MCM Newsletter – Outlook for Week 18-22 September

The sideways action from two weeks ago was resolved last week in the same way we got used to in the last few years - up. Last week was certainly bullish, with 5 green daily candles and several new ATHs. Although the last 3 days saw the market only grinding up, the declines were very limited, so nothing to cheer on from the bear camp. From an EWT perspective, now that the market made new highs, the favorite is still the bull option, which looks like a nested move up from the low at 2417. Even if that will not turn into a nest and will prove to be only a bigger 3 waver, it still looks like it needs a bit more up. The bear option is that this turns out to be either the flat we were mentioning in last week’s newsletter or that this overlap is not a nest, but an ending diagonal. The latter will gain weight if the market heads down and overlaps 2480 before making 5 clear waves up off 2428.
No change on the weekly cycles. Directionality is still heading lower despite the upside from this week.

Weekly Cycles

The daily cycles are in an interesting place. ES broke above the resistance level and is close to confirming a new up impulse. That would be very bullish if it happens.

Daily Cycles

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MCM Newsletter – Outlook for Week 11-15 September

Last week was another sideways week. Most of the action was on Tuesday, when also a rather large range (26 points). The other 3 days in the holiday shortened week had very little volatility and didn’t move the price much. From an EWT perspective last week was significant though because Tuesday’s low overlapped the 1st high off the lows. Which means this is either a bullish nest going up or we have a rare double 3 which started at the ATH (the famous w-x-y structure or 3-3-3). I favor the double 3 instead of the flat because the B wave off the lows didn’t retrace 90% (which is required for the flat to be in place). That means the bears still have one option to head lower more immediately, but that move lower will only be 3 waves, so likely not go so much lower (compared to a flat).
No real change on the weekly cycles. Directionality is heading lower still, which could be a sign the market needs more downside action in the short term.

Daily Cycles

The daily cycles seem to add to that conclusion with resistance levels triggered at the 1st of September’s highs. Those levels become important to watch and are likely to be hard for the bulls to get past without a trip lower (and a new support).

Daily Cycles

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MCM Newsletter – Outlook for First Week of September

Last week was the most bullish one in quite a while. Tuesday put in a low in the o/n on the North Korea missile test news, but from there the bulls did exactly what they needed to. They defended the previous week’s lows and moved up never looking back. They also managed to overlap 2475 which negates the most bearish scenario (a nested sequence on the downside). So while that seals an 3 wave move off the ATH, the bears do have one more option as far as EWT goes. And that is a (yet another) flat. However, there is quite a lot to be done before that takes shape (namely that 2455 is overlapped before this develops into a 5 wave sequence), so the bulls have to be viewed as favorites at this point.
On the weekly cycles, the mcm-MA continued to provide support and market bounced yet again from there. No sign of a support bullish retrace (BR) just yet.

Weekly Cycles

The supports on the daily cycles held nicely and directionality also bounced. Bulls did what they needed to and avoided a potentially very dangerous situation (an impulse down).

Daily Cycles

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MCM Newsletter – Outlook for Last Week of August

Last week seemed uneventful compared to the previous 2 weeks. Monday made a new low, albeit minor, then bulls got back in the game by protecting that low with a big up day on Tuesday. Big is a relative term, as that was “only” a bit over 20 points, nothing like the 30+ we got used to recently. The rest of the week saw sideways movement inside Tuesday’s range, so we can definitely say that the week ended undecided. From an EWT perspective we have an overlap of the first wave off the ATH, so now we have clear levels to watch for the bull/bear scenarios. The low at 2417 is all important as breaking it would mean that a nested move lower has started, which would see us a lot lower before it finished. On the upside, 2475 is the level to beat for bulls to be out of the woods (at least for now) as this would seal in a likely a-b-c down from ATH, which would mean new highs should follow.
On the weekly cycles, the mcm-MA did provide support yet again on ES, as we were saying last week. It remains to be seen if it will continue to do so.

