mcm daily market update 31.Oct.22

Main trend: up

ST trend: up

After hitting a low near 3800 on Thursday, the market bulls managed to bounce hard on Friday pushing to new highs and touching that elusive 3900 area. Mkt finished at the highs on Friday, to end the week on a high note.

Sunday open saw a quick drop from there and we saw the usual ML back-test, as anticipated in the chat room on Friday. Text-book action so far. Now the important thing is what price will do next from this inflection zone. If ML holds, then bulls might get the chance to push one more leg higher. If ML fails, then bears might get a shot at macro-ML below (near 3840 area as of this moment). FGSI is showing bearish EE, as bulls are inefficient, so it could be a sign that bears might get a chance to look below ML.

In the big picture, we had that "at least one more" 4-5 unwind, so the question now becomes is the upside done or will they turn it into sth else. So far the move off 3500 low still looks like a correction. If bulls would manage to defend 3800 zone on any pullback and then push to new high above 3900, then it would start to look impulsive. So we are now at the inflection point of either an abc correction off 3500 OR an impulse. Worth mentioning is that even if this move will turn impulsive, a decent retrace either to 3800 area or 3750 below will be needed. So immedite term, it looks like bulls need to be a bit coutious and see how things shape up before committing too much on the long side.