Tuesday 6/9/2015

The daily chart shows price yesterday with a large move down, opening below the daily pivot and making a lower high and lower low versus the prior day. Price today has opened below the daily pivot and has also thus far made a lower high and lower low. This is textbook behavior of price on the downside of its multi-week cycle. The MW low is well past due; in fact, the MW high is projected for tomorrow. Perhaps we will see an inversion of the cycle and the MW low will finally be made on the projection for the MW high. Regardless of when the MW low is made, the action will look familiar- price will move above the blue MD MA and lead that average upward in search of the next MW high.

If the MW low is not made within the next few days, another more bearish alternative will have to be given more weight. It is possible that the MW low has already been seen and was followed by a feeble one-day rally to a MW high on June 3rd (marked with a "?"). Price did close above the MD MA that day, flattened the average out from its prior decline, and tested the MW MA. This is not the preferred line of thinking at this stage, but if larger timeframe cycles such as the multi-year and multi-month are moving down hard, the smaller MW cycle can often be swamped and its own peaks and troughs are muted. For now, I will stick with the expectation that a MW low is overdue and will be seen soon.

The hourly chart continues to show a textbook picture of price on the downside of the multi-day cycle, with price finding resistance for its 24Hr highs at the 24Hr MA or the daily pivot. A white trendline has been drawn connecting the 24Hr highs, and it is a fairly nice parallel to the white 24Hr MA. This usually indicates that we are near the end of a move and that a change of trend is near. We are grossly overdue for a MD low to be seen and in fact we are overdue for a MD high. As mentioned above, it is possible that the MD cycle is being swamped by the downward force of longer timeframe cycles. This is not a frequent occurrence, but it has happened on a few occasions. At some point, the multi-day cycle will start to assert itself again, and when it does price will leave behind its MD low by closing above the 24Hr MA and daily pivot and turning the 24Hr MA upward as it tests the blue MD MA.