Price yesterday made a lower low, lower high but
higher close versus Friday's candle, an odd scenario which, along with its
reverse sibling the higher high, higher low but lower close, has been occurring
with great frequency lately. Price yesterday ran into resistance at the blue MD
MA which had been providing support to price for over a week, confirming last
Thursday as a multi-week high. Price today has thus far also found resistance
at the MD MA and weekly pivot and has traded sharply lower.
With price on the downside of the MW cycle, the market is in a precarious situation. If we are on the upside of the multi-year and
multi-month cycles, price should simply make a higher MW low near the 9/24
projection. With price having found resistance for its MW high from the
declining MM MA, however, it is fully possible that one or both of those higher
timeframe cycles is on the decline. This opens up the possibility of the MW low
extending past the projection in time, and a retest of August lows (or deeper)
in price. There is no guarantee that this is what price will do, but as
mentioned yesterday the downside risk is far greater than the upside
reward.
The hourly chart shows price yesterday making a
24Hr high at MD MA and weekly pivot resistance. Price found support late
afternoon on the white 24Hr MA and green MW MA and then made a lower Session
high. Whether the drop to this support area constituted an early 24Hr low is
still unknown; how soon price finds its next 24Hr low will help determine that.
Should a 24Hr low be made shortly, it is likely that there was no intervening
24Hr low and high. A trend day down where the 24Hr low is not seen until near
the close or later would make it more likely that an intervening 24Hr low and
high did occur. What is known is that the support area in the 1940 area which
provided support for three different 24Hr lows has been breached, and we must
now watch this area for future resistance.
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