Friday 1/29/16

Despite fairly large swings during the day, price yesterday still managed to make a lower high and higher low and closed little-changed versus Wednesday.  Price continues to find support on the MD MA as we continue on the upside of the MD MA, but price seems reluctant to make any upside progress.

As mentioned the last few days, we are overdue to see a MW high, but if we had experienced an inversion of the MW low, we could expect another couple of days of upside before the MW high is seen (roughly a half-span extension).   I had expected price to rally up to the MW MA before the MW high was seen, but instead price has moved mostly sideways while the MW MA has raced down to meet price.

If the MW MA provides resistance to price for its MW high, it would be an indication that price is on the downside of the multi-month cycle.   If this is the case, I would expect the recent MW low to be taken out during the downleg of the next MW cycle.   It should be noted that crude oil, which has had a high correlation with the equity markets of late, has eclipsed its MW MA the last several days; though running out of time before the downleg of the next MW cycle, there is still hope that the S&P can break through MW MA resistance. This would in turn give hope that last week's low was also a MM low.

The hourly chart shows price yesterday whipsawing around the daily pivot throughout the day, making a 24Hr high shortly after the NY open and making its 24Hr low just one bar later. The lower 24Hr high and higher 24Hr low confirmed Wednesday's 24Hr high and low as a MD high and MD low.  With price now on the upside of the MD cycle and late in the timing window to see a MW high, bulls need a strong move up during this current MD cycle.

It appears that price saw an early 24Hr high in overnight trading, and price has recently tested the 24Hr MA. On the upside of the MD cycle, it is quite possible that the 24Hr MA has provided support for an early 24Hr low.  If so, price should be free to stage a strong rally today on the upside of the daily, MD, and MW cycles.

Thursday 1/28/16

Price yesterday made a higher low and higher high versus Tuesday's candle, but closed lower on the day and below its daily pivot.    Price thus far today has opened below its daily pivot and is little-changed from yesterday's close.  We are overdue for a multi-week high to be seen, but until the MD MA ceases to provide soft support for price, we cannot assume that the high has been seen.

I have attached a daily chart of crude oil this morning, as the crude and the S&P have been tracking at an extremely high correlation since the beginning of the year, even down to the hourly chart.  One can see that crude oil has broken above its MW MA and weekly pivot decisively, indicating that its recent low was not only a MW low but a MM low.  We have discussed this possibility for the S&P futures as well, but thus far price has been reluctant to rally.   A break above the MW MA is still possible, but a close below MD MA and weekly pivot support should force swing traders to bail on any long positions and go short.

The hourly chart shows price yesterday surging into its 24Hr high just after noon, two bars earlier than projection.  The market then sold off sharply after the Fed statement to leave rates unchanged.  Price found support for an early 24Hr low at the weekly pivot and was able to climb back above the daily pivot in overnight trading.  With price having backed off below the daily pivot, it is unclear but suggestive that the overnight high was an early 24hr high, which would confirm yesterday's high as a MD high.   A lower Session high due near the open would confirm that the 24Hr high has been seen.  A 24Hr low is not projected until the close, but the daily cycle has been running shorter than normal lately, and the weekly pivot could always provide support for an early 24Hr (and perhaps MD) low.

Wednesday 1/27/16

Price yesterday made a lower high and lower low versus Monday but closed higher after finding soft support on the MD MA and weekly pivot.   Price thus far today has opened above its daily pivot but below yesterday's close.

The ability of the MD MA to act as support indicates that price is finally on the upside of the multi-week cycle.  We are overdue to see the MW high, however, so it is unclear how far price can rally before the MW cycle starts to roll over again.  Price would be expected to test the MW MA before finding its MW high, but thus far it appears that this will happen due more to the MW MA's rapid decline than the ability of price to rise.  With price just coming out of a MD low, price has at least one more MD cycle upswing to make some headway.  When price breaks below MD MA support this week or next, it will indicate that the MW high has been seen.

The hourly chart shows price yesterday rising into its 24Hr high an hour before the NY close and declining into its 24Hr low in after-hours trading.  This low was made on daily pivot/24Hr MA support, classic behavior of price on the upside of the multi-day cycle.  A 24Hr high is not projected until near the close, so I expect price to rally for most of the day today.

