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MCM Newsletter – Outlook for Week 29 Aug – 2 Sep

Executive Summary:
Main Trend (weekly): up
Intermediate Trend (daily): up
Short-Term Trend (480&288min): up/neutral

Details:
On the weekly cycles ES confirmed the up impulse, by breaking above the resistance level and having also the mcm-MA crossing over. That means that the main trend is up, at least for ES. As we were noting earlier, YM is underperforming on that aspect quite significantly since because of the bigger correction registered, it still has a few weeks to go before confirming the up impulse. Going forward, the fact that both indexes are above their resistance levels, with ES in a confirmed up impulse is a serious warning for the ones holding short positions. Once an up impulse is confirmed, it is usual for the market to back-test the break-out level and in our case, that back-test becomes very important to see if the market can sustain the up impulse or not.

Weekly Cycles

Weekly Cycles

On the daily cycles, the up impulses triggered quite long ago are in the unwinding (or dissipation) phase. YM already put in a 3rd END resistance, meaning the up impulse finished the unwind and the index is now in a normal oscillation. ES is in a slightly different position since it only had a 2nd END resistance and could have another unwind with a new support and a 3rd END resistance. There is not much change vs what we were mentioning last week, except the fact that the market did come back down and is now right on the 2nd END resistance level on ES. What happens next is key since if the market comes back below it, a new support level could be triggered, looking for a corresponding 3rd END resistance higher. If the market manages to hold above and break into a nested impulse, that would be a sign a bigger up move is coming.

Daily Cycles

Daily Cycles

480 and 288min cycles show nicely the flatish structure in which the market held, despite some minor new highs. 288 finished the unwind of the up impulse with a 3rd END and is now oscillating, having had already a support level trigger. 480 has had the 3rd bullish retrace support (BR) and now needs a corresponding 3rd END resistance higher. Reaction to that 3rd END is expected to be significant.

288&480min Cycles

288&480min Cycles

In conclusion, we have a confirmed up impulse on ES on the weekly chart which points to more upside. However the daily and also the 288/480min cycles are in terminal phases of the up impulses. That structure contradicts with a fresh up impulse on the weekly unless the market manages to break into nested impulses on those time-frames. The next 1-2 weeks appear to be key in regards to which scenario will play out.

S&P500 Expert Lounge Update –August 22, 2016

Good morning everyone,

These are key timing for today: N/A

These are key MA levels:  5EMA 2182, 10DMA 2182, 20DMA 2176, 50DMA 2137

These are key Fib Levels:  2193, 2161, 2144

These are key primary and intermediate levels:  2180(minor), 2155(minor), 2148(minor)

Here is today's market look at the S&P 500 for Monday, August 22,  2016

As noted in the weekend Technical Laboratory update, today into tomorrow marks the official turn date for the long term MSP.  There are no economic data releases today of significance.  We are still simply range bound between the 3rd end on the YM daily chart and the Bullish Retrace on the 480.  Of great importance is the fact that the 480 did put in the End to go with the Bullish Retrace so it has satisfied the minimum requirements for a full impulse.  A break of the Bullish Retrace or of the daily YM 3rd End will be of importance in the larger directional view.  Good luck today!

LT MSP

LT MSP

 

S&P500 Expert Lounge Update –August 19, 2016

Good morning everyone,

These are key timing for today: 9:30AMEST, 12:00PMEST

These are key MA levels:  5EMA 2183, 10DMA 2182, 20DMA 2176, 50DMA 2134

These are key Fib Levels:  21, 2160, 2144

These are key primary and intermediate levels:  2180(minor), 2155(minor), 2148(minor)

Here is today's market look at the S&P 500 for Friday, August 19,  2016

HAL continues to maintain its placeholder position which hints that it does see some downside potential, but the fact that it dumped the majority during the most recent rally it is not entirely comfortable with the associated upside risks.  We found some weakness in the overnight, that at present will have us opening marginally red.  Data is very light with only the Baker Hughes Rig Count coming in at 1:00PMEST this afternoon.  Timing takes place right at open today so be mindful if there is a strong move in either direction coming into the regular trading hours because it has the potential to be reversed at market open.  YM is currently working on a 3rd End on the daily chart which has the potential to be very significant wherever it confirms today so please take note of that.  From everyone here at MCM, we hope you have a great weekend.

