mcm daily market update 12.May.22

ST trend: down (with bottoming attempt)

Yesterday we were noting that the ST trend was up as buyers had regained ML and sellers were inefficient on the pullbacks. We did mention that CPI release is "likely to cause some spikes and finally give the direction for at least the 1st part of the day. Overall the market remains weak as any bounce, even large ones, continue to get sold hard. Buyers need to break resistance, then start holding supports on pullbacks to reverse the big trend. Otherwise any bounces are sells.". That played out exactly. The CPI release caused a massive drop erasing all the gains buyers managed to build. The it stopped at the 3950 support lvl and staged an impressive bounce into the 1st hours of the RTH open. After that buyers failed to hold ML and we sold off to new lows.

The o/n continued the bearish character and dropped to lower lows. Buyers are attempting to stick save 3900 and FGSI stubbornly refused to confirm the lows. We now have 3 consecutive unconfirmed lows on FGSI as well as an unconfirmed low on IGSI. So there is at least a bottoming attempt ongoing. Buyers must defend those lows and break the 1st bearish EE lvl to confirm at least a ST low is in. Otherwise the unconfirmed lows set-up can get broken and we continue to sell off.

As a side note - it looks like markets are gripped by extreme fear. It is likely we are going to need a capitulatory action before we find a more meaningful low. As repeated for weeks already, the intermediate target for this down move is, in my opinion, in the 3600 range. That's not even that far anymore as it's "only" 300 points from where we are. Considering that we already dropped from 4600 at the end of March and the brutal sell-off in many stocks, this is likely the initial stage of a bear market. We should get a larger bounce after this capitulatory low, but new ATHs are unlikely to happen for a very long time.

mcm daily market update 02.May.22

ST trend: neutral

On Friday we had another full-on bearish day, similar to the previous week action on Thursday-Friday. After a gap down, which was never completely filled, buyers were overwhelmed and we sold off for the entire RTH session, dropping a whooping 150+ points from prior day's close.

Sunday made the usual lower low, although it was a minor one, with buyers managing to defend that area 3 more times and bouncing, albeit not very convincingly. FGSI is showing that both sides are inefficient, so the ST trend is up for grabs. Fwiw, the bounce looks rather weak, so it is possible we might need another leg lower before a real bottoming attempt. On the downside the o/n LOD is important as it was unconfirmed on FGSI so if buyers can defend it it could be the start of something. On the upside, ML is the key line in the sand, as usual. 400bar MA and danny are also important and it seems buyers are having a hard time holding price above them, which is a further sign of weakness. Bigger picture we could have a capitulatory low today, so in case we do see another flush, watch for reversals (having a lower low which is unconfirmed on both FGSI and IGSI from which price bounces strongly would be a good indication buyers are trying to find a bottom).

mcm daily market update 25.Apr.22

ST trend: down (with bottoming attempt)

On Friday we were noting that the ST trend was down with potential bottoming attempt, as we had the potential for a bottom with FGSI and IGSI showing unconfirmed lows. We warned that "The absolute KEY level for buyers to defend is the o/n low. Below that likely opens up the flood gates again and we could see a repeat of yesterday". Our warning came true, after losing the o/n low, there was no looking back as the flood gates opened again and same type of action as the prior day happened - non-stop selling with little bounce along the way.

Sunday opened even lower (as expected and called out in the chat room on Friday) and we dropped another 40+ points from Friday's close. The o/n today continued even lower. Now we again have the potential for a bottom, as IGSI is not confirming these lows. Price made a double bottom at the o/n low and buyers defended it, staging a bounce, however FGSI is showing buyers are inefficient on this bounce, which is capped by the 400bar MA so far. It looks like we have the same situation as Friday. If the o/n low is broken, then it's possible we will get yet another leg down, similar to Thursday and Friday. If buyers can defend, then we might see a larger bounce, maybe to test ML. Ultimately, it looks like the market has a date with the mid March lows, so the expectation would be for us to see that area before this series of declines stops (at least for a while).

mcm daily market update 22.Apr.22

ST trend: down (with potential bottoming attempt)

Yesterday we saw one of the biggest reversal ever recorded. After the RTH open, buyers pushed higher strongly and triggered a BE on TTs which marked the top. After that, markets took the "elevator down" as price just dropped in a steep manner all the way until the RTH close. Pretty unreal price action and HUGE trap for buyers.

