mcm daily market update 21.Jan.22

ST trend: down

Yesterday we were noting that the ST trend was neutral as price was testing ML, so it was decision time. Breakout would get an up squeeze while rejection would lead to immediate downside. We did get the breakout and a large up squeeze right into macro-ML. However, as we warned yesterday "Ultimately, it seems likely that we have unfinished business on the downside". The market rejected hard at macro-ML and buyers did have a feeble attempt to defend ML, but failed and after that there was no looking back. The market lost a whooping 100 points after ML was lost.

The o/n continued the pattern of the last few days. Instead of seeing an acceleration and breakdown, it put in yet another attempted stick save. Price made a lower low, which was unconfirmed on both FGSI and IGSI and the cue to start an attempted bounce. This one, although looking similar to the one from yesterday, didn't make it to test ML yet, so from that perspective looks weaker. Today is OPEX so there was always the prerequisites to have many shennanigans, but with VIX so elevated and markets in a very fragile state after these aggressive declines, whipsaws both ways are expected to be larger than normal. So reducing size and being extra nimble is required if wanting to actively trade. Same as yesterday, it doesn't seem like the market found a stable low just yet, despite the large decline. So the main trend is still down. Large bounces are possible, but are likely to be good selling opportunities, while attempting to buy dips is extra risky. Dust should settle after OPEX, so the timing window for a potential important low would be Monday or Tuesday.

mcm daily market update 18.Jan.22

ST Trend: down (with bounce attempt ongoing)

Friday saw large whipsaws in both directions. After a decently large gap down (30+ points), buyers stepped in and managed to fill the gap. Then the opening low was tested and finally broken, after which the last 2h of the session saw the "usual" late Friday ramp to take out the highs.

The o/n today saw a big "rug pull", as buyers are seeing a 60+ point drop from Friday's highs. That area was tested several times, but macro-ML capped price and finally once buyers lost ML, we had a large flush to take out Friday's lows. Buyers are attempting to reduce the large gap and with FGSI and IGSI at extreme pessimism that was to be expected. So bounce is ongoin ghere, however as long as ML is overhead, sellers have the upper hand. The o/n low is confirmed on IGSI and locally on FGSI, while FGSI is slightly unconfirmed vs the low from yesterday's late futures session. So even if a bounce is likely here, sellers are still preferred, until buyers can prove themselves by gaining efficiency on FGSI and winning back ML.

mcm daily market update 10.Jan.22

ST Trend: down (with potential bottoming attempt)

On Friday we were mentioning that the ST trend was neutral, as both sides were inefficient via FGSI. We did note that as long as ML and macro-ML are above price, sellers retain an edge and that proved to be true. The bullish EE on FGSI with FGSI at extreme pessimism did lead to a bounce right into a ML test, but ML held as resistance and after whipsawing a few times, marrket then made new lows. We did get the usual Friday afternoon ramp, but that also failed just below ML.

Sunday saw new lows reached, before another bounce into ML. And the o/n today also saw 2 ML tests, but both rejected price strongly. Now the market appears to try to find another bottom. FGSI is at extreme pessimism again, but the main problem for buyers is that this is a confirmed low. So even if we get a ST bounce, more work is likely needed before a more meaningful bottom is found. In the bigger picture, ML keeps rejecting price and acting as a brick wall of resistance, which is in itself bearish. Buyers would need to break above ML to start looking at a more significant change in trend. Until then, sellers have the ball.

mcm daily market update 03.Jan.22

ST trend: up (with pullback in progress)

First off: Happy New Year! Welcome to 2022!

On Friday we were mentioning that the ST trend was down, with potential bottoming attempt. The market had finally broken the 4770 support and fell to macro-ML quickly after that (as warned it would happen if ML and 4770 would give way). Price was just retesting 4770 and our expectation was that it could be just a reflective bounce. The market proved our expectations correct as it failed on the 1st back-test of ML and that important area and fell into another macro-ML test. Then another bounce, a spike above ML to 4780, then again failure and sell-off to macro-ML. Basically the entire Friday session was a chop between 4780 and macro-ML. Buyers held macro-ML, so that at least gives them some hope of holding the up trend.

