Monday 8/31/2015

The monthly chart shows price with one day left in August having made a lower high and lower low versus the July candle. Having probed lower, price has thus far recovered the yearly pivot and is attempting to regain the MY MA.

As mentioned in last week's post, the last two multi-year lows have come just two candles after the multi-year high, but the average of the last five MY lows has come between four and five bars after the MY high. Given that we were overdue for the MY high to finally have been seen, we are also overdue for the MY low's average duration. So with all of that said, it is possible the MY low will be seen in September or October, but we must be open to the possibility that the low occurred last week. The original targets for the MY low were the MY MA or the yearly pivot, and price did test those areas. With minimum targets met and the timeframe plausible for a MY low to have been seen, we must look to the lower timeframe charts for evidence of whether a MY low was made.

The weekly chart shows price last week with a sharply lower high and sharply lower low but a higher close versus the prior week. This "hammer" candlestick closed above the MY MA and many pundits have declared it to have been the end of the correction. As explained above, this could very well be the case, and price could have made a half-span multi-month low last week on MY MA support, which will also mark the MY low. Thus far, however, there is no evidence of that price is still not on the downside of the multi-month cycle whose low is not projected until the first week of October. Should price trade above the green MW MA and turn that average upward, we would have evidence of an early turn in the MM cycle. As usual, the earliest evidence will come from a lower timeframe chart, and the daily chart is where some bullish clues can be found.

The daily chart shows price last week making a Monday low and Friday high, classic price behavior in an uptrend. Price is currently trading above the blue MD MA and today has seen that average turn upward. While any decent bounce would have seen price trade above this average (and this bounce has thus far fell short of a 62% retracement), should price close today with the average pointing upward it will still be an indication that price made a half-span multi-week low last Monday. While that would not be evidence of price being on the upside of the MY cycle, half span shifts often indicate turns in the larger timeframe cycle. Thus, a half-span MW low could mean we are on the upside of the MM cycle, and the half-span MM low could mean we are on the upside of the MY cycle.

Tomorrow will see a new monthly pivot which would currently come in around the 1969 area. How price reacts around this new pivot as well as around the MW MA will provide additional evidence of where we are in the MW, MM and MY cycles. While price during the topping formation showed little respect for the MW MA as support or resistance, I would expect it to provide substantial resistance should price be on the downside of the MM and MY cycles. Failure of that MA to act as resistance to price would be another piece of evidence in the bulls favor.

The hourly chart shows price trading above the weekly pivot and the blue MD MA, behavior indicative of price being on the upside of the multi-week cycle. As mentioned above, however, I mildly discount this evidence since any decent bound would seen price eclipse these areas. Should price make a higher multi-day low, however, it will be a clear sign that price is on the upside of the MW cycle. A multi-day high is past due and could well have been seen on Friday. Price is in the timeframe to see a 24Hr high, and if this high is made below 24Hr MA or daily pivot resistance it will confirm that price is on the downside of the MD cycle. We will then see if the weekly pivot/MD MA confluence area can provide support for a higher MD low to be made.

Friday 8/28/2015

There will be no update today due to personal obligations.  The commentary on the daily chart from yesterday's post still holds today, as nothing in yesterday's action (despite the large gain) warrants any change in outlook.

Thursday 8/27/2015

The daily chart shows price yesterday making a lower low but much higher close versus Tuesday's candle, closing just under the MD MA. Price today has opened above the daily pivot and is currently trading above the MD MA. This tells us that price is certainly on the upside of the multi-day cycle, but it tells us nothing other than that. While the ability of price to trade above the MD MA is usually indicative of price being on the upside of the multi-week cycle, the severity of the decline made it likely that even a shallow retracement would exceed this level. Until evidence to the contrary arises (read more below), all rallies should be shorted as price appears to be on the downside of the multi-year, multi-month, and multi-week cycles.

The hourly chart shows price yesterday making a higher 24Hr low on 24Hr MA support early afternoon before rallying up toward the MD MA the remainder of the day.  This confirms that price is on the upside of the multi-day cycle, and I have marked the prior 24Hr low as the MD low.  An explanation of why that low, and not the pre-market Monday low, is designated as the MD low can be found in yesterday's blog.

We are in the timeframe to see a 24Hr high, and if we are still on the downside of the multi-week cycle I would not expect the 24Hr cycle to extend too far in time. A break below the gold Session MA will likely signal that the 24Hr high has been seen. We are also overdue to see a MD high, so it is likely the next 24Hr high will also be a MD high.

