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Major and minor updates to eTickTools

Lots of Stuff and Projection Update

This weekend we completed a major upgrade of charts and chart streaming for the mcm site. We added significant new enhancements to the eTickTools Project and we rolled out some new analyses - Historical eMotional Extremes.

From a housekeeping standpoint we will bullet-point the list.

  • Fixed Cycle Display and Markers on 5-Minute chart
  • Fixed Scaling issue on 1 and 2-minute charts
  • Addressed the printing of a double "potential stop-run" when triggering at the open for eTickTools
  • Added Percentile Ranking for each buy and sell-extreme for eTickTools - this is a big deal
  • Added a Ranking for the volume extreme taking place during a Buy or Sell extreme for eTickTools
  • Added auto updating Historical Extreme Charts for both the S&P500 and DOW
  • Added an alpha toolset for DAX that is just in testing phase
  • Added various other general clean-ups and labelling for tools and charts

The additions of rankings to all the eTickTools extremes is a significant enhancement and allows an unprecedented and high quality of gauge of the amount of effort the market is exerting at a specific capitulation point. The addition or a ranking of the amount of transaction at the point is also a significant enhancement. We encourage you to ask questions regarding any of the enhancements.

Major and minor updates to eTickTools

Major and minor updates to eTickTools

Regarding the markets, Daily/Weekly market structure projection has suggested that a consolidation after the projected bounce during the 1st week of September occurred. This is indeed appearing to be playing out. Markets are very bearish and people are very scared which could contribute to a pause in down movement and leads to strength into the week of the 21st. It needs to be made clear that these are contextual time ranges. If you have been reading these pages, you now doubt know that week 1 of September has been viewed referred to as potentially important point for the markets and as such could be a significant turn from an up move to down to new lows or in the more likely case, a down move that comes in the form of a period of consolidation for further highs into the week of the 21st. Additionally, note that MSP was correctly projecting weekly weakness into Thursday, August 20th. However, the turn from down to up did not come during Thursday's day session as projected but rather 9:30 AM on Monday - 1.5 sessions away. It seems to us that a projection made several months ago for a down week into Thursday the 20th being met to within 12.5 cash trading hours is about as accurate as one can reasonably expect during a market dislocation and certainly more accurate than most wave extrapolations and technical analysis would usually be able to be with any reliability. This condition resulted in needed in to rely on shorter term tools: eTickTools and Cycle Impulses for example. We did a webinar on these subject (http://mcm-ct.com/blog/webinar-follow-up-and-content/) and plan another because in the coming markets impulsing beyond emotional extremes and through cycle supports is a key tool that can objectively help to remain on the right side of a market even when the desire of a trader are to take the opposite direction - such as buying weakness when in fact an impulsive move downwards may just be beginning.

As such, eTickTools did an exemplary job of pointing out that the markets were likely under a severe capitulation by triggering multiple X-Tick downward selling impulses during that Thursday's session.  We made this post wich is a good reference: Market Consciousnesses – Running Through a Flux Capacitor. Indeed, the markets have been rushing back through time and retracing the gains of the last years. The danger continues to be high, though for the time being abated somewhat.

DAX Market Structure Projections

DAX Market Structure Projections

Below is an updated chart of the Longer-term MSP (Projections) for the S&P500. With the DAX suggesting a shallower pullback, edge is increased that probability of consolidative behavior for S&P500 is increased into strength into [5] on the chart below. This chart is suggesting a period of consolidation/weakness and then a push into the long referred to week of Sept 21st.

S&P500 Market Structure Projections

S&P500 Market Structure Projections

Everyone Is Getting Bearish – Are They Too Early?

