Thursday 12/10/15

The daily chart shows price yesterday making a lower high, lower low, and lower close versus Tuesday's candle.  Price thus far today has opened below its daily pivot and is trading near yesterday's lows.  With price having taken out last week's lows, it is obvious that we are still on the downside of the multi-week cycle, and with price below the MM MA and monthly pivot, we could very well be on the downside of the multi-month cycle as well.  A move below the November lows will confirm this; such a move would also increase the odds that we are still on the downside of the multi-year cycle and indicate that the August lows will be revisited and possibly taken out.

The hourly chart is the most confusing chart I can recall seeing.   It appeared that price had made its 24Hr low just after the open as price then rocketed higher up to the weekly pivot.   I had mentioned yesterday that we were possibly due for a multi-day low and that a break above daily pivot support would likely lead to a 10 point move higher, and possibly significantly more over the remainder of the week if the MD low was also a MW low.  Well, we got the 10 point move in a flash but then quickly took out the early morning low just two hours later.  Price inexplicably then stopped its decline and moved higher/sideways the remainder of the day and in overnight trading.

How and why did we see a 24Hr low just three bars after the prior 24Hr low?   If the brief surge higher was news-related, I could easily dismiss the move as noise and use the prior session high seven bars earlier as the 24Hr high under daily pivot resistance; the low I marked as a 24Hr low would then simply be a 3Hr low or session low and the ultimate low would be the 24Hr low.  The move higher was not news-related however, and to make matters worse it appears likely that it was also a multi-day high.  How does one ignore a MD high as "noise"?

We are currently facing a chart that looks much like yesterday's hourly chart looked at this same time.  Price has moved up and sideways from a low and has started to arch back down after finding resistance at the daily pivot and 24Hr MA.   The difference is that we were in a timeframe for a MD low to be seen yesterday, and if yesterday's high was indeed a MD high then we are now possibly days away from seeing another MD low.  A 24Hr low is not expected until early afternoon, leaving open the possibility of an ugly morning for the bulls.