Friday 6/5/2015

Yesterday price made a lower high and lower low than the prior day, closing on monthly pivot support. The low took out Tuesday's low and indicated price is still searching for its multi--week low. Today's action has seen price open below the daily pivot and the MM MA and is currently trading below the monthly pivot.

The inability of price to find support on the monthly pivot or MM MA is concerning, as it usually means that price is on the downside of the multi-year cycle. We are overdue for the MY high, and the MY low is actually due this month. It should be noted, however, that there is not yet confirmation that the MY high is in, and that price over the last several months has breached its monthly pivots and MM MA quite frequently. More importantly, it quickly recovers from those breaches and closes its monthly candlestick above those key areas.

Trading below its key higher timeframe support areas of the MM MA and monthly pivot, there is little we can look for to guess  where price may find support should price not recover today. The low thus far today was a perfect 61.8% Fibonacci retracement of the gain from the last MW low to the mid-May MW high.  Failure of price to hold there leaves the level of the prior MW low as the next obvious target.  Wherever price makes its MW low, we will know it has been made when price is able to trade above the blue MD MA and turn that average upward.

The hourly chart shows price yesterday making its 24Hr high under 24Hr and MD MA resistance. Price then made an oddly premature lower 24Hr low, then spent the overnight hours trading sideways under the monthly pivot before a feeble attempt at the daily pivot formed its 24Hr high. This is all behavior indicative of price being on the downside of the multi-day cycle, which when combined with the downside of the multi-week cycle can create some large price declines. We are in the window for the expected MD low, and are overdue for the MW low. It is reasonable to expect that the next MD low will also be the MW low. When price is able to close above the daily pivot on an hourly basis, and find support on the pivot or the white 24Hr MA, we will know the MD low is in.