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S&P500 Expert Lounge Update –November 30, 2016

Good morning everyone,

These are key timing for today: 1:00PMEST

These are key MA levels:  5EMA 2207, 10DMA 2200,  20DMA 2173,  50DMA 2156, 100DMA 2162, 200DMA 2113

These are key Fib Levels:  2213.5

These are key primary and intermediate 2194(intermediate minor), 2177 (intermediate minor), 2157 (intermediate minor), 2144 (intermediate minor),

Here is today's market look at the S&P 500 for Wednesday, November 30, 2016

With both magenta and red MSP's the most probable based off present price action look for a moderately positive bias coupled with a healthy dose of chop for today.  The last hour will be the deciding factor as to which ultimately plays out where red falls off rather dramatically.  We also have a rather full economic data set today with the MBA Mortgage Index at 7:00AMEST, ADP Employment Change at 8:15AMEST, Personal Income, Personal Spending, Core PCE Price Index at 8:30AMEST, Chicago PMI at 9:45AMEST, Pending Home Sales at 10:00AMEST, Crude Oil Inventories at 10:30AMEST, and the Fed Beige Book at 2:00PMEST.  Also tucked in amongst all this is the announcement from the OPEC and others on a production agreement around the 11:00AMEST hour.

2016-11-30_3-49-06_intradayMSP

MSP

The technical picture hasn't changed that much since yesterday.  Momentum is still in the buyers favor while we maintain the 5DEMA, but the price action is becoming sloppy around it which hints that the upward trend is weakening.  2194 intermediate minor level remains the first area of interest on any decline with the 10DEMA and rising support also residing in that general vicinity as we push deeper into our timing turn zone.  Good luck today.

Primary and Intermediate Levels

Primary and Intermediate Levels

S&P500 Expert Lounge Update –July 22, 2016

Good morning everyone,

These are key timing for today: 9:00AMEST, 12:30PMEST

These are key MA levels:  5EMA 2168, 10DMA 2160, 20DMA 2122, 50DMA 2098

These are key Fib Levels:  2179, 2169, 2150, 2138

These are key primary and intermediate levels:  2130(minor), 2126(primary major), 2116(major)

Here is today's market look at the S&P 500 for Friday, 22 July,  2016

HAL book roughly a quarter of its position with yesterday's weakness and today looks set to be the same after some strength into timing at 9:00AMEST.  There are a couple data points for this session with PMI Manufacturing Index at 9:45AMEST, and the Baker-Hughes Rig count near afternoon timing at 1:00PMEST for all of you oil buffs.  The ATH's are key still with the daily 2nd End located there while the 288 chart has a support cycle that triggered at the lows of yesterdays cash session.  That will define the range and give clues as to what direction the market will likely want to take in the near term.  Everyone here at MCM hopes you have a great weekend, and trade safe today.

MSP

MSP

Primary and Intermediate Levels

Primary and Intermediate Levels

Critically Important Support at S&P500 1842 – Below Is A Thinzone

We apologize for limited amount of recent articles published on the site. We have been very active in managing, analyzing and examining detailed market activity in the lounge and also sharing via other forums directly with people we care about. At this juncture, the post from last week which showed the 1840 area as key support has now come into play right in the MSP projection timing area. An inflection point is building and should shortly trigger.

However, it must be stated that the failure to liquidate for the extended periods from 2012 to 2015 sets up a severe potential for volatility greater than the volatility we have seen so far. In this analyst opinion, near-term would be something like a capitulatory type of volatility that would likely lead to a short-term reversal. However, volatility is likely to remain elevated as leverage remains under severe stress and overall account equity has continued to drop.

Note that if liquidation occurs today (or tomorrow) as many commodity centered hedge funds, futures managers and investment firms are likely being taken out in body bags, this liquidation will certainly not remain concentrated in the commodity space.

Oil is interestingly putting in a significant low presently according to MSP which is looking for a significant and potentially somewhat extended rally, as a result of this week's inflection point. Initially, it would be believed that equity markets will consider any recovery of oil prices to be positive and therefore, will correlate. However, it is highly likely. After about two and half weeks or so while oil continues to rally the equity markets will likely no longer correlate with that rally and liquidation phase will continue more focused on traditional risk assets into March in what hopefully will be a more lasting low.

Please be especially concerned with the level shown on the charts below. It is this analysts hope that we remain above the 1680 level by 30 to 40 points, and that enough emotional energy is released and leveraged reduced that some short-term recovery can take hold. Ideally, a recovery rally would look like something extremely strong as capitulated. Long's become shorts and are once again trapped. We ideally would look for return to the 1922 1950 area on such rally into early February.

