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mcm-Alex

mcm daily market update 23.Mar.22

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ST trend: down (larger correction attempt)

Yesterday we were noting that the ST trend was up as buyers had held another ML test and bounced off it. Indeed from our post, the market consolidated briefly, then ramped another 50+ points to breach 4500. The RTH session was a "ramp 'n camp" as after the initial push, there was a choppy slow grind.

The o/n saw a pullback from those new highs and we again had buyers being inefficient, which was a warning they might not be able to sustain such a relentless push. And now we dropped into yet another ML test. As we kept mentioning, ML is the KEY level for the main trend. If buyers can win back ML, then this is just another small dip to be followed by new highs. If ML is lost on a sustained basis, then a trip to macro-ML (aprox 50 points lower) is possible and likely next large inflection point.

mcm-Alex

mcm daily market update 16.Mar.22

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ST trend: up (with potential topping pattern)

Yesterday we had a huge reversal day and up squeeze. FGSI and IGSI both signalled an unconfirmed low at the o/n LOD, and those have the potential to be explosive set-ups. Yesterday didn't dissappoint, for sure. After the o/n LOD was touched, the market went straight up with little to no pullbacks. During RTH we had a drop and retest of macro-ML, but that was quickly brushed off and mkt rocketed to new highs to close near HOD.

The o/n was perfect for buyers. We had almost no pullback with price going only sideways after which another push higher started. FGSI is starting to show extreme overbought conditions as price is pushing into sell zones, but the buyers seem very determined and just push higher and higher. Sellers on the other hand are VERY inefficient, tiny pullbacks in price lead to big declines in FGSI, which means they are likely to continue to get squeezed. The 1st step for sellers would be to break below the danny line. As long as that holds as support, the immediate up trend is intact. Once danny fails a pull-back to back-test ML would be expected. There we will have the next big inflection point. If the newly found up trend is to be kepy, ML needs to hold. FOMC today, which should provide fireworks, large moves expected. As usual the "real" direction after FOMC will be seen only tomorrow and with this week being OPEX, that just means more volatility and wild swings in both directions expected.

mcm-Alex

mcm daily market update 14.Mar.22

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ST trend: down (with potential bottoming attempt)

On Friday we were noting that the ST trend was up with potential topping pattern, as FGSI and IGSI were at extreme optimism and near term the market was overextended. We mentioned that as long as danny is supportive to price more upside is possible and indeed once danny was lost, the upside momentum dissappeared. We also mentioned that "In order to keep the new found up trend intact, buyers would need to hold ML on any potential back-test". And ML was lost as well and price fell another 50 points from there. The market also closed at the lows not having the usual late Friday ramp.

Sunday saw an attempted bounce, which failed near ML, and today's o/n saw a proper test of ML which even made it to macro-ML, but failed there. The rejection at ML and macro-ML means the downtrend is still intact. FGSI is at extreme pessimism which indicates a ST bounce is possible, however as long as ML is above price, the main trend is down. Friday's low is important on the downside. It held on Sunday and also today, if it breaks it would likely trigger the next leg lower.

mcm-Alex

mcm daily market update 11.Mar.21

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ST trend: up (with potential topping pattern)

Yesterday we were noting that the ST trend was down with potential bottoming attempt as FGSI continued to show unconfirmed low set-ups. We did mention that ML and macro-ML were the key levels for the trend and that proved once again true. Price continued lower, back-tested ML, rejected to new lows, then had a larger bounce off RTH open to test macro-ML, rejected there and pushed once more to new lows. Buyers managed to take control after that, as FGSI continued to refuse to confirm those lows and had a very impressive bounce to win back ML and macro-ML.

The o/n had a head-fake drop below macro-ML and ML, which was quickly bought to new highs. Then another ML back-test before it continued higher. Buyers were already making good progress and got and additional help from Russia as apparently "positive progress" in the talks with Ukraine is worth a 60+ point ramp. We are in an extended situation near term as both FGSI and IGSI are at extreme optimism, however danny continues to act as support for price and as long as that happens more immediate upside is possible. In order to keep the new found up trend intact, buyers would need to hold ML on any potential back-test.

mcm-Alex

mcm daily market update 9.Mar.22

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ST trend: up (with potential topping pattern)

Yesterday we were mentioning that the ST trend was down as price made lower lows in the o/n and buyers had stepped in to push a bounce into a ML back-test. We noted that what would happen at ML would be important. Price was indeed rejected at ML, went lower to test the o/n lows, before staging a very impressive rally all the way to macro-ML. Then the market did the same as the prior day (similarities to which we noted as well). It went to macro-ML and failed there quickly after, lost ML on the way down and came back to the lows, erasing almost the entire pop.

The o/n proved once more that the market likes to trap both sides in this high VIX environment. The close near the lows was a trap and the market ramped 90 points o/n. Buyers won back ML again and erased almost the entire drop. The action is likely to remain volatile (with VIX at 35+ it's no surprise) and even if buyers managed to step in hard, the next inflection (area near yesterday's HOD and macro-ML) is important to keep an eye on. If price stalls there and buyers fail to make head-way above macro-ML, then we could see yet another trip to the lows.

mcm-Alex

mcm daily market update 7.Mar.22

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ST trend: down (with bottoming attempt ongoing)

On Friday we noted that the ST trend was down as sellers pushed prices to lows at the all important 4280 lvl and then rejected price at ML. We mentioned that ML might be back-tested again and also that "bounces are sell opportunities, until proven otherwise". Both came to pass, ML was back-tested and price rejected there once again and sold off to retest the lows, before bouncing back near ML, holding there until the close.

