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MCM Newsletter – Outlook for Week 4 – 8 July

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): down
Details:
On the weekly cycles, the market made a low below the “Brexit low” which was greeted by a new LRE (lower risk entry) for longs. After that the market rallied, giving credit to the 2 consecutive LREs, and is now close to testing the resistance level once more. The directionality tool keeps moving down and the action next week looks critical to see if it will bounce back up or continue its slide (which would be bearish).

Weekly Cycles

Weekly Cycles

The daily cycles show nicely the huge 4 day rally following the lower low registered on the next day following the Brexit vote. The market bounce right back through the broken support and bounced enough to an area where it’s possible already for a 2nd END resistance to trigger. That doesn't mean the market cannot go higher though. It’s interesting that the mcm-MA on YM changed color and a LRE for shorts was triggered on Thursday.

Daily Cycles

Daily Cycles

As anticipated last week, the 480 and 288min cycles spiked below their END support levels before the market came back and rallied strongly. The big rally triggered new resistance levels at 2075 ES, which were broken and 288 is now close to confirm its up impulse. If this breakout turns into a real impulse on both and if the impulse holds any back-test, then the bounce could go significantly higher. The next 1-2 trading days appear to be key for that, especially considering the directionality tool which is at its maximum value and if it turns, it would be a clue the bounce is done. The even shorter time-frame cycles like 60&135min or even 5&15min will also be important to watch for early clues about a potential turn or further break-out.

288&480min Cycles

288&480min Cycles

MCM Newsletter – Outlook for Week 27 June – 1 July

Executive Summary:
Main Trend (weekly): neutral
- Intermediate Trend (daily): up
Short-Term Trend (480&288min): down
Details:
On the weekly cycles, the market re-tested the resistance levels once more before being denied with authority. Again the resistance held cleanly on YM and was spiked briefly on ES. The directionality tool (white lines at the bottom of the charts) finally started to move down on both indexes which is a serious warning that the trend is changing. We did get a LRE (lower risk entry) for longs at the lows from Friday which shows that at least short term the market is oversold, so a near term bounce would not be totally unreasonable to expect. We need to be aware however that due to the large move, the market could drop further (and quite significantly) before the bounce (as it happened on the previous LREs for longs triggered on ES - highlighted on the chart).

Weekly Cycles

Weekly Cycles

The daily cycles provided again a nice “zoom-in” into the weekly cycles. The bounce from the 2nd support triggered (which corresponded with the test of the mcm-MA on the weekly) was very strong and already reached an area where a 2nd END resistance could trigger (at the highs of last week). The Brexit vote was the main news behind the huge daily bar from Friday which spiked directly through support and triggered a LRE for longs at the low (same like weekly). The price is still below the support level and it is important to see how the market will behave when (or if) it will come back to test it. If the market comes back above it and we do not get a 2nd END resistance trigger at the previous highs, then a bigger bounce might ensue. If it cannot come back above, that could have very bearish consequences since it could be the start of an impulse down.

Daily Cycles

Daily Cycles

The 480 and 288min cycles were in down impulses and they attempted to reverse them by breaking above the resistances triggered in the form of a bearish retrace (BR) on 480min and a 2nd BR on 288. The up impulses never confirmed (mcm-MA never broke above the break-out level) as the market reversed strongly on the Brexit news and found a bottom marked by support and a LRE for longs on both cycles. The bounce from there touched the mcm-MA on 480 and spiked it a bit on 288 before reversing. Where this down move ends will be telling for the near term direction and the support levels area is key to watch. The current move is close to qualify already as a back-test of the support levels, however the market could test them better and even make a new low by spiking below.

480&288min Cycles

480&288min Cycles

S&P500 Expert Lounge Update – June 14, 2016

Good morning everyone,

These are key timing for today:  10:00AMEST, 1:30PMEST

These are key MA levels:  5EMA 2096, 10SMA 2100, 20SMA 2087, 50SMA 2077

These are key Fib Levels: 2063

These are key primary and intermediate levels:  2059(minor), 2073(major), 2086(major), 2099(minor)

Here is today's market look at the S&P 500 for Tuesday, June 14,  2016

On the data front everyone is casting their attention to the FOMC announcement tomorrow afternoon so we'll likely be in for some jockeying volatility as the big players place their bets on the outcome.  Today we have Business Inventories at 10:00AMEST which coincides with timing and will likely set the tone for most of the session with regards to MSP.  Cycle wise we have the 15min unwinding into a likely 2nd end while a few of the longer term charts are likely to need a bounce for a BR so be on the lookout for a reversal of some kind.  VIX is above the 20 level which signals normal intraday volatility in the 1-2% department, so these reversals have the ability to be rather substantial.  Both HAL and RVS are long, but be mindful that they have deep pockets and a mastery of averaging and risk controls built into them.  Be careful out there, take your time, and choose your entries carefully.