The o/n saw the usual "lower low" which was unconfirmed on both FGSI and IGSI and buyers attempted a bounce there. However they stalled at the back-test of the area where a bottom was attempted yesterday near the RTH close. And it looks like they failed there, as now the lost momentum and price is back below both danny and 400bar MA. The absolute KEY level for buyers to defend is the o/n low. Below that likely opens up the flood gates again and we could see a repeat of yesterday. On the upside, buyers would need to overcome the o/n HOD area (4395ish) to have hopes at touching the next inflection area at ML and macro-ML.

mcm daily market update 20.Apr.22

ST trend: up (with potential topping pattern)

Yesterday we were noting that the ST trend was neutral, with potential bounce coming, as FGSI had set up both bullish and bearish EE, but was at extreme pessimism, indicating at least a ST bounce. Buyers took full advantage of that though and after the initial failure at ML, rocketed past ML and macro-ML in a giant vertical move. We also had another push into the close, before the market finally gave up and dropped quite strongly to the prior consolidation area.

The o/n didn't bring too many developments. Buyers held the consolidation area where price stayed after the initial rocket launch and then buyers managed to psh back towards yesterday's high. This is now a big inflection point. If buyers can power through we will likely get more immediate upside. If they fail and price comes back below danny, then a consolidation down to 400bar MA or even ML is possible. FGSI did peak again at extreme optimism, so at least a ST pullback would be warranted.

mcm daily market update 8.Apr.22

ST trend: up (with correction ongoing)

Yesterday we were noting that the ST trend was neutral as we were still in the prior day's range (from the FOMC minutes spike high and low) and having bearish and bullish EE vs those levels. Sustained breakout/down of those levels was needed to escape the range. Initially we saw a rejection at the upper level, then buyers lost ML and we went down all the way to test the lower end of the range. That held as well and after being marked as an unconfirmed low on both FGSI and IGSI, the buyers stepped in with authority and put in a larger bottom.

The o/n played out well for buyers. We had the usual sideways consolidation from the yesterday's RTH highs, but sellers couldn't even touch ML on the pullback. And then a push to new highs. Now we have an ongoing correction from the higher high, which was marked as unconfirmed on FGSI and IGSI. The pullback again couldn't touch ML, which means buyers are still in good shape. We also had a large bullish EE set up on FGSI. As long as buyers hold price above ML, they are in control of the trend. Yesterday's ramp fixed a lot of the technical damage inflicted in the prior 2 days and if today ML is not lost, it's likely we are dealing with a new found up trend.

mcm daily market update 04.Apr.22

ST trend: up

On Friday we were noting that the ST trend was neutral, as both buyers and sellers were inefficient via FGSI. We did mention that "the bounce is a slow grind and is looking more like a bear flag than a change in trend" and warned that losing the bullish EE lvl set up on FGSI and the important ST lines (danny and 400bar MA) would "If those levels break, then another trip to the lows is likely". That is exactly what happened as buyers failed and the market dropped to new lows. The bottoming attempt near 4500 was caught nicely by FGSI which showed a 2nd consecutive unconfirmed low there, before buyers stepped in for the usual late Friday rally.

The o/n showed a decent continuation of the bounce, as the initial pullback was small and more a side-ways consolidation, then we had another push to new highs, then a pullback from extreme optimism on FGSI, but which set up bullish EE that held. Now we are back near those highs (which are testing macro-ML), but with sellers showing inefficiency. ML was won back also and if it continues to act as support, buyers could get a follow through day until the next inflection area - 4580.

mcm daily market update 01.Apr.22

ST trend: neutral

Yesterday we were noting that the ST trend was down as buyers were showing inefficiency via FGSI. Additionally they attempted to win back ML, but failed to hold above it. We did mention that "ML remains the key level for the trend and if it continues to reject price, that would point to another leg lower". That is exactly what played out. ML rejected price and we dropped into a macro-ML test. Macro-ML was also lost towards the end of the RTH session leading to another 40 point flush.

