Monday 3/23/15

The monthly chart, with 7 trading days left to complete the candle, has thus far acted in a bullish manner; it tested and found support at the MM MA and monthly pivot and is now challenging last month's highs. Until new highs are made, we must be open to the possibility that last month's candle was the multi-year high, but little evidence on the monthly chart exists to dampen the bullish argument; it is on the weekly chart that some concerns appear.

Last week's candle made a higher low and higher high, finding support on the MM MA and challenging the February highs. Early in this week's candle we can see that price has opened above the weekly pivot and has turned the MW MA upward, behavior associated with being on the upside of the multi-month cycle. This is a very bullish scenario, though it is important to note that there is plenty of time left in the week for price to turn down, bending the MW MA back down with it. A lingering concern is the shortened cycles that are appearing on the weekly chart. If two weeks ago did indeed see price put in a MM low (marked with a "?"), then it appeared only 5 weekly bars after the prior MM low. This is an abnormally short duration for a MM cycle and brings into question the status of the multi-year cycle, as abnormal behavior in a cycle is usually caused by the turning of a larger timeframe cycle. A move to new highs this week will erase any fears about being on the downside of the MY cycle, but that is the only evidence that will do so.

The daily chart shows last week being a Monday low/Friday high (ML/FH) situation, a bullish pattern that was discussed last week. Price today has opened above the daily pivot but thus far has not managed to eclipse Friday's high. Price is still searching for the overdue MW high, and the bulls would like to see that high be an all-time high. When the high is in, price will no longer find support on the blue MD MA and will flatten or bend the MA downward as price seeks out the MW low projected for the month's end.

The hourly chart shows the 24Hr high being made late afternoon on Friday. Less clear is the behavior since then; it is possible that a 24hr low was made a few hours later, as price did break below session cycle MA support and the MA subsequently dipped downward. Price then spent the next six candles riding on top of session cycle MA support, turning that MA upward in the process before then breaking below it again and turning it back down. Price seems to have found support on the daily pivot and is currently sitting just above the session cycle MA. We are overdue for a MD high, and it is quite possible that it was found Friday afternoon. If so, the white 24Hr MA should provide resistance for any upward move and price should break daily pivot support as it probes lower for its MD low projected for 6:00am tomorrow. If price instead rallies through the 24Hr MA then the overdue MD high has yet to be found. With the ambiguous price action and current location between the daily pivot and the 24Hr MA, I am reluctant to give a bias to today's trading. Given the ML/FH scenario that so often occurs in uptrends, however, it would make perfect sense for price to probe sharply lower today, find the MD low today or tomorrow, then ride the upside of the MD, MW, and MM cycles to highs the rest of this week.