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mcm daily market update 21.Jul.21

ST trend: up (with potential topping pattern)

Yesterday we were noting that the trend was neutral as both sides were showing inefficiency via FGSI. Because of the set up on all ST GSIs (FGSI, IGSI and MGSI) we were mentioning that a bigger low might have formed at Monday's lows and that yesterday's action would be key for the intermediate term. ML being the main line in the sand for the trend. The buyers did everything right after the cash session open. They broke above the opening BE and then simply sliced through ML and never looked back. The breakout was very strong and considering the bigger low potential from Monday, the buyers are now back in control.

The o/n continued to show the buyers are regaining strength. It continued to make new highs and most importanly - the IGSI "reloaded" quickly on a small retrace, triggering a very large bullish EE. With ML below price and continuing to be drawn higher and higher, the sellers need to be careful here and wait for a clear set up before trying to jump back in. We do have FGSI at extreme optimism, so an immediate term pullback could occur from here. Momentum line and danny will be the clues if that will occur, as they would need to give way. So far danny has held support very strongly, so it won't be an easy feat for sellers to pull off. If danny gets broken, an ML test would be expected. That would be the inflection point. There is still a slim chance this face ripping rally off Monday's lows is just a dead cat bounce, but it is getting very slim. Only a break below ML would tilt the odds back towards that bearish scenario. Buyers need to defend ML at all costs, while a green day today would be ideal (follow through to yesterday).

mcm daily market update 20.Jul.21

ST trend: neutral

Yesterday we were noting that the ST trend was down, with a potential bottoming attempt (as FGSI was showing an unconfirmed low). We did warn that the bottoming attempt was only a potential as if sellers continued to push, that could have been broken. Sellers did just that and continued to break lower almost the entire cash session, until the last 30min when buyers stepped in and staged a larger bounce. The follow through on the downside after Friday's bearish session is a serious warning a larger shift is at hand (from full-on bullish to a bearish stance), so longs do need to be careful here.

The o/n continued higher building on the late bounce from yesterday and a bigger dip showed sellers were inefficient, so the trend went back to neutral. Boths sides are inefficient as shown by FGSI, so the ST trend is up for grabs. A ST bounce after the sell off from the last 2 days should be expected. The only question is if it's just a dead-cat bounce or are buyers ready to step back in with authority. We do have the potential for a big low at yesterday's lows with IGSI and FGSI showing that low to be unconfirmed and MGSI touching extreme pessimism there. So there is a possibility that the correction is done and market runs back higher. However buyers need to prove themselves now, as the last 2 days were showing a change in character with the bounces failing. ML is, as usual, our main line in the sand for the trend. It was decisively broken on Friday and yesterday there was only a feble attempt in the o/n to touch it. So the ST trend was clearly pointing lower. Now this bounce took price right to ML and it's just whipsawing around it. That means the current area is an inflection point. Depending on which side of ML the price will settle will dictate the near term trend. The bullish and bearish EE levels on FGSI will be additional confirmation after that.

mcm daily market update 9.Jul.21

ST trend: up

Yesterday we were noting that the trend was down, but with a potential bottoming attempt as FGSI was showing unconfirmed lows. Turns out the actual low was a few points away on yet another unconfirmed low on FGSI, then market bounced again very strongly from there. However, differently than in the other situations in the last 2 weeks, the bounce was stopped by ML which held as resistance.

The o/n came to the buyers' rescue and after a sideways action both up and down, there was yet another strong bounce which did manage to break back above ML. Now, as I have been repeating like a broken record - ML is key for the near term trend. Buyers winning back ML is a strong statement they are trying to get back in the lead. FGSI is showing an unconfirmed high at the o/n high and market pulled back from there to test ML once more. That triggered a pretty large bullish EE, so now this is where it gets decided. ML is the big inflection point going into today. If buyers manage to defend it and bounce, then the trend is back to up and we could be getting back to the usual up grind. Especially if they can turn the unconfirmed high on FGSI to a confirmed high. However, if price breaks back below ML then that would signal more bearishness ahead.

mcm daily market update 16.Feb.21

Summary: all 3 GSIs had unconfirmed highs at Monday's high, which means we are at an important inflection point. Sellers continue to be inefficient, however if FGSI breaks below a bullish EE level that would be a big warning that we might get a bigger correction. If the bullish EE level is defended, then another squeeze into the highs is possible. TT signals (danny, momentum, 400bar MA and ML) will be helpful in identifying early which scenario will play out. Breaking below ML would be a big statement from sellers (which would coincide with breaking the bullish EE too).

ST trend: up, with reversal risk

The late Friday melt-up into the long w/e produced extreme optimism on FGSI and then a series of unconfirmed highs. However Sunday and Monday saw price action continuing to grind up, while FGSI showed that sellers were extremely inefficient on all pullbacks which led to more and more highs. We currently have 2 unconfirmed highs on FGSI, from where the market pulled back, but again sellers were very inefficient and generated bullish excess energy (EE) vs the prior trip here (close to extreme pessimism). That is a 1st important level, if sellers are going to take initiative they would need to break below. If that happens, it would be a sign that at least ST, the character of the market is changing. Buyers are favorites now, so they simply need to defend that level and if so, then another trip to the highs is very likely.

IT trend: up, with reversal risk

We had some interesting developments also on the longer term GSIs, so we will cover them today as well. IGSI moved similarly to FGSI and made a big confirmed high on the open on Sunday, but then pulled back strongly, while price continued to grind higher. Now it dropped to below mid value after it put in an unconfirmed high at Monday's high. That sets up class B bullish EE already and means another squeeze up is possible. However, if FGSI breaks the bullish EE level, then we need to start watching the bullish EE levels on IGSI as breaking those would be more serious.

MGSI peaked and made a confirmed high at extreme optimism levels, which is again a warning this rally is getting very extended. It also started to pullback from there, while price continued highs, which makes Monday's high unconfirmed also on MGSI. A bigger pullback from MGSI extreme optimism is likely, the only question is if we will get one immediately or get another squeeze higher first into a clearer unconfirmed high.

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