MSP

MSP

Primary and Intermediate Levels

Primary and Intermediate Levels

MCM Newsletter – Outlook for Week 13 – 17 Jun

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): neutral
Details:
On the weekly cycles, as warned about the possibility in the previous newsletter, the market tried to get above the exact level of resistance, at least on ES. It is interesting that YM is under-performing quite noticeably and never made it to the resistance level, while ES managed to overcome it slightly. The long term view is unchanged and the expectation is for the resistance level to hold and the market to register a more significant correction from this general area. Where exactly the market will finish running the stops is difficult to pin-point exactly and the shorter term cycles should provide better early clues in this regard. The directionality tool is still close to maximum levels and would need to start moving down to confirm a turn.

Weekly Cycles

Weekly Cycles

The daily cycles show better the brief move above resistance and here the YM moved in sync with ES, although it’s under-performing vs the previous end of April high. The directionality tool started to move down on both ES and YM and its behavior going forward will be telling for if this is a more significant turn or not. The mcm-MA could provide some near term support, together with the new LRE (lower risk entry) for longs which triggered on YM on Friday. On a bigger picture level we expect the up impulse to either be finished or to require another BR and a 2nd END. For another BR support to trigger more downside will be needed though.

Daily Cycles

Daily Cycles

The 480 and 288min cycles provided early clues about the turn. 480 had previously unwinded an up impulse with a BR and an END resistance in the same area as the weekly and daily resistances. 288 also had resistance trigger there. The market attempted to break-out over those resistances, however failed to sustain momentum and 480min never confirmed the nested impulse. The directionality tool moving lower also warned that the break-out was likely a head-fake and that the up momentum was not sustained. After coming back below resistances, both cycles then triggered support levels which were broken and are now very close to confirm the down impulses. If they will confirm and hold a back-test, that would warn of a bigger correction.

480&288min Cycles

480&288min Cycles

Note: please be aware that the price on the charts has been corrected with the roll-over of the ES and YM contracts from June to September.

MCM Newsletter – Outlook for Week 30 May – 3 Jun

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): up/neutral
Details:
The initial decline from the triggered resistance level on the weekly cycles has stopped when it tested the mcm-MA and the market managed to bounce from there. Now, price is close enough to the resistance level to be considered a back-test (highlighted on chart). What happens here will be key for the main trend direction, with the normal expectation being for resistance to hold and market to have a more pronounced correction. As it can be seen from the previous resistance levels, it would not be totally unexpected for the market to either head directly lower or challenge the resistance a bit more before that. The directionality tool should be watched closely for signs of down movement as well. Interesting is that YM is underperforming ES, being about 200 points below the resistance level, while ES is only 7 points.

Weekly Cycles

Weekly Cycles

On the daily cycles, we can see that the mcm-MA on the weekly also had help from the daily when it held. Namely, the market back-tested the bullish retrace (BR) support which had triggered a while back. That back-test showed that not all is as bullish as everyone thinks since the support held with difficulty and was spiked below. However it did hold in the end and market bounced strongly from there. Now an END resistance to that BR could trigger basically any time at these levels. It can also be seen even better than on the weekly cycles how significant is the YM underperformance - while ES went clearly above the previous high, YM did not and is in that general area. The mcm-MA on YM also turned red and we started to get some LRE (lower risk entries) for shorts. As previously said, once that END triggers, that would signal a possible unwind of the up impulse and in the context of the weekly, a larger down move would be expected. There is also the option that a 2nd BR will trigger and require a 2nd END, which would need more back and forth movement before the bigger correction.

Daily Cycles

Daily Cycles

The 480 and 288min cycles show the effect of the big move we had in the past 4 days. 480min actually broke into an up impulse, while 288 had a larger regular wave which triggered resistance at 2092.75. Considering the up impulse on 480, if the market sustains the move past this level and starts an impulse also on the 288min cycle, then we would have to acknowledge that the bounce would have further to run. However, the resistance on 288 might still hold, despite of it having been spiked briefly, so keeping an eye on that level in the next few trading sessions is important.