Weekly Cycles

The daily cycles both put in supports. ES triggered had already support at the lows from the initial drop off the ATH, while YM reversed it’s nested up impulse to put in a fresh support at this week’s lows. Interesting that directionality is still stuck at the lowest level, which is a warning the bulls need to do a bit more heavy lifting to get a more significant bounce going.

Daily Cycles

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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

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MCM Newsletter – Outlook for Week 14-18 August

Last week saw volatility come back with a vengeance. A new ATH was reached on Tuesday with a spike-like move, but that was immediately sold off hard. SPX lost more than 50 points from that high to the low registered 2 days later. Friday ended inconclusively but very close to that low and still in, what appears to be, a crash channel. That was for sure the best feast the bears had in a while, but from an EWT stand-point it is hard to scream “the top is in”. Because the last wave into the ATH was very choppy and full of overlaps, being difficult to file that off as an impulse. Which means the B wave (into the new ATH) option we were mentioning last week is still alive and well and that does not bode well for bears. If that is indeed what we are dealing with, after this (presumed C) wave is done a new thrust to the highs will follow. Of course, strange impulse waves have been known to happen, so I would not bet the farm we’ll make new highs, but if the market stops in this general area I would keep this option in mind. The more the market continues lower, the less odds for the flat and more weight to the scenario the top is in for a while.
No change on the weekly cycles. ES is getting close to the mcm-MA again, so it would be interesting to see if it will provide support again.

Weekly Cycles

The daily cycles are in an interesting place. ES broke back below resistance, while YM is still above and just met the mcm-MA, which seems to provide support. The up impulse is confirmed on YM, but not on ES, which is an interesting divergence. We do have a fresh new LRE (lower risk entry) for longs on ES which is also pointing up (and in favor of the EWT flat scenario).

Daily Cycles

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MCM Newsletter – Outlook for Week 2nd week of August

The market did pretty much nothing last week, moving in a very tight range and all inside the limits of the previous Thursday’s range, which we were mentioning last week as important. This sideways move is likely to precede a strong move and it remains to be seen if that will be up or down. From an EWT standpoint this can be either a wave 2/B (part of a move lower) or a wave 4 (part of an up move). I believe the bullish option is favorite, but technically both are possible. The range from the last ATH day (7/27) are still important and good lines in the sand.

No change on the weekly cycles. Directionality didn’t make it to the max level yet, but it is still moving up.

Weekly Cycles

The daily cycles managed to break above resistances. ES in a rather shy manner, but YM did this in a more convincing manner, already confirming a new up impulse. This is a serious warning for bears since another long leg up could ensue. Most likely a back-test of the breakout will come soon and that back-test is all important. If it holds, then bears need to sit on the sidelines for a while; if it fails and market drops back below the resistance level, then the up momentum will be negated.

Daily Cycles

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MCM Newsletter – Outlook for Week 1st week of August

The market moved mostly sideways in the past week, seemingly trying to catch its breath after the relentless upward push. It did manage to make marginal new highs in the middle of the week and Thursday saw an head fake to a new ATH which was then sold hard, the market dropping more than 20 points. The week could’ve ended badly for bulls, but they saved the day on Friday defending Thursday’s lows, so it ended rather muted around the same levels as at the start of the week. The near term EWT picture is complicated now. It’s possible the most recent ATH was a B wave, with the strong selling that followed to be C of a flat. This option would see new highs rather directly. Or it could be that the impulsive move off that ATH is something more. Regardless of which one will play out, Thursday’s range limits are important lines in the sand - both the high and the low.
On the weekly cycles, directionality is moving back up on both indexes, which means bears were unable to change the trend. Nothing much to add except these are looking rather bullish.

Weekly Cycles

The daily cycles are in a make or break situation. Both indexes managed to move slightly above resistances, but not decisively. The resistance levels are important and might still hold, a reversal back below them acting as a warning for bulls that it was just a head-fake breakout. If the market continues to run up and breaks above successful then bears need to sit on the sidelines and wait for another inflection point that might signal a turn.

