Wednesday 10/7/2015

The daily chart shows price yesterday making a higher high and higher low, closing slightly down versus Monday's candle but above the daily pivot.  Price thus far today has opened below the daily pivot but has made a higher high and is currently trading above yesterday's close. Yesterday was the projection for the multi-week high, and with a sell-off late in the day and a down close it appeared that maybe the projection would be spot-on; today's action obviously indicates that the MW high is still in front of us.

Readers of this blog will know that Wednesdays often mark MW highs or MW lows, so there is certainly the possibility that today will mark the MW high and the bears will then get to show what they have left in the tank as price searches for its MW low, projected for 10/16.   It is possible, however, that the overnight low marked a MD low (this will be discussed in the hourly chart commentary).   If so, a MD low made so far above the MD MA indicates enormous underlying strength in the larger timeframe cycles; such strength from the MM and MY cycles could easily extend the MW high in time, and has occasionally even muted the MW cycle so that MW lows become hard to discern.  Should today not prove to be the MW high, the argument for the August low being a MY low will strengthen dramatically.

The hourly chart shows price yesterday making a higher 24Hr high just after the NY open and trading down throughout the day, finally breaking daily pivot support several hours after the NY close. This early 24Hr high and the breaking of daily pivot support should have meant that the MD high (and likely the MW high) was in, and price should have traded down to the blue MD MA in search of support for its MD low.  Price instead regained the 24Hr MA and daily pivot and has made a higher high in pre-market trading.  My short position was sadly opened at what proved to be an early 24Hr low and I was stopped out for a decent loss as price broke through the daily pivot en route to taking out yesterday's high.  

As mentioned above, yesterday's early 24Hr high and the after-hours early 24Hr low may have been a MW high and MW low.  The lower 24Hr low certainly argues that it was, as does the slight downward turn in the white 24Hr MA.  There was no lower 24Hr high, however, and price came nowhere near the MD MA which is usually provides support or resistance for MD highs/lows.   It is quite possible, however, that the higher timeframe cycles are muting the MD cycle (and possibly the MW cycle).  This would be extremely bullish and would indicate that the multi-month and multi-year cycles are moving up strongly.   I am open to the possibility that the MD high (and MW high) will instead be seen today, but failure to do so will indicate that rather than the MW high providing a great shorting opportunity, we must look instead at the next MW low as a good buying opportunity.