1825 S&P500 Level is Critical – Below it is No eMotional Support Till 1640

This post is in no way is suggesting that 1640 gets attention presently, but if 1820 breaches there is a high likelihood that a fairly direct test of 1640 over time would occur.

Larger Picture eTickTools Historical Emotional Extremes

Larger Picture eTickTools Historical Emotional Extremes

Update on Historical eTickTools eMotional Extremes

True to form, in a matter of hours this centrally unplanned disorder is reaching targets that usually occur over months in hours...here is an update

eTickTools Historical eMotional Extremes Update

eTickTools Historical eMotional Extremes Update

Market Flux Capacitor in Overdrive – Crash Potential and Techniques to Trade One

Last week we posted a definitive warning that something was aberrant and dangerous in this post: Market consciousnesses running through a flux capacitor. MSP is suggesting a bounce to an early September week one peak. While this remains the highest probability given that DAX and Eurostoxx both show reversal windows on weekly MSP starting this week, these are unprecedented times and as the example in the referenced post states: The market not following its metronome or market structure is very similar to hitting the brake in an automobile with the reaction of accelerating rather than slowing...things are clearly aberrant for what could be a variety of reasons - all of which need to be taken very seriously. A car should slow with a depression fo the brake and similarly the market should slow and react when it reaches its market structure metronome let alone support as in the 2044 area mentioned extensively last week. All reasonable expectations argued for, at the least, a short few day pause or test there, the overrunning of the infection forces, similarly to the eTickTools concept, suggests that the professionals professional was getting run over. Either way I am quite sure that there are a lot of people wishing they traded aggressively to sell a dangerous setup and there are quite a lot more people who are frantic about having bought all the way down. The approach for mcm is, was and continues to be since our post about taking a trading break as opposed to getting blindsided by low probability and risky setups, that the highest probability trades are yet to come and occur in September. That is still the case, a bounce in week 1 of September will likely be at the least a high probability reversal point and a second one towards September 21st. In all of the trading systems we have authored, a characteristic of any market turn is the highest opportunity is NOT when the turn occurs and the breakdown appears but after - and that is our calm and considered assessment presently too. These systems rarely trade the actual turn but rather focus on harvesting the subsequent larger move. We feel that if traders approach this market attempting to harvest this move aggressively - especially without the proper tools, funds are likely to be depleted by the time the real tradable market reveals. For these reasons, we emphasized the danger to all and still advise a high degree of caution.

Meantime, the markets are in an intense state of acceleration with the brake pedal fully depressed (not to mention parking brake on) that we felt it important to share some thoughts and setups to trade a crashing market. When the vehicle just will not stop it can be the ground that is moving, and we would be remiss to NOT further examine this subject. So, to make things easier we added some features to the eTickTools analytics toolset and want to take the time to discuss out methods regarding our cycle oscillation toolset. We feel that refocusing on these tools can help to do exactly what they were designed to do, assist in retaining clarity and consistency in all market conditions but especially in powerful momentum markets such as explosive up or down crashes. The objective is to locate risk and rewards inflection points that retain a reasonable and definable risk reward with an understanding of the market framework and psychology. Additionally, the goal is to retain a significantly higher than normal probability.

Below are charts of the additions to eTickTools. Among them, we have sped up the chart streaming, added the historical extreme background support and resistance lines in such a way as to require a minimum amount of cpu as possible. Additionally, we wanted to emphasize the use of Accumulation Index to help determine what market psychology is being conveyed during a consolidation market behavior or near inflection points. Examples are below.

eTickTools Additions

eTickTools Additions

eTickTools Additions Detail

eTickTools Additions Detail

The cycle oscillation toolset are not technically a part of eTickTools, however, a lot of learning has come from them and some similar concepts apply which is why we added the mcm moving average to the eTickTools charts. We wanted to share and discuss a few details regarding using these tools especially during non-cash hours to help identify impulsive moves. The interesting thing about cyclical oscillations, even on short term charts is that they do not act as high-speed signals that need to chop you up...but when used properly they provide insight into market structures that help orient the mindset of the market - for example impulsive and cyclic/counter-trend oscillations. Below are charts that go into more detail.