S&P500 Cash Index Levels Chart

S&P500 Cash Index Levels Chart the failure to liquidate

An Overview of the Markets and Projections

While many are likely to have been turning their bearishness into bullishness over the last week or so, having confused bearishness and the potential for new lows in September where bullishness was warranted into November with of upward probability. Currently, we are sitting in a key timing window for the S&P500 as we have discussed recently and have high probabilities of a turn either being in as of the beginning of this timing window last week or possibly into this week (ideally early).

While we did expect back and fill earlier in the month of October from the 2140 area, the primary scenario expected strength into November. However, running corrections reduced the pullbacks that should have appeared early in the month to trivial events. Even though a correction/consolidation was registered on the charts, this correction period was classified as a running correction. A running correction is a pattern in which the impetus for market participants to interact with the market is so strong in one particular direction that what normally would be a price retracement pattern or consolidation becomes a consolidation with direction. Meaning, that instead of a consolidation pulling back it actually grinds upwards during the correction process when occurring in an upward market and then breaks out. These patterns are prone to very strong reactions in that many people attempt to short what looks like a breakdown that actually never occurs and immediately runs against them - thus trapping as many participants as possible. These patterns are powerful in up markets and in down markets and are occurring increasingly as greater intervention in markets occurs.

Given this, market structure projection indicated a pronounced period of upward bias throughout October and left translated MSP precisely indicated the previous turns. The market has been leading (which we refer to as left translation) the normal market structure projections. We represent this in the charts with the cyan plot showing the left translated projection which has coincided very well with activity in the markets over the last 2 1/2 to 3 months.

Moreover, market internals and other symptoms of ill health abound, regardless of hyperbole from analysts or the Fed - it appears things are not healthy. Preceding the August crash, the equal weighted S&P 500 index underperformed dramatically. This index has underperformed even more dramatically during this bounce. It is this analyst's interpretation that this is a sign of significant stress. The stress will need to be resolved, and if history is a guide, the resolution is likely to be stronger and quite likely more persistent than our August episode.

Note, the market structure projection for commodities and bond markets. These projections suggest equally interesting timing and also contradict the prevailing perception in the markets as to what are reasonable expectations near-term and even medium-term. It appears that there is a quite marked probability of a buy-the-news reaction in bonds combined with the sell-the-news reaction in equities and latent dollars strength to keep pressure overall on the risks markets. It also appears that the dollar may have a significant inflection point in December to early January, which may, in fact, be a larger sell-the-news type event.

Accumulation index components

Accumulation index components

S&P 500 Index - equal weight vs. capitalization weight performance

S&P 500 Index - equal weight vs. capitalization weight performance

S&P 500 market structure projection

S&P 500 market structure projection

US treasury market structure projection

US treasury market structure projection

Gold market structure projection

Gold market structure projection

US dollar market structure projection

US dollar market structure projection

Oil market structure projection

Oil market structure projection

Projections Suggest a Significant Turn in September

It has been a wild week or so. We have been asked often recently regarding short-term MSP and why we have not been publishing. The question has been more-or-less: "has the effort of publishing this data ended and is that why short-term MSP has not been published". While it is correct that this data takes a lot of effort to build and is not principally created for the general public - this is NOT the reason that we have not published these data. The reason is that when the markets become as volatile and emotional as they have been, the best thing to focus on is the larger picture and the fundamental near-term emotion and price movements of the markets. Sometimes it takes a few days for the markets to overshoot - which seems to be the case curgently. Markets may be in an altered state of reality...we have been referring to the market being on "METH" the last week or so in the "Lounge". Therefore, we have felt that short-term market structure is more of a distraction then needed and only been referring to it judiciously as it points to highly probable data point inflections and probabilities.

So, what is the bigger picture? It appears that there is a tremendous amount of coincidence pointing to the 3rd and 4th weeks of September. In Gold, the US Dollar, Oil, the Dax, EuroStoxx 50, S&P500 etc...all have confidence for a probability for  a risk reversal in the mid - to latter part of the month into the end of October. Ironically, for risk assets - despite the anarchy going on in the world - there seems to be a predominant bias for a bid in the markets into this coming week - most probably mid weekish. A reaction from these areas are to be most interesting. Some charts have broken down into potential downward impulses and these patterns would usually imply a retest of the breakdown area - which coordinates with the levels charts on the SPX cash posted earlier - suggesting a retest of 2010 at the very low end and up to 2090 on the high-end. 2045 to 2060 SPX cash seem like a serious area to watch. But these price levels have nothing to do with MSP and are just educated guesses.

