Friday 5/22/2015

The daily chart shows price yesterday making a lower high, lower low but higher close versus the prior day, closing above the daily pivot and the MD MA. Price today has opened above the daily pivot but is currently testing both the daily pivot and the MD MA. Price is overdue for the multi-week high; this MW high may have been made on Tuesday, but thus far price has given no evidence of being on the downside of the MW cycle. This evidence will come in the form of price breaking below the blue MD MA and turning that MA downward. The MW low is projected for next Thursday, so a move down to the weekly pivot or green MW MA by then should be anticipated.

We enter the last trading day of the week with a rare Monday low/Tuesday high situation, something I cannot recall during the life of this blog (or its prior incarnation). I am unsure whether the expected light pre-holiday trading will help or hurt the odds, but the odds still strongly suggest that price today will either take out Tuesday's high or Monday's low.

The hourly chart has seen the 24Hr cycles lengthen dramatically over the last several days. After making what I have marked as a multi-day low below the MD MA on Wednesday, price moved back above that average and (to my surprise) took out the daily pivot before making its 24Hr high near the NY close. Price has since made two lower session highs, the last one finally leading to a collapse below the 24Hr MA and daily pivot. Price is attempting to find support on the MD MA; if we are still on the upside of the MW cycle, this MA should provide support for the overdue 24Hr MA to be made.

The MD high is not projected until Sunday evening trading, but while the 24Hr cycles have recently lengthened, the MD cycles have recently shortened. This is often a sign that a larger cycle is in the process of turning, and given the overdue MW high it is reasonable to be wary that the MW cycle is finally turning. If so, the weekly pivot and MW MA in the 2107 area are reasonable targets for the decline.