The o/n saw the usual bounce off extreme pessimism on FGSI. However the bounce is a slow grind and is looking more like a bear flag than a change in trend. However not all is bad for buyers. Sellers keep showing inefficiency and actually set up bullish EE on FGSI. Buyers also keep holding 400bar MA as support. If buyers can defend those levels and win back ML, that would be a serious warning they are ready to take the lead again. If those levels break, then another trip to the lows is likely.

mcm daily market update 29.Mar.22

ST trend: up (with potential topping pattern)

The market has continued the melt-up started in mid March with each ML break down attempt being stick-saved quickly and ML being recovered easily after that. Yesterday was the same as prior 2 days. ML test in the o/n, bounce into the o/n highs, then drop into RTH session to lose ML briefly, but recover it again and then squeezer higher once more.

The o/n saw continued follow through for the buyers. Only sideways consolidation, FGSI showed sellers were VERY inefficient as it declined to centerline on almost no price pullback. Then push to new highs. Right now we do have an unconfirmed high on FGSI and IGSI, which has the potential to mark a larger top. The key word is POTENTIAL. As long as danny holds and/or 400bar MA, the up trend is intact. Sellers need to show up and defend those unconfirmed highs, then break these 2 supports (which held throughout the entire o/n). Once that happens another ML test would be likely and that would be the key for the trend, as always.

mcm daily market update 23.Mar.22

ST trend: down (larger correction attempt)

Yesterday we were noting that the ST trend was up as buyers had held another ML test and bounced off it. Indeed from our post, the market consolidated briefly, then ramped another 50+ points to breach 4500. The RTH session was a "ramp 'n camp" as after the initial push, there was a choppy slow grind.

The o/n saw a pullback from those new highs and we again had buyers being inefficient, which was a warning they might not be able to sustain such a relentless push. And now we dropped into yet another ML test. As we kept mentioning, ML is the KEY level for the main trend. If buyers can win back ML, then this is just another small dip to be followed by new highs. If ML is lost on a sustained basis, then a trip to macro-ML (aprox 50 points lower) is possible and likely next large inflection point.

mcm daily market update 16.Mar.22

ST trend: up (with potential topping pattern)

Yesterday we had a huge reversal day and up squeeze. FGSI and IGSI both signalled an unconfirmed low at the o/n LOD, and those have the potential to be explosive set-ups. Yesterday didn't dissappoint, for sure. After the o/n LOD was touched, the market went straight up with little to no pullbacks. During RTH we had a drop and retest of macro-ML, but that was quickly brushed off and mkt rocketed to new highs to close near HOD.

The o/n was perfect for buyers. We had almost no pullback with price going only sideways after which another push higher started. FGSI is starting to show extreme overbought conditions as price is pushing into sell zones, but the buyers seem very determined and just push higher and higher. Sellers on the other hand are VERY inefficient, tiny pullbacks in price lead to big declines in FGSI, which means they are likely to continue to get squeezed. The 1st step for sellers would be to break below the danny line. As long as that holds as support, the immediate up trend is intact. Once danny fails a pull-back to back-test ML would be expected. There we will have the next big inflection point. If the newly found up trend is to be kepy, ML needs to hold. FOMC today, which should provide fireworks, large moves expected. As usual the "real" direction after FOMC will be seen only tomorrow and with this week being OPEX, that just means more volatility and wild swings in both directions expected.

mcm daily market update 14.Mar.22

ST trend: down (with potential bottoming attempt)

On Friday we were noting that the ST trend was up with potential topping pattern, as FGSI and IGSI were at extreme optimism and near term the market was overextended. We mentioned that as long as danny is supportive to price more upside is possible and indeed once danny was lost, the upside momentum dissappeared. We also mentioned that "In order to keep the new found up trend intact, buyers would need to hold ML on any potential back-test". And ML was lost as well and price fell another 50 points from there. The market also closed at the lows not having the usual late Friday ramp.

Sunday saw an attempted bounce, which failed near ML, and today's o/n saw a proper test of ML which even made it to macro-ML, but failed there. The rejection at ML and macro-ML means the downtrend is still intact. FGSI is at extreme pessimism which indicates a ST bounce is possible, however as long as ML is above price, the main trend is down. Friday's low is important on the downside. It held on Sunday and also today, if it breaks it would likely trigger the next leg lower.