The monthly chart rarely receives long commentary in my Monday morning posts; any timeframe's candlestick/bar only tells the full
story after it has completed, so even when the bar appears to be doing something
worrisome, it is always important to remember that price is always capable of
erasing that action by the close of the candlestick. With the monthly chart,
this generally means that there are usually three weeks out of each month where
the chart's picture can be described in a few sentences (I know, shorter than
this explanation).
With only two trading days left in the monthly
candle, price is a mere 5 points above its monthly pivot and some 28 points
above the MM MA. Why is this important? All of the analysis in this blog flows
from the same core concepts. I mention most frequently in the hourly chart
commentary that the Session Moving Average will support (or resist) price until
the 24Hr high (or low) is in. I mention that the white 24Hr MA or daily pivot
will support (or resist) price until the multi-day high (or low) is in, and
that the blue MD MA or weekly pivot will support (or resist) price until the
multi-week high (or low) is in. In each case, the component MA or pivot is the
backbone of the move into and out of the highs and lows of the cycle of the next
larger timeframe. For the monthly chart, we are looking at price interaction
with the monthly pivot and MM MA to ascertain where price is in the multi-year
cycle. The projection for the multi-year high is next month, but this
projection means nothing compared to price action, and thus far price action as
reflected by this month's candlestick is more bullish than bearish in regards to
the multi-year cycle; while we have made a lower high than last month and are
currently trading below this month's open, price is trading above its upsloping
MM MA and has found support and bounced off of the monthly pivot.
The weekly chart shows price last week's
candlestick making a higher high, lower low and lower close versus the prior week. This calls into serious question whether we have seen the multi-month low earlier this month or are still on
the downside of the MM cycle. Early in this week's action, price has opened
below the weekly pivot and is trading up slightly to test this pivot and the MW
MA. Notice the MW MA is flattening out after last week's bar had turned it
upward in last Monday's post, only to have price sell off into the end of the
week and turn the MA back down. Price appears to be consolidating sideways with
a pick up in volatility the last several weeks. The consolidation will
ultimately break out in the direction of the larger cycle. If the MY cycle is
still searching for its high, price will not break below the January lows. Of
course, a move to new highs can erase the concerns that the MY cycle has rolled
over; in fact, with price so close to the highs, it is the only thing that can
erase these concerns.
The daily chart shows price having made a Monday
high and Thursday low last week, with Friday being an inside day that closed
above its daily pivot but below lots of higher timeframe pivots and MAs. Thus
far today price has opened above the daily pivot and is bumping against the
underside of weekly pivot and MD and MW MA resistance. The multi-week low is
projected for Wednesday. When it is in, price will trade above the MD MA and
bend it upward. Until then, expect it to provide resistance.
The hourly chart shows price having made a 24Hr low
overnight on daily pivot and 24Hr MA support, behavior associated with being on
the upside of the MD cycle. We are currently overdue for the MD high. Higher
timeframe resistance in the form of the MD and MW MAs above are logical places
for the MD high to be found if we are still on the downside of the MW cycle.
Price is currently testing the MD MA in the timeframe for a session high to be
made. A higher session high means that we have not yet found the 24Hr high,
which is projected for overnight; a double-top or lower session high means that
the 24Hr high was made early against higher timeframe resistance. A break of
a trendline connecting the two most recent session lows runs roughly parallel to the current gold session MA angle of ascent and will provide relatively timely
warning that the 24Hr high is in.
No comments:
Post a Comment