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mcm daily market update 10.Dec.21

ST trend: up (with potential topping pattern)

Yesterday we were mentioning the ST trend was down with a potential bottoming pattern as buyers were inefficient via FGSI and they had lost ML. However FGSI was at extreme pessimism, so a bounce was likely. The market did what we expected as it did bounce, but that bounce failed and in the end it resumed lower to make new lows. RTH closed at the lows, which we mentioned in our chatroom that is likely a bear trap.

The o/n proved the bear trap to be true. Buyers managed to hold yesterday's low, despite testing it 2 times, after which they launched higher. More importantly, they won ML back. That is a serious warning for sellers. If ML managed to hold, then the up trend will resume. FGSI is at extreme optimism up here, so a pullback is expected. If buyers manage to hold ML on that pullback, that would be the ideal bullish scenario. Sellers want to see ML fail on a sustained basis to arrest the bounce and attempt more downside.

mcm daily market update 6.Dec.21

ST trend: neutral

On Friday we were noting that the ST trend was neutral as both sides were inefficient via FGSI, having both bullish and bearish EE set up. The market did the same thing as the day before, namely rallied initiailly and broke the bearish EE lvl, until FGSI hit the extreme optimism zone. Then broke back lower to new lows. Buyers then stepped in from an unconfirmed low on FGSI and we got the usual late Friday ramp to repair the weekly close (as much as it could be repaired anyway).

Sunday saw a continuation of the boucne off Friday's lows and after reaching a "high plateau" a slow chop grind. The o/n today saw a push higher until FGSI reached extreme optimism, then the usual drop from there right into FGSI extreme pessimism. Buyers stepped in, of course, and now we are in a bit of "no-man's land". A few things are worth mentioning. FGSI kep showing sellers were inefficient on Sunday and even today on this larger drop. Buyers however also appear to be inefficient, having bearish EE vs Friday's high. Price is now close to ML, so a push higher would need to be taken seriously by the sellers, as it would indicate an attempted breakout. As can be seen on the FGSI chart the macro ML (thicker line above) was tested on Friday and even spiked above, only to reject price hard there. So price reaction to those important lines in the sand (ML and macro ML) will be important. The them the past 2 weeks has been o/n rally which spills into the RTH open, only to have the market drop hard from that high. It remains to be seen if this happens also now, while sustained breakout over 4600 is likely to be problematic for sellers.

mcm daily market update 03.Dec.21

ST trend: neutral

Yesterday we were noting that the ST trend was neutral, as both sides were inefficient via FGSI and set up both bullish and bearish EE. And we noted that breakout/down of those levels would be telling. The market initially broke down the bullish EE, which led to a decline that tested Wednesday's lows. That test coincided with an unconfirmed low set up on FGSI and buyers managed to step in there are arrest the decline. They tested ML, which rejected the 1st time, but then managed to hold yet another higher low and won ML back the 2nd time around and managed to hold above until the close.

The o/n saw price coming back to test ML once more. We even broke below it, but buyers managed to step in and stick save it close by and then won it back. ML got tested once more and this time buyers managed to make a higher low. Sellers are inefficient on FGSI and the 2nd decline to ML triggered a bullish EE lvl. The problem is that also buyers look inefficient on FGSI, so the trens is neutral. ML is the big line in the sand for the trend. Buyers need to keep holding above it to have hopes at more upside.

mcm daily market update 29.Nov.21

ST trend: neutral

On Friday we were noting that the ST trend was down, with a potential bottoming attempt. The market obliged and buyers made a decent effort going into the RTH open, but failed to take out the important bearish EE level on FGSI just below 4660. That failure was pretty ugly and led to another 50+ points drop until the close.

Sunday saw a big bounce off that close at the lows as the news driven scare from Friday aleviated somewhat and the market got right back to Friday's bounce high (near 4640). Buyers couldn't push through and today we retested that area twice and rejected every time. What is more problematic is the fact that buyers have exhibited continued inefficiency on the bounces into that area, last bounce making a lower high in price, but a higher high in FGSI, hitting extreme optimism zone. Sellers are also inefficient on dips, which makes the near term trend neutral. When a bigger trend change happens it is normal to see initial indecision on FGSI with both sides being inefficient, so this could still be part of the bottoming process. For that to happen buyers would need to break through 4640 area soon (ML is also in its vicinity now) and then 4660. If they can take out those 2 levels, Friday's low would start to look like an important bottom. On the other side, sellers need to hold 4640 (ideally) and break Friday's low. That was unconfirmed on both FGSI and IGSI, so it is VERY important.

mcm daily market update 26.Nov.21

ST trend: down (with potential bottoming attempt)

On Wednesday we were mentioning that the ST trend was neutral as both sides were inefficient via FGSI and set up both bullish and bearish EE. Those levels were mentioned as important for breakout/down. The market dropped on the RTH to test the bullish EE level and held it narrowly, proceeding afterwards into a big bounce that took out the bearish EE level. They definitely won the battle when they held the bearish EE level.