MSP

MSP

Primary and Intermediate Levels

Primary and Intermediate Levels

MCM Newsletter – Outlook for Week 15 – 19 Aug

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): neutral
Details:
No real change on the weekly cycles, except the fact that the continued grind higher made the predictive pivot move higher. The up impulse on ES is still not confirmed, but if market holds up it could in the next 1-2 weeks. YM is still dragging on this and needs more time to (potentially) confirm. The action on the directionality tool is not very bullish with the lines becoming thick, but it doesn’t mean the market will turn immediately either. We have to look to the shorter time frame cycles for near-term clues.

Weekly Cycles

Weekly Cycles

On the daily cycles, both ES and YM managed to break above the resistance levels in the form of a 2nd END. It thus becomes very important to see if the market manages to stage a real break-out from here. Directionality bounced from the lowest level, however it is turning back down on ES, so it’s important to see what it will do next.

Daily Cycles

Daily Cycles

480 and 288min cycles show the plateau the market reached, after which it actually didn’t move much. 288 started a new impulse up and already began to unwind it, having an END resistance at last weeks’ highs, close to 2185. 480min actually managed to break over its 3rd END resistance and confirm a nested up impulse. Those 2 levels become very important for the near term since coming back below the break-out level on 480 would cancel that nested impulse and the bullish momentum, while breaking above the END resistance on 288, would mean more up movement is likely.

288&480min Cycles

288&480min Cycles

MCM Newsletter – Outlook for Week 1 – 5 Aug

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): up/neutral
Details:
The market basically did nothing but move sideways in a tight range, putting in a frustrating week. One interesting aspect to note is the fact that YM started to under-perform ES quite significantly. This can be seen also when looking at the potential break-out into an up impulse. The mcm-MA is close to confirming the up impulse on ES, but needs a lot more work on YM. Directionality continued to bounce, but didn’t make it to the max value yet, so going forward it will be important to see if it will. Another interesting aspect is the fact that the predictive pivot sits now very close to the resistance levels (highlighted on chart), which adds weight to the expectation that the market will come back to test that level. Reaction there will be critical to watch for confirmation or failure of the (potential) up impulse.

Weekly Cycles

Weekly Cycles

The daily cycles show even better the under-performance on YM. While ES moved flatish to up, whipsawing the 2nd END resistance, YM drifted down from there. The directionality tool also started to move down and watching to see if it makes it to the minimum level will provide clues as to whether we will get the normal expectation of down movement from resistances or the market will attempt to spike (or even break) through.

Daily Cycles

Daily Cycles

The 480 and 288min cycles show nicely the unusual action from the last 2 weeks. ES only moved between 2151 and 2171 and has chopped the nerves of both bulls and bears. The 288min finished it’s up impulse with a 3rd END and is now oscillating, having a recent resistance at 2168.25. 480min is in a nested impulse up, which already had a 1st END, a new support and now we are on the look-out for a 2nd END resistance, which is likely to point the direction back down. Interesting is that the directionality tool moved to the lowest level on 480min and stayed there despite the choppy bounces. On 288 it bounced only recently, so the next 1-2 days will be important to see if it gets to the max value (pointing up) or it will be a failed bounce (pointing down).

288&480min Cycles

288&480min Cycles

In conclusion, the cycles show that downside risk is more significant than upside risk. The market did break-out over the resistances on the weekly and if the up impulses are confirmed, that would need to be respected. However the daily cycles are in the unwind phase of the huge up impulse, having put in a 2nd END resistance. It is unlikely that after such a big run, the market will have enough energy left to push through the resistances for more than a brief spike, before a more significant pull-back. The 288 and 480min are also unwinding up impulses (288 is oscillating already), which points to the same conclusion: the market is dissipating the energy from this huge rally and looks more close to a top than an intermediary bottom. That being said, if the shorter time frame cycles 288/480min but also 60/135min (not shown) will break into fresh up impulses, that would be an early warning that the market is indeed trying to push upwards despite the odds.

 

MCM Newsletter – Outlook for Week 23 – 27 May

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): neutral
Details:
The weekly cycles continued to move slightly downward from the resistance level. As mentioned a while back, the mcm-MA provided some support and the market failed to break below it so far. Also a historically relevant level was tested last week and held (highlighted on the chart). The directionality tool is still at the highest level and it would be important to see when it starts moving lower. So far it looks still open whether the market will be able to back-test the resistance level again or if it will accelerate down.

