mcm-Alex

mcm daily market update 20.Dec.21

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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-Alex

mcm daily market update 17.Dec.21

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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-Alex

mcm daily market update 16.Dec.21

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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-Alex

mcm daily market update 13.Dec.21

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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-Alex

mcm daily market update 10.Dec.21

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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-Alex

mcm daily market update 6.Dec.21

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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.

mcm-Alex

mcm daily market update 03.Dec.21

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ST trend: neutral

Yesterday we were noting that the ST trend was neutral, as both sides were inefficient via FGSI and set up both bullish and bearish EE. And we noted that breakout/down of those levels would be telling. The market initially broke down the bullish EE, which led to a decline that tested Wednesday's lows. That test coincided with an unconfirmed low set up on FGSI and buyers managed to step in there are arrest the decline. They tested ML, which rejected the 1st time, but then managed to hold yet another higher low and won ML back the 2nd time around and managed to hold above until the close.

The o/n saw price coming back to test ML once more. We even broke below it, but buyers managed to step in and stick save it close by and then won it back. ML got tested once more and this time buyers managed to make a higher low. Sellers are inefficient on FGSI and the 2nd decline to ML triggered a bullish EE lvl. The problem is that also buyers look inefficient on FGSI, so the trens is neutral. ML is the big line in the sand for the trend. Buyers need to keep holding above it to have hopes at more upside.

mcm-Alex

mcm daily market update 29.Nov.21

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ST trend: neutral

On Friday we were noting that the ST trend was down, with a potential bottoming attempt. The market obliged and buyers made a decent effort going into the RTH open, but failed to take out the important bearish EE level on FGSI just below 4660. That failure was pretty ugly and led to another 50+ points drop until the close.

Sunday saw a big bounce off that close at the lows as the news driven scare from Friday aleviated somewhat and the market got right back to Friday's bounce high (near 4640). Buyers couldn't push through and today we retested that area twice and rejected every time. What is more problematic is the fact that buyers have exhibited continued inefficiency on the bounces into that area, last bounce making a lower high in price, but a higher high in FGSI, hitting extreme optimism zone. Sellers are also inefficient on dips, which makes the near term trend neutral. When a bigger trend change happens it is normal to see initial indecision on FGSI with both sides being inefficient, so this could still be part of the bottoming process. For that to happen buyers would need to break through 4640 area soon (ML is also in its vicinity now) and then 4660. If they can take out those 2 levels, Friday's low would start to look like an important bottom. On the other side, sellers need to hold 4640 (ideally) and break Friday's low. That was unconfirmed on both FGSI and IGSI, so it is VERY important.

mcm-Alex

mcm daily market update 26.Nov.21

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ST trend: down (with potential bottoming attempt)

On Wednesday we were mentioning that the ST trend was neutral as both sides were inefficient via FGSI and set up both bullish and bearish EE. Those levels were mentioned as important for breakout/down. The market dropped on the RTH to test the bullish EE level and held it narrowly, proceeding afterwards into a big bounce that took out the bearish EE level. They definitely won the battle when they held the bearish EE level.

Yesterday saw buyer euphoria continue as the market ramped another 20 points above Wednesday's high. It then started dripping lower very slowly before it picked up speed and outright crashed. From top to bottom we travelled more than 120 points. We do have now a potential bottoming zone. For the 1st time since this big decline started buyers have been building higher lows, despite bearish EE showing up on FGSI. And they have also started to whipsaw danny, which has kept a lid on bounces since near 4700. Buyers are not out of the woods yet, as they have been unable to hold above danny, while FGSI still has bearish EE vs a level that is almost 40 points higher. Nevertheless the fact that danny is no longer capping price is a 1st warning buyers are attempting to bounce back. If they can win back also 400bar MA, then that would be additional confirmation of a bigger low in the works. Buyers need to start holding danny as support in order to avoid a potential run to a lower low.

mcm-Alex

mcm daily market update 22.Nov.21

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ST Trend: neutral (potential reversal of uptrend underway)

On Friday we were noting that the ST trend was down, as price had reversed lower off an unconfirmed high on both FGSI and IGSI and broke below ML. We did mention that FGSI hit extreme pessimism and bounced into a ML back-test that rejected price. Buyers then defended the initial low and managed to win back ML and stage an impressive rally in the 1st part of the RTH session. The usual OPEX whipsaws then started to kick in and we dropped very quickly into a retest of the o/n lows, before buyers stepped in to defend that level.

Sunday and today's morning session saw a continued up grind putting some decent distance to Friday's afternoon low. However price stopped again near Friday's RTH high and reversed strongly. FGSI hit extreme optimism there too. Now price is testing ML in earnest and also broke the 1st bullish EE lvl on FGSI. These are worrying developments for buyers because if ML is lost, the edge will go to the sellers. They need to step in quickly to avoid a potential break of Friday's lows.