Wednesday 6/17/2015

The daily chart shows price yesterday making a lower low but higher high and close, closing above the blue MD MA. Today price has opened above its daily pivot and made a higher high, testing the MM MA. Note the slope of the blue MD MA; if today's candlestick closes with the MA still pointing upward. it would indicate that price is on the upside of the multi-week cycle.

Yesterday's low was one point higher than last week's MW low, leaving open the possibility that the pullback from Thursday's high was merely a very deep correction of the multi-day cycle. If price can rally above last week's high, that will be my preferred scenario. Until that happens, it is possible that last week did see a MW high and that this two day rally is merely a sharp move on the upside of the multi-day cycle.

Note also the flattened slope of the pink MM MA, which is important for two reasons. A flattened MA is an indication that the next higher timeframe cycle could be turning; in this case, the MM MA turning sideways from a prior uptrend would indicate that the multi-year cycle top could be in. The other reason it is important is that a sideways MA ceases to provide strong support or resistance to smaller timeframe cycles, leading to price whipsawing around that MA; this action was also seen around the flattened MM MA in December/January. It is important to acknowledge that the flattened MM MA at that time did not mean that the multi-year high was behind us, but price will never be on the downside of the MY cycle without the MM MA having flattened out/turned downward so it is not a sign that should be taken lightly.

The hourly chart shows price yesterday making a multi-day low before the NY open and price then rising throughout the day. This is a textbook example of a trend day up, which occurs when price is on the upside of the MD cycle and 24Hr cycle throughout the day. Price moved sideways along the green MW MA overnight before breaking higher and making what may have been an overdue 24Hr high several bars ago. Price is currently below the flattened gold Session MA, which supports the notion that we are now on the downside of the 24Hr cycle. We are also in the timeframe for the projected MD high. Where price finds support for its next MD low (projected for before Monday's NY open) will be important in determining where we are in the MW and MM cycles.