Weekly Cycles

Weekly Cycles

On the daily cycles, the unwind of the up impulse is continuing. After failing to sustain the initial bounce off the bullish retrace (BR) support, the market back-tested that level again, came slightly below it and recovered it once more. Although the support level may still hold and this bounce could continue until an END resistance is triggered higher, the fact that the price came below the support level shows the market is no longer full-on bullish. That also means that the END could come after a weaker bounce than usual.

Daily Cycles

Daily Cycles

The 480 and 288min cycles continued to whipsaw their support and resistance levels, showing the emotional behavior of the market. The last level triggered was support on both, which appears to be holding after being spiked below in a few instances. As the predictive pivot is also higher, the normal expectation is for the bounce to continue until a resistance level is triggered. How the market behaves there will be important for the near term.

288&480min Cycles

288&480min Cycles

In conclusion, it seems the market is staying true to the saying a top is a process not an event. The 288&480min cycles did not break into real impulses just yet (although 480 had an impulse down unwind, that had more a sideways form rather then being truly impulsive). The BR support on the daily still attempts to hold and is the key line in the sand for downside movement, while the resistance on weekly is key for upside movement.

MCM Newsletter – Outlook for Week 16 – 20 May

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): neutral

Details:
No real change in the weekly cycles. They are still oscillating, which means the main trend is neutral. However, as previously mentioned, the fact that resistance has triggered shifts the normal expectation to down movement until a new support level is found. The directionality tool did not move down yet, so a re-test of resistance is still not out of the question before a larger correction. The mcm-MA also provided support, as the market came into its area. As it can be seen from the history, the market couldn't break below the mcm-MA easily, so paying attention to the level indicated by it is important.

Weekly Cycles

Weekly Cycles

On the daily cycles, the unwind of the up impulse is continuing. The bullish retrace (BR) support provided an initial bounce, but the market could not sustain the up movement and came back down and is now back-testing that level again. Those levels are key. The market could regain some composure and bounce to put in an END resistance and a proper unwind of the impulse, like it did on a previous instance (highlighted on the chart). Or, it could break through the support level directly, without triggering an END. That would be quite bearish since it could be an attempt at an impulse down. The next few days will be key as to which option will play out.

Daily Cycles

Daily Cycles

The 480 and 288min cycles both attempted up impulses, by breaking above their resistances triggered, however these were reversed (highligthed on the charts). 288 triggered a support level quite quickly after coming below the break-out level and has in the mean time broken below it, with the impulse down looking to confirm most likely in the next trading day, if the weakness continues (by having the mcm-MA also moving below the broken support level). 480min triggered a support level which confirmed right at the lows from Friday. That points to a bounce being the normal expectation. However if the support on 480 will also be broken, then the picture would become very bearish, since true impulses down on 480 and 288min would likely travel quite far and the daily cycles would also start impulsing down in the mean time.

288 & 480min Cycles

288 & 480min Cycles

In conclusion, we maintain our view that the market may have registered an important high at the level indicated by the resistance on the weekly cycles. Near term it is again make or break time for the markets. The support level on the daily cycles is under pressure again and the next few days are key to see if they will hold once more and produce another bounce or not.

S&P500 Expert Lounge Update – May 12, 2016

Good morning everyone,

These are key timing for today:  10:30AMEST,  2:30PMEST

These are key MA levels:  5EMA 2067, 10SMA 2065, 20SMA 2078, 50SMA 2054

These are key primary and intermediate levels:  2060(minor), 2072(major), 2086(major)

Here is today's premarket look at the S&P 500 for  Thursday, May 12th, 2016

The heavy economic data points have passed with an unexpected jump in jobless claims which has the potential to weigh on the market along with the predominantly downward pointing MSP's for today's session.  The market caught support on close at the 10SMA which hints that there are still willing momentum buyers left in the crowd.  With the BR broken on the 15min cycle, look for that to become support if the market does in fact turn into a weak session.  Having Bullish LRE's on both the 288 and 480 charts coupled with support cycles on the 135 and 288 it makes for an area of extreme interest for the near term at yesterday's low of day.  Trade safe!

