Market Analysis for 7/26/12

The daily chart shows price yesterday opening below the daily pivot and making a lower low but finding support on the monthly pivot and closing above the daily pivot. Price today has opened above the daily pivot and made a higher low and higher high. Price has thus far eclipsed the MD and MW MAs and is approaching the weekly pivot. This behavior indicates we are on the upside of the MD cycle; how price reacts to the weekly pivot will let us know where we are in the multi-week and multi-month cycles. It is possible that the monthly pivot and MM MA have turned the MW cycle early, indicating we are still on the upside of the MM cycle and are now on the upside of the MW cycle; it is also possible that we are merely on the upside of the MD cycle and price will resume its search for a MW low. Price behavior in the next day or two should tell us which scenario is unfolding.

  

The hourly chart shows price yesterday with a double-topping gyration around the daily pivot but with 24Hr MA support to form a 24Hr high, then a break of the 24Hr MA to form what appears to be a 24Hr low several hours ago. Price has since surged up and taken out the MD and MW MAs this morning. The higher 24Hr low confirms we are on the upside of the MD cycle. We are past due to see a MD high, and the 24Hr high is projected for around the close of today's regular session. We are currently in the timeframe for a session high to be seen, and a session low is projected for 11:15am EST.

Once again I have been fooled by sluggish early action coming out of a multi-day low; while the action coming out of a multi-day high is usually a market free-fall, the action coming out of a multi-day low seems to stutter step the first day before skyrocketing in day two.  While we found "soft support" on the 24Hr MA yesterday like I had mentioned was possible, it was too soft for my liking and I ended up bailing on my longs near the lows yesterday morning.  I clawed back to near break-even during the day with some daytrades but have no long positions as I awake to find the market soaring.  The market should continue to rise today, but I would expect the weekly pivot to provide resistance for the move up.  If we pull back toward the brown session MA sometime around 11:15am I will look to go long for a move up the remainder of the day, but I will look to short if price gets up to the weekly pivot in the 1358 area.