MCP Long Trade Set Up

I'm probably pretty repetitive here, but MCP is one of my favorite long positions for a primary trend that can buck the market, it is still in a large stage 1 base that I believe Goldman Sachs has been accumulating.

Tuesday I put out this post warning that MCP is getting close, not quite there, but starting to move toward a new long trading position, you can look at the charts in this post from Tuesday.

As to the update today, we are still not quite there, but have made significant progress and what I was thinking we'd see moving forward from Tuesday's update has been what has developed.

When looking at these charts, realize this is a large stage 1 base. If you know that an asset is going to move higher, some inside information or as a result of massive buying from numerous funds, do you want to pay whatever price or do you want to try to get the best price you can? Especially when the average entry difference can mean an extra 30% on the trade. It is this dynamic that creates "W" bases or rectangle bases, any base that is eventually pushed lower toward it's lows as I believe is happening in Gold over the sub-intermediate trend.

 The two yellow trendlines define the base from about $4.50 at the low end to $8 at the high end, note every time price reaches the high end of this large rectangle there's a negative divegrence sending it lower and at the lower support end every time there's a positive divergence or accumulation, this is played over and over again until the position size is reached, there's less distributed than accumulated, but it still takes time, we see this on every timeframe including intraday bases.

In fact at the orange "GS", Goldman came out with some news/analysis that sent MCP lower, why do you think that is, especially when the divergence since then has been the strongest leading positive of the entire year long period. Home builders were accumulated for about a year and a half right around the time the Tech bubble popped, who would have thought several years later Housing would lead the next bull market after a tech revolution that introduced the internet? Boring Housing! Well some of those stocks gained 2500-5000% so having a substantial position makes sense at the best prices possible.

 Here's the 60 min chart since the Goldman comments, note there's a positive divegrence or accumulation at every touch of the lower trendline and we just recently turned down from a move higher as we see a stronger divegrence that looks like it's going to be ready to launch soon.

On Tuesday this is what we had at the far right, I drew in the reversal process we almost always see and note the difference between bottom reversals and top reversals, bottoms are much tighter so we don't need a huge base , but I thought on Tuesday we'd see some kind of lateral base form moving forward.

Fast forward to today on the same chart.

 All of the sudden we have what we were looking for, perhaps not completely finished and perhaps not yet ready for a new long position, but progress toward EXACTLY what we were looking for Tuesday.

 This is the 15 min 3C signals for the area, that's what we want to see, accumulation in to a pullback is what I call a constructive pullback, the kind I want to buy as the price is better and the risk is lower and I'm trading with the people who are going to move the asset.

 Look at the 5 min chart during the same period, Tuesday we had an idea from 3C that this would happen and there it is.

And the 2 min trend, the highs in price being knocked down so MCP can be accumulated at lower prices.

I'm not sure what the exact signal for an entry will be, a head fake move, leading divergences that are even larger, a rounder base, but I do think MCP should be on your watchlist if you are interested, I don't think it will be long considering developments since Tuesday.