288&480min Cycles

288&480min Cycles

S&P500 Expert Lounge Update – May 9, 2016

Good morning everyone,

These are key timing for today:  9:30AMEST,  2:30PMEST

These are key MA levels:  5EMA 2056, 50SMA 2049, 10SMA 2069, 20SMA 2078

These are key primary and intermediate levels:  2060(minor), 2040(minor), 2070(major)

Here is today's premarket look at the S&P 500 for  Monday, May 9th, 2016

With no real economic data points out today, all focus should be on timing at market open and at 2:30PMEST.  In the overnight we had the 15min put in a cycle end, the 288 put in a bearish LRE(Low Risk Entry) at the overnight highs, the YM daily cycles chart put in a BR(Bullish Retrace) at the May 6th lows, and the RSI cycles begin a bullish dissipation phase so we may be in for a low volatility consolidation for the duration of today's session.  We have Levels resistance at 2060 coupled with the 5EMA at 2056 and as support we have the 50SMA at 2049 and a minor intermediate support level at 2040.  The rise from Friday in through the overnight has also brought us back into congestion zones for both YM and ES historical extremes.  Good luck today and profitable trading.

2016-05-09_3-24-40_IntradayMSP

MSP

PRIMARY AND INTERMEDIATE LEVELS

PRIMARY AND INTERMEDIATE LEVELS

ES HISTORICAL EXTREMES

ES HISTORICAL EXTREMES

YM HISTORICAL EXTREMES

YM HISTORICAL EXTREMES

MCM Newsletter – Outlook for Week 9 – 13 May

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): down/neutral
Details:
The weekly cycles are still oscillating, however, as mentioned in the previous newsletter, the fact that the resistance level triggered is a significant event. That signals the crest (top) of the wave and although the market may choose to test that area again before heading down, the normal expectation is for it to hold any bounces and the market to move lower from that general area. The directionality tool did not yet turn down and once it does that will also be an important signal that the market is starting a more significant correction.

Weekly Cycles

Weekly Cycles

On the daily cycles, the up impulse started to unwind. As expected, the pull-back did trigger a bullish retrace (BR) on ES and on Friday it triggered one also on Dow. The normal expectation is for these levels to provide support and a bounce. If that comes to pass, the END resistance of that bounce would be a very important signal since that would mean that the impulse up either fully unwinded, or ended the first unwind phase (and a 2nd and potentially a 3rd END would be required). That level, viewed in the context of the resistance on the weekly cycles, becomes even more important and has the potential to mark an important top. There is one important thing to be mentioned about the potential END - it does not have to be higher than the previous high, just as the 2nd END (if we will get one) does not have to be higher than the 1st one. If the market fails to bounce and breaks these support levels for more than a brief spike, that would be more immediately bearish since it could start an impulse down. The directionality tool is still at the lowest point, if it will move upwards that would likely confirm that the bounce will continue and we will likely get the END higher. Additionally 3 consecutive LRE (lower risk entries) for longs triggered on the Dow and one on ES.

Daily Cycles

Daily Cycles

The 480 and 288min cycles continued their different developments. The 480min is still in an impulse down, after having held the back-test, while 288 is having a weak impulse up which is unwinding lower than the break-out level. Interesting is that 480min started to generate LREs for shorts - it had 2 consecutive ones (highlighted on the chart) which worked really well. Also 288 triggered 3 (highlighted on the chart) which behaved very well too. Another interesting fact is that the directionality tool on 480 moved lower from April 21st until April 25th and stayed at the lowest point until now. Near term it will be important to watch if the directionality tool on 480 will bounce and, if the market continues to bounce, what will happen at 2065 and another back-test of the impulse down on 480. It is important to mention that the next resistance level on 288 might be a 3rd END, which normally triggers a strong reaction.

288&480min Cycles

288&480min Cycles

In conclusion, the market may have registered an important high, at the level indicated by the resistance on the weekly cycles. Near term however, the normal expectation is for a bounce from the BR support on the daily cycles to unwind the impulse up. The behavior of the 288 and 480min cycles will be telling if we get the bounce indicated by the daily or not. 2065 ES and break-out into the down impulse on 480min is a key level. Holding that and/or getting a resistance level on 288 that holds, could see the support level on daily being under pressure again.

MCM Newsletter – Outlook for Week 2 – 6 May

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): neutral/down

Details:
The weekly cycles are still oscillating, however a significant development was registered last week. A new resistance level finally triggered and will confirm when the market opens and the new weekly bar is generated. That does not mean that the market will go down immediately, although that is certainly one of the options. Another option would be for the market to back-test the resistance area after an initial downward reaction (like it did on previous instances - highlighted on the chart). Regardless of how this will play out it is important to be aware that the normal expectation shifted to weakness for the intermediate term. And also that the resistance levels (2105.5 ES and 18084 YM) become key going forward, the normal expectation being that they will hold any bounces. If the market manages to break above them in a significant way that would change the picture and be very bullish, however that is viewed as having low odds at the moment.

