MCM Newsletter – Outlook for Week 20 – 25 Jun

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): down
Details:
On the weekly cycles, in line with the normal expectation, the resistance level held (cleanly on YM and after a brief spike above on ES) and the market moved again lower from there. Once more the price met the mcm-MA on the way down, which provided a bit of support. Interesting is that the directionality tool on YM already started to move down and on ES not yet (highlighted on chart), which is not surprising considering that YM is underperforming quite significantly. The normal expectation about a more significant correction from this general area is unchanged, however for early clues about when the actual turn happens, we have to look at the shorter term cycles.

Weekly Cycles

Weekly Cycles

The daily cycles captured nicely the move above the resistances on weekly, by having resistance in the form of an END coming up on daily too. Both YM and ES spiked here above the ENDs before being reversed with authority. A significant development was registered last week, as the retreat from the highs triggered a 2nd support level which normally needs a 2nd END resistance higher. It is interesting that, given the underperformance on YM, the support level there was triggered lower than the initial one, while on ES triggered higher (shown on chart). Considering that, we don't expect the 2nd END to be significantly higher than the 1st END, if we will get one. If the market breaks significantly below the support level that would be very bearish since it could signal the start of an impulse down (that is not the normal expectation however). Near term, the initial bounce from support was sold, so it remains to be seen if the price will back-test the support again or will go directly higher.

Daily Cycles

Daily Cycles

As mentioned last week the 480 and 288min cycles were close to confirming the down impulses. They did, held also an attempted the back-test which stopped at the mcm-MA (shown on chart) and the market moved further down from there. The impulses are now firmly established so the normal expectation is for them to unwind in a regular fashion with at least one bearish retrace (BR) and corresponding END.

480&288min Cycles

480&288min Cycles

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