Tuesday 1/26/16

Price yesterday made a higher high and high low than Friday' candle, but closed below Friday's low and its own daily pivot.  Price thus far today has opened below its daily pivot and made a lower low, behavior indicative of being on the downside of the multi-day cycle.  We are also in the timeframe to see a multi-week high, but thus far price appears to have found soft support on the MD MA and weekly pivot.  Price would be expected to test the green MW MA before the MW high is seen, and if today is merely a MD low, price will have the next several days to make this test; failure to do so would be an indication of extreme weakness and lower lows ahead.

The hourly chart shows price yesterday being unable to eclipse the MW MA but finding support on the daily pivot for most of the day until breaking support late afternoon and dropping down to the MD MA and weekly pivot.  That support also broke in overnight trading but price then found its 24Hr low and has since rallied above the MD MA and weekly pivot.  We are in the timeframe to see a 24Hr high, and the daily pivot would be a logical place to find resistance for this high, especially if we are still on the downside of the MD cycle.

A 24Hr low is not projected until well after the close.  If we are still on the downside of the MD cycle, this means we should see a steady decline as soon as the 24Hr high is seen.  Failure to do so would indicate that the overnight 24Hr low was also a MD low, and price should be able to eclipse the Sunday evening highs in the next day or two.

January 1/25/16

Entering the final week of trading for January, the monthly chart shows price thus far having made a lower high and lower low versus December, with the low having taken out the August low.  Along with price trading below the MM and MY MAs and the monthly and yearly pivots, this all points to price being on the downside of the multi-year cycle.

There are two possible scenarios unfolding with one being far more bearish than the other.  It is possible that price is still searching for its overdue multi-year low after its May multi-year high. This scenario opens the possibility that price will soon find its MY low and will soon start on the upside of a new MY cycle, with its MY high not projected until the August/September timeframe.

The more bearish scenario is that August was indeed a MY low, but November saw an extremely early MY high; this would indicate that cycle(s) larger than the MY cycle have rolled over, forcing the MY cycle to roll over prematurely.  Under this scenario, a MY low would not be projected until the end of 2016, and one would expect a severe decline with price being on the downside of very high-timeframe cycles.

The weekly chart shows price last week having made a sharply lower high and sharply lower low, but closing above the prior week's close.  Price early in this week's candle has opened above its weekly pivot and is trading slightly below last week's close.   Price has obviously been on the downside of the multi-month cycle the last several weeks, but that is where the certainty ends.

Much like the monthly chart, there are two possible scenarios playing out.   It is possible that price has been searching for an overdue multi-month low.  Under this scenario, the MM low may have been seen last week or will be seen very soon, and price will soon rally on the upside of a MM cycle.  While the MM high under this scenario is already overdue due to the inversion of the MM low (see last week's blog entries), a rise of another four or five weeks would be expected. The more bearish scenario has price having made a MM low six weeks ago, but then having made an early MM high four weeks ago under MM MA resistance.  Under this scenario, price would be expected for fall for another six weeks before finding its next MM low.

The daily chart shows price last week making a Wednesday multi-week low with price subsequently rallying above the declining MD MA.   Price today has thus far opened above its daily pivot and traded above Friday'd high but is currently trading below Friday's close.  The MW high was projected for Friday, but there is a small possibility that the MW cycle also saw an inversion, in which case price could rise for another week.  How much endurance this rally will have will be a major factor in determining which scenario we are facing in the weekly chart, which in turn will go far in determining which scenario we are facing in the monthly chart.  Failure of price to eclipse the green MW MA before turning down into new lows would be a strong argument that the most bearish of scenarios is unfolding.

The hourly chart shows price rising throughout the day Friday before finding resistance at the MW MA.  Price has since traded slightly lower and is currently testing the daily pivot.  We are overdue for price to see a 24Hr low, and the daily pivot would be a logical place for price to find support for this low, especially if we are still on the upside of the MD cycle.  We are in the timeframe to see a multi-day high, however, and it is possible that Friday's 24Hr high was also a MD high.  We are also in the timeframe to expect that the next 24Hr low (or the one after that) could be a MD low.  Bulls would like to see price make this MD low on or above the MD MA/weekly pivot area to indicate that price is still on the upside of the MW cycle.

Friday 1/22/16

The daily chart shows price yesterday opening above its daily pivot and making a higher high, higher low, and higher close versus Wednesday's candle.  Price today opened just below its daily pivot but has made a higher high and is currently testing the weekly pivot.