Daily Cycles

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MCM Newsletter – Outlook for Week 24-28 of July

The market continued the bullish momentum and pushed to new ATHs after a brief pull-back into mid week. The high of the week was reached on Thursday, with Friday seeing a retreat from there. Like we were saying last week - the bulls are favorites and in this environment it’s very hard (and risky) to call a top. The near term EWT option the bears still have is for this to be a B wave (off the low at 2405). And if that’s what this is, then there are enough waves for it to be complete. Of course, there are also a lot of bullish options out there, so the B wave is far from being favorite. That would change with an overlap of 2440, but that seems very far away right now.

No new development on the weekly cycles. Directionality is starting to creep back up, which would be very bullish if it made it to the maximum level.

Weekly Cycles

The daily cycles triggered corresponding resistances to the supports of 2 weeks ago. ES managed to spike slightly above that, while YM has respected it so far. The normal expectation now is for the market to retreat from the said resistances. In fact YM looks to be doing just that with directionality tilting lower and not being able to push past resistance.

Daily Cycles

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MCM Newsletter – Outlook for Week 17-21 of June

The market it making history again making fresh ATH and closing very near them on Friday. It seems that the 3 waves decline we were mentioning last week (with the low at 2405) was all that it was, since we held that low and made new highs. Of course this can still be a B wave of a flat and if the market were to stop close to where we are and head down strongly, it would add weight to that scenario. But this option has to be viewed as the underdog now, so bulls are yet again favorites.

Nothing new to report on the weekly cycles. Directionality is worth keeping an eye on for early clues. We mentioned that it’s behavior was not bullish, but given this rally, that might change.

Weekly Cycles

The daily cycles provided an early warning to this ramp. Both ES and YM had supports triggered. ES canceled the nested up impulse, by having support trigger just below the previously broken resistance. While YM confirmed the up impulse and had a bullish retrace (BR) support. Both those supports held and were pointing up, at least until corresponding resistance level trigger.

Daily Cycles

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MCM Newsletter – Outlook for Week 10-14 of June

We are back after a 2-weeks summer holidays and it seems things got more interesting in the market with the volatility starting to pick up. The market made yet another ATH on 06/19 and then pulled back in a more volatile manner around 50 points. There is nothing to write home about for bears just yet though, since this is just a 3 waves decline so far. Therefore the low from 06/29 sitting at 2405 is important from an EWT (and bears) stand point.

No major signal on the weekly cycles expect for directionality which had an interesting development. It had a failed bounce off the lows, meaning it didn’t quite make it to the maximum level before heading down again. Normally that is quite bearish, so bulls need to take that as a warning for the near term. Just as a reminder, these cycles are still in up impulses, so the normal expectation is for the first more significant pull-back to be bought, as it should trigger a bullish retrace (BR) support which would lead to another bounce.

Weekly Cycles

The daily cycles are in a make or break position for the near term. ES didn’t quite make it to confirm a new nested up impulse, while YM did, but just barely. What happens in the next 1-2 weeks is important for how these cycles will shape up. If bulls can push here, then another leg up is to be expected, while the bears would hope to manage to turn this below the resistance levels to avoid that. In any case the said levels are important to watch.

Daily Cycles

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MCM Newsletter – Outlook for Week 19-23 of June

The market pulled the old “W” pattern last week, making a low on Monday, then bouncing back up to test the ATH (which it missed by 3 points), then moving in lower again to (barely) take out Monday’s low before bouncing once more. From an EWT standpoint this sideways action might be a wave 4, which means the bull count is still alive and well and still the favorite. That continues to be the case until the market will overlap the 2398-2402 area (depending on which high you consider the top of nested wave 1).

Same as for quite a while now, the weekly cycles do not show any significant change. However it is interesting to note some aspects. Namely, the mcm-MA on these cycles provided support several times when it was tested from above. Also, both YM and ES are in up impulses which are now firmly established so would normally need a regular unwind, with a bullish support (BR) and corresponding END resistance to dissipate the up energy.

Weekly Cycles

The daily cycles are also in nested up impulses and recently broke yet again above resistance, breakout which would soon turn into another nested up impulse, unless the market reverses strongly. In fact YM will confirm in the next few days, as the mcm-MA is now crossing over resistance.

Daily Cycles

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