The monthly chart shows price mid-way through
November having made a higher low and higher high versus October's candle but
currently trading below October's close. Price is testing its monthly pivot and
trading just above the MM and MY MAs. This is a crucial test for the market, as
the ability after the August lows to climb back above these MAs is a key point
in the argument that price is now on the upside of the multi-year cycle. If
these MAs now fail to provide support for price it will weaken that argument,
but should price find support here and move higher it will help confirm that the
August lows were multi-year lows.
The weekly chart shows price last week making a
lower high and lower low and close versus the prior week's candle. Price closed
well below its weekly pivot and on monthly pivot support. Early in this week's
candle we have thus far opened below the new weekly pivot and are currently
testing the MM MA. This is behavior indicative of price being on the downside
of the multi-month cycle. We are in the timeframe to see a multi-month low, and
the monthly pivot, MM MA and MY MA confluence area is a logical place for that
low to be found.
As mentioned above, should price find support at
this level for a multi-month low, it would further bolster the idea that price
is on the upside of the multi-year cycle. We should then expect price to reach
new all-time highs before finding its next multi-month high due in late
January/early February. This is my current expectation; obviously, if price is
unable to find support in this area and continues to trade lower, it will force
me to reassess where price is in the multi-year cycle.
The daily chart shows price last week making a
Monday high and Friday low, typical bearish behavior with price on the downside
of the multi-week cycle. Price today has opened below its daily pivot but is
little-changed versus Friday as we try to find support at the monthly pivot/MM
MA confluence area mentioned on Friday.
We are overdue for price to find its multi-week
low, and this is the logical place for that low to be seen. A multi-week high
is projected for 11/25, but if the upcoming MW low is also a MM low then I would
expect the MW high to extend longer in time. As mentioned last week, the next
swing low on the daily chart is very likely the MW low with the probability of
also being a MM low; this offers a very high risk:reward trade to get long using
whatever buy trigger one prefers with a stop just below the swing low.
The hourly chart shows price on Friday making an
early morning 24Hr high well below the 24Hr MA and daily pivot. As mentioned in
Friday's blog, with a 24Hr low projected for after Friday's close, we were set
up to see a second straight trend day down; price did not disappoint, trading sharply lower and slightly below the targeted 2017 area mentioned that morning.
We have traded modestly higher during overnight
trading, but price appears to have found strong resistance at the daily pivot in
the timeframe for price to be seeing a 24Hr high. This indicates that price remains on the downside of the multi-day cycle, and with a 24Hr low again
projected for after the close the potential for yet another trend day down
exists. However, with price overdue for a multi-day and multi-week low and in the
timeframe to see a multi-month low (and trading near higher-timeframe support
levels), I am reluctant to call for another trend day lower. While certainly a possibility, I would not be surprised to see price instead make an early higher 24Hr low or a
double-bottom with Friday's low and then rally as price will then be on the
upside of the MD, MW, and likely MM cycles. A break of the overnight high will
likely signal that the MD low has been seen and should be followed by a sharp
rally this week.
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