MCM Newsletter – Outlook for Week 8 – 12 Feb

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): neutral/down
Short-Term Trend (60min&135min): neutral

Details:
The weekly cycles are oscillating, with the last triggered level being support (at 1804 ES and 15364 YM). This means that although the trend is neutral, the normal expectation is for an up movement, until a new resistance level is triggered. Breaking the support level before a resistance level is triggered would be very bearish since that would start an impulse down. Therefore watching for reaction at the mentioned levels is critical in case the market moves lower.

Weekly Cycles

Weekly Cycles

On the daily cyclesYM is in a confirmed the down impulse while ES is whipsawing its support level after spiking below it initially, but managing to recover and bounce back over it. Interesting is that YM started to show Lower Risk Entries (LRE) for shorts (the red rectangles at the top of the bars) on all spikes above it’s Moving Average (MA). We are still on the look-out for a bearish retrace (BR) resistance to trigger on YM since that would act as the line in the sand going forward. As mentioned before, the normal expectation is for YM to unwind its impulse down in similar manner as the previous one (highlighted on the chart), meaning a BR resistance will likely trigger another wave of downside.

Daily Cycles

Daily Cycles

We were mentioning in the previous newsletter that the 60 and 135min cycles both confirmed up impulses. The 60min actually had a nice initial bullish retrace (BR) and an END, while the 2nd support triggered (which coincided with support triggering on 135min too) was broken down and impulses down actually started on both cycles. Those impulses were reversed though and currently we had a full unwind of the up impulse on 60min (3rd END occurred at 1914.75) while 135min had a 2nd END and might need also a 3rd END resistance higher. At the moment both have supports triggered in more or less the same area (1872-1873) which were slightly whipsawed. These levels are critical to watch near term since if the market head down we might start down impulses again, which would be bearish. However if the market manages to hold these levels and move up, the next resistance level triggered will be important since it will likely be a 3rd END on 135min and that usually triggers a strong reaction (which in this case would be expected to be a down movement).

60 & 135 min Cycles

60 & 135 min Cycles

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