Weekly Cycles

Weekly Cycles

On the daily cycles, the historical extreme area which we were pointing to last week managed to put a stop to the up movement and the market turned. The directionality tool continued to move down and is now approaching the lower boundary; staying there would point to further weakness. Considering that we are in up impulses, a more significant pullback would likely generate a bullish retrace (BR) which would provide support and, normally, a bounce. Reaction to that level will be important for defining the near term direction. Interesting to point out is that YM triggered a LRE (lower risk entry) for longs and although the trigger of a 2nd one at a lower level would not be out of the question, it is pointing to the fact that a bounce could be close.

Daily Cycles

Daily Cycles

After breaking into up impulses the 480 and 288min cycles had slightly different developments. The 480min reversed its up impulse and had another oscillation, while the 288min triggered a bullish retrace (BR) which held, after a brief spike below, and unwinded the up impulse with an END resistance. After that, both triggered support levels which were broken. 288 also had a nice LRE (lower risk entry) for shorts right before that. At the moment 288min is impulsing down, while 480min didn’t confirm the impulse down just yet (by having the mcm-MA move below the broken support level). For the near term direction it will be important to watch if those levels will hold the back-test or not (2070-2076 ES). Holding the down impulses would mean there is more downside likely, while a reversal would point to more oscillating movements.

288&480min Cycles

288&480min Cycles

In conclusion, the cycles are finally pointing to a pause of the relentless up movement and to the possibility of a more significant turn. The resistance level on the weekly points to a possible intermediate term top being close (or even in already). The daily cycles turned in an area of previous historical extremes and would ideally need a bit more downside before triggering support in the form of a bullish retrace (BR). The 288 and 480min cycles broke into down impulses which, if hold the back-test, would point to further weakness near term.

MCM Newsletter – Outlook for Week 25 Apr – 30 Apr

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): neutral/up
Details:
Not too much to be said about the weekly cycles. The situation is pretty much the same as in the previous few weeks: the oscillation is ongoing and the resistance level did not trigger yet. The market is now in the area of the previous resistance level and also slightly above the predictive pivot, but so far there are no clear signs of a reversal (or resistance triggering).

Weekly Cycles

Weekly Cycles

On the daily cycles, the up impulses reached yet another historical extreme area. The directionality tool on YM turned down, bounced and now it is turning down yet again. That doesn’t mean that the market will turn immediately, but it does show that the up strength is weakening and we believe that the risk has shifted and long positions should be reduced or hedged. Once the market finally tops, the expectation is for a more significant pull-back to happen which would trigger a bullish retrace (BR). Reaction to that BR support would be important, the normal expectation being a bounce to an END resistance higher, which would signal the unwind of the up impulse.

Daily Cycles

Daily Cycles

The 480 and 288min cycles have oscillated for quite a while. Recently both managed to break out into up impulses, after the market broke resistances triggered at 2077.25 (point 1 on chart). The impulses never really established themselves though and came back to test the break-out level several times. On 288min, the most recent back-test triggered a bullish retrace (BR) at nearly the same level, which usually has higher odds of holding. The 480min did trigger a support level, however before this confirmed, the market traveled below the break-out level and so the support level confirmed below, invalidating the up impulse (point 2 on the chart). Considering the support triggered on both, the normal expectation is for the market to bounce until new resistance levels are triggered. However if the market breaks down through these levels, that would be a strong signal that an important short term top is in.

288&480min Cycles

288&480min Cycles

MCM Newsletter – Outlook for Week 18 Apr – 22 Apr

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): neutral

Details:
The weekly cycles are still oscillating. The mcm-MA turned green and, although that invalidated the 2 consecutive LRE (lower risk entries) for shorts which triggered a while back, the reaction to the expected resistance level will be key going forward.

Weekly Cycles

Weekly Cycles

On the daily cycles, the up impulses are relentless. The market had only brief pull-backs which never triggered a bullish retrace (BR). The directionality tool on YM finally turned down, but quickly bounced again. Although that does point to the fact that the last pull-back was more important than the previous ones and put a dent in the bullish up move, there is still no sign of a top. Once the market finally tops, the normal expectation is for a more significant pull-back to happen which would trigger a BR and then a bounce to an END which would signal the unwind of the impulse.

Daily Cycles

Daily Cycles

The 480 and 288min cycles are still oscillating. The change in the oscillating nature which we were pointing last week seems to have been only temporary, the market managing to make a higher high now which triggered also a new resistance level (at 2075). The normal expectation now is for the market to come back down until it finds a new support level. As already mentioned several times, once the market breaks into an impulse on these cycles that will be a strong message about the intermediate term direction.

288&480min Cycles

288&480min Cycles