When the MD high is found, price will be presented with its first opportunity to provide us with evidence of whether the recent low was something more substantial than just a MD low.  If price is able to make a higher MD low within the next few days, it would confirm that price is on the upside of the multi-week cycle.  This in turn would mean that price saw a half-span shift of its MW low, which has potential implications for an early turn of the multi-month cycle, which would provide evidence that the multi-year low was seen.   At this point, all of this "if price does this" commentary is just climbing out further on a figurative limb which was already providing feeble support, but it is an example of the bare minimum that price must show us before we even begin to change to a bullish stance.

Wednesday 8/26/2015

The daily chart shows price yesterday making a lower high, higher low and slightly higher close versus Monday, with price closing below the daily pivot. Price today has opened below the daily pivot and traded below yesterday's low, but is currently trading above the daily pivot.

There is really nothing different to write from yesterday's commentary. While it is possible that Monday will prove to be a multi-year low, and thus was also a half-span multi-month low and a half-span multi-week low, there is no evidence yet to support this belief. Until price gives reason to think otherwise, we must assume that price is on the downside of the MM cycle with a low projected for late September/early October, and on the downside of the MW cycle with a low projected for September 2. Under this scenario, any rallies of the multi-day cycle should be capped by the blue MD MA or perhaps the weekly pivot should price see a more normal corrective bounce.

The hourly chart shows price yesterday making a slightly lower 24Hr high before the NY open and selling off during the trading day. Price found its 24Hr low in after-hours trading and has traded back up to the 24Hr MA/daily pivot resistance area. Price is currently trading slightly above this confluence area, but still below yesterday's 24Hr high. 

 We are in the window to see a 24Hr high, and the timing and placement of this high will go far to tell us where we are in the multi-day cycle. While it seems obvious that Monday was a multi-day low, there has been no 24Hr high that exceeded a prior 24Hr high. Also, the Monday afternoon low was a lower close than the earlier low's close. Similarly, yesterday's 24Hr low close was lower than Tuesday's 24Hr low close. Thus, it's possible that we are still searching for a multi-day low (or that yesterday was that low). If price can extend the current 24Hr cycle in time and take out yesterday's high, we will finally know we are on the upside of the multi-day cycle.   As mentioned above, however, resistance for the multi-day high should be found at the MD MA or weekly pivot.

Tuesday 8/25/2015

The daily chart shows price yesterday with another wide range bar down as the markets continued their sharp decline. Price thus far today has opened below its daily pivot but is attempting to correct much of yesterday's decline. Many pundits are saying the bottom was seen yesterday, while just as many are saying the worst is yet to come. Listen to none of them, for none of them know with any more certainty than predicting the flip of a coin. Price can do anything it wants, and it can do it despite the intentions and will of government intervention or in sympathy with them.

What is known is that this decline has happened while price is on the downside of the multi-year, multi-month, and multi-week cycles. The multi-year low could be seen as early as this month (like most recent MY lows), late September/early October (average of MY lows), or even later (extended cycle to adjust for the recent shortened cycles). The multi-month low is projected for the first week of October. Lastly the multi-week low is projected for September 3rd. Given that the longer cycles have influence over the shorter cycles, the bottoming of the MY cycle could easily see the other cycles bottom earlier (or later) than projection. Until there is evidence to the contrary, my expectation is for price to decline into an early September MW low, rebound into a lower MW high, then decline to new lows or a double bottom for the late September/early October MM low.

The hourly chart shows price spiking down on the open yesterday to make its 24Hr low then rallying up to the 24Hr MA where it found resistance for its 24Hr high before selling off into the close. Price overnight found support on the new daily pivot and has traded to retest yesterday's high. It is likely that an early (and higher) 24Hr low was seen either at the cloe or in overnight trading on the daily pivot. This would indicate that price has finally seen a multi-day low. If price is still on the downside of the multi-week cycle, the blue MD MA should provide resistance for the multi-day high. Given the magnitude of the recent decline, however, I would not be surprised to see even a counter-trend multi-day rally exceed the normal areas of resistance. For the same reason, failure to reach the MD MA before finding the MD high would be extremely bearish.

Monday 8/24/2015 - How Now, Pounded Dow?

The monthly chart shows price with one week remaining in August having made a lower high and much lower low than the the prior month. With price currently trading below the yearly pivot and the MY MA, I have marked the May high as the overdue multi-year high.

The questions now are when and where will price find its overdue multi-year low? The last two MY lows came just two monthly bars after the MY high, but an average of the last five lows came over 4 bars after the MY high. With the MY high occurring in May (even though only being officially recognized now), a September or October MY low would be expected. With a multi-month low projected for the week ending October 2, a late September/early October low would make further sense.

