Our Approach to Technical Analysis

Global macro markets are shaped by the constantly shifting forces of economic cycles, trade flows, geopolitics, and central bank policy. In this environment of noise and conflicting narratives, technical analysis becomes indispensable, and price action a crucial arbiter.

Traders need a structured, disciplined lens on price action – one that cuts through complexity and helps them stay aligned.

MCP exists to deliver that insight. Our research is written to stay grounded in price action and to help traders identify the signal from the noise of the narrative.

We believe technical analysis is a vital part of any trader’s research mix. When used alongside fundamental insight, it creates a more complete view of the market. Our role is to deliver independent technical perspectives, drawing on years of market experience, to complement your process.

Independence is critical. In a landscape saturated with narrative, opinion, and noise, our work brings focus to what truly matters: the message of price.

Here’s how we approach that task.

At the core of our framework is the belief that price reflects human behaviour.

Our work is grounded in Elliott Wave theory, a methodology that offers a forward-looking, probabilistic view of market behaviour. It explores the nature of market psychology, revealing patterns in price action that unfold across all timeframes. These movements are not random, but expressions of collective optimism and pessimism, or waves, that repeat in recognizable structures.

By identifying these patterns, we can build a structured view of where price may be headed, not just where it’s been.

“The Wave Principle” is Ralph Nelson Elliott’s discovery that social, or crowd, behaviour trends and reverses in recognisable patterns.

Using stock market data, Elliott isolated thirteen patterns of movement, or “waves,” that recur in market price data and are repetitive in form, but are not necessarily repetitive in time or amplitude. He named, defined, and illustrated the patterns. He then described how these structures link together to form larger versions of those same patterns, how they in turn link to form identical patterns of the next larger size, and so on.

The Wave Principle is a catalog of price patterns and an explanation of where these pattern forms are likely to occur in the overall path of market development.

Elliott’s descriptions constitute a set of empirically derived rules and guidelines for interpreting market action. Elliott claimed predictive value for The Wave Principle, which now bears the name, “The Elliott Wave Principle.”

Under the Wave Principle, every market decision is both produced by meaningful information and produces meaningful information. Each transaction, while at once an effect, enters the fabric of the market and, by communicating transactional data to investors, joins the chain of causes of others’ behavior. 

As the forms are repetitive, they have predictive value. Sometimes the market appears to reflect outside conditions and events, but at other times it appears entirely detached from what most people assume are causal conditions. The market is not propelled by the linear causality to which one becomes accustomed in the everyday experiences of life. Nor is the market the cyclically rhythmic machine that some declare it to be. Nevertheless, its movement reflects a structured formal progression. That progression unfolds in waves.

Waves are patterns of directional movement. More specifically, a wave is any one of the patterns that naturally occur under the Wave Principle.

There are two modes of wave development: motive and corrective.

Motive waves have a five-wave structure, while corrective waves have a three-wave structure or a variation thereof.

In his 1938 book, The Wave Principle, and again in a series of articles published in 1939 by Financial World magazine, R.N. Elliott pointed out that the stock market unfolds according to a basic rhythm or pattern of five waves up and three waves down to form a complete cycle of eight waves. The pattern of five waves up followed by three waves down is depicted in Figure 1-1.

Elliott Wave can be a powerful analytical tool when applied correctly and consistently. It helps create order from perceived chaos. Some of the key benefits for trading:

1. Provides a framework to construct a clear roadmap of probabilistic price paths.
2. The fractal nature of Elliott Wave means it can be applied over multiple timeframes and across asset classes.
3. Identifies the direction of the dominant market trend.
4. Distinguishes between trending and correcting markets.
5. Determines the maturity of the trend as we look for important market turning points.
6. In combination with Fibonacci analysis it helps provide measured price targets.
7. Identifies specific points of ruin where you know the trade is wrong.

Elliott Wave is a powerful tool for analyzing market behavior, but mastering its full framework is a significant undertaking. The discipline requires building an advanced knowledge of a vast catalog of recurring price patterns, a skill that takes time, dedication, and a natural aptitude for pattern recognition. For many, the dense and often confusing terminology can become a barrier to entry, obscuring the powerful insights that lie within.

This is where the real value of our Mars Market Update analysis lies. We remove the burden of mastering Elliott Wave analysis and, instead, deliver its most valuable output. Our research applies a disciplined, structured, and pragmatic approach to the Elliott Wave Principle, distilling complex price action into a clear, forward-looking outlook.

We exist to be your shortcut to a deeper understanding of market cycles, helping you cut through the complexity and unlock the true value of Elliott Wave analysis as a vital component of your trading process.

See how we apply this framework in our research.

A more detailed description of the Wave Principle can be found here… EW Basics Frost & Prechter’s book, “Elliott Wave Principle – Key to Market Behavior” is the primary reading guide for budding Elliotticians https://www.amazon.com/Elliott-Wave-Principle-Market-Behavior/dp/1616040491