By the looks of things, there is some pain ahead for those that may get too bearish too early. So, far the previous daily/weekly MSP analyses published previously have been playing out well for the array of product covered. The expectation for this analyst is that traditional technical analysis and the most tempting Elliott wave analysis will need to be significantly tested and likely quite early. Ideal counts will likely get to bearish too soon. If you read these pages you will no doubt be aware that a turn down has been expected starting sometime this week (week 1 of September) - preferably down move begins past mid-week. That pullback, which should last around 1 to 1.5 weeks) may be currently starting as of Thursday and will be very telling regarding the expected bounce into the week of the 21st. A similar situation exists for the US market as well, so it is likely worthwhile to pay close attention to market activity for any significant developments in which ever direction they occur.

Daily Daily and Weekly Market Structure Projections

Daily and Weekly Market Structure Projections

S&P500 Expert Lounge Update – August 25, 2015

Our last formal update forebode the breaking of the long term bullish channel on the S&P 500 cash index around the 2020 level and looked ahead to what could be the next levels of support. 2000 did not provide any support & subsequently 1980 did not either.  For the S&P 500 futures market, the open on Sunday August 23rd was yet another gap down & immediate breach of 1960 ES, which was a major support shelf.  This action pointed to a possible extreme scenario which subsequently played out in the overnight session. It is important to remember that when hyper trends end in either direction, like the one which ended with the breach of the long term weekly SPX chart (attached), an equal or greater acceleration in the opposite direction is highly probable.

Monday August 24th cash open was one for the record books as the DOW opened down over 1,100 points & the S&P 500 futures index was 'lock limit' down prior to open.  As you'll see, the market found it's first level of long time support & then proceeded to put in a wild ride of intraday volatility which is shown in the additional SPX chart & contains near term potential inflection points if the market is to resume an immediate downtrend.  The first obvious level is the downtrend channel.

Please adjust trading approach to factor in the volatility expansion when taking position sizes or your trading will also experience 'risk expansion'.  Stay patient & disciplined.

As always, please continue to monitor the Market Structure Projections via our blog at http://mcm-ct.com/blog/public/  and stay nimble in this market environment.  Good Luck to your trading

These are key MA levels: 2077 (200sma) - 2095 (100sma) -  2086  (50sma) -  2052 (10sma)

These are key support and resistance levels: 1867 - 2040

Bulls Find First Level of Long Term Support

Bulls Find First Level of Long Term Support

 

Near Term Symmetry for Probable Inflections

Near Term Symmetry for Probable Inflections

Market Consciousnesses – Running Through a Flux Capacitor

Today's action is a cause for some special attention. If you read these pages you will no doubt be aware that we have presented a scenario for analysis purposes that has been accurate, timely and disciplined. Using this approach, we were in front of the sharp rally and the downturn into today. We expected that today would likely be a weak day generally - given the intraday MSP posted this AM and daily flow projection shown on the day-of-week tendency subgraph on the longer-term MSP charts - Thursday's being the strongest close-to-close momentum to the downside. Regardless,  downside potential into the afternoon was highly reasonable and additionally a reaction/retracement/bounce would have been entirely reasonable as well and this was not forthcoming. Today, however, did a few things which are quite concerning.

We do not change analysis to fit the market, Rather we stick with our discipline and accept the distribution of inaccurate projections and unfulfilled probabilities as valuable feedback and information. That is EXACTLY WHAT IS HAPPENING at the present. Though the markets are currently on track with our analysis and we still expect a bounce in the near-term into early September, there were key deviations and issues with today's reflections of market consciousness via our tools that deserve some special discussion.