The New Year brought some support for buyers as we gapped up on Sunday above ML and buyers were able to hold it on the back-test. Then they made another high above 4780, although they stopped 10 points higher. Now we are seeing a pullback from extreme optimism on FGSI into yet another ML back-test. The fact that buyers held macro-ML and won back ML, gives them hope that they just might stick save the up trend and resume the move higher. They are definitely not out of the woods just yet, so they need to keep holding these important levels and push higher to avoid a longer (and deeper) consolidation. They have not shown too much efficiency on FGSI or IGSI, so there are still some issues. Nevertheless, as long as ML and macro-ML are below price, buyers have the edge, so that needs to be respected until those levels fail.

mcm daily market update 31.Dec.21

ST trend: down (with potential bottoming attempt)

Yesterday we were noting that the trend was up with potential topping pattern as the high was unconfirmed on FGSI. We did mention the big picture ranges of 4770 and 4800. The market first had yet another bounce off ML which stopped again on the 4800 resistance and then sellers finally took over and we saw a big sell-off in the 2nd part of the RTH session and closed at the lows right into 4770 lower part of the range.

The o/n saw sellers finally break the 4770 area with a quick 20 point drop right into macro-ML. That test of macro-ML was unconfirmed on FGSI and buyers stepped in and brought price right back up to 4770. They are not very efficient via FGSI, as they are testing that big level from below, so this bounce could be just a reflexive back-test of prior broken support. Buyers would need to see a break back above 4770 and ML (which is just above) in order to get back in the lead. Either directly from here or after making a higher low vs the o/n low. Sellers have the upper hand now and they need to hold here and break the unconfirmed low.

And as today is the last day (and trading day) of the year, Happy New Year!

mcm daily market update 27.Dec.21

ST trend: up (with potential pullback coming)

On Thursday we were mentioning that the ST trend was up, as after Wednesday's big run the o/n saw just sideways chop, but buyers still managed to muster higher highs. The market delivered as it had a run up just after RTH open and then camp in a tight range, before pulling back into the close.

The o/n today looks very similar to Wed-Thu o/n from last week. Sideways chop in a tight range, but with buyers pushing from time to time and achieving higher highs. FGSI is at extreme optimism, so a ST pullback is possible to "reset" FGSI. As usual, if the danny line is broken, next support would be 400bar MA. IF 400bar MA also fails to hold price, then another ML back-test is possible. If either of those upper lines holds, then more immediate upside is possible. We are close to the prior ATHs, so if 4730-4740 area is broken through, then we could see another squeeze higher before a consolidation.

mcm daily market update 20.Dec.21

ST trend: down

On Friday we were noting that the ST trend was down as buyers had lost ML and macro-ML and were very inefficient on bounces via FGSI. That played out as expected as price continued lower about 40 more points from our post, before buyers finally attempted a bigger bounce from another trip to extreme pessimism on FGSI. That bounce perfectly back-tested ML and price rejected there. Buyers attempted again, after holding a higher low, but ML rejected price again and closed the session on Friday pretty ominous for buyers.

Sunday and today's o/n sessions continued the bearish set-up from Friday. Buyers were very inefficient on bounces (via FGSI) and price kept making lower lows. Given the strong rejection at ML, the main trend is down, until that changes. We are on the Monday after OPEX, so the market might attempt a larger bottom here. The 1st step for buyers would be to defend the o/n low and if they can't at least the low near 4500 reached beggining of December.

mcm daily market update 17.Dec.21

ST trend: down

Yesterday we were noting that the trend was up as buyers continued to build on the big FOMC bounce and sellers kept being inefficient on the tiny dips. This continued until ES made a new ATH, after which price finally starting to come down from nose-bleed highs. The normal expectation would have been for a pullback into a ML back-test to resolve the ST overbought situation. However that is not what the market had in mind. ML failed to hold and the initial bounce off it quickly failed. That was a major warning something is wrong (with the bullish scenario).

The o/n session continued the bearish character, as bounces were weak and buyers were very inefficient via FGSI. Additionally every trip to extreme pessimism on FGSI provided only very limited relief bounces and were then subsequently broken. So now we are back to a down trend. Buyers need to prove themselves now by breaking bearish EE levels and winning back those 2 important lines. Immediate term danny and 400bar MA have been capping price and if they finally fail to do that, it would be the 1st sign buyers are attempting to step in. OPEX is today, so whipsaws are possible in both direction, but the main trend is down until ML and macro-ML are won back.

mcm daily market update 16.Dec.21

ST trend: up

Yesterday we were noting that the ST trend is neutral as both sides were inefficient. We also mentioned that the prior day low was a big line in the sand and being a FOMC day, the market should pick up a more sustained direction after the announcement. Wednesday's low held the whole day and as it turned out was a great level to act against for those who wanted to enter long positions. The FOMC action was typical. First move (down) was the fake one and then the market rallied off that base to breakout significantly and close near the highs.