MSP

MSP

Primary and Intermediate Levels

Primary and Intermediate Levels

MCM Newsletter – Outlook for Week 9 – 13 May

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): down/neutral
Details:
The weekly cycles are still oscillating, however, as mentioned in the previous newsletter, the fact that the resistance level triggered is a significant event. That signals the crest (top) of the wave and although the market may choose to test that area again before heading down, the normal expectation is for it to hold any bounces and the market to move lower from that general area. The directionality tool did not yet turn down and once it does that will also be an important signal that the market is starting a more significant correction.

Weekly Cycles

Weekly Cycles

On the daily cycles, the up impulse started to unwind. As expected, the pull-back did trigger a bullish retrace (BR) on ES and on Friday it triggered one also on Dow. The normal expectation is for these levels to provide support and a bounce. If that comes to pass, the END resistance of that bounce would be a very important signal since that would mean that the impulse up either fully unwinded, or ended the first unwind phase (and a 2nd and potentially a 3rd END would be required). That level, viewed in the context of the resistance on the weekly cycles, becomes even more important and has the potential to mark an important top. There is one important thing to be mentioned about the potential END - it does not have to be higher than the previous high, just as the 2nd END (if we will get one) does not have to be higher than the 1st one. If the market fails to bounce and breaks these support levels for more than a brief spike, that would be more immediately bearish since it could start an impulse down. The directionality tool is still at the lowest point, if it will move upwards that would likely confirm that the bounce will continue and we will likely get the END higher. Additionally 3 consecutive LRE (lower risk entries) for longs triggered on the Dow and one on ES.

Daily Cycles

Daily Cycles

The 480 and 288min cycles continued their different developments. The 480min is still in an impulse down, after having held the back-test, while 288 is having a weak impulse up which is unwinding lower than the break-out level. Interesting is that 480min started to generate LREs for shorts - it had 2 consecutive ones (highlighted on the chart) which worked really well. Also 288 triggered 3 (highlighted on the chart) which behaved very well too. Another interesting fact is that the directionality tool on 480 moved lower from April 21st until April 25th and stayed at the lowest point until now. Near term it will be important to watch if the directionality tool on 480 will bounce and, if the market continues to bounce, what will happen at 2065 and another back-test of the impulse down on 480. It is important to mention that the next resistance level on 288 might be a 3rd END, which normally triggers a strong reaction.

288&480min Cycles

288&480min Cycles

In conclusion, the market may have registered an important high, at the level indicated by the resistance on the weekly cycles. Near term however, the normal expectation is for a bounce from the BR support on the daily cycles to unwind the impulse up. The behavior of the 288 and 480min cycles will be telling if we get the bounce indicated by the daily or not. 2065 ES and break-out into the down impulse on 480min is a key level. Holding that and/or getting a resistance level on 288 that holds, could see the support level on daily being under pressure again.

ES – Current Set-up

Recently there have been two significant developments in the market.

First, a resistance level triggered on the weekly cycles signaling the crest (peak) of the current wave which started at 1804. We have to note that the wave was quite large, for a non-impulsive wave. That means that it would take a much larger amount of energy to push through resistance and turn into an impulse.

Weekly Cycles

Weekly Cycles

The 2nd big development was on the daily cycles, where ES triggered a support level in the form of a bullish retrace (BR). What is important is that the daily cycle broke out into an impulse back at 1944 and has been in this impulse up all the way until to now. The bullish retrace (BR) is signaling the start of the impulse unwind. Normally we would expect an END resistance higher (as shown on the chart) and, considering the length of this impulse, a possible 2nd support and 2nd END resistance.

Daily Cycles

Daily Cycles

The most important conclusion comes when we look at the 2 cycles combined. The beginning of the unwind of the daily cycles seen in the context of the wave peaking on the weekly is a very strong message. Considering that the daily is a fractal of the weekly, the fact that the impulse up on daily is unwinding (meaning dissipating the energy and finally ending the impulse), means that the weekly cycle has very low odds of breaking above resistance and turning into an impulse. And considering that the resistance level on the weekly already confirmed it also means that the most likely unwind of the impulse on daily would be with an END which is lower than the previous high and, if a 2nd END will come, that could be lower than the 1st END.

There is also the possibility  that the BR support on the daily is broken directly. If that happens, that would be very bearish since it would likely start an impulsive wave down. So if the market continues to be weak and fails to bounce in the next days, the 2045.5 support level is a big line in the sand.