August 18th, 2015 eTick-Tools X-Tick Breakdown

August 18th, 2015 eTick-Tools X-Tick Breakdown

You may hear us refer to "X-TICK" triggers. X-TICK's are rankings of ultra high emotional exertions by market participants to sell/buy as a part of capitulatory extreme behavior. Capitulation in our terms is described in more detail under the eTick-Tools Core Concpets pages. In order to trigger an X-TICK the urge to sell and energy invested has to rank in the top 19% percentile (most of the time higher) of all selling efforts and events over the last 15 to 20 years. As you can imagine this is not an easy thing for the market to do. Today we opened with an X-TICK and got a decent bounce from it of something like 8 or 9 ES futures points. However, the thing with X-TICKS is that professional buyers (or sellers if the market is rising and generating a buy extreme -as the case may be) like to show up and take weak handed contracts when they are made available - X-TICKS are precisely these types of areas. WHEN these professionals then subsequently get run over the X-TICK is broken and it is demonstrating that the market sellers have real conviction. This was expected this morning and occurred. However, this afternoon we got two more X-Ticks that ranking in the top 9% of all selling emotion extremes in the last 15 to 20 years, and though each got a 5 point bounce or so - they were broken subsequently. Additionally, each X-TICK was at a lower and lower price which is a sign that professional buyers with conviction were not shifting the trend and ineffective. Breaking this many X-TICKS in one day is a serious event and a sign to remain alert. This is a sign of increasing risk to the markets capability to stage its reversal. This can not be overstated. Each X-Tick today, being lower than the previous one, indicates a significant capitulation going on among market participants as a whole. This is always something to keep an eye on.

First thing this morning we got a reasonable negative GAP TOOLS emotional analysis that suggested that the market had normal probability distribution for a gap fill. In this case, that means: "not that likely but plausible". However, it got a high rank (on the first bar of the cash session when it's analysis is scheduled to trigger) that a breakdown would occur below the opening range. This was a large negative as it is often that such an event can lead to a trend day down. In this case, trending down was expected into the 1;30 to 2:00 pm timing window in the afternoon.

There were quite a few reasons that the market was being afforded some room for a bounce this afternoon or in the near-term. Timing, longer-term market structure, convergence of support in the 2044 area (which was pointed out as a possible target for today), a neckline on a very large support shelf that also is a pretty symmetrical head and shoulders pattern and intraday behavioural analysis that would usually score towards some strength showing up this afternoon. As it turns out, the markets ran over these areas after setting up months and months of work above them without even reacting with a small bounce attempt - something reflected in the X-TICK breaches described above. The market had other plans for today. Primary degree support is at 2020.5 to 2010 on the SPX cash and probably is now a magnet before a bounce occurs.

One of the things that is very important to understand is that when the market does not follow market structure, as it began to do today, this is often a sign of a change in market consciousness. Market Structure, the way we measure it and define it, is an objective, transparent and unbiased analysis/evaluation of a market within its contextual probability skew. Therefore, when a difference occurs and especially one that is substantial, it is important to take notice. Today's deviation was just minor so far but could get much more if it wants - so, tomorrow and the next few days will help to make things much more clear. Currently this tracking deviation from probabilistic market structure scenarios, is of significant concern, An analogy of this effect if similar to hitting the brake pedal in your car and instead of the car slowing down it speeds up. It's an indication that something is wrong and it's a warning that aberration and risk is increasing.

Additionally, we closed below the neckline of the 6-month head and shoulders - breaking through it without even bounce at the 2043.5 SPX Cash area - this is very concerning.currently, the market most likely needs to go lower a bit, probably to the 2020 area and then attempt its bounce - which as mentioned earlier should be expected into early September. September offers an early month high or possibly a higher high around the 21st. Currently, as mentioned in today's AM post, favored is an early month high for the US markets with a lower high retest into the 21st. HOWEVER the capacity for this bounce attempt to be very small or worse to become a running pattern is of significant concern as this could easily lead to a panic. Given how much leverage and risk the Fed and other central banks have infused into the risk markets it is is notable importance how markets react to a bounce attempt into early September. If the bounce if very weak and thin, it would be a good idea to increase power to the flux capacitor and prepare for an emotional and high volatility future.

Daily & Weekly Projection – Live versus Memorex – Bears Need to be Careful

Interestingly, many analysts are finally starting to look downwards. Last week many the same analysts were looking upwards. The issue with Elliot wave analysis is that it is so often missing a wave. One most often finds out a wave was not missing when their trading account is lower by a few percentage points. We would like to suggest, for those looking for insightful Elliot wave analysis that most often does not fall into the missing wave trap - check out pretzelcharts.com - some serious wave genius activity going on with Jason over there.

