Price yesterday made a higher low and higher high
versus Wednesday's candle but failed at MM MA resistance and closed lower. Price
today has opened below the daily pivot and is currently trading below the MD MA.
I mentioned in yesterday's blog that I was
questioning whether last week's high was indeed an early MW high and was open to the
idea that we should instead be looking for a projected Monday MW high; it was
also mentioned that the MM MA could provide resistance for the MW high. It is
possible that yesterday was merely a multi-day high, and price is still on the
upside of the multi-week cycle; if so, price should recover the MD MA and use it
as soft support as it has done since early last week. A close below the MD MA
and a turn of that average downward would confirm yesterday as a MW high.
A MW low is projected for next Wednesday, and
where and when that low actually is made will provide a good deal of information
about where the market is in its MM and MY cycles. We could see a shallow
pullback that finds support at the green MW MA/weekly pivot confluence for an
early MW low, or we could see a severe decline that extends in time and retests
the August lows or makes new lows. This is a high-risk
area for the market right now with far greater downside risk than upside
reward.
The hourly chart shows price yesterday with a
Fed-induced spike to a 24Hr high followed by a complete retracement moments
later. Price traded mostly sideways overnight between Session MA support and
24Hr MA resistance until Session MA support broke early this morning and price
once again declined sharply. It is possible that the overnight trading saw an
early 24Hr high and low put in, which would confirm yesterday as a multi-day
high, but the severity of the decline makes the confirmation moot - we are certainly on the downside of the MD cycle.
Price is searching for its 24Hr low, and the
monthly pivot/MW confluence area at 1959 should provide support for that low to
be seen. We are also in the time window for a multi-day low to be seen, and
that confluence area should be able to provide support for that low as well. Below that region, the weekly pivot remains as support (and price has found
support there twice already this week), but after today's close we will be
looking at a new weekly pivot (currently projected for approx.
1968). Failure of these higher-timeframe MA/pivots to provide support for the MD cycle low would add evidence that supports a bearish case for the market.
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