mcm daily market update 12.Mar.21

ST trend: down (with potential bottom attempt)

Yesterday we were noting that the trend was up as sellers were very inefficient on bounces. That played out nicely until SPX cash hit new ATHs. After that we noted live in the chat room that a low risk set-up for a short was arising. Price was significantly above the ML and 1 and 2.5min cycles were unwinding their up impulses. Whenever that happens and price gets too distant from ML, a sort of "return to mean" is likely in the next 1-2 sessions and price tends to return to "kiss" ML again.

The short set-up played out picture-perfect and price didn't only come back to touch ML, but overshot it on the downside. FGSI was giving signs that sellers were gaining efficiency, while buyers were inefficient on the bounces. This is a dangerous situation for longs, because losing ML is a sign the trend is now down. We do have bullish EE going further back, but sellers are close to breaking the first level. If that happens, then this could retrace deeper.