Below is a probability analysis that we have been posting, updated to today. No probabilities or plots have changed over the last weeks or in fact for months. We are now at the point where directional shifts are starting to turn. There may be some noise around the very short-term. However, risks start to skew upwards and have the capacity to be very stressful for bears if they want. This is a high-stress moment for traders, investors and bull/bears. However, the edge has to go to the bulls into early September based on probabilities. There is a pivotal shift that seems to take place around the 21st of September from which a 5 to 6-week straight decline has high probabilities. Either the week of September 5th is the high of a bounce attempt, or the week of September 21st is. This can be a lower high or a higher high for the bounce attempt if it materializes. There is a slight edge for this being a lower high for a bounce attempt for the US markets and a more pronounced high for EU market such as DAX and Eurostoxx.

It is easy to count downward Elliot-wave impulses, but it is healthiest to look to trade high-probabilities at the edges and to be very careful. In fact, we suggested taking some R/R time for the next week in the "Lounge" today and to await the high R/R potential that appears to be coming in early September. Psychological preparedness is a big deal. We were focused on booking short exposure today...however, more chop is a highly draining market construct that can damage psychological preparedness. The most important aspect of trading is NOT knowing when to trade - but when not to trade. This is something very easy to forget. A smart trader lets the market do the work for them and waits patiently while other follow their opinions, impulses, and compulsions.

August 18th, 2015 Daily & Weekly Market Structure Projections

August 18th, 2015 Daily & Weekly Market Structure Projections

The Invitation

by Oriah - Mountain Dreamer

It doesn’t interest me
what you do for a living.
I want to know
what you ache for
and if you dare to dream
of meeting your heart’s longing.

It doesn’t interest me
how old you are.
I want to know
if you will risk
looking like a fool
for love
for your dream
for the adventure of being alive.

It doesn’t interest me
what planets are
squaring your moon...
I want to know
if you have touched
the centre of your own sorrow
if you have been opened
by life’s betrayals
or have become shrivelled and closed
from fear of further pain.

I want to know
if you can sit with pain
mine or your own
without moving to hide it
or fade it
or fix it.

I want to know
if you can be with joy
mine or your own
if you can dance with wildness
and let the ecstasy fill you
to the tips of your fingers and toes
without cautioning us
to be careful
to be realistic
to remember the limitations
of being human.

It doesn’t interest me
if the story you are telling me
is true.
I want to know if you can
disappoint another
to be true to yourself.
If you can bear
the accusation of betrayal
and not betray your own soul.
If you can be faithless
and therefore trustworthy.

I want to know if you can see Beauty
even when it is not pretty
every day.
And if you can source your own life
from its presence.

I want to know
if you can live with failure
yours and mine
and still stand at the edge of the lake
and shout to the silver of the full moon,
“Yes.”

It doesn’t interest me
to know where you live
or how much money you have.
I want to know if you can get up
after the night of grief and despair
weary and bruised to the bone
and do what needs to be done
to feed the children.

It doesn’t interest me
who you know
or how you came to be here.
I want to know if you will stand
in the centre of the fire
with me
and not shrink back.

It doesn’t interest me
where or what or with whom
you have studied.
I want to know
what sustains you
from the inside
when all else falls away.

I want to know
if you can be alone
with yourself
and if you truly like
the company you keep
in the empty moments.


Our invitation is not nearly so eloquent, however, we invite you to some introspection regarding the markets, your trading and our non-correlated, objective and prescient tool-set. In an effort to increase discussion on the blog, comments to posts and participation in the mcm community we are offering for a short time, an invitation to join us and to learn to see "market things" in a new way, a deeper way, a more authentic, unique and honest way. 

mcm tools are not "see-ers" or random predictors, signals or neural networks that increase your frailty with each step. Every piece in our toolset reinforces the other. An MSP does not track is as useful as that that does because these are true probability analyses - not random guesses regarding the future or its potential. Similarly for emotional extremes with eTick-Tools, these are not lines on a chart but emotional capitulations where market participants are measurably stressed. Reactions at the areas are real and objective points to leverage the conviction and opinions of participants. Its the same with market cycles and our market internals - each look at pieces that no other analysis does in an effort to understand a deeper meaning - perhaps even what the market is like in its most empty moments.

