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.