mcm-Alex

mcm daily market update 19.Sep.22

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Main trend: down

ST trend: down

On Friday we noted that both MT and ST were down as all 3 MLs were above price and red, after bulls lost them all following the CPI number release. We also issues a CRASH warning set up in our EWT analysis, as the market looked bear nested off the 3960 area. Given that Friday was OPEX, MMs managed to stop the bleeding at 3840ish, following a 35 points gap down, and even managed to stage a face-ripping rally in the last 2h to save themselves from paying too many put positions.

As noted in the chat room on Friday, the rally looked "phony". The LOD on Friday was looking like a b-wave, meaning that it should be taken out, before too much upside. The market delivered and we took out Friday's low in the o/n session already. Not only that but Friday's rally stopped dead right at ML, for another ugly rejection. So for now the trend is down.

In EWT terms, the CRASH warning is still valid, however it looks at least possible that the impulse off 3960 area finishes with the new low (once RTH opens). That will be the next decision point. If bulls manage to stop the decline and bounce convincingly, then they have a few options that postpones the CRASH for at least a few sessions. They might push this back to 3960 or even 4000 before that is done. However if bulls can't stop the bleeding soon, the CRASH might happen rather directly. Considering FOMC decision on Wed, that looks rather unlikely though.

mcm-Alex

mcm daily market update 17.Aug.22

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Main trend: down

ST trend: down

Yesterday we noted that the ST trend was neutral as both sides were inefficient, while the main trend was up as buyers managed to hold above ML. We had some more whipsaws near ML, but finally it was defended once again and buyers then proceeded to yet another up squeeze higher into new highs. What is interesting however is that the new highs stopped suddently and we saw the first impulsive looking decline in quite a while. That decline was bought from ML vicinity and retraced exactly 61.8% Fib ratio, before stopping just near the RTH close. The fact that the up squeeze retraced so quickly and we tested ML again in the same session, was a sign that bulls are losing the trend.

As mentioned several times before, once ML would be lost, the main trend changes. And ML was significanly lost in the o/n session. The o/n moved sideways early on, retested the bounce high from just before the RTH close and failed exactly there. FGSI signaled that short with a nice extreme optimism reading and from there we saw a big drop. Once ML was lost macro-ML would be the next target and potential inflection and we are there already. FGSI is at extreme pessimism, but bulls are having problems getting a bounce together, so the decline can continue for a while. Danny is the main line which should be watched for a change in the ST trend. Once bulls manage to win it back, that would signal a larger bounce can start. ML and 400bar MA are next key lines for upside. And unless bulls win back ML, the assumption is that we found an important top at yesterday's HOD. All 3 GSIs were showing unconfirmed highs there (IGSI and MGSI had their 2nd consecutive unconfirmed high reading), which means the prerequisites of an important medium-term TOP are there, while the break below ML confirms that set up.

EWT wise, it is possible the the entire move off the 3646 low is done and we have started the next large down leg. We have what looks like a large ABC zig-zag off there and because the C is so large (touched the C=2xA at yesterday's HOD), it can always turn into an impulse. Personally I doubt that will happen, so my current assumption is we have topped and it's STR (sell the rip) time for a while now. The bulls can invalidate this assumption if they overlap yesterday's lower high from before the RTH close.

mcm-Alex

mcm daily market update 08.Aug.22

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ST trend: up

On Friday the market gapped down big after the job numbers, however the bulls showed that they are still in control of the trend as they stepped in and filled the gap entirely, before chopping in that range for the rest of the session.

Sunday saw a small pullback, which was bought and now bulls are back at it again, challenging last week’s highs. The GSIs are showing that things are quite stretched up here, with both FGSI and IGSI hitting extreme optimism. Now FGSI is showing that this latest push as an unconfirmed high. So it is up to the bulls to keep going and turn it into a confirmed one. If they can’t and the market turns, then this could turn into a larger correction.

What is more important for the bulls is that they won back ML after it was lost on Friday. It also changed color back to green. So for now the trend is (back) to up, but the next time ML is lost it is likely to signal a change in trend longer than 1 day.