Warning! Warning! Danger, Will Robinson!

Obviously, the blog did not resume as mentioned in my previous post; the luxury of not having to write the entries and add the charts far outweighed the benefit I got from the exercise.  This was especially the case due to the shift in focus of my trading to solely daytrading, as well as the Fed-fed markets showing zero interest or ability in correcting in even a minimal manner.

The current situation is dangerous enough that I felt compelled to post a comment about it, however (in case any of the three readers of this blog is die-hard enough to still be checking it).
I won't bother with the charts, because frankly the commentary should be explanation enough. 

The loosely-termed Multi-year Cycle has over the past several cycles been running 15 months, and November is the current expectation for the MY Cycle high to be seen.

The Multi-month Cycle has been running shorter than normal at 12 weeks for both cycle highs and lows.  Last week was the expectation of the MM Cycle high, and next week is the expectation of the MM Cycle low (because the declines into MM lows have been so shallow and brief they are falling right after the MM cycle highs).  Typically, having passed the date for an expected high and being so near the expectation for a cycle low, I would expect a "cycle inversion" - where price makes its cycle high at the time of the expected cycle low.  This could still happen, but given that today was also the expected day for the Multi-week Cycle high, I am more cautious than normal.

The MW cycle has been running at 12 days recently, with the high expected today.  Technically, yesterday was a higher high, though today had a higher close.  In either case, this blog in the past has touched frequently on the Monday/Tuesday - Thursday/Friday scenario and the much rarer Wednesday high/low scenario.  In a nutshell, during the upside of the MW cycle, the market makes its lows of the week on Monday or Tuesday and its highs on Thursday or Friday.  If the market happens to make its high of the week on a Wednesday during an uptrend, it almost always marks the MW high.  So if the market were to close lower the remainder of the week, regardless of whether one wants to argue whether the high of the week was on Tuesday or Wednesday, it still points to the liklihood that the Multi-week high has been seen.

The majority of MW highs recently have not seen worthwhile sell-offs, but given that we are in the window of expectations for the Multi-month and Multi-year Cycle highs as well, I feel that this one could be different. 

It is important to emphasize that "expectations" are not tradeable, but having such an expectation followed by the triggering of one's own sell signal should not be ignored; most swing traders and investors have long since abandoned their market sell signals after being forced to constantly buy back in at higher levels, but I would suggest the discipline to follow one's signals this time.

Now that the warning has been posted, it could easily take only a decent day up on Thursday or Friday to void the entire post (at least until the Multi-week high is eventually seen).  In any case, I will not be following up on this post (either to gloat or admit failure), though I will likely post again the next time the cycles line up for a compelling bullish or bearish call.

Good trading,
Bruce V.

No blog posts for this week.

The blog will return shortly, likely through Monday-only entries.  The format, while utilizing the same concepts, will be somewhat different.  In its current form this blog was merely a pale imitation of a far superior original.  It attempted to teach the concepts as they occurred in the market; I envision the new blog having links to better explain the concepts for those who are interested, while the commentary will make more specific calls for those who are only concerned about whether to be long or short.

Thursday 3/24/16

Price yesterday made a lower high, lower low and lower close versus Tuesday's candle, closing below the MD MA in the process. Thus far today price has opened below its daily pivot and has made a lower low and is trading below the weekly pivot.   This is behavior indicative of price being on the downside of the multi-week cycle.

 

The next multi-week low is projected for 4/1, and price should be expected to test the green MW MA before then.  The prior MW low did not make this test, however, as the upward strength of the multi-month cycle muted the downturn of the MW cycle.  We are in the timing window for a MM high this time, however, so it is very possible that Tuesday was not only a MW high but also a MM high; if this is the case price should be expected to test the MM MA or even the monthly pivot as it searches for its MM low projected for the first week of May.  How price reacts at the MW MA and how high price can bounce out of its eventual MW low will tell us whether we are on the downside of the MM cycle.

 

 

 

The hourly chart shows price yesterday finding support for its 24Hr low on the daily pivot and 24Hr MA in pre-market trading and then making an early, lower 24Hr high just three bars later. Soon after we broke 24Hr MA and daily pivot support and quickly dropped to the MD MA.  Little support was found there, however, and we dropped to the weekly pivot at the close.  Price in overnight and pre-market trading broke through this support as well, giving a strong clue that Tuesday was a multi-week high and we are now on the downside of the MW cycle.

 

We are overdue to see a 24Hr low. We are in the timing window to possibly see a MD low, and the MW MA could easily provide support for this low.  It should also provide support for the MW low if price is still on the upside of the multi-month cycle, but if we are on the downside of the MM cycle it will be interesting to see if the MD cycle becomes just as muted on the downside as it was on the upside during the recent rally.  As mentioned above, how price reacts to the MW MA will provide us with important information.

 

 

As an aside, I had mentioned in yesterday's hourly commentary that the 24Hr high was due early afternoon but failed to mention that with the MD high so overdue we could see an early 24Hr high and a break of daily pivot/24Hr MA support.  I had written of this possibility in Monday's and Tuesday's blog and, quite frankly, was tired of repeating myself.  Cycles by definition involve a large amount of repetition, and I try to make the commentary make some sense to any potential first-time reader which also means repeating many key elements of this particular style of cycle analysis. The fact that I am more frequently getting tired of this repetition is a sign that I am again suffering from blog burnout and need to take a break.  My plan is to turn the blog into a weekly effort posted on Sunday nights or before Monday's NY open. Whether it reverts back to a daily blog or disappears from there will depend on whether the weekly format eases my burnout.

Wednesday 3/23/16

The daily chart shows price yesterday making a higher high and lower low versus Monday while closing one tick lower.  Price today has opened above its daily pivot and is little-changed from yesterday's close.  All evidence points to price still being on the upside of the multi-week cycle, and the MW high is projected for 3/28.

