MCP Update

I actually still do like MCP, however I want a more stable opinion on the market (mostly regarding tomorrow and the rest of the week). I have a feeling MCP is going to make a move higher, but I suspect we can remove some draw down and get a better price point.

The market can do 3 things tomorrow, go up, go down or sideways. Certain charts look like the market goes up (say tomorrow), there are gaps that could be filled, there's still a range in a lot of stocks that can be used for a stop fishing expedition. If the market moves up tomorrow, my main concern is that it doesn't hold it, I'm not putting this out as what I think is most probable because I'm still gathering that data, but if it did move up failed to hold it and then moves down aggressively as many charts still indicate, chief among them the longer timeframes in ES and NQ, then there's significant draw-down risk, but there's also significant opportunity to add or re-establish a position in a stock like MCP around the $6.50-$7 area.

 60 m MCP with a nice positive divergence, but it has lost momentum and it has lost what could otherwise be a continuing positive divergence at this consolidation area between $8 and $9; that's a little concerning.

 15 m. MCP also with a nice positive divergence, but again (and this is a shorter timeframe that moves easier), there's a lack of a continuing leading positive divergence in what is otherwise a wide range, almost a bull flag or pennant.

 The 5 min chart is showing a negative tone, not horrible like, "MCP moved up and smart money is heading full force for the exits", but more like preparation for a constructive pullback. The head fake move yesterday also doesn't fill me with confidence as it is a common marker or timing cue for a reversal move.

 Here it is again on the 3 min chart, note there is NO positive divergence here, only a leading negative. If there were accumulation I'd expect to see migration through these intraday timeframes, it doesn't take much to move a 3 min chart.

The 1 min chart does have a decent positive divergence, I think it is most likely one of two things: 1) preparation for a very fast, short lived pop up that may fade within an hour or so, like an opening gap or 2) the start of a positive divergence that migrates through the longer timeframes.

All things considered and at least in the scenario in which the market makes a quick move up tomorrow, followed by a devastatingly sharp move down, then I'd want to be looking to pick up MCP down in the gap-maybe $7 or so. If MCP continues to build a positive divergence off this starting block, then there's plenty of time to position long here, however I feel that this positive we are looking at which is only a 1 min chart, simply isn't enough accumulation to do much of anything with on the upside other than set up a head fake move. This timeframe is along the lines of a market maker. I'd rather take a $1.50 (assuming MCP can be bought again at $7.00) and collect another $1.50 or more on a move higher.

This 1 min chart simply isn't enough on its own and there's not much in the longer timeframes to support a move higher from here that can hold.

If you are holding MCP long and we do get a gap up early in the a.m. tomorrow in the stock, email me and we need to look at it quickly, it may be a good exit and then be patient and wait for it to set up again. The reason I say this is the 1 min chart's positive, but the fact it isn't enough to hold much so I'd suspect if anything, a gap that is almost immediately faded.