As to where the MY low could be seen, price is currently at the 50% retracement level of the gains from the prior MY low; should price rebound this week to close the month above the yearly pivot or MY MA, it is possible that the low could be seen today. There is no magic that says price will retrace only 50% of a move however, and even if there were, who is to say that price will not retrace 50% of the move up from the 2009 low and fall down to the 1140 area? The only thing that I know for sure is that when the MY low is finally made, price will eventually make a higher multi-month low and trade back above the MM MA, turning that average back upward. It's the simple logic behind this market framework that has worked at every multi-year low (and multi-month low, and multi-week low, and multi-day low) that makes it so invaluable.

The weekly chart shows price last week making a large move lower and closing on the MY MA. Price early in this week's candle has opened well below its weekly pivot and trading sharply lower. With a double-top of multi-month highs and a lower multi-month low, I have now officially designated the May MM high as a multi-year high. As mentioned above, a multi-month low is projected for the first weekly bar in October; while this timeframe would coincide with the average length of the move down from a MY high to a MY low, it is merely a projection. Price behavior will tell us far more than projections.

The daily chart shows the ferocity of break down from the long congestion area. A multi-week low is projected for the first week of September. With price on the downside of the multi-month and multi-year cycles, all rallies for the next month are likely to be capped by the weekly pivot or green MW MA (currently near 2066 but falling sharply).

The hourly chart shows price finding resistance for its 24Hr low at or below the white 24Hr MA and leading that average downward. The combined force of the downsides of the MW, MM and MY cycles has overwhelmed the multi-day cycle.  Eventually the MD cycle will regain some influence, but until price is able to trade above the 24Hr MA or daily pivot and make a higher 24Hr low, there is no point in time projections for the cycle. Half-span shifts of the 24Hr cycle often mark the MD low (or high) when the MD cycle is being overwhelmed. As to the 24Hr cycle, it is possible that overnight trading saw both a 24Hr low and 24Hr high, again under the 24Hr MA.  If so, a 24Hr low will not be due until overnight tonight, meaning another trend day down. I will keep an eye on the possibility of a half-span 24Hr low occuring around noon instead, however, which would likely spark a sharp counter-trend rally.

Friday 8/21/2015

The market finally chose its direction yesterday, as price traded down sharply and took out the early July low. With this move, price is certainly on the downside of the multi-month and multi-week cycles. Most importantly, there is finally evidence that price is on the downside of the multi-year cycle; more discussion of this will take place in Monday's blog entry.

It was mentioned in yesterday's post that with a MW low not due until early September and a MM low not due until early October, price should fall sharply over the next couple of weeks. The multi-year moving average (MY MA) near the 1986 level or the yearly pivot at 1948 are areas to watch for support for the multi-year low.

The hourly chart shows price falling throughout the day in what was a trend day down. Price finally made its 24Hr low in overnight trading and is currently testing the Session MA for support for a Session low. The 24Hr high is overdue, and while it is possible the high was seen several bars ago, I expect that price will test the 24Hr MA or the daily pivot shortly after the NY open before the 24Hr high is seen. The multi-day low is also overdue, so a rally up to the blue MD MA would be expected by early next week unless the MD cycle gets muted by the strength of the MW and MM cycle downturn.    

Thursday 8/21/2015

The daily chart shows price yesterday making a lower high, lower low and lower close versus Tuesday's candle with price finding soft support at the lower triangle boundary. Price today has opened below the daily pivot and has thus far made a lower low.

With the movement of the past two days, it is apparent that price is on the downside of the multi-day cycle. It is still unclear, however, where we are in the multi-week cycle; until price takes out the early July low or the mid-July high, it seems likely this uncertainty will persist. A MW high is projected for Monday, but it is possible that high was seen on Tuesday.   If so, this would normally mean that we have another two weeks of decline ahead of us before the projected MW low is found, but the cycles have been behaving anything but normally lately.

Stock prices should drop dramatically over the next two weeks if we are on the downside of the MM and MW cycles, so this is a high risk time for the market. Failure to do so would indicate an underlying strength that could propel the market much higher once these cycles turn up. As mentioned in Monday's blog, there is no need to be a hero while the market sorts this out;  the ensuing move in either direction will be large enough to participate after the direction is decided.

The hourly chart shows price making its 24Hr low at noon yesterday before a sharp Fed comments-induced rally that marked an early 24Hr high. Prices quickly gave up all of those gains and drifted sideways until an overnight sell-off which has taken out yesterday's low.

