MCP Is on the RADAR

I have been thinking a lot about MCP lately, as it is one position I can close and create more dry powder in my personal account to add to positions I believe in with full conviction, take FAZ for instance, I (personally) have  a little room to add to that position, but I'd need to close MCP to do that and it's a balance between two very different moves, but two very potentially huge moves and offers "some" diversification.

It's the big picture for MCP that I'm most attracted to, but I've covered that a hundred times, recently it has been a range and strong behavior in that range. Today looks like a near perfect head fake move / Stop run just below the range, the stops were hit, the supply to be accumulated is there, the signals look strong thus far and the daily chart is seeing increased volume, maybe even a bullish reversal candle by the end of the day. So I'm probably very close to making a final determination as what to do with MCP depending on how it acts the rest of the day. So far, just as BABA's price upside move on November 10th of +4% was deceiving as we called for a Channel Buster pullback and it has pulled back nearly 9% starting the very next day (which I'll be updating shortly) , this too is a scenario in which it looks like its own head fake move/stop run (as explained earlier in BABA analysis, a Channel Buster is a type of head fake move as well).

Is price once again deceiving getting ready to lead to a reversal like BABA as long expected or even today's gap up which many averages have already retraced most of the move as QQQ nears break-even at a +.35% gain after such a strong opening move (which I keep alluding too because of the recent concept play-out at 100% of the prediction and because I'm nearly done with its update)?


Essentially we have had 2 consecutive days of fading the open. MCP may be a a very similar fade of a head fake stop run.

The charts...

 The daily chart and a support level at a descending triangle range, the descending triangle alone is a bearish consolidation/continuation pattern so it would be likely that many of the sell orders are not just stops, but rather short limit orders, either way, they are supply that can be accumulated on the cheap  with the added bonus of setting a bear trap that leads to a momentum inducing short squeeze as most short trade stops will be just above $1.16, the former support/now resistance trend-line seen above.

Note the increasing volume on the day, while it doesn't need to produce a bullish reversal candle to show bullish probabilities of a head fake move, that would be even more interesting, especially on the higher volume as those candles (reversal) on higher volume are more successful by an order of multiples over a regular reversal candle on average or below average volume (or of the previous day's). This could easily turn to a big bullish Hammer.

 On an intraday 5 min chart you can see the sells, whether stops or limit orders/short, volume has swelled just as price crossed below thee 2 month support range on a bearish consolidation traders easily identify as a descending wedge.

 The 3 min 3C chart shows a negative divegrence and a gap up, a sort of head fake move on the open in yellow with a stronger negative divegrence creating this move down to hit orders and increase volume, the point is the supply, it's cheap and easy to accumulate with no one asking questions.

The 3C chart is leading positive in a flat range suggesting that is most likely what is happening and the negative divegrence to send MCP lower was planned in advance, it's also not a large divegrence like a 15 min negative which would scare me that something has changed, but like the quick Gold short earlier this week, a small, sharp divergence that makes a small, but sharp move before reversing.

As for the 15 min chart, it has a negative right at the area it would need to in order to create the bearish descending triangle that traders easily identify as one of the basic price consolidation/continuation patterns, expecting a break lower and thus setting limit shorts just below support.

This 15 min chart would suggest the resolution is positive as the intraday charts already are, I'd like to see some more, if indeed this starts really screaming, this may even be an area in which I'd open an MCP call on the discounted premium today.