The holiday shortened first week of 2017 had a strong bullish bias. The market advanced in almost all trading sessions and finished by making new all time highs on Friday.
The market’s move, although seemingly impressive, did little to change the big picture. Partly because YM had under performed relatively to ES. And on the weekly cycle, YM is now overlapping its resistance level, while ES managed to spike above once again. The normal expectation for downside has not changed, but will do so in case the move above the resistance levels is sustained.
The daily cycles are in up impulses and held the initial decline (which stopped exactly at the mcm-MA on ES). It is interesting that the directionality is still stuck at the lowest level. That is a sign that the up move is not sustained just yet, so if it starts to move up, that would mean the bounce might have more to go.
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