Price is currently searching for a Session high. A Session low and 24Hr low are projected for noon.  We are overdue for a multi-day low as well, and it is likely the next 24Hr low will also mark the MD low.  Should the next Session low be higher than the overnight low, it would mean the 24Hr low was already seen and I would expect price to rise through the rest of the day. Whether price will be able to reach the MD MA/MW MA confluence area near 2084 today is questionable, but I would expect that area to be tested in the next few trading days, unless the MD cycle gets muted by the downward force of the MW and MM cycles.  

Wednesday 8/19/2015

The daily chart shows price yesterday making a higher high and higher low but lower close versus Monday's candle. Price today has opened below the daily pivot and thus far made a lower high and lower low and is testing the MD MA, MW MA, MM MA and monthly pivot confluence area. If price is still on the upside of the multi-week cycle then price should find support in this area or at the weekly pivot slightly lower. The MW high is not projected until next week, but lately the MW highs and lows have been coming earlier than projected. It is possible that yesterday was an early MW high and that we are now on the downside of the MW cycle; should price fall back down to test the lower triangle boundary, it would indicate this is the case.

The hourly chart shows price yesterday making its 24Hr low on daily pivot support and then finding resistance for its 24Hr high overnight at the new daily pivot. This lower 24Hr high, as well as the downward turn of the white 24Hr MA, confirm the overnight Monday high as a multi-day high. We are in the timeframe to see a multi-day low put in, and the confluence area of the monthly pivot and MD and MW MAs is a logical place for this low to be seen. With a 24Hr low projected for early afternoon, it is possible that this support area will see the low put in early, or price could probe lower for support at the level of the weekly pivot.  

Tuesday 8/18/2015

The daily chart shows price yesterday making a higher low and higher high and close versus Friday's candle. Yesterday's close was above all higher timeframe pivots and MAs and also above the triangle downtrend line. Price today has opened above the daily pivot and made a higher high but is currently trading below yesterday's close.

The action of the last two days has turned both the MD MA and MW MA upwards, confirming last week's low as an early multi-week low. The multi-week high is not projected until next Monday, though the MW cycle has shortened as of late for both MW highs and lows. We will see if the blue MD MA can provide support during this upturn in the MW cycle and let price lift out of this consolidation; if so, it would call into serious question my current belief that we are on the downside of the multi-month cycle. Little upside and an earlier-than-projected MW high would lend more credence to that belief.

The hourly chart shows price yesterday making its 24Hr low on weekly pivot support. It was mentioned yesterday that this would be a logical time and place for the 24Hr high to be made, but with the tightening range price had seen I felt little confidence in the ability of price to eclipse the overnight high. Price did so rather easily however, and didn't stop rising until well after the NY close.

Price in overnight and pre-market trading has dropped back to the 24Hr MA and the daily pivot where it is looking for support to put in the 24Hr low. If price is still on the upside of the multi-day cycle, then daily pivot support should hold and price should spend the rest of the day on the upside of the 24Hr cycle. We are in the timeframe for a MD high to be seen, however, and it is possible that the overnight high was also a MD high. If so, it is possible that either the 24Hr low extends in time and breaks daily pivot support, or that price makes its 24Hr low here but makes an early, lower 24Hr high this morning and then breaks daily pivot support on the downside of the next 24Hr cycle. The key will be to watch the gold Session MA for support and resistance throughout the day. As long as it is providing resistance, we are on the downside of the 24Hr cycle, and as long as it provides support we are on the upside of the cycle.

Monday 8/17/2015

The monthly chart shows price thus far in August having made a lower high and higher low versus July's candle. Price is currently trading just below the monthly pivot and just above the MM MA, and the MM MA is starting to flatten out. It remains unclear if the May/July double top marked a multi-year high or if that high has yet to be seen. When the MY high is in, price should trade below the MM MA and turn that MA downward. Price would then be expected to test the white MY MA for support (currently nearly 100 points lower).

The weekly chart shows price last week making a lower high and lower low but higher close than the prior week. Price early in this week's candle has opened above its weekly pivot and is trading near the levels of the monthly pivot and MW MA. As with the monthly chart, the weekly chart is unclear as to whether the May/July highs were a multi-year high; it is unclear even where we are in the multi-month cycle, as price has traded mostly sideways for several months now. My belief is that we are currently on the downside of the multi-month cycle, with the MM low not projected until October.