Identifying Impulses Down

Identifying Impulses Down

Identifying Impulses Up

Identifying Impulses Up

Identifying Impulses Down Overview Chart

Identifying Impulses Down Overview Chart

Market Consciousnesses – Running Through a Flux Capacitor

Today's action is a cause for some special attention. If you read these pages you will no doubt be aware that we have presented a scenario for analysis purposes that has been accurate, timely and disciplined. Using this approach, we were in front of the sharp rally and the downturn into today. We expected that today would likely be a weak day generally - given the intraday MSP posted this AM and daily flow projection shown on the day-of-week tendency subgraph on the longer-term MSP charts - Thursday's being the strongest close-to-close momentum to the downside. Regardless,  downside potential into the afternoon was highly reasonable and additionally a reaction/retracement/bounce would have been entirely reasonable as well and this was not forthcoming. Today, however, did a few things which are quite concerning.

We do not change analysis to fit the market, Rather we stick with our discipline and accept the distribution of inaccurate projections and unfulfilled probabilities as valuable feedback and information. That is EXACTLY WHAT IS HAPPENING at the present. Though the markets are currently on track with our analysis and we still expect a bounce in the near-term into early September, there were key deviations and issues with today's reflections of market consciousness via our tools that deserve some special discussion.

August 18th, 2015 eTick-Tools X-Tick Breakdown

August 18th, 2015 eTick-Tools X-Tick Breakdown

You may hear us refer to "X-TICK" triggers. X-TICK's are rankings of ultra high emotional exertions by market participants to sell/buy as a part of capitulatory extreme behavior. Capitulation in our terms is described in more detail under the eTick-Tools Core Concpets pages. In order to trigger an X-TICK the urge to sell and energy invested has to rank in the top 19% percentile (most of the time higher) of all selling efforts and events over the last 15 to 20 years. As you can imagine this is not an easy thing for the market to do. Today we opened with an X-TICK and got a decent bounce from it of something like 8 or 9 ES futures points. However, the thing with X-TICKS is that professional buyers (or sellers if the market is rising and generating a buy extreme -as the case may be) like to show up and take weak handed contracts when they are made available - X-TICKS are precisely these types of areas. WHEN these professionals then subsequently get run over the X-TICK is broken and it is demonstrating that the market sellers have real conviction. This was expected this morning and occurred. However, this afternoon we got two more X-Ticks that ranking in the top 9% of all selling emotion extremes in the last 15 to 20 years, and though each got a 5 point bounce or so - they were broken subsequently. Additionally, each X-TICK was at a lower and lower price which is a sign that professional buyers with conviction were not shifting the trend and ineffective. Breaking this many X-TICKS in one day is a serious event and a sign to remain alert. This is a sign of increasing risk to the markets capability to stage its reversal. This can not be overstated. Each X-Tick today, being lower than the previous one, indicates a significant capitulation going on among market participants as a whole. This is always something to keep an eye on.

First thing this morning we got a reasonable negative GAP TOOLS emotional analysis that suggested that the market had normal probability distribution for a gap fill. In this case, that means: "not that likely but plausible". However, it got a high rank (on the first bar of the cash session when it's analysis is scheduled to trigger) that a breakdown would occur below the opening range. This was a large negative as it is often that such an event can lead to a trend day down. In this case, trending down was expected into the 1;30 to 2:00 pm timing window in the afternoon.

There were quite a few reasons that the market was being afforded some room for a bounce this afternoon or in the near-term. Timing, longer-term market structure, convergence of support in the 2044 area (which was pointed out as a possible target for today), a neckline on a very large support shelf that also is a pretty symmetrical head and shoulders pattern and intraday behavioural analysis that would usually score towards some strength showing up this afternoon. As it turns out, the markets ran over these areas after setting up months and months of work above them without even reacting with a small bounce attempt - something reflected in the X-TICK breaches described above. The market had other plans for today. Primary degree support is at 2020.5 to 2010 on the SPX cash and probably is now a magnet before a bounce occurs.

