cycles show why we were doubting (and still are)  the real break-out into an up impulse on the weekly. They have been in a big up impulse ever since it broke out above resistance around 1950 ES. The impulse up has started to unwind with a bullish retrace (BR) and an END, then another and a 2nd END, so it was in a terminal phase, not supportive of a new big up move.

Coming back to the recent past, the daily cycles show nicely the brutality of the decline registered last week. The market basically lost aprox. 80 points in just 2 days and sliced directly through the support levels. In fact ES is now close to confirm a down impulse. As we were mentioning in the mcm Newsletter last week, breaking directly the support levels before resistances trigger is very bearish, although it depends a lot on what the market does in the next 2-3 days. If the break-down is confirmed and the market cannot manage to bounce back to or even above the support levels, then the bearishness will be confirmed. We do have to mention that both ES and YM triggered LREs (lower risk entries) for longs on Friday, so a near term bounce (maybe after a minor new low) would be normal expectation based on that.

Daily Cycles

Daily Cycles

There are a couple of options from an Elliott Wave standpoint that we are currently tracking. Although our primary focus is for the S&P 500 and its futures, we do track many other markets as well, one of the those being the NYSE Composite. Weighting a number of various items, expectations are for some near term weakness and then another run at new all time highs, but the depth of the correction currently underway can take a couple of paths as noted above.

NYSE Composite

NYSE Composite

 

 

 

MCM Newsletter – Outlook for Week 22 – 26 Aug

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): up
Details:
The weekly cycles are in an interesting position, as ES is close to confirming the up impulse, while YM is still a few weeks away from that. The mcm-MA on ES is now crossing the resistance level and even if YM is under-performing, both markets have moved enough above the resistance levels to rule out a mere spike above. If it would not be for the structure of the daily cycles, a prolonged up move as a result of this impulse would be normal expectation.

Weekly Cycles

Weekly Cycles

On the daily cycles, we had a significant event last week. YM had triggered a new support level just below the 2nd END resistance and on Friday, it triggered the 3rd END resistance to that support, marking the complete unwind of the massive up impulse which started close to 16,500. That is a very important level and because it is a 3rd END resistance, it has lower than normal odds of being broken above. The up energy of this impulse fully dissipated at this level, and the normal expectation is for a move in the opposite direction (i.e.down). ES is in a slightly different position since it never triggered the 3rd support and END higher, as the market never moved back below the 2nd END resistance after moving slightly above it. However the market never moved significantly above that resistance level, so coming back below it would not be surprising. The terminal status of the up move on the daily is what makes unlikely the start of a true impulse on weekly, despite the near confirmation on ES. However, if the daily cycles manage to break the resistance levels against the odds and start a nested impulse up, that would be a very big warning that a new big up move is coming, since we would have impulses up on daily and on weekly. So how the daily cycles shape up becomes key for defining the intermediate term direction.

Daily Cycles

Daily Cycles

480 and 288min cycles are still in the area of the plateau which we were mentioning last week, although the market did manage to make a 2-3 points higher high. 288 is in the unwind phase of a new up impulse and already had a 2nd END resistance very close the the highs. 480min had a BR support very close to the break-out level of the nested impulse up, which gave it higher than normal odds of holding; which it has done so far and we are looking at the next END resistance (higher) to mark a potentially significant turning point.

288&480min Cycles

288&480min Cycles

MCM Newsletter – Outlook for Week 25 – 29 July

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): up
Details:
The market continued the relentless up move, albeit at a slower pace. As mentioned last week a potential break-out and up impulse on the weekly cycles is now on the table, as price moved significantly above resistances. The direction in the next 1-2 weeks will be critical for confirmation (or not) of the up impulse. If the markets travel back down, the back-test of the resistance level became also very important to watch, as it is now support. The bounce started by the directionality tool continued and going forward it will be important to see if it gets to the maximum value or it will be a failed bounce.

Weekly Cycles

Weekly Cycles

Last week a significant development was registered on the daily cycles. A 2nd END resistance was triggered pointing to the continuing unwind of the up impulse. This 2nd phase of the unwind was unusually strong and as a result this sub-wave is a lot bigger than the 1st unwind (1st BR and END). The normal expectation now is for the market to correct until a new support level is triggered which will likely lead to another bounce to a 3rd END and complete unwind of the up impulse.

Daily Cycles

Daily Cycles

The 480 and 288min cycles are both in up impulses. 288 is already in the unwind phase, having had already an END and a following support, so a 2nd END could trigger soon. 480 is in a nested impulse which, even if it confirmed, never really broke out from the vicinity of the resistance, so it could still be reversed directly. It is interesting that the directionality tool on both fell and at the moment is bound at the minimum level which is usually a sign for weakness. Near term it will be important to see if it stays there or it bounces.

288&480min Cycles

288&480min Cycles