If May/July marked a multi-year high and we are currently on the downside of the multi-year cycle AND the multi-month cycle, I would expect price to be falling sharply rather than trading sideways. Corrections in time rather than price during the downsides of any cycle are usually extremely bullish and lead to sharp moves up once the cycle low is found. Thus, while it is my expectation that price will trade lower out of this range, I am open to the possibility that a resolution to the upside will lead to a large move higher.

The daily chart shows price last week making a Wednesday low, a somewhat unusual occurrence that often marks a multi-week low; while the MW low is not projected until tomorrow, it remains a possibility that Wednesday was indeed an early MW low. Price today has opened above the daily pivot and tested the upper triangle boundary but is currently trading below its daily pivot and is testing MD MA and weekly pivot support.

If price is on the downside of the multi-year cycle, price should make a lower multi-month low, which is why I expect price to take out the early July low before the projected October multi-month low. Failure to do so would indicate that either we have not yet seen the multi-year high, or that we have already seen the multi-year low. Either scenario would be bullish (the latter even more so), which is why I would expect any surprise upside resolution to the multi-month trading range to lead to a significant move up. With so much possible downside and yet the potential for a large move upward, there is zero need to be a hero while price remains within the triangle pattern; when price gives evidence of its intention there will be plenty of time (and price) left to participate.

The hourly chart shows price having made a multi-day low on Wednesday of last week and then trading mostly sideways since, with price finding resistance at the MW MA and support at the weekly pivot or MD MA. The designations of MD highs and lows is becoming difficult as price whipsaws in a narrow range toward the apex of the triangle pattern shown on the daily chart. Price appears to have made a 24Hr high in overnight trading and is currently trading lower in search of its 24Hr low which is slightly overdue; the weekly pivot would be a logical place for the 24Hr low to be made. With the trading range narrowing and only about ten points between the MW MA resistance and weekly pivot support, today could be a good day to run some errands or read a book - anything to get one away from the trading screen until price breaks out of this range.

Friday 8/14/2015

The daily chart shows price yesterday making a higher high and higher low but lower close versus Wednesday's candle. Price thus far today has opened below the daily pivot and has taken out yesterday's low.

It remains to be seen whether Wednesday's low was a multi-week low. Wednesday lows frequently mark multi-week lows, and the blue MD MA has started to turn upward, which would indicate that price is on the upside of the multi-week cycle; with price trading back below that moving average, however, that turn is not yet definitive. A MW low is projected for early next week, so we will see if price can move lower by then to take out Wednesday's low. If not, it will further strengthen the triangle pattern which is quickly nearing its apex.

The hourly chart shows price yesterday dropping down to the daily pivot for its 24Hr low but being unable to break MW MA resistance and surpass yesterday's 24Hr high. This indicates that yesterday's pre-market high was also a multi-day high. A 24Hr low is projected for late morning, and price should take out yesterday's low before then if we are still on the downside of the MD cycle.  

Thursday 8/13/2015

The daily chart shows price yesterday making a lower high and sharply lower low versus Tuesday's candle, but closing slightly higher on the day. Price today has opened above the daily pivot and is thus far trading above yesterday's close.

Yesterday's sharp reversal off the lows kept the triangle pattern more or less intact, but with the increased volatility and the narrowing of the triangle a conclusion is likely to come soon. It remains to be seen if yesterday's low proves to be an early multi-week low; the MW low was projected for next week but the early prior MW high and the unfolding triangle pattern make it possible that the MW low is already in. If so, price would normally be expected to move upward and turn the blue MD MA upward with it. In a triangle pattern, however, things are rarely normal.

The hourly chart shows price trading down to a 24Hr low in the 11:00am hour and then rallying sharply for the remainder of the day before finding resistance at yesterday's daily pivot. Price traded slightly higher overnight to test the green MW MA where it appears it may have put in a 24Hr high. Price appears to be falling into its 24Hr low which is projected for late morning.

The strength of yesterday's move out of the morning low indicates that yesterday was likely a multi-day low. If price is still on the upside of the MD cycle then price should find support for its 24Hr low at the 24Hr MA/MD MA/weekly pivot confluence area at the 2080 area, or at the daily pivot at 2071.50. Because of the triangle pattern, we must be aware that the early morning 24Hr high may also have been a MD high, in which case price would not find support at these levels and could trade down to retest yesterday's low.

Wednesday 8/12/15

The daily chart shows price yesterday making a slightly higher high and slightly lower low as price gave back most of Monday's gains. Price today opened below the daily pivot and traded below the July 27 multi-week low but has thus far recovered back above the lower triangle boundary. With the action of the prior two days, it does appear that Monday's move up was just a sharp move into a multi-day high and that price is still on the downside of the multi-week cycle. The multi-week low is projected for 8/18, giving price plenty of more time to decline into its MW low should the lower triangle boundary fail to hold.

