Friday 12/11/15

The daily chart shows price yesterday making a lower high and higher low and slightly higher close versus Wednesday.  The MD MA again provided resistance to yesterday's move, indicating that price is still on the downside of the multi-week cycle.   Price today has confirmed this by opening below the daily pivot and making a new low for the week; in doing so, this week has seen a Monday high and Friday low (MH-FL), textbook bearish action during the downside of MW cycle.

We are now overdue for the MW low to be seen.  The fact that the MW low has extended in time is a worrisome hint that we may be on the downside of the multi-month cycle, and if we are on the downside of the MM cycle then the MW low could extend in time even further.  Even more troublesome, if we are still on the downside of the MM cycle, then we are overdue for the MM low, which in turn hints that we are on the downside of the multi-year cycle.   

I had mentioned in Monday's blog that this week's action was very important- with just the slightest effort bulls could have achieved all-time highs and confirmed that price was on the upside of the MW, MM and MY cycles; instead we have seen growing indications that the exact opposite was true.   The bullish argument is not yet dead, but the risk of a sharp sell-off has increased dramatically.

The hourly chart is just as confusing today as it was yesterday.   I mentioned that the setup yesterday morning looked very similar to the prior day's setup, and indeed the action was similar.  Price rallied on the open, found resistance at the MD MA and quickly reversed the rally. While I am not extremely confident my designations of the 24Hr low and high, it does appear that somewhere in the after hours sideways trading that both were seen.  Price has since started falling in pre-market trading as it searches for its 24Hr low projected for after today's close.

I am equally unsure about my MD low and MD high designations.   I had mentioned yesterday that if Wednesday morning's sharp move up and then back down were news-related that I would just ignore it as noise, as the moves didn't make much sense cyclically.  Well, despite the fact that they were not news-related, I have still decided to treat the move as noise; this changes the MD low to the Wednesday low and the MD high to yesterday's high.  With a MD low not projected for Monday or Tuesday and the 24Hr low not projected until after the close, this should be a trend day down.  Failure of price to sell off sharply today would be a good indication that the MW low has been seen, forcing an early 24Hr low and MD low in the process.