Friday 10/16/2015 - Yesterday was the death of the bear

The bears had every chance to show their strength yesterday.  We were in the timeframe to see a multi-month high and overdue to see a multi-week high.  We had just made a multi-day high on Tuesday, giving us every opportunity for a large decline on the downsides of the MM, MW and MD cycles.  Price instead found support on the weekly pivot and printed a bullish wide range bar, taking out Tuesday's high in the process.

It is possible that price needs one more multi-day cycle before finding its multi-week (and multi-month) high, but it is just as likely that the weekly pivot provided support for a multi-week low, which would indicate that price is still on the upside of the multi-month cycle.   It would be unusual for price to not see at least another week of higher prices before the next MW high, which would be a half-span high and very likely also be a MM high.  If we see a full MW cycle, price could easily rally for another two weeks.

With the major indices trading below their 200 day MAs and below lots of overhead congestion, all is not rosy for the market.  Perhaps we will see a lower multi-month high made in the next week or two, and price will decline sharply on the downside of the MW and MM cycles and breathe new life in the bearish argument.   Extended, right-translated cycle tops like what we are seeing in the MW and MM cycles, however, argue that price is on the upside of the larger multi-year cycle.  The failure of the pink MM MA to act as resistance and the subsequent upturn of that MA also argue that price is on the upside of the MY cycle.

My short position on the market has been closed out at loss as price took out the Tuesday MD high.  The irony is that while the title of my 9/30/2015 blog entry was "a likely multi-week low was seen yesterday", I chose not to go long for that cycle upswing as I believed there was potential to see a muted upside move with the longer-term cycles headed downward. Instead, I missed out on a huge rally, going short at the likely MW high which has possibly seen the same muted move down that I feared for the prior upswing.  My thinking was sound but 100% incorrect, likely because we are on the upside of the multi-year cycle while my belief was that the multi-year low had not yet been seen.

The hourly chart shows price on Thursday making a 24Hr (and multi-day) low on weekly pivot support then rising to find its 24Hr high at MD MA resistance in yesterday's pre-market trading. Price found support for its 24Hr low on daily pivot support around noon and then rocketed higher into the close.  A 24Hr low is projected for noon, and the fact that price is merely drifting sideways into this low is further evidence of the strength of the higher-timeframe cycles pushing price higher. While 24Hr lows (and highs) are almost always made against the 24Hr MA or daily pivot, it would not shock me if price fails to drop that far and price rockets higher yet again on the open.