MCP Core Long Position Update

It's an amazing market if you are looking at the right place at the right time. So yesterday I put up some analysis of MCP in which I thought there may be an earnings leak because of the positive action...

Earlier action got me to start a partial, phased in entry with conditions laid out that if we get a head fake move, I'd addd the rest of the position, that head fake move started the very next day and culminated yesterday before earnings came out.

Earnings missed, but our signals seem to have been right on as MCP is up 3.78% today right now.

There is such thing as a Wall Street "Whisper Number" and that is not the consensus of earnings expectations, that's a number Wall Street is looking for and often far removed from consensus and if the Whisper number is beat, even though consensus is not, we see action like today, but ultimately all Wall Street really cares about is their PERCEPTION of what they expect from the asset, nothing else matters in the end, it's all perception.

However the After Hours earnings trade was very interesting and 3C caught it which I published at the bottom of last night's wrap .

 MCP 3C chart after hours, the dip to the low of $4.50 in AH was accumulated as can be seen. 

After hours trade was the very reason we developed 3C for the TOS platform initially.


If I'm correct I believe PCLN beat on revenue and EPS, but had the worst of earnings reports and gave guidance that was below consensus. Ultimately this is all the market cares about, what you did last quarter is done, there may be information in the report like for instance how AAPL's I-Phone 5 sales are trending, but Guidance is the most important because even if you blew away estimates on earnings, if guidance is below consensus, the asset may actually be in a situation in which it has peaked and now with lower guidance it is OVER-VALUED and perception is, "THIS LAST QUARTER IS AS GOOD AS IT GETS".

So, PCLN did the same thing in AH earnings, a strong 3C positive divegrence at the lows of $945.19!!!! BELOW $1,000!!!!

I posted yesterday about PCLN and showed some very negative action at the high probability longer term "Trend " indications, but also thought that PCLN would bounce even with those earnings and give us an opportunity for those interested to start a new core short and for those already in PCLN short, to add to their position at a more favorable/lower risk area.

PCLN ended up only closing AH 10 points below the regular hours close and MCP CLOSED AH RIGHT AT THE REGULAR HOURS CLOSE!!!!

MCP charts now...

 The larger trend of the Ascending Triangle Base with the break down out of the triangle, this area and the previous reaction low that came right after a head fake move above resistance (yellow box to the left) which sent MCP down to lower levels, where the two main accumulation area.

*It's important to remember that my experience in almost all cases is "Wherever accumulation first starts (even though it usually continues in to lower prices to make for an average accumulated position somewhere in between) the price move, once it begins, will ALMOST ALWAYS SURPASS THE FIRST AREA OF ACCUMULATION NO MATTER HOW MUCH HIGHER IT WAS AND QUITE OFTEN, PRICE BLOWS WAY PAST THAT.

That would mean we'd expect MCP to at least pass the $6.25 area. If we use the "measured move", then we'd expect MCP to eventually make an upside move of $11.10 (the measured move is the range of $7.90 to $4.70=$3.20 and $3.20 added to the top of the range at $7.90 = a measured move target of $11.10).

 The head fake levels, after the fall out of the triangle where the largest accumulation zone was to be found, we had a range broken on the downside by a GS sell rec'd which means GS was buying (orange) and then a break of first obvious support around $4.90 and a break of final yearly support at $4,70 which happened yesterday on 3C positive divergences suggesting the volume and lower prices were used (size or supply and lower prices are two of the main reasons for a head fake move and another is we see them right before a reversal as any shorts would be squeezed or new longs would create demand as MCP acts better than the crowd expects, so momentum is a big reason for a head fake move just before a reversal.

Also note the ATR increasing dramatically on the move up from $0.039 to $0.1190 (white indicator at the bottom)

 The head fake levels taken out in yellow, in orange what looks like a capitulation event intraday and it is close if not the low of the day, then the point of a head fake move in white as new shorts are squeezed and new longs jump in, volume is up, this is one of the other main reasons for a head fake move.

Please see my two articles always linked on the member's site, "Understanding the Head Fake Move".

 We also have two recent buy signals in my Custom Buy/Sell DeMark inspired indicator.

 This was 3C's leading positive on the head fake move below $4.70 yesterday as of the 4 p.m. close.

This is a larger view of several head fake moves including the Goldman Sachs Sell Rec'd, note the 3C divergence even stronger as it seems GS was using the sell rec'd to create supply on the cheap which they were likely buying, someone was.

So far MCP looks great, AH trade looked great considering the report, volume looks great thus far. Remember this is meant to be a Core long position or a "Trend Trade", so I'd give it some time unless you are using it strictly as a trading position, I think we'll see some nice action in the near future.