 

 

 

The hourly chart shows price yesterday making a 24Hr low before the NY open and rallying to a higher 24Hr high early afternoon.  I had believed that price would make a lower 24Hr high yesterday, as we were in the window to see a multi-day high and the lower 24Hr low below daily pivot/24Hr MA support was a hint that a MD high had been seen; yesterday's higher 24Hr high and price finding support on the daily pivot/24Hr MA overnight argues that the MD high has not yet been seen.  Price currently appears to be bouncing out of a Session low on the way to its 24Hr high which is projected for early afternoon. 

 

 

Tuesday 3/22/16

Yesterday's candle shows yet another higher high, low and close versus the prior candle as price continues on the upside of the multi-week and multi-month cycles.   Price today has made a higher high but has also made a lower low than yesterday and is currently trading below its daily pivot.

 

I have officially designated March 4th as the MW high and 3/10 as the muted MW low for the intervening MW cycle off of the February multi-month low.  With this designation, the next MW high is projected for 3/28; the turn of the MM cycle will determine whether the actual MW high arrives earlier, later or on projection, however, and this week is the projection for the MM high.  If today is merely a multi-day high, price will find support on the MD MA and resume its move higher.  If today ends up marking the MW high (and likely MM high), price will break MD MA support and drag that MA downward in search of support for its MW low projected for 4/1.

 

 

 The hourly chart shows price yesterday making its 24Hr low before the NY open and chopping grudgingly upwards into a slightly higher 24Hr high after the NY close.  Price broke daily pivot and 24Hr MA support several hours ago and took out yesterday's low in what may have been the 24Hr low.  If so, price should move higher into its next 24Hr high which is due after the close today.  We are overdue to see a MD high, however, and price trading below 24Hr MA/daily pivot support and taking out yesterday's low is a strong hint that we are now on the downside of the multi-day cycle.  If so, price should find resistance at the 24Hr MA/daily pivot for an early 24Hr high (perhaps next hour for a half-span shift of the daily cycle high) and move lower to test the MD MA/weekly pivot confluence area.  A move below this area would signal that the MW high (and likely MM high) has been seen and we should expect price to move lower to test at least the MW MA near 2004.

 

 

Monday 3/21/16

The monthly chart shows price thus far in March having made a higher low and higher high versus February with price now trading back above the MM and MY MAs and the monthly and yearly pivots. This candle is shaping up to be very similar to last October's, when we saw a nearly identical move that stalled out the next month and eventually saw new lows.  While it is possible that one of these moves was out of a multi-year low, by definition it is impossible for both to have been multi-year lows.  Unfortunately I will have to wait for further price action to determine when (or if) the MY low was seen.

 

 

 

The weekly chart shows price last week continuing its recent string of higher low-, higher high- and higher-close candles.  We are obviously on the upside of the multi-month cycle, and if the late December/early January test of the MM MA was a MM high then we are in the timeframe to see a MM high.  It is important to remember that cycle highs and lows can come way before or after the projections; in fact, it is possible that we are just extremely overdue to see the first MM high after the November MM high.

 

When the MM high is in, price will first trade below its weekly pivot and then trade below the MW MA and turn that average lower. The bears will then have much heavy lifting (or pushing) to do, as price will have the MY MA , MM MA, and monthly pivot below all acting as potential support for the next MM low projected for the first week of May.

 

 

 

The daily chart shows price finding support on the upsloping MD MA several times last week as price continued on the upside of the multi-week cycle.  As has been mentioned far too often in the daily chart discussions, we are either overdue to see a MW high or one is not projected until next Monday.  The MW highs have been difficult to discern because the MW lows have been so shallow.   I expect this to end when price finds its multi-month high, as that higher timeframe cycle will no longer be supporting price.  It is very likely that when price eventually breaks below the MD MA to mark the MW high that it will also mark the MM high, meaning a more substantial decline will be at hand. 

 

 

 

The hourly chart shows price making its 24Hr high at noon on Friday and drifting below daily pivot and 24Hr MA support in Sunday evening trading.  We made a 24Hr low several hours ago and price then rallied above the 24Hr MA and daily pivot and eclipsed Friday's high.  Price has since pulled back to dailiy pivot/24Hr MA support, and unless we have seen an early 24Hr high price should find support here to move higher into its projected early afternoon high.

 

We are in the timeframe to expect a multi-day high to be seen, so it is very possible that today's 24Hr high will also mark the MD high.  Should price fail to find support at current levels and take out the overnight low, it would hint that price is already on the downside of the MD cycle and we should expect price to test the weekly pivot or MD MA today or tomorrow.  Given the possibility that we are also due to see a MW high and MM high, one can see how a simple 24Hr high could turn into the launch point for a significant downside move.

 

 

Friday 3/18/16

Price yesterday made a higher low, higher high and higher close versus the prior day, a situation which has become quite commonplace as price continues on the upside of the multi-week cycle.  Price thus far today has opened above its daily pivot and eclipsed yesterday's high.   There is nothing new to add to yesterday's commentary, so I will direct readers there rather than repeat.

 

The hourly chart shows price yesterday morning making a 24Hr low just below the daily pivot and then rallying to eclipse the prior 24Hr high.  Price corrected sideways in overnight trading, making a 24Hr low above the 24Hr MA in yet another sign of underlying strength.  The next 24Hr high is projected for near the close, and it is possible that it may also be a multi-day high. If so, when price breaks Session MA support, it should not only test the 24Hr MA and daily pivot, but likely move below those areas.  Normally a test of the MD MA would be expected before price finds its next multi-day low, but price has often found support above this level lately due to the strength of the higher timeframe cycles moving higher.