The hourly chart shows price yesterday dropping throughout the morning until finding its 24Hr low mid-afternoon. Price then rallied back in late afternoon trading until finding its 24Hr high under daily pivot and 24Hr MA resistance, confirming that price was on the downside of the multi-day cycle. Price then fell off sharply in overnight trading, taking out yesterday's low.

Price is currently trading above the gold Session MA, which likely indicates that the 24Hr low was seen several bars ago. Confirmation of this would come with a higher Session low due roughly an hour after the NY open. With the 24Hr low not projected until early afternoon, we must remain open to the possibility that price will instead see a lower Session low and new lows.

Tuesday 8/11/2015

The daily chart shows price yesterday with a wide-range bullish bar that closed above all higher timeframe pivots and MAs. Price thus far today has made a slightly higher high but has sold off and is currently trading slightly below all but the weekly pivot. 

 Yesterday's action was certainly that of price on the upside of the multi-day cycle, but was it anything more than that? The blue MD MA is trying to curl upward, which would indicate that price is on the upside of the multi-week cycle, but unless price can regain its footing today that upward curl may not exist at the close. It is also possible that we are entering into yet another triangle pattern, where price continually chops through higher timeframe support and resistance and makes the designations of cycle highs and lows a nightmare. Until proven otherwise, however, I have no choice but to stick with my current designations which say that price is on the downside of the multi-week, multi-month and multi-year cycles.

The hourly chart shows price yesterday with a trend day up, rising all day and trading above all higher timeframe resistance. Price then dropped overnight and in pre-market trading and is currently attempting to find soft support at the monthly pivot.

The strength of yesterday's move confirmed the Friday low as a multi-day low. The inability of price to find support at the daily pivot or 24Hr MA overnight indicates that yesterday's high was likely the multi-day high. Price is overdue for a 24Hr low to be seen, and the monthly pivot or weekly pivot below would be likely places for this low to be made. If price is indeed on the downside of the MW, MM, and MY cycles, or just in the midst of a triangle pattern, price is less likely to respect these pivots as support. The ability of price to find support here and eclipse yesterday's high would be bullish and cast more doubt on my bearish scenario.

Monday 8/10/15

The monthly chart shows price in the August candle thus far making a lower high and higher low - an "inside" candle - versus the prior month. Price this month has tested and thus far found support on the MM MA and the monthly pivot. As long as price continues to find support at these levels, it indicates price is on the upside of the multi-year cycle; the weekly chart provides some earlier clues that the overdue multi-year cycle high is behind us, however.

The weekly chart shows price last week making a lower high, higher low and lower close versus the prior week. Price closed below its weekly pivot, monthly pivot, and the MW and MM MAs, and turn the green MW MA downward in the process. Price early in this week's candle has opened below its new weekly pivot but is currently trading above it all of the higher timeframe pivots and MAs.

The downturn of the of the MW MA indicates that price is on the downside of the multi-month cycle. This in turn means that price saw an earlier than projected multi-month high, a high which matched the May high to the tick.  This double-top of MM highs indicates a strong likelihood that one of these MM highs was also the multi-year high, meaning we are now on the downside of the multi-year cycle. The past several multi-year lows have seen very shallow and brief pullbacks, with the MY low coming only a couple of months after the MY high. If the MY high was the May MM high, we are already in the timeframe to see a MY low. While it is unlikely that the July low was the MY low, a double-bottom of that low in the coming weeks could conceivably occur. A more normal multi-year downcycle, however, would see price drop down to the white MY MA or lower.

The MM high was projected for this week, and any readers of this blog know that I was fully expecting price to be at an all-time high before the cycle turned. With the market up strong to start the week, it is tempting to hope for a strong move up this week that will fulfill my prior expectations. Should that occur, it would mean that the July low was a multi-year low, a wildly bullish interpretation as it would indicate we are just starting a new multi-year cycle up. While I think a sharper pullback into a MY low is more likely, this is an alternative outcome.

The daily chart shows price last week making a Wednesday high and Friday low, closing below the weekly and monthly pivots and the MD, MW and MM MAs. With both the MD MA and MW MA pointing downward, it is evident that price is on the downside of the multi-week and multi-month cycles. The MW high was projected for tomorrow but instead came on 7/31 in a half-span shift of the cycle high. The MW low is projected for 8/18. With price on the downside of the MM and MW cycles, any rallies should find resistance at the monthly pivot, the MW MA/MM MA convergence area, or the downtrend line from the July highs.

