mcm-Alex

mcm daily market update 21.Dec.22

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Main trend: down

ST trend: up

After 5 straight red days, and a whooping 300 points loss, SPX finally put in a green candle yesterday. Not only that, but bulls managed to bounce off unconfirmed GSIs on all time frames and won back ML.

The o/n saw a shy continuation of the bounce as bulls managed to hold ML on all back-tests and continued to put in higher highs. Now ML is under attack again, it is key that bulls continue to hold here.

In the big picture view, bulls managed yesterday to also get out of the crash channel which started from the lower high vs 4100. We saw non-stop violent selling inside that channel and bulls are finally out. They need today to be a continuation day to stick the breakout (both over ML and out of that crash channel). The next BIG resistance above is at macro-ML near 3890 ES and then at trend-ML near 3950. These lines align and converge on large technical levels so they are very important. On SPX side 3870-3900 area is going to be tough to overcome from the bull side. If they can 3950 is next... above that is starting to get iffy for the bear case. So keep an eye on that area as we will likely know if this is just a DCB or bulls have bigger intentions .

mcm-Alex

mcm daily market update 16.Dec.22

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Main trend: down

ST trend: down

Yesterday I alerted the members in the mcm chatroom that if bulls were unable to defend the opening SE Xtick and at least try to fill the gap, the breakdown would point to 30-50 points lower and we could be in for a strong down trend day. 1st part proved to be conservative as open to LOD was 70 points, while the 2nd part was spot on. TTs provided nice opportunities to re-short or start a short for those who missed the initial breakdown with danny capping price all day and with several BEs which hit (and held). In such strong trend days best is to play the trend until it breaks, which only happened 1.5h before the close with a decently strong bounce. Danny is an amazing line for showing the immediate trend.

In the o/n we had the exact same set up which we had yesterday in the o/n and triggered the 1st short opp. FGSI bouncing hard on shallow price movement and setting up bearish EE above centerline. The inability of price to conquer the prior high triggered the sell and we sold off 40-50 points, just like yesterday. This sets up another large gap down (if holds until RTH open), and back to back runaway gaps can lead to crashes. That being said, I do not think the market can sustain 2 runaway gaps in an OPEX week. So I would expect MMs to change the tune and attempt to fill it rather than let it run like yesterday. The opening SE will help in identifying if we breakdown again and run or not.

In terms of the big picture, bulls are in big trouble here. They lost the trend (all MLs were broken and are now above price and red) and also the wave structure off the last 4100 high looked like nested bear waves which now confirmed with yesterday's runaway gap. Once they manage to stop the bleeding ,the shape of the bounce will tell us if we are going to revisit the Oct lows or not. In anycase it looks like a bigger retrace is now needed before potential new highs above 4100.

mcm-Alex

mcm daily market update 21.Nov.22

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Main trend: up

ST trend: neutral

Markets finished last week undecided putting in an indecision doji, ending the week near the lvl where they started, with long tails both up and down. Friday was OPEX and the whipsaws didn't dissappoint, large gap up, that got sold hard, then LOD hit near mid day and push higher into the close to end at the infamous 3960 lvl.

The o/n was pretty indecisive, however price dripped lows and broke below ML and macro-ML. Bulls are not beat yet, as Friday's low wasn't broken, but the loss of ML and macro-ML is a warning. Those are the key levels going fwd. If bulls cannot win back ML and macro-ML, then that would mean bears are taking control and we have likely started a larger degree decline. If they do manage to breakout, then they have a shot at pushing this back higher.

In the big picture, things are at a cross roads here. There is at least a chance that last week's high marked the end of the entire move off 3500, which would mean a large retrace is due. Bulls still have some outs as the decline off that high is only 3 waves so far and we overlapped the low of the 1st wave. So if bulls can push here, they can "lock in" another 3 wave decline (which is corrective) and can extend this above the recent highs, potentially into the next resistance area near 4100. The problem is, if they cannot do that and the lows are broken, the most obvious bearish pattern would be a bear nest, which would mean an acceleration to the downside. From an EWT perspective Friday's high is important and then the 4000 lvl on the upside while 3922 SPX and then 3900 are key on the downside.

mcm-Alex

mcm daily market update 18.Nov.22

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Main trend: up

ST trend: up

The market flushed yesterday in a pretty violent manner opening with a large 50+ points gap down, however bulls managed to defend the prior support area near 3900 and staged an impressive rally. The gap fill area provided some resistance for a late day drop, but bulls again managed to come back and in the last 30m almost got back to HOD.

