mcm daily market update 1.Oct.21

ST trend: down (with potential bottoming attempt)

Yesterday we were mentioning that the ST trend was neutral, as both sides were showing inefficiency via FGSI. We did note however that after buyers had won ML in the o/n, the decline off extreme optimism on FGSI saw ML being lost again. That was a warning the trend shift (back to up) was not confirming. The cash open saw ML being tested from below again, but it held as a brick wall and we got a big down day. The bounce attempt from noon was sold off hard into the close and cash session closed at the lows again.

This time however it seems the weak cash close was no longer a bear trap. The bounce off the weak close was VERY weak, and FGSI kept showing that buyers were inefficient on each bounce attempt. And each one was then sold off to new lows. Which brings us to the current set-up. The trend is clearly down, however we do have the potential in place for a bigger bottom. The last low was unconfirmed on both FGSI and IGSI. And even though the initial bounce off there generated yet another bearish EE which held, this time sellers couldn't push price to a new low. 1st step for buyers to do to confirm the attempted bottom would be to break the bearish EE level. After that the all-important ML test will likely be the next big inflection. As long as ML is overhead, the main trend is down, so no big bounce can come until that is won back. Below the unconfirmed low would break the attempted bottom and continue the pattern of lower lows.