The hourly chart shows price on Friday making its 24Hr high against daily pivot resistance and dropping down into its 24Hr low which came one hour past projection. Price has since rallied sharply and is currently testing the monthly pivot and the MW MA from below; this sharp rise indicates that price is on the upside of the MD cycle, and I have marked Friday's low as the MD low. A multi-day high is projected for tomorrow after the close, but resistance from the MW MA and monthly pivot could see this high put in early. A 24Hr high was projected for the prior bar, and it is quite possible that the high was indeed seen at this higher timeframe resistance. Price in the timeframe to turn down for a session low; a break of the trendline should indicate that the 24Hr high has been seen.

Friday 8/7/2015 - Rallies are now to be shorted

The daily chart shows price yesterday making a lower high and lower low with price closing below the weekly and monthly pivots and the the MD and MW MAs. With both moving averages now pointing downward, along with a lower multi-week high, it is apparent we are on the downside of the multi-week and multi-month cycles. The double-top of multi-month highs also makes it extremely likely that we are on the downside of the multi-year cycle. More detailed discussion of this will come in Monday's blog post, but the absolute minimum expectation for a decline would be a retest of the early July low to attempt a double-bottom of multi-month lows.

The hourly chart shows price yesterday making its 24Hr high just above daily pivot/24Hr MA resistance before falling sharply into its 24Hr low early in the afternoon. Price rallied in overnight trading where it put in an early 24Hr high under daily pivot resistance and is now retesting yesterday's low. This behavior indicates price is still on the downside of the multi-day cycle.

 A 24Hr low is projected for early afternoon, and we will see if price can double-bottom with yesterday's low to put in the multi-day low which is projected to be the next MD low. It is possible, however, that we will see the MD cycle extend in time if price is indeed on the downside of the MW, MM and MY cycles. Should price find its MD low, I would expect any rallies into the MD high to be capped at the MD/MW MA confluence area at 2090 which would provide a good shorting opportunity.

Thursday 8/6/2015 -

The daily chart shows price yesterday making a higher low, higher high and higher close versus Tuesday's candle. Price today has opened below the daily pivot and thus far made a higher low and lower high. It would appear that price is on the upside of the multi-day cycle, but the status of the MW cycle is still in question.

The blue MD MA is starting to flatten out; should price fail to move up and carry this average upward, it will indicate that price is on the downside of the multi-week cycle. The green MW MA is already pointed downward (though it is not on the more important weekly chart); while some wiggle is allowed for on the daily chart, it is important that price quickly regain this MA and turn it upward or it would indicate that price is on the downside of the multi-month cycle. In both of these cases, it would indicate that the cycle highs came early and were double tops with prior cycle highs. This would be the strongest indication that the higher timeframe multi-year cycle has seen its high and is turning downward. Price still has until the middle of next week (the projected timeframe for the MW and MM high) to make new all-time highs, but failure to do so would be a bearish scenario.

The hourly chart shows price surging after the NY close Tuesday until late morning yesterday where it found its 24Hr high exactly 24 bars after the prior 24Hr high; I had expected that this high would extend until later in the day given the assumption that price was on the upside of the MD, MW and MM cycles, and that the MD cycle itself would extend in time to give price more time to eclipse Friday's MD high. The reason for this belief is that a lower MD high would indicate that price is on the downside of the MW cycle, a bearish scenario as explained above. Price, however, dipped back below the daily pivot and 24Hr MA overnight, a signal that we are already on the downside of the MD cycle. A 24Hr high is projected for late morning, and if this is a lower 24Hr high it will confirm that price is on the downside of the MD and MW cycles.

Can today be the day that the 24Hr cycle extends in time, allowing price to take out Friday's high indicating that we are indeed still on the upside of the MD and MW cycles? Of course it can, but failure to do so sets off a chain reaction of arguments for the bearish case.

Wednesday 8/5/2015

The daily chart shows price yesterday making a lower high and lower close versus Monday's candle. Price today has opened below the daily pivot and thus far made a higher low and higher high. With price above the blue MD MA, it is safe to say that price is on the upside of the multi-day cycle. My belief is that we are also on the upside of the multi-week and multi-month cycles until Mid-August, so I would expect price to rally from here and make new all-time highs by that time. Failure to do so would likely indicate that price is on the downside of the multi-year cycle.