One of the things that is very important to understand is that when the market does not follow market structure, as it began to do today, this is often a sign of a change in market consciousness. Market Structure, the way we measure it and define it, is an objective, transparent and unbiased analysis/evaluation of a market within its contextual probability skew. Therefore, when a difference occurs and especially one that is substantial, it is important to take notice. Today's deviation was just minor so far but could get much more if it wants - so, tomorrow and the next few days will help to make things much more clear. Currently this tracking deviation from probabilistic market structure scenarios, is of significant concern, An analogy of this effect if similar to hitting the brake pedal in your car and instead of the car slowing down it speeds up. It's an indication that something is wrong and it's a warning that aberration and risk is increasing.

Additionally, we closed below the neckline of the 6-month head and shoulders - breaking through it without even bounce at the 2043.5 SPX Cash area - this is very concerning.currently, the market most likely needs to go lower a bit, probably to the 2020 area and then attempt its bounce - which as mentioned earlier should be expected into early September. September offers an early month high or possibly a higher high around the 21st. Currently, as mentioned in today's AM post, favored is an early month high for the US markets with a lower high retest into the 21st. HOWEVER the capacity for this bounce attempt to be very small or worse to become a running pattern is of significant concern as this could easily lead to a panic. Given how much leverage and risk the Fed and other central banks have infused into the risk markets it is is notable importance how markets react to a bounce attempt into early September. If the bounce if very weak and thin, it would be a good idea to increase power to the flux capacitor and prepare for an emotional and high volatility future.

The Invitation

by Oriah - Mountain Dreamer

It doesn’t interest me
what you do for a living.
I want to know
what you ache for
and if you dare to dream
of meeting your heart’s longing.

It doesn’t interest me
how old you are.
I want to know
if you will risk
looking like a fool
for love
for your dream
for the adventure of being alive.

It doesn’t interest me
what planets are
squaring your moon...
I want to know
if you have touched
the centre of your own sorrow
if you have been opened
by life’s betrayals
or have become shrivelled and closed
from fear of further pain.

I want to know
if you can sit with pain
mine or your own
without moving to hide it
or fade it
or fix it.

I want to know
if you can be with joy
mine or your own
if you can dance with wildness
and let the ecstasy fill you
to the tips of your fingers and toes
without cautioning us
to be careful
to be realistic
to remember the limitations
of being human.

It doesn’t interest me
if the story you are telling me
is true.
I want to know if you can
disappoint another
to be true to yourself.
If you can bear
the accusation of betrayal
and not betray your own soul.
If you can be faithless
and therefore trustworthy.

I want to know if you can see Beauty
even when it is not pretty
every day.
And if you can source your own life
from its presence.

I want to know
if you can live with failure
yours and mine
and still stand at the edge of the lake
and shout to the silver of the full moon,
“Yes.”

It doesn’t interest me
to know where you live
or how much money you have.
I want to know if you can get up
after the night of grief and despair
weary and bruised to the bone
and do what needs to be done
to feed the children.

It doesn’t interest me
who you know
or how you came to be here.
I want to know if you will stand
in the centre of the fire
with me
and not shrink back.

It doesn’t interest me
where or what or with whom
you have studied.
I want to know
what sustains you
from the inside
when all else falls away.

I want to know
if you can be alone
with yourself
and if you truly like
the company you keep
in the empty moments.


Our invitation is not nearly so eloquent, however, we invite you to some introspection regarding the markets, your trading and our non-correlated, objective and prescient tool-set. In an effort to increase discussion on the blog, comments to posts and participation in the mcm community we are offering for a short time, an invitation to join us and to learn to see "market things" in a new way, a deeper way, a more authentic, unique and honest way. 

mcm tools are not "see-ers" or random predictors, signals or neural networks that increase your frailty with each step. Every piece in our toolset reinforces the other. An MSP does not track is as useful as that that does because these are true probability analyses - not random guesses regarding the future or its potential. Similarly for emotional extremes with eTick-Tools, these are not lines on a chart but emotional capitulations where market participants are measurably stressed. Reactions at the areas are real and objective points to leverage the conviction and opinions of participants. Its the same with market cycles and our market internals - each look at pieces that no other analysis does in an effort to understand a deeper meaning - perhaps even what the market is like in its most empty moments.