The o/n continued what looked like a new found bullish leg as bulls easily took out the RTH HOD from yesterday, pulled back from there, but then made new highs. So for now bulls look like they are in control as they recovered ML and macro-ML easily. Those lines remain important and bulls will want to hold above in case of any pullback.

Big picture wise it looks like bulls have "one more wave" up looks like a 4th wave, with another push to recent highs near 4030 still needed to complete the move. It could, ofc, go higher, but once we have made a new high bulls will want to be careful as there would be enough waves in place for a complete move off 3700 and 3500. Given that we traveled more than 500 points, the coming same degree pullback is likely to be large.

mcm-Alex

mcm daily market update 7.Nov.22

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Main trend: neutral

ST trend: up

Things were looking pretty grim for bulls last week after a hawkish FED broke the up trend, price slicing below all MLs and some important TLs. On Thursday bulls managed to defend the 3700 SPX lvl and chopped in a 50 point range. Friday saw a surprising gap up, which was sold twice, but bulls managed to come back each time. Price rejected on Friday at macro-ML, but bulls managed to defend ML, albeit sloppy. So while bears had every reason to break lower, they couldn't, so it looks like they dropped the ball, bulls signaling that they are ready to take the lead again.

Sunday saw a gap down, but also that was bought and bulls managed to defend ML. Now bulls are trying to breakout from macro-ML too. These developments show that bulls are attempting to win back the ST trend.

In terms of the larger picture, EWT wise the situation is pretty complicated. We have what looks like a corrective 3 wave pattern off the 3500 lows, however the drop off the recent highs at 3910 also looks like only 3 waves so far. Given the strong bullish showing on Thursday-Friday it would seem that bulls are attempting to lock-in this 3 wave decline and turn that larger 3 wave bounce into an impulse. 3760 SPX area seems to be the key area to win/defend for both sides. Not surprisingly ML converged there in the o/n and was defended by the bulls. If bulls manage to defend this area, then 3800 is the next lvl above, followed by 3845 and 3895 which are 2 important EWT overlaps.

In conclusion, the immediate trend favors the bulls, as they defended ML and won back macro-ML. They need to hold above these 2 lines to continue the upside. Bears on the other hand would need to prove themeselves by breaking below them. Only if they manage to break back below ML will they be back in the lead.

mcm-Alex

mcm daily market update 27.Oct.22

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Main trend: up

ST trend: neutral

Yesterday the market continued to push higher after holding ML once again. Bulls almost touched 3900 ES, before bears finally emerged and we had the 1st large reversal lower in quite a while. Price ended up near ML again.

The o/n was neutral, as bulls managed to win back ML initially, but gave it up again. So far though they are still avoiding a real ML breakdown, so the immediate trend is up for grabs. If ML is lost on a sustained basis, then macro-ML is the next target on the downside. Losing macro-ML would be very problematic for bulls as it would signal the main trend is shifting as well.

In the bigger picture, it looks like the impulsive move off 3650 finished yesterday and we started a larger degree correction. Whether the entire move off 3500 finished is debatable since the waves are overlapping and some of them also look corrective, which would point to either a complex correction (WXY type) or at least one more 4-5 unwind to the upside needed still. So one step at a time continues to be the right approach. For now it looks like bears finally started a larger correction so once this 1st push lower is done, a DCB (dead cat bounce) and then another push lower should be the next path. After that, we'll just have to see if it will turn into a larger impulsive move or not. 3750-3770 looks like the inflection area bears could hit on this pullback.

mcm-Alex

mcm daily market update 12.Oct.22

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Main trend: down

ST Trend: neutral

Yesterday the market dropped to new lows, before staging a face ripping rally until lunch time. After that the BOE crushed the bulls' hopes and the mkt lost ALL its gains to make a new low on ES and basically made a double bottom on SPX before bouncing a bit into the close.

The o/n was decently bull friendly as they continued the late day bounce and even managed to peak above ML, but the PPI came in hotter than expected, so bulls lost what was building as a gap up and now indicate a flat open. The RTH open will be important, as will reaction off it. If bulls can win ML again and hold above it, then they may have hopes at a larger bounce into a macro-ML back-test. On the other side, if bears take control early on, this can slice the recent lows to make new lows again. Therefore for today ML is key on the upside, while yesterday's LOD is important on the downside.

