Tuesday 5/19/2015

The daily chart shows price yesterday making a lower low but a higher high and higher (all-time) close. Price today has opened above the daily pivot and thus far has made a higher low and higher high. Price is above the strongly upsloping MD MA, and the green MW MA is starting to turn up from its recent sideways movement. This is all behavior indicative of price being on the upside of the MD, MW and MM cycles.

After the recent May MW low, my commentary frequently said that there is no excuse for price not to launch to new highs. As is typical with the market, price proceeded to meander for the following week; evidently my bearish commentary yesterday was the fuel the market needed to finally lift up out of the sideways chop.

We are slightly overdue for a multi-week high, and the multi-week low is projected for the end of the month. The projection could be far off - we could even see an inversion where price continues up until the end of the May and makes its MW high at the projected date of the MW low. This is why price action is always more important than the projected turn date; it just happens that the two coincide enough to make it worthwhile doing the projections. When the MW top is in, we will see price break below the blue MD MA and turn that average downward while price tests the MW MA for support.

The hourly chart shows price making a 24Hr low in the early a.m. hours on Monday then breaking above the daily pivot shortly after the NY open. My bearish thesis for yesterday was scrapped at that point, as I indicated a move above the daily pivot would force me to reassign the 24Hr highs and lows and designate a MD low somewhere in the action of the past few days. The designations are still not clear, but it is obvious that last Friday was a multi-day high and that the overdue multi-day low was made sometime after that, likely with yesterday's 24Hr low. Price then rose throughout the day, and appears to have done an inversion with the overdue 24Hr high not being made until the time of the projected 24Hr low.

Price is currently trading below the gold Session MA and testing the white 24Hr MA for support. This would appear to confirm the high six bars ago as the 24Hr high. The MD high is projected for after the close Wednesday, but inversions often mark turns in a higher timeframe cycle so it is possible that the overnight 24Hr high was also a MD high. If we are still on the upside of the MD cycle, price will find support for the 24Hr low on the 24Hr MA or the daily pivot. If the MD high has been seen, price will eventually test the blue MD MA or weekly pivot, but given that we are overdue for a 24Hr low, it may require an intervening lower 24Hr high before that test is made.