Join Our Community by Clicking this Link - No Fees - No Credit Cards - No Gimmicks and No Unnecessary Commitments

Overview of Today’s e-Tick Tools Intense Emotional Extremes

Below is a chart that references the X-Ticks that were discussed in the previous posts. X-Ticks are VERY important events in that they allow a precise measurement and profiling of the energy and emotions being expended in the markets. Today, was a first. Never having traded through a day that generated the single biggest expenditure of BUY energy in all our sample set of the last 15 to 20 years...we got it. The highest amount of BUY energy ever expended in the markets happened today at 2:45 PM. The key with buy energy is that prices MUST stay above that kind of energy expenditure otherwise its aberrant and likely exhaustion/capitulatory. Currently, after hours we just broke the 100% X-Tick at 2068 and immediately dropped 10 ES points. This presents a potentially very serious issue for the markets (Sorry, I mean central bankers) to overcome.

e-Tick-Tools Review - BIG EMOTION today

e-Tick-Tools Review - BIG EMOTION today

Athens/Brussels Edition – MSP update

Strange times we live in. The most reliable analysis for me generally results from early AM market structure confirmation.

Last nights gap had some normal probabilities associated with it that implied a retest or new lows into the 4:00 AM area. Currently 4:00 AM timing is in play with a high. We did get a retest of the lows around 2:00 AM as can be seen on the chart below.

The most significant probabilities and switch revolve around 9:30 AM. If 9:30 AM is fairly strong then the day session is favors weakness from around the cash open. If the 9:30 AM area represents a pullback or test of lows then short bounce with weakness thereafter. With such a news driven situation, the Timing Windows represent ideal areas to look for opportunity - direction implied from the market at the window. If we drop into the afternoon window...bounce or acceleration is probable if market decides to go completely manic making a high into 2:00 PM, then 2:00 PM would be potential inflection point area.

Either way, on day's like today, paying attention to market direction into timing windows while minimizing notions or assumptions about what it path market is on can be more useful than normal - objective reaction in timing is very powerful.

July 5nd, 2015 Intraday Market Structure Projections

July 5nd, 2015 Intraday Market Structure Projections

10:30 AM High Attempt Failed…Bearish Market Structure Continues Tracking

For the record, one of the elements that we attempt and I believe achieve, is market analysis without preconceived bias. Last night pointed to a high on Wednesday daily market structure and also probabilities for one of the strongest momentum days of the week today - usually upward biased. This morning early, before in our expert lounge we lowered the probability of that potential dramatically. This was around 5:00 or 6:00 AM. When something substantive changes, this is one place that is not going to be embarrassed about making the determination promptly and also determining if "EDGE" is compromised. Therefore, the impact of a change in outcome for the market probabilities today for us was of very little impact. It has not been easy to develop this kind of discipline and capability. BUT it is one of the distinct advantages of NOT using indicators and instead using data, statistics and probabilities and combining this with real-time emotional tools such as e-Tick-Tools.

When strongly bullish market structure and probabilities get overrun, often time, market participants get trapped. So, the moves can be as strong in the opposite direction if these participants become disoriented or forced sellers or buyers as the case may be. Therefore, today was and is a potentially important day. It is also, YET ANOTHER good example of using bi-modal decisions to navigate without getting trapped in expectations, opinions or notions.

It was clear in the early morning update that market structure favoring a bullish outcome was no longer highest probability, due to the patterns from 10:00 pm to 3:00 AM. These was a shot at recovering, however, noting all the anecdotal contributors supporting weakness and the importance of performance at 10:30 AM, the market responded in highest probability fashion. Delivering on the BEAR Market MSP probabilities at a 90% correlation. Gap Tools delivered the fill that it anticipated, and that led straight into the 10:30 AM timing. While there, e-Tick-Tools called a capitulatory BUY EXTREME. Which translates to as buying exhaustion. This was NOT confirmed by Accumulation Index, which undermine today's upward movements by showing emotions and execution feedback consistent with selling psychology even at the highs.

This post is not about per se today's outcome, it is about the important to have the humility to adjust to the markets probabilities without hanging onto previous assumptions and expectations.  This afternoon 2:30 PM to 3:00 pm is important as we can consolidate there. Probabilities favor further selling from this consolidation into the close.  3:00 pm is timing, and one should be careful and aware at time windows.