Yesterday saw buyer euphoria continue as the market ramped another 20 points above Wednesday's high. It then started dripping lower very slowly before it picked up speed and outright crashed. From top to bottom we travelled more than 120 points. We do have now a potential bottoming zone. For the 1st time since this big decline started buyers have been building higher lows, despite bearish EE showing up on FGSI. And they have also started to whipsaw danny, which has kept a lid on bounces since near 4700. Buyers are not out of the woods yet, as they have been unable to hold above danny, while FGSI still has bearish EE vs a level that is almost 40 points higher. Nevertheless the fact that danny is no longer capping price is a 1st warning buyers are attempting to bounce back. If they can win back also 400bar MA, then that would be additional confirmation of a bigger low in the works. Buyers need to start holding danny as support in order to avoid a potential run to a lower low.

mcm daily market update 22.Nov.21

ST Trend: neutral (potential reversal of uptrend underway)

On Friday we were noting that the ST trend was down, as price had reversed lower off an unconfirmed high on both FGSI and IGSI and broke below ML. We did mention that FGSI hit extreme pessimism and bounced into a ML back-test that rejected price. Buyers then defended the initial low and managed to win back ML and stage an impressive rally in the 1st part of the RTH session. The usual OPEX whipsaws then started to kick in and we dropped very quickly into a retest of the o/n lows, before buyers stepped in to defend that level.

Sunday and today's morning session saw a continued up grind putting some decent distance to Friday's afternoon low. However price stopped again near Friday's RTH high and reversed strongly. FGSI hit extreme optimism there too. Now price is testing ML in earnest and also broke the 1st bullish EE lvl on FGSI. These are worrying developments for buyers because if ML is lost, the edge will go to the sellers. They need to step in quickly to avoid a potential break of Friday's lows.

mcm daily market update 19.Nov.21

ST trend: down

Yesterday we were noting that the ST trend was neutral as both sides were inefficient via FGSI. Sellers took the lead early after the RTH session started and accelerated lower to break the bullish EE level. The market found support at extreme pessimism on FGSI and helped by a Seller Exhaustion and buyers were able to stage a V-shaped bottom from there to finish back near the highs.

The o/n saw a continuation of the bounce as buyers pushed the price almost ~20 points higher. That high was stubbornly unconfirmed by both FGSI and IGSI and once price failed to hold danny and 400bar MA we started the rollercoaster down again. Buyers also lost ML, which is particularly bad. We did hit extreme pessimism on FGSI again and buyers staged a bounce into a ML back-test, which rejected price. It is OPEX today so wild whipsaws in both directions are to be expected. ML remains important for the trend, so where price settles in relation to it will be telling.

mcm daily market update 15.Nov.21

ST trend: up

On Friday we were noting that the ST trend was neutral, as price was stuck in a range and both sides were showing inefficiency on FGSI. We had both bullish and bearish EE at the ends of the chop range, and mentioned that breakout would be telling. ML was also close by and that also provided nice clues. Price chopped around in the range for a bit more and off the cash opened dipped below ML slightly. However buyers were able to stop very close and once they broke back above ML there was no looking back.

Buyers continued to dominate on Sunday, making new highs above Friday. Today we had the usual pullback from the Sunday high, but buyers stepped in quickly to buy the dip and we made another high vs that one. So buyers are in control, as sellers continue to look inefficient on pullbacks. We do have IGSI stubbornly refusing to confirm the highs and FGSI setting up another locally unconfirmed high, so there is the potential for a reversal. The important TT lines (danny, 400bar MA and ML) must give way though. So far danny held support, which limited pullbacks. Once danny finally gives way, 400bar MA is the next inflection. A ML back-test could happen if 400bar MA also fails and if it does, that would be the big decision point. As long as price is above ML - buyers have the edge and this can continue to push higher.

mcm daily market update 12.Nov.21

ST trend: neutral

Yesterday we were noting that the ST trend was up, as sellers continued to be inefficient on pullbacks, while buyers had managed to win back ML. We did mention that ML is the key for the trend and that proved to be important. ML was lost early after the cash session started, which was a warning buyers are losing control. Sellers were not able to take advantage of that though and we spent the rest of the day in a sideways chop.

The o/n didn't bring much change. Both sides are inefficient (via FGSI) and we continue to chop sideways, just like in yesterday's cash session. ML is still overhead and rejected price several times - again, just like yesterday. ML continues to be the key level and if buyers manage to win it back, that breakout would be significant. The breakout must be sustained, a head-fake above ML which fades back below would actually be very bearish. So keep an eye on ML and how price acts around it. Given the sideways chop yesterday, today should bring a bigger move. ML should tell us if it will be up or down.

mcm daily market update 8.Nov.21

ST Trend: up

On Friday we were noting that the ST trend was (still) up, as sellers were very inefficient on FGSI. We also mentioned that the important lines on TTs would provide important clues when a reversal would finally show up. The market ended up pushing another ~30 points higher from our post, before finally reaching exhaustion and pulling back for the rest of the session. Once danny was broken on TTs, it was a clear sign a pullback is coming. The pullback was also 30+ points, after which the buyers managed to bounce into the close.

The action on Sunday and today in the am doesn't look very promising for buyers. Despite the news of the infrastructure bill passing over the w/e, price continued to consolidate in a limited range. It tested ML and bounced, but not convincingly and is still below the bounce high from Friday. Buyers also printed a bearish EE vs that high which held. On the other hand, sellers continue to show inefficiency on FGSI so considering that ML did hold, buyers still get the benefit of the doubt. If the bearish EE gets broken, that would be confirmation of more upside. If it continues to hold and we break below ML, that would be a sign a bigger pullback is in the cards.