Another element arguing for further time for upside is that the normal up wave for a 60-minute bar calculated wave is around 155 hours. This would fit well with mid-week. However, given the veracity of the move down a bit more time could be required additionally.

Below are some updates to the MSP charts that cover this probability scenario:

August 30th, 2015 S&P500 Daily & Weekly Market Structure Projections

August 30th, 2015 S&P500 Daily & Weekly Market Structure Projections

August 30th, 2015 DAX Daily & Weekly Market Structure Projections

August 30th, 2015 DAX Daily & Weekly Market Structure Projections

August 30th, 2015 EUROStoxx 50 Daily & Weekly Market Structure Projections

August 30th, 2015 EUROStoxx 50 Daily & Weekly Market Structure Projections

August 30th, 2015 Oil Daily & Weekly Market Structure Projections

August 30th, 2015 Oil Daily & Weekly Market Structure Projections

August 30th, 2015 GOLD Daily & Weekly Market Structure Projections

August 30th, 2015 GOLD Daily & Weekly Market Structure Projections

Support and MSP for What appears to be a Pivotal Week Coming Up

With the obvious situation impacting the world of total disintegration of central bank cooperation - to expected effect, we now have the addition of extremely high pressure on Chinese investment firms and institutions to sell everything that is not glued down and that is NOT a Chinese asset. If they can not sell a Chinese asset or share without going to jail the next best thing is to apparently blow it up and also to sell non-domestic assets - such as US stocks, European Stocks and anything else that is not glued down that the Chinese officials will not arrest them for. If this capitulation is to continue things can get very messy indeed. But before we throw out the baby with the bath water, let's take a look at what the markets would be expected to do if the third transaction type for fund managers were not "BLOW IT UP".

DAX and Euro Stoxx are at inflection points and can start a large rally and by the looks of things, would potentially be very painful for shorts. Longs are already in pain and it seems they need to sell too just so the pain is shared more equitably. Funny how that is centrally planned. But in any case, there appear to be quite a lot of influences coming up that imply a convergence to the upside that by the looks of things could be swift. IF we can not get the hint of some traction to this structure, then it should be apparent that the brakes are not working and likely the ground is moving which could imply a "crash". Crashes are rare, even though this feels like a crash already, nonetheless, the urge to get emotionally involved in a crash is not usually a highly rewarding one and caution is warranted. It is common for us to stress that most money earned from trading is not on huge winning trades but on normal base hits. We have worked very hard to increase the odds on base hits and to be open to larger trades when they happen. We also have worked hard to developed tools and approaches to handle a crash or very powerful trend. However, it must be restated that smart and judicious trading is far more rewarding than big winners followed by a string of many losses of arbitrary size - usually larger than the large winners, though. This is why we can not overstate that the potential of this change in psychology in the markets will take more than a few days and the opportunity has not even started yet...patience and restraint are highly rewarded. Buying multimillion dollar jet planes before you've closed what appear to be gigantic winning trades is equally unrewarding. So, in all the lessons we can reinforce, patience, discipline, and clarity is key NOW.

Below are various charts that may help put some perspective on where the market is standing. On the Historical eTickTools Emotional Extremes - Support and Resistance Chart note, that one fo the objective is to show thin zones and also to show areas of congestion. Brighter or more intense colors indicate stronger influence, Light colors indicate previous resistances and darker colors are previous supports.

Historical eTickTools Emotional Extremes - Support and Resistance

Historical eTickTools Emotional Extremes - Support and Resistance

DAX Daily And Weekly Market Structure Projections

DAX Daily And Weekly Market Structure Projections

Euro Stoxx 50 - Daily And Weekly Market Structure Projections

Euro Stoxx 50 - Daily And Weekly Market Structure Projections

Oil - Daily And Weekly Market Structure Projections

Oil - Daily And Weekly Market Structure Projections

US Dollar - Daily And Weekly Market Structure Projections

US Dollar - Daily And Weekly Market Structure Projections

Centrally Planned Unintended Consequences – Oil – Now Nearing Inflection

In a chaos created by abcent minded centrally planning there is OIL. It appears that oil is nearing some inflection point and is another market to add to the early AM post.

Crude Oil Daily and Weekly Market Structure Projection

Crude Oil Daily and Weekly Market Structure Projection