Tick Tools Today June 24, 2015

Tick Tools Today June 24, 2015

Today – Another Example of Timing & Modal Switching

Timing, Timng Timing...Probability, Probability, Probability

This is a brief post to cover today's activity. Probabilities favored an upside move into around 1:00 pm based on market structure. Ironically, the 5:30 AM timing low, as presented in this morning's 4:30 AM post, did bounce almost 5 points and within 10 minutes of schedule. However, the first signs that market structure was sloppy were the repeated tests of that 5:30 AM low. This in itself is not an issue as market structure should have some room to breath. It did indicate some sloppiness. Sloppiness in this fashion is an early sign of potential loss of edge. Additionally, at 9:15 AM before the cash open, the market broke the 5:30 AM low that severely impacted the positive biased market structure. Clearly, the probability plan as posted in the morning was at risk and likely incorrect.

The implications of such a structural break were clear, timing was still going to be 1:00 PM but odds of 1:00 PM being low increased dramatically. This is one of the reasons that modal decision making is so clean.  The impact of being "wrong" is clear and does not imply a lack of flexibility or capability - but rather just the reverse. There was little reason to attempt to hold to hard and unnecessary indications when clearly "edge" was compromised and risk of adverse or downward bias into 1:00 PM timing increased substantially.

The preferred approach is to wait for high probability timing and then looking for execution potential. NOT trying to out-think the market. Too often, systems developers and traders alike think that it is necessary to do every possible trade. In fact, this causes confusion, risks more errors and does not improve odds or preserve mental capital. Waiting, while difficult, is a very productive risk management method. If probabilities are not greater than normal after all why waste effort or resources till they are. Clear thinking and planning is one of the biggest assets to bring to market interaction. Being "right" is of comparatively much less value.

There were quite a few other edges that occurred today from e-Tick-Tools that were of significant value. Capturing the 1:00 PM long potential and also, understanding that the 10:08 AM high was an area of buyer capitulation. In any case, the objective is to retain clarity and efficiency. Operating at inflection and high probability points relieves much of the over thinking we are all likely to be attracted to. Moreover, most of the time, it can be planned in advance to a decent degree.

Post-Mortem for Today’s MSP work

Today was unusual for a FED day. Volatility was much higher than normal. However, as can easily be reconciled from the enclosed chart. One can not expect much more prescient, accurate and useful data than what we provided today. Against the crowd and common wisdom that today's FED day morning session would be a breakout and continue with strength into the meeting and high expectations for Janet to say something, anything soothing, probabilities once again win out over macro/rational, emotion or opinion.

One of the issues that we seem to be having that I feel is a discrepancy is the incidence of the post-announcement conference/show and tell, tea and cookies, whatever one wants to call it. This event has added new volatility and timing implications and though we do not like to adjust for historical data and will not make any adjustment, it is interesting to note that the afternoon bounce lasted nearly 1 hour longer and this is not the first time this has occurred. All else is highly accurate with the exception of the post announcement meeting.  We do not feel like these events will be continuing for that much longer as the FED is attempting to use them to sell its story. If it's implausible to sell a story, adding an event to do so is a risk more than a benefit. Therefore, it is most likely that these affairs are not permanent.

Below is our MSP  post-mortem.

June 17th, 2015 FED DAY DATA SET Post-Mortem Intraday Market Structure Projections

June 17th, 2015 FED DAY DATA SET Post-Mortem Intraday Market Structure Projections

Additionally, as was posted via the Twitter Feed in real time - the X-Tick emotional capitulatory Xtreme triggers marked the bottoms and both afternoon tops. In addition they set up some serious emotional baggage at these areas. So, between 2094 and 2097.25 is now an area that a lot of buyers capitulated and lost. Below 2097.25 and especially 2094 is advantage bears because of this. If the market can gather the strength to overcome the emotional energy that was exerted and wasted at these areas then bulls get a shot.

June 17th, 2015 FED DAY Post-Mortem e-Tick-Tools

June 17th, 2015 FED DAY Post-Mortem e-Tick-Tools