Happy New Year!
The market action in the last week of 2016 was on the bearish side. After attempting to continue the pre-Christmas bounce when the market reopened on Tuesday, the market declined on all remaining trading days for an almost 40 points decline from Tuesday’s high to Friday’s low. The pattern of higher lows and lower highs which we were noticing a while back was broken to the downside.
The market’s decline was enough to finally trigger a resistance level on the weekly YM cycle. That is a big deal and an important line in the sand going forward. The normal expectation is for downside from here, especially since ES also came back below its previously triggered resistance which was a bit whipsawed at first.
The daily cycles are in up impulses, however the directionality tool turned down and made it to the lowest level. Watching for a bearish retrace (BR) support to trigger and the market’s reaction to that would be important. If the market continues its decline it will be also important to see how it behaves when ES will back-test the break-out level at 2212.
The 288 and 480min cycles You need to be authorized or upgrade to see this content. Please go to http://mcm-ct.com/membership-signup-dev-2/ to sign up.