Thursday, 3/26/2015

The daily chart shows price yesterday opening below the daily pivot and the MD MA and closing sharply lower below the MW and MM MAs and on monthly pivot support. Price thus far today opened below the monthly pivot and is trading lower, challenging the recent March lows. I have marked the recent swing high as a MW high, and the MW low is due early next week.

If price takes out the recent MWL, it will mean that we will have had lower MWHs and lower MWLs- action indicative of being on the downside of the multi-month cycle; I had long since marked the February high as a MMH on the weekly chart (shown Mondays) based on the downward turn of the MW MA. I had marked the March low with a "?" as a potential MML, but if that low is taken out then obviously price is still searching for its MML. There could be another few months before the MML is found if the cycle were to be of normal length, time for this MW cycle to complete and another MW cycle with a lower high and lower low to unfold. A more optimistic scenario would be price finding a low this week above the recent March low and continuing higher. Price is capable of either of these actions.

One thing is certain, however. A multi-month high was made in February, nine weeks after the prior MMH - an extremely abbreviated cycle that calls into question the status of the multi-year cycle. Add in the disregard price has been showing of late for the monthly pivot and MM MA, and I get even more concerned that we are currently on the backside of the MY cycle. If so, then the scenario of another couple months of searching for a MML will be the more likely scenario, with the yearly pivot at 1948 and the MY MA at 1901 (and rising) would be areas of likely support.

On the hourly chart, I have marked the 6:00am bar yesterday as the 24Hr high, a possibility mentioned yesterday. Price then slashed through the weekly pivot, the MW MA, and finally the monthly pivot before finding what may have been a 24Hr low at the close. If that was indeed a 24Hr low, then the 24Hr high was made several bars later under monthly pivot resistance. The session MA never turned up (it merely flattened out), leaving open the possibility that a 24Hr low has not made at the close and opening up the possibility that the 24Hr low was made at 6:00am this morning. Price is currently above the session MA as it searches for an overdue session high. Normally, I would say to look for a higher session low around noon above session MA support as a sign that the 24Hr low is in; however, the last several 24Hr highs have been made mere hours after the 24Hr low, offering no higher sess

ion low opportunity for long trades. We are overdue for a MD low. When that MD low is in, price will finally be able to get above the white 24Hr MA. There are many layers of resistance above that in the form of the monthly and weekly pivots and the MM, MW, and MD MAs. While price has shown a rare disregard for these levels lately, its interaction with these levels is still a crucial piece of the unfolding puzzle.