The MCC identifies the day to day shifts in the MCV. If the MCV is a snapshot where the market “is” in terms of its technical state, the MCC identifies how it got to that position. This adds additional insight to the condition and has duel significance. First as a measure of technical “change” and second as a quantifiable variable to identify the market’s signature state condition or MarketColor Bias (MCB).

  1. Technical Change – The MCC as a measure of technical movement provides an easy way to identify markets that are technically in “play” with the potential for opportunity. An MCC of +/- 3 is considered significant. Large shifts do occur and point to markets with good volatility. Markets that have no or little MCC are typically either waiting for a news event to occur or are in a state that is more likely to persist. Markets with large MCC have had a technical “event” and are likely to offer good price action trading opportunity. Below are examples of an MCV plot that shows the MCC over a 10 day historical .mcc mcv 10d
  2. MCV Plot provides a picture of the MCC which represents changes in market STATE condition. Insight to longer term themes are revealed “at a glance”, enabling traders to anticipate opportunity and align trading tactics.
    •  NOTE: The MCC is not based on price movement but on the change in the underlying technical profile. It is possible to have a big technical shift without a noticeable price move. In addition The MCC in this context is not meant to be a directional signal, although it can be, but rather provides an expectation of healthy market movement and increased liquidity of new market participants.
  3. Signature State – The MCV defines a markets general state type, providing a result as a single value in a bounded scale. The goal of this indicator is not to be “predictive” but rather define “what is” the technical position of the market. The day-to-day shifts or MCC do provide actionable “signals” and further define the markets signature technical state for optimization of strategy execution.

mcb shift

The MCV defines the market general MARKET STATE TYPE. The day-to-day shifts in the MCV or MCC define the signature MARKET STATE or the MarketColor State MCS.

For more information on MCS click HERE.