mcm daily market update 8.Sep.22

Main trend: neutral

ST trend: up

Buyers finally managed to stage a big up day yesterday, after all prior attempted bounced were sold hard intra-day for the past weeks. Not only that, but they also managed to win ML and macro-ML. And kept pushing higher, so both changed colour to green.

The o/n saw a rather usual behavior after a big up squeeze. Sideways consolidation, then another push higher into a minor new high, then a pullback. Normally a pullback to ML would be expected. Once that happens, that would be the big inflection point. If bulls can avoid a ML test and manage to push higher directly, that would be more bullish (with the o/n high being the inflection area). It is lower odds vs the ML test, but in case it happens then a new up squeeze leg could happen and ML back-test would be pushed until tomorrow.

From an EWT perspective there are many options on the table, but it would seem that the leg down started at 4325 finished and we are working on a higher degree bounce. This doesn't mean that it would go much higher before turning. That being said, it should still hit at least 4060 before dropping again (38.2% retrace). However once that happens, the next leg is expected to be at least as large as the initial drop, meaning ~400 points, so the risk is very elevated for longs.