The hourly chart shows price yesterday making a 24Hr high under MD MA and MW MA resistance and then falling into its 24Hr low an hour before the NY close. This 24Hr low was higher than Monday's 24Hr low and confirms Monday as the MD low.

Price overnight and this morning has rallied sharply above MD MA and MW MA resistance. A 24Hr high is projected for late morning, but with price on the upside of the MD and likely MW and MM cycles it would not be unusual for the 24Hr high to extend later in time. Likewise, I expect the MD high for this cycle to extend in time, and for price to take out last Friday's MD high during this upswing of the MD cycle. A lower MD high would indicate that last Friday was an early MW high and would have bearish connotations.

8/4/2015 late-morning update

I foolishly assumed that this morning's pre-market attempt to clear the daily pivot was the 24Hr high despite it not being confirmed by a lower Session high 5 to 7 bars later.  Following that belief I assumed eclipsing this morning's high would indicate that the 24Hr low was in and that we would then be on the upside of the multi-day cycle.  While that scenario may still be the case, I must point out the alternative which is that the 24Hr high has not yet been seen (or was seen this bar), and that price has yet to seek out its 24Hr low; if so, it is still entirely possible that the 24Hr low will be lower than yesterday's low.  My belief is still that we will see a sharp move up once the multi-day low is in place, but it is possible that low is not yet in.

Tuesday 8/4/2015

The daily chart shows price yesterday opening below the daily pivot and making a lower high, lower low and lower low versus the prior candle. Price thus far today has opened below the daily pivot and is testing the weekly pivot/monthly pivot convergence for support. Price is unquestionably on the downside of the multi-day cycle; if price is still on the upside of the multi-week cycle then price should find support in this area and rally back above the MD MA before that average turns downward. If this occurs in the next day or two, my expectation is that price will see a strong rally to new highs before the next projected MW and MM highs in mid-August.

The hourly chart shows price making a 24Hr high yesterday at daily pivot resistance in pre-NY open trading and then falling sharply down to the weekly pivot/monthly pivot convergence area which provided soft support to put in the 24Hr low. Price in overnight trading has continually found resistance at the daily pivot or 24Hr MA, indicating price is still on the downside of the MD cycle. We are overdue for a MD low, and the weekly/monthly pivot convergence area is a logical place for this low to be found. It is possible that yesterday will prove to be the MD low, but price must make a higher 24Hr low to confirm this. While the 24Hr low is not projected until mid-afternoon today, it is possible that the higher timeframe pivots will provide support to put this low in early. Should price break above the daily pivot and take out the overnight high, it will indicate that price is on the upside of the MD cycle. When this happens, I would expect price to rise sharply as it should then be on the upside of the MD, MW, and MM cycles.

Monday 8/3/2015

The monthly chart shows the July candle having opened below the monthly pivot and MM MA but closing above both of those levels. Price early in this month's candle has opened above the new monthly pivot and the MM MA. As long as price remains above these levels, it is hard to argue that price is not on the upside of the multi-year cycle. We are overdue to see a multi-year high, however, and last month's double-top with the May high could mark a MY high unless price exceeds these highs.

The weekly chart shows price last week making a lower low an lower high but higher close, closing above the monthly and weekly pivots and the upsloping green MW MA. Price early in this candle has opened above all of these levels.

The upsloping MW MA indicates that the mid-July low was a multi-month low and that price is on the upside of the MM cycle. A MM high is projected for next week, and the expectation is that price will make new all-time highs by then. Failure to do so would likely mean that we have already seen the MM high, and that the MM high was a double top with the prior MM high; a double-top of MM highs would strongly hint that the multi-year cycle has rolled over.

The daily chart shows price last week making a Monday low and Friday high - classic price action in an uptrend. With the blue MD MA pointed upward, I have marked last Monday's low as a MW low. The MD MA should now provide support for any pullback until price reaches its multi-week high. The MW high is not projected until 8/12, and with price on the upside of both the MW and MM cycles, price has no excuse not to make new highs by then.

The hourly chart shows price moving mostly sideways the last few days, with price finding support on or above the MD MA but unable to get far above the MW MA. With price currently trading below the 24Hr MA and daily pivot, it would appear that price is on the downside of the multi-day cycle. A 24Hr high is not due until early afternoon, but it is possible that we have already seen an early high under 24Hr MA/daily pivot resistance. If so, I would expect price to test the MD MA for support as it searches for its MD low. 

If price is indeed on the upside of the MW and MM cycles as posited above, price should make new highs on next turn in the MD cycle. A break above 24Hr MA/daily pivot resistance will likely indicate that the MD cycle has turned up.