MCP Charts

The faster intraday charts are moving so quickly now that it's difficult to keep up with them (capturing). Earlier today I've been corresponding (answering emails) from several members interested in MCP long, my thoughts were to wait for a break of $2.50 (it took surprisingly long today) and to watch for volume to increase as $2.50 would be a very obvious level to place stops/orders. MCP teased around the area at $2.52 for most of the day, but I had set alerts to let me know when $2,50 was broken and as it was, volume picked up and the intraday charts were showing the kind of positive divergence that I want to see at a run of stops/orders like that.

Also on the first watchlist scan I ran using the Custom DeMark inspired Indicator, MCP came up as giving a long signal.

 This 60 min chart shows the bottom area of a larger rectangle base, it's specifically a descending triangle. The yellow box right at the apex of the triangle is where we were long MCP and had a breakout day of 6% and closed the trade that day as the first problem was the support of the triangle is the same support as the larger rectangle that reaches back to April 2013, I had a very hard time believing MCP could make a real breakout to stage 2 without having first run the stops under a year+ base, this is just such a low probability outcome (to breakout to stage 2 without a shakeout first) that I would have exited the long (even though we were at and exited with a nice gain) . Later in the day 3C was showing no confirmation of the breakout, just as it is showing no serious confirmation of the breakdown, which is actually proportionate with the size of the base so we exited the long that day while it was still up well over 5% on the day.

MCP Daily Chart with the multiple 4 stages of a cycle. Each trend / stage is very proportional to the preceding trend, the stage 3 top is the right size for the preceding rally, the stage 4 decline is proportionate to the Stage 3 H&S top, which by the way has a price-pattern measured move (implied target) of approximately $15, these are often overshot, but considering the highs near $80, the neckline near $50, where MCP ended up to form stage 1 is very reasonable. The size of the Stage 1 base of over a year is proportional and the break of support/head fake, while very sharp, is well within proportions for this chart and MCP's character.

 Here's the range that developed after the MCP earnings decline, a very solid 3 trading week base with a very tight trading/basing range and again, the move below which became a higher and higher probability the longer this range persisted and the longer support persisted, is still very proportional to the base above.

Head fake moves are good for several things, one of course is making money on increased volume, bid/ask spreads, volume rebates. Of course for anyone putting together a large position and we know that a $500 million dollar position is a moderate size position for many larger funds with $1 billion dollar positions not uncommon, the supply generated by running stops/short orders and the lower prices are something larger Wall St. firms need.

Lastly, the bear trap that this kind of move can create can cause a significant strong reversal as covering and eventual long buying push momentum (like Channel Busters).

Here are the stops hit the last 2 days, to the right , that's $2.50 exactly and on volume.

 The intraday charts responded almost immediately.

The 2 min chart is fast enough that it could have confirmed any one of the moves lower the same day, it has not, it has stayed in a leading positive position.

Again the longer 3 min intraday responded to the break of $2.50.

 This 10 min positive divergence is not scaled properly, I just don't have enough history on the chart to get it to scale properly, but the 3C divegrence would be sitting higher .

 Interesting 15 min chart

 And this is really what has kept me hanging around in MCP, a very strong 60 min chart that has added significantly to the post-earnings decline/base.

The 60 min in scale after Goldman Sachs downgraded MCP.
 

This is the DeMark inspired indicator, the signals don't have any targets with them, but each has sent MCP higher. The current single signal is larger than the others, that's about the only indication of a stronger move with this indicator.