Monday 6/29/2015

The monthly chart shows price late in this month's candle having made a lower high and higher low and trading below the monthly pivot and testing the MM MA. This is a more bearish picture than this time last week, due entirely to the overnight move in futures due to the Greek crisis. We are overdue to see a multi-year high, and the first warning sign for being on the downside of the MY cycle is price trading below monthly pivot and MM MA support. It is important to remember, however, that the candle is not yet complete and that a warning sign is merely that; note that January's candle (the yellow ellipse) similarly made a lower high and higher low versus the prior candle and closed below the monthly pivot and MM MA yet did not mean that the MY high was behind us.

The weekly chart shows price opening this week with a gap lower below the monthly and weekly pivots and the MM MA and MW MA. This action has taken out the lows from earlier this month and has the MW MA pointed downward again, indicating that we are still on the downside of the multi-month cycle. We are overdue for the MM low.

The daily chart shows price last week having made a Monday high and Friday low, the textbook pattern on downside of a MW (and MM) cycle. Price today has gapped sharply lower below all higher timeframe support and made a lower lower than the June 9 multi-week low. Price is attempting to find support on a trendline that I had drawn early this year from two MW lows when price was chopping its way into a triangle pattern. The multi-week low is projected for Wednesday.

Today's action is certainly not the most bullish scenario that could have developed, but it is not a deal-breaker for the bulls. The ideal scenario (which had appeared to be unfolding) would have seen a higher MW low put in on monthly pivot support which would have given price a short distance to new all-time highs during the move to its next MW high. We are instead looking at a lower MW low and price will need to overcome much overhead resistance on the upside of its next cycle if new highs are to be seen. Should the MW low not be found here, but be made much lower, the task will be even more daunting. Just as with the earlier June MW low, the process will start with price regaining the blue MD MA and turning that average upward as price seeks out the next MW high.

The hourly chart shows price on Friday making a 24Hr high under MW MA resistance before gapping sharply lower to its 24Hr low when trading reopened after the weekend. Price is overdue to see a 24Hr high, and a Session high is projected for just after the NY open. If this is a lower Session high than the 5:00am high, it will mean that the 5:00am Session high was also a 24Hr high, and price should then fall below the Session MA and retest this morning's lows. A higher Session high just after the open will likely lead to the eventual 24Hr high, but the ability to trade above the white 24Hr MA would be an indication that the overnight 24Hr low was possibly also a multi-day low.