The o/n confirmed the shift (back) to full-on bullish mode. The RTH close was bested by another 30 points and ES came close to a new ATH. Pullbacks continue to be very small, while FGSI is showing sellers are having a very hard time getting price to cooperate. Brief drops of price below the danny line were quickly recovered, so until that line fails on a sustained basis, dips are likely to be contained. Once danny gives way and also 400bar MA is lost, then a pullback to ML could happen. That might not occur today and considering that ML is also being dragged higher by price, it could occur at higher prices. For now the buyers are back in the lead and the main trend is up. So dips are buying opportunities until the market signals again a change in character.

mcm daily market update 13.Dec.21

ST trend: neutral

On Friday we were mentioning that the ST trend was up with a potential topping pattern, as buyers had managed to win ML back, but FGSI was at extreme optimism so a pullback was expected. We did note that if buyers could hold ML on that potential pullback, that could set up another push higher, and that is exactly what played out. We got the pullback into a ML test, then buyers launched higher in a vertical ramp off the 8:30am data release. That pushed FGSI back to extreme optimism and the pullback from there tested ML once more, bounced, but the bounce failed and price dropped into a test of macro-ML. Buyers stepped in there, won back ML and held it twice before launching higher. All in all a good day for buyers, which held the up trend intact.

Sunday saw another push higher from Friday's close at the highs and then the usual grind back lower from there. What is worrying for buyers is that they started to show inefficiency via FGSI. So even if the larger trend is up (as ML was won and defended), the ST trend seems to be up for grabs as boths sides are inefficient. We also had an unconfirmed high on FGSI at Sunday's high, so if sellers break the bullish EE lvls and manage to break below ML, then we might see another test of the macro-ML. Buyers on the other hand would need to break Sunday's high to keep running.

mcm daily market update 10.Dec.21

ST trend: up (with potential topping pattern)

Yesterday we were mentioning the ST trend was down with a potential bottoming pattern as buyers were inefficient via FGSI and they had lost ML. However FGSI was at extreme pessimism, so a bounce was likely. The market did what we expected as it did bounce, but that bounce failed and in the end it resumed lower to make new lows. RTH closed at the lows, which we mentioned in our chatroom that is likely a bear trap.

The o/n proved the bear trap to be true. Buyers managed to hold yesterday's low, despite testing it 2 times, after which they launched higher. More importantly, they won ML back. That is a serious warning for sellers. If ML managed to hold, then the up trend will resume. FGSI is at extreme optimism up here, so a pullback is expected. If buyers manage to hold ML on that pullback, that would be the ideal bullish scenario. Sellers want to see ML fail on a sustained basis to arrest the bounce and attempt more downside.

mcm daily market update 6.Dec.21

ST trend: neutral

On Friday we were noting that the ST trend was neutral as both sides were inefficient via FGSI, having both bullish and bearish EE set up. The market did the same thing as the day before, namely rallied initiailly and broke the bearish EE lvl, until FGSI hit the extreme optimism zone. Then broke back lower to new lows. Buyers then stepped in from an unconfirmed low on FGSI and we got the usual late Friday ramp to repair the weekly close (as much as it could be repaired anyway).

Sunday saw a continuation of the boucne off Friday's lows and after reaching a "high plateau" a slow chop grind. The o/n today saw a push higher until FGSI reached extreme optimism, then the usual drop from there right into FGSI extreme pessimism. Buyers stepped in, of course, and now we are in a bit of "no-man's land". A few things are worth mentioning. FGSI kep showing sellers were inefficient on Sunday and even today on this larger drop. Buyers however also appear to be inefficient, having bearish EE vs Friday's high. Price is now close to ML, so a push higher would need to be taken seriously by the sellers, as it would indicate an attempted breakout. As can be seen on the FGSI chart the macro ML (thicker line above) was tested on Friday and even spiked above, only to reject price hard there. So price reaction to those important lines in the sand (ML and macro ML) will be important. The them the past 2 weeks has been o/n rally which spills into the RTH open, only to have the market drop hard from that high. It remains to be seen if this happens also now, while sustained breakout over 4600 is likely to be problematic for sellers.