Wednesday 11/4/2015

Price yesterday made a higher low, higher high and higher close versus Monday's candle as price continued on its relentless march along the upside of the MW and MM cycles.  Today is the projected date for the MW high, and we are overdue for a MM high.  Until price manages to close below the MD MA for consecutive days and turn that average downward, however, we must continue to assume that the MW high remains in front of us.

With price this close to all-time highs, I expect stocks to eclipse the May/July highs before finding the multi-month high.  Whether the Fed's ZIRP was intended to inflate asset prices or that was just a side effect, they are certainly concerned with the anemic economic growth displayed during this entire recovery.  All-time market highs would certainly help consumer confidence to some extent as we head into the heart of the consumer spending season.  A turn lower here just a few points shy from new highs, however, would bring about talk of a triple-top and fears of a substantial decline ahead.  It is easy to see which news headline would be preferable to everyone.

The hourly chart shows price yesterday making a 24Hr high before the close then correcting only slightly into an early 24Hr low on daily pivot support.  With a 24Hr high not due until near the close, I would expect yesterday's high to be eclipsed by day's end, but a double-top with yesterday's high is possible if today will end up being the MW high.   In any case, until Session MA support is broken, trades today should be taken to the long side.

I suggest readers of this blog review the hourly charts from the September "retest" low forward to see the repeating signs of strength the market has shown on the upside of the multi-month and new multi-year cycles.  Right translated cycle peaks, weak corrections into 24Hr lows, and multi-day lows made well above MD MA support have all been seen numerous times. The same strength was shown on the daily chart with the weak correction into a multi-week low, of course, but there are always more examples to be found on intraday charts versus daily charts for a given period.   The concepts are all the same, however, so the knowledge learned from the hourly charts can be applied to the daily and weekly charts.