In the big picture, this chopping around is typical of a compressed spring before the explosion, setting up after CPI release tomorrow. Wave wise the lows do not look stable or "clean" and I would expect them to be taken out, if not today, then tomorrow after CPI. Because we overlapped the end of Sept lows, the entire move off 4300 now looks like an impulse, however the last wave (5) is still too short. Which means more downside is likely needed before the structure can complete. The last wave started at 3800, so that's the KO lvl for bears. If bulls can somehow overlap that lvl before heading lower from here, then they would have dodged a bullet. Given how the structure looks at the recent lows, I put the odds of bulls winning 3800 before we are heading below 3500 at slim to none. The GSIs also lost the clear unconfirmed lows with the subsequent lows as both FGSI and IGSI have confirmed local lows. That's not ideal since it would indicate that the initial unconfirmed lows were broken as momentum was too strong and the bounce was overwhelmed.

mcm-Alex

mcm daily market update 10.Oct.22

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Main trend: down

ST trend: down

Friday the market finally revealed its intentions after the back and forth on Wed-Thu. The NFP numbers coming out at 8:30am were the final nail in the bull coffin as the market dropped 50points instantly. The forces at work managed to hold the line there until RTH open, but the cash session was simply horrible for bulls. It gapped down about 40 points, but sold off the entire day with only tiny bounces and dropped nearly 90 points more until the day's LOD.

Sunday saw lower lows being made, bears taking out quickly Friday's lows, before bulls managed to bounce back to 3650 area on ES. LOD and 3650 defined the ranges of the o/n action with 3 round trips from the lower range to the higher one. FGSI is sowhing that both sides are rather inefficient, so looks like chop until RTH opens.

In terms of big picture, no change vs what I indicated last week. I believe Wed's high marked the end of a higher degree 4th wave (of the impulse started at 4320), and we are now in wave 5 of that move targeting 3000-3300 area. Until we break the late September lows, we will have no confirmation that the move off 4320 is indeed an impulse, but I believe that can be achieved today. That area should provide at least a DCB though, to trick some bulls into thinking that a double bottom is holding and shake off some late bears. It would be strange for such a strong support area to be broken directly without a fight. So after we break that low, be on the look out for a fake breakdown and quick recovery. If they go that route, the bounce target would be the breakdown area near Friday's RTH gap open (3708 SPX).

mcm-Alex

mcm daily market update 3.Oct.22

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Main trend: down

ST trend: down

On Friday the market managed to stage a nice bounce back to the 3680ish zone before failing and flushing to new lows. I mentioned that bears are in the "pay me now or pay me later" camp as the move into the lows looked incomplete and the new low confirmed my view. The sell was pretty relentless in the 2nd part of the day and RTH closed near the lows.

The bigger problem for bulls is that price was rejected at macro-ML and they lost ML quickly after that too. Which confirms the conclusion that the trend is still down, as bulls are unable to hold any support on the way down. the up moves are just DCBs to shake off bears, but once the selling resumes, supports are broken with ease. As we had a down squeeze on Friday, a ML back-test would be normal. We already had a shallow one in the o/n and it might very well be that's all we get.

In the bigger picture, not much changed vs our Friday post. The move off 3737 is still a 3-waver. Friday's bounce was simply completing wave 2. So again bears can say "pay me now or pay me later". From an EWT perspective, bulls have some near-term options, including the presumed wave 2 becoming more complex (therefore needing another bounce to 3680 area before back lower) or even this move off 3737 being part of the prior (larger) wave 4 and needing a pretty direct bounce to 3740-3750 area. I do think that's rather unlikely, but in case bulls clear 3700, then it would start being more likely. The bear option is pretty straight-fwd. Gap down that goes directly lower to finish wave 3, then DCB for wave 4 then final wave 5 flush.

mcm-Alex

mcm daily market update 30.Sep.22

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Main trend: down

ST trend: neutral

Yesterday the market saw a big gap down open and flushed more after RTH oepned. it stopped near the prior lows and staged a bounce, but it was just a DCB and mkt dropped to new lows after that. Last 1h brought again a short squeeze and price got back near ML again.

The o/n was decently bullish so far. ML back-test pushed price lower, but bulls made a higher low vs yesterday's LOD and then pushed back to win ML. Now price is chopping between ML and macro-ML. Mkt is waiting for the PCE numbers coming out at 8:30 ET. That is likely to trigger fireworks so watch your stops.

In the bigger picture, the market continues to act weak. Every bounce is sold and bulls are unable to hold any support. That is not constructive price action for bulls. EWT wise, bulls had a shot at a larger multi-day bounce yesterdays at the initial low reached in the morning, but again they failed to hold and the new low points to further weakness as now the move off 3737 looks like only 3 waves and therefore incomplete. Bulls do have a few near term options, so it's not crystal clear if we are gonna break the lows directly or if bulls wanna bounce first. In any case it is again a case of "pay me now or pay me later" for bears, as yesterday's lows are unlikely to hold for long. PCE is the catalyst and after this data we will know if we are going lower directly or after another trip higher.