Wednesday was undoubtedly a MD low, but it is uncertain whether it was also the overdue MW low.  The fact that price is currently trading above the MD MA is a good sign, but a glance at the chart shows several candlesticks during this MW decline whose wicks stood above the MD MA but whose bodies closed below it.  When price is able to close above the MD MA and turn that average upward, we will know that the MW low is behind us.  

The problem is that today is the projection for the MW high; a further problem is that price is currently at the weekly pivot, and if price is still on the downside of the multi-month cycle then the weekly pivot could very well provide resistance for the MW high.  It is possible that we saw an inversion, where the MW low came at the expected time of the MW high, in which case we would likely see 7-8 days (a half-span of the MW cycle) of a rally before seeing the MW high.

There is great uncertainty as to where we are in the larger multi-year and multi-month cycles, and the only way this uncertainty will clear up is to see how price reacts with higher timeframe pivots and moving averages in days ahead.   The burden of proof is currently on the bulls, and they have lots of convincing to do.

The hourly chart shows price yesterday bouncing from its overnight 24Hr low and making a higher 24Hr high just above the MD MA.  Price then fell into an early 24Hr low on daily pivot/24Hr MA support, classic behavior of price on the upside of the multi-day cycle.  Price has since rallied up to the weekly pivot in overnight and pre-market trading but thus far has found resistance there.

As mentioned above, today is the projected date for the MW high to be seen, and we are also in the timeframe to see a MD high.  While a 24Hr high is not projected until early afternoon, the weekly pivot would be a logical place for the 24Hr and MD high to be seen; it would also be a logical place for the MW high to be seen if we are still on the downside of the multi-month cycle, though the green MW MA just above would also be a normal resistance area in that scenario.

While price may very well break above weekly pivot resistance and trade to the MW MA or higher today, an eventual break below the gold Session MA will likely indicate that the 24Hr high has been seen, and a short down to the white 24Hr MA as a first target is likely to be the safest bet today, with the possibility of a much further decline if price has also seen a MD high.

Thursday 1/21/16

Price yesterday yet again made a lower high, low and close, as we continue on the downside of the multi-month, multi-week and multi-day cycles.   The August low was briefly taken out (horizontal dashed line) before we rallied to cut the losses in half.  Price today has opened above its daily pivot and is currently trading slightly above yesterday's close.

We are extremely overdue to see a MW low.  Wednesdays have been popular days for MW highs and lows lately, and it is possible that Wednesday again marked the MW low.  An inversion is also very possible, where the MW low is seen in the timeframe that we should be seeing a MW high; the MW high is projected for tomorrow, but that does not mean that it could not come earlier or later than projection.    A close above the blue MD MA and a move higher the following day (something not yet seen this year) would be a strong indication that the overdue MW low has finally been seen.  Whether that MW low will also prove to be a MM low or even the MY low will still be uncertain until we see how price reacts to higher timeframe resistance such as the MW and MM MAs and the weekly and monthly pivots.

The hourly chart shows price yesterday falling sharply into a 24Hr low early afternoon, and then rising into the close and after hours trading until finding a 24Hr high under MD MA resistance. Price in overnight trading saw price make an early, half-span 24Hr low at daily pivot/24Hr MA support, and we are currently starting to move higher.  This action indicates that yesterday was a MD low; given the overdue nature of the MW low it is also very likely that it was also the MW low, but that has been said about the last several MD lows and proved untrue.

A 24Hr high is not due until well after the close.    If yesterday's low was the overdue MW low, price should be able to move higher throughout the day ( a trend day up) and eclipse the MD MA on its way to eventually testing the green MW MA over the next several days.  

Wednesday 1/20/16

Once again the MD MA provided soft resistance to price as we continue on the downside of the multi-month and multi-week cycles.  We are extremely overdue for the MW low to be seen, but it was mentioned last week that once a high or low becomes extremely overdue there is nothing to say that it can't become even more overdue.  The most usual extreme is the inversion, where (in this case) price keeps dropping into the projected date of its MW high (Friday).

The extreme overdue nature of the MW low is coupled with one of two possible scenarios.

