Price yesterday made a higher high but lower low
and sharply lower close versus Wednesday's candle. Price thus far today has
opened below its daily pivot and made a lower low. This is behavior indicative
of price being on the downside of the multi-day cycle, a situation whose
likelihood was mentioned in yesterday's blog. It was also mentioned that this
occurrence would bring into question whether price saw an early multi-week high
under MM MA resistance, and that question must indeed be asked. Unfortunately,
at this point there is no definitive answer.
If price can rally today and close higher, it is
likely that the weekly pivot will have provided "soft support" for a multi-day
low and give price a chance to take out yesterday's high by the 12/24 projection
for the MW high. Obviously, price taking out Monday's low would confirm that
yesterday was indeed an early MW high, but even a slightly higher low (but solidly
below the weekly pivot) would keep the fear of an early MW high alive. If
Thursday was an early MW high, price should be expected to fall, potentially
sharply, in search of its next MW low which is not projected until
1/5/16.
The hourly chart shows price making its 24Hr high (and MD
high) in yesterday's pre-market trading and then falling throughout the day before
finding support after the close at the weekly pivot. We are overdue for price
to see a 24Hr low, and we are also in the timeframe for price to see a MD low. The weekly pivot would be a logical place for price to find support for both of
these lows, but thus far price has been unable to muster any rally, and we are
already at the projected time for the 24Hr high to be seen.
If price is on the upside of the MW and MM cycles,
price would be expected to move sharply higher out of its MD low. Should price
fail to do so today, it would be a very strong indication that price is NOT on
the upside of those cycles. While this scenario would not guarantee a dramatic
price decline, it would keep the possibility alive.
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