Join Our Community by Clicking this Link - No Fees - No Credit Cards - No Gimmicks and No Unnecessary Commitments

The Bigger Picture – More Chop in a Seemingly Endless Chop

Down 100 points, up 100 points - pretty soon you can be talking about real money. In this market, however, the real money is being lost by market participants unable to grasp the larger direction who are getting stopped out at every centrally planned levitation point or fear-laden drop. So, last weeks lows, from our perspective should have been near the 2040 area - possibly nearer to 2010 - they were short and put in so far a higher low. However, since at mcm our analysis does not really get decisions based on support and resistance or wave counts but rather by implications of eMotions and definable probabilities, it appears that we are now on the reversion trip back into chopsville. It is still possible to get an intermediate short-term drop to test lower levels, but the energy on the downside has been dissipated. Though for the near-term, market movements may be constrained within out 120 point chop zone, probabilities are favoring an early September spike that will most likely not last long. 

August 10th, 2015 Daily & Weekly Market Structure Projections

August 10th, 2015 Daily & Weekly Market Structure Projections

Elliott Wave Structure

The proposed Elliott Wave Structure here at mcm is derived independently and objectively outside of the data and analytics of the Market Structure Projections (MSP). At this time, the count coincides and supports the data which is calling for a pronounced bearish week or so into around August 7th, 2015.  As a trader and market participant it is important to look a for confluence of professional data and technical work when evaluating risk.  Please be cognizant of the chart herein & as always, control your risk & good luck to your trading.

Please follow our public blog daily for Market Structure Projections and other proprietary content & for intraday charting, signals and other work please join the Expert Lounge, which is our real-time and interactive trading analysis conversation toolset.  If you are not currently a member, contact us if you would like to learn more via the contact us page or email me at randy@mcm-ct.com.

http://mcm-ct.com/blog/public/

http://mcm-ct.com/expert-lounge-update/

http://mcm-ct.com/products/tick-tools/expert-sp500-chat-analyst-conversation/

 

Proposed Elliott Wave Structure

Proposed Elliott Wave Structure

Projections: Brick Wall Collision – Now What?

Yesterday turned out mostly as expected. we were on the look out for weakness after around 1:00 PM. Normally a FED specific MSP would be run, but due to the simple nature of this move off the lows, strong daily and weekly market structure projections and development work on our chart streaming infrastructure, we opted to NOT run a fed specific MSP.  On review, this was less than optimal and we will now always run Fed Targeted MSP, in addition to weighting that data in intraday projections higher. Was a solid day and we did not get sell signals till around 3:00 pm.  In any case, predominant, impulse towards downside now takes over int he markets and has strong potential to be more pronounced than most are expecting.

Yesterday saw a lot of bears flipping bullish and technical and EW analyses bias shifting. We see no reason for this and, in fact, see that activity as further reason that downside has potential to be more pronounced. We do not find market facts that support a change in stance. One of the more consequential issues with most trading analysis is relying tools that require an opinion and arbitrary change of such opinion. When many opinions change towards one direction or another, its usually not a good sign. When such occurs when down fails the 200 SMA, NYSE showed a horrible showing and Nasdaq Composite was barely able to bounce 50 points, it is most probably not a great moment to shift bullish. In the present situation, we see the resident bullishness in market analysts is a large negative...which makes us the more grateful for out methods and tools and further reinforces the bearish implications.

Consensus probabilities are for downside price progress today as shown below - starting either with a 3:00 AM timing or roughly market open timing around 10:00 AM.

July 30th, 2015 Intraday Market Structure Projections

July 30th, 2015 Intraday Market Structure Projections