We are either also extremely overdue to see a MM low, or we are early in the start of a new MM cycle downswing.  The first scenario is bearish in that extensions of both the MW and MM lows would be hard to occur unless we are also on the downside of the multi-year cycle.  The latter scenario is even more bearish as it would not only point to us being on the downside of the MY cycle but on the downside of a fresh MY cycle, with August having indeed been a MY low but November having seen an early, lower MY high.   In the former scenario, price could double-bottom with the August low or make a lower low this month or next that would be the overdue MY low.   In the latter scenario, price would not be expected to find its MY low until the end of the year.

The hourly chart shows price yesterday making its 24Hr high just above the MD MA.   I had expected price to find support on the weekly pivot/24Hr MA for its 24Hr low, but instead we saw that yesterday's 24Hr high was also an early MD high, as the relentless search for the MW low continued.   It appears that a 24Hr low was seen several bars ago, as price is currently attempting to turn the Session MA upward.  We are in the timeframe to see a 24Hr high however; if we are still on the downside of the MD cycle then price should find resistance for the 24Hr high at the 24Hr MA or the daily pivot and then resume its decline.  

Tuesday 1/19/16

The monthly chart shows an increasingly bearish picture unfolding as we have made a lower high and lower low thus far in January versus December and are currently trading below the MM and MY MAs as well as the monthly and yearly pivots.

This behavior is indicative of price being on the downside of the multi-year cycle.  Of course, where price closes in a given candlestick is far more important than the journey it took to get there, so it is possible that price could close January trading above all the MAs and pivots. This would support the idea that the August low was a multi-year low and that price is currently on the upside of the MY cycle.  Should price instead take out the August low, we would be left with a choice of two bearish scenarios; it is possible that the August low was not a MY low, and price is still searching for that overdue low, or August was a MY low but we saw a very early lower MY high in November and price is now on the downside of a brand new MY cycle.  This latter scenario is the most bearish of all, as price would spend most of 2016 searching for the next MY low.  Unless price makes a higher low or double-bottoms with the August low, the bullish case for the market is lost.  Of the two bearish scenarios that would remain, the evidence would side on the latter, most bearish one.

The weekly chart shows price last week making a lower high and lower low versus the prior week, closing below all relevant MAs and pivots. This is behavior indicative of price being on the downside of the multi-month cycle.  There is some question as to whether we are overdue to see a multi-month low, or if we saw a MM low five weeks ago followed by a lower MM high two weeks later.  Again, the latter case would be the most bearish scenario, as it would mean the next MM low would not be expected until late February.

Early in this week's candle price has traded above its weekly pivot and is attempting to trade up to the MW MA.   As mentioned above, where price closes in its candle is more important than the journey it took to get there, so while a bullish open is nice to see, it has no real bearing on where price will be by the week's close.   If last week was a MM low, price should rally throughout the week in search of its MM high which is projected for next week.   If we are still on the downside of the MM cycle, price should make its high for the week today or tomorrow and then trade lower towards the end of the week.

The daily chart shows price the past two weeks finding resistance at the blue MD MA, behavior indicative of being on the downside of the multi-week cycle.  We are overdue to see a MW low, and the MW high is projected for this Friday.  Price is currently trading at the MD MA, and if it is finally able to break through that resistance it will indicate that the MW low has been seen.  I would then expect price to test the green MW MA by week's end.  Should price instead find resistance here at the MD MA, it would become more likely that we will see an inversion, with the MW low coming on the day of the projected MW high.

The hourly chart shows price yesterday making a 24Hr high under weekly pivot resistance and making a higher 24Hr low several hours later just below the 24Hr MA.  This confirmed Friday's low as a multi-day low.  Price has since traded higher but appears to have made a 24Hr high three hours ago, as price is now trading below the Session MA and that MA has begun to turn lower.   A 24Hr low is projected for late afternoon, but if Friday was also a MW low then I would expect price to find support for the 24Hr low at the weekly pivot/24Hr MA confluence area near 1890.  If this occurs price would then be free to test the MW MA on the upside of the daily, MD , and MW cycles.

Friday 1/15/16

Apologies but there will be no blog post today or Monday 1/18/16.

Thursday 1/14/16

The daily chart shows price yesterday making a higher high but lower low and sharply lower close versus Tuesday's candle.  The MD MA provided "soft" resistance for price yesterday, indicating that price is still on the downside of the multi-week and multi-month cycles.

We are well overdue for price to make a MW low.  The problem when cycles deviate too far from their norms is that there is nothing to say that they can't deviate even further, to the point where inversion even becomes likely; that is, at some point price is just as likely to keep falling into the projected 1/22 MW high as it to rally into it.  That being said, I don't think we are at that point yet, and the odds still say that the next MD low will also be the MW low.

