As a reminder, MCP was a trade we looked at about a week ago; the idea was it looked like a possible long trade that would come to us (more favorable price, lower risk, hopefully higher probabilities). So far stage 1 of the analysis for the MCP long set up is in motion: halting the climb higher and pulling back toward the initial target of the 10-day moving average.
Yesterday after a -3.08% move down it wouldn't seem likely to get so far a -1% move today on account of a short term oversold basis, but MCP still had not reached our target, today that has started to change so perhaps the second stage of our expectations/plans is being fulfilled.
The last stage is to see the underlying trading action turn very bullish by demonstrating the negative divergences needed to take it down are transforming in to positive divergences suggesting accumulation of the pullback, the exact same way we want to enter the trade-by letting it come to us rather than chasing it higher, which if we had, we'd not only be down -3% or so, we'd also have wasted over a week in opportunity cost and unnecessary market risk.
MCP is not where I would call it a long trade right now, but it is in the area in which we would expect to see the signals needed to call it a long trade start to develop.
Here's the update...
The X-Over Screen went from a short signal to a long signal, the pullback to the yellow 10-day moving average is the initial target area and we are there today.
The 30 min chart shows the accumulation that got this leg up kicked off, then a negative divergence which was our signal to keep an eye on MCP as a pullback/long candidate.
The 1 min chart showed some accumulation yesterday at the a.m. lows, price responded so it could be an intraday positive divergence only that has already been consummated, but I doubt it given the leading positive that followed. What we want to watch for now is improving positive divergences in the yellow area as price likely moves toward yesterday's lows.
The 3 min chart shows something similar since the pullback divergence showed up, yesterday' lows saw a positive divergence and leading at that, again the area in yellow is where we want to see big improvement as prices pullback a bit more.
The 5 min chart is no different than the others above, just not quite as strong being a longer timeframe and taking more to move it.
The 15 min chart "could" put in a positive if 3C turns up, this is a better situation than the SPY 15 min relative positive right off the open yesterday at the 15 min chart had no time to move, here we do have time to move. Ultimately we'll want to see the 15 min timeframe positive before making any commitment here, however that can happen quickly.
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