Sunday saw yet another gap down and flush move, as the optimism that the Russia-Ukraine conflict would get solved over the w/e didn't come to pass. We broke Friday's o/n lows and reached 4240 before buyers finally stepped in and bounce price right back to ML. Now we are directly in a big inflection area at ML. Buyers overshoot it, but failed to put some distance to it. So this can be yet another ML back-test which rejects price. ML has proven to be a brick wall of resistance so far, so that would not be surprising. If buyers manage to hold price above ML and keep pushing higher to put some distance to ML, then we might have at least a ST bottom at the o/n lows. Next could of hours and especially how market acts after RTH open will be key for that.

mcm-Alex

mcm daily market update 4.Mar.22

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ST trend: down

Yesterday we were noting that the ST trend was neutral as both sides were inefficient via FGSI. The latter was showing a potential large divergence set-up, which normally points to a large decline (80-100 points). It didn't play out exactly, as the prior high was surpassed, but it proved to be correct in the end. We did mention "4400-4420 area has a lot of resistances (classic TA - descending trend lines, 200DMA and BC on daily) and is a VERY tough nut to crack, so risk/reward doesn't favor longs here". The market stopped right near 4420 and then dropped 100+ points.

The o/n proved that sellers were indeed in full control. It dropped to test the important 4280 support and bounced 80 points, with buyers attempting to win back ML, but failing spectacularly after that. Now buyers are attempting to hold the area near the prior higher low from the o/n and FGSI is showing a potential unconfirmed low here. That doesn't mean the decline is over, but if buyers do manage to step in here (break above danny would help), then we might see another ML back-test, which would then be the big inflection point (ML is key for the near term trend). For now sellers are in control, at least until buyers can win back ML on a sustained basis. So bounces are sell opportunities, until proven otherwise.

mcm-Alex

mcm daily market update 28.Feb.22

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ST trend: neutral

On Friday we were noting that the ST trend was neutral as the market had consolidated in the o/n following the push on Thursday and was back-testing ML. We did mention that "As long as buyers hold ML, they could continue to push higher immediately" and that played out nicely. ML held price and buyers pushed to gain macro-ML as well, which had a text book back-test before the final push upwards. Mkt closed Friday' session at the highs, which proved to be a bull trap.

Sunday opened with a huge gap down based on the escalation to Russia-Ukraine conflict and the 1st use of the words "nuclear deterrent". Despite the big gap down, sellers didn't accomplish too much, as buyers managed to step in and stick save ML. Further on, sellers dropped the ball as FGSI showed they became inefficient on pullbacks. ML continues to be the KEY line in the sand for the ST trend. If buyers can continue to hold it as support, this can go to RTH gap fill which will be the next upper inflection point. Alternatively, if sellers manage to break below ML and take out the 1st bearish EE level (just below ML), then that would indicate that this decline wants to go deeper.

mcm-Alex

mcm daily market update 25.Feb.22

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ST trend: neutral

Yesterday we were mentioning that the ST trend was down with potential bottoming attempt. At the time we were testing the unconfirmed low on FGSI and it looked like the final low wasn't in yet. But buyers held that low (narrowly) and after the RTH open never looked back. We had a huge up day and TTs showed us that the mkt character changed, as danny held as support all day. Buyers had a huge win reversing the entire large gap, winning back ML and actually ending the day very green. Price finally stopped at the macro-ML test.

The o/n saw the expected pullback to ML, as the mkt was very extended immediate term (FGSI at extreme optimism and sell zones on its chart). Buyers held ML so far, which is constructive for higher prices. For today the situation is pretty straight forward. As long as buyers hold ML, they could continue to push higher immediately. If ML is lost, then a deeper pullback is possible. Buyers do not want to see this heading much lower than 4200, with 4150 being the MUST defend lvl (bullish EE on FGSI vs that level).

mcm-Alex

mcm daily market update 22.Feb.22

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ST trend: up

The market had some wild swings both ways since Friday's close. As the cash market was closed for the holiday on Monday, the algos had some fun, making a lower low on Sunday, then 80-100 points up, down and up again. At the end we are close to Friday's cash close, so for cash traders not much happened, but they missed one heck of a rollercoaster ride.

The low was hit yesterday on a drop to 4250 ES, then buyers stepped in and after a retest of that low in the o/n today, they pushed price 100 points higher and won back ML. That is a significant achievement. Of course, it depends if this time around they can actually hold above, since they managed to spike above it also early on yesterday, before the huge rug pull to new lows. That is the key line in the sand for today. If price holds above ML, we could have a large low in place (cash traders that tried to sell Friday will be very annoyed, no doubt). Adding to that potential is MGSI which hit extreme pessimism (prior trips there triggered large bounces - 150+ points). If ML is lost, then buyers need to be cautious as that could imply another trip to the lows, especially since IGSI is showing bearish EE again (which triggered yesterday's huge sell off). For now buyers have the edge, as price is above ML, they just need to not drop the ball (like yesterday).