The hourly chart shows price yesterday making its 24Hr high at MD MA resistance.  While I even mentioned in yesterday's blog that the 24Hr high was likely to also be the overdue MD high, I failed to go short as I believed that we were on the upside of the MW cycle and would see a tame decline into a higher MD low.  That incorrect belief left me at the train station as price cratered through the daily pivot and quickly took out the prior MD low.

It appears that a 24Hr low was seen in after-hours trading.   It is unclear whether a 24Hr high and higher 24Hr low have been seen.    If so, it would mean that yesterday saw a MD low (and likely MW low) and price should rise sharply throughout the day.   If we have not yet seen the 24Hr high, however, price will likely find resistance at the 24Hr MA or daily pivot and then fall throughout the day.  Scenarios like this are extremely frustrating as there is plenty of money to be made but much of the move will be completed before it is evident which possibility is unfolding.  

Wednesday 1/13/16

Price yesterday made a higher low and higher high versus Monday's candle.  Thus far today price has opened above its daily pivot and made a higher high and is currently trading above the MD MA, a hint that Monday was indeed the multi-week low.  A MW high is projected for 1/22, and how high price can go before then depends on whether Monday was also a multi-month low.   If so, price should at least test the green MW MA before the MW high is seen, but if price finds resistance at the weekly pivot at 1955 then it could mean that the MM low has yet to be seen.

The hourly chart shows price making a 24Hr high an hour before projection yesterday morning but finding support for an early 24Hr low on daily pivot support, behavior indicative of being on the upside of the multi-day cycle.   In overnight trading price finally touched the MD MA, something I expected since Friday morning when I said to prepare for a "face-ripping rally".  Of course, price at that point was at 1951, ten points higher than now, and the MD MA at that time was at 1991, 50 points higher.   It's safe to say that if that call wasn't so damaging, it would be laughable.

It is unclear at this point whether price saw an early 24Hr high in overnight trading and is now attempting to find support for its 24Hr low on the 24Hr MA, or if this is merely a pullback into a Session low.  The 24Hr high is not projected to be seen until late morning, but we have been experiencing early highs and lows over the last several trading days.  We are also due to see a MD high, so it is possible that today's 24Hr high will also be the MD high.  Price should then make a higher MD low in the next day or two before continuing higher in search of its MW high.

Tuesday 1/12/16

Price yesterday made a lower high and lower low but slightly higher close versus Friday's candle.   Price today has opened above its daily pivot and taken out yesterday's high, behavior indicative of price being on the upside of the multi-day cycle.  It is possible that yesterday also marked the overdue multi-week low, but until price is able to trade above the blue MD MA and turn that average upward this will remain speculation.

If price requires one more MD cycle before finding its MW low, price will find resistance at the MD MA and turn lower.  If yesterday was also a MW low, price should test the green MW MA before its next MW high (projected for 1/22).   It is also possible that yesterday could prove to be a multi-month low, in which case price could move even higher before finding its next multi-month high (also projected for the week of 1/22).

The hourly chart shows price yesterday making its 24Hr high under daily pivot resistance and then falling into an early, slightly lower 24Hr low.   Price in overnight/pre-market trading was finally able to break through daily pivot/24Hr MA resistance, indicating that yesterday was a multi-day low.  We have since taken out yesterday's high as price searches for its 24Hr high projected for 11:00am EST.  It is likely that the next 24Hr high will also be the overdue MD high, and the blue MD MA or weekly pivot would be a logical place for this high to be made.  If yesterday was also a MW low, it is possible that both the 24Hr high and MD high will extend in time and we could see price rally throughout the day.  For scalpers or day traders, any dips down to the brown Session MA should be bought until price reaches the MD MA, then more caution will be needed as we see how price interacts with that resistance.  For swing traders, one should be long until price visits the MW MA.

Monday 1/11/16

The monthly chart shows price thus far in January having made a lower high and lower low, with price currently trading below the MM and MY MAs and the monthly and yearly pivots.  This is behavior indicative of price being on the downside of the multi-year cycle, and unless price can rally soon and regain these key pivots and MAs by month's end it is likely that August's lows will be taken out.

The weekly chart shows price last week opening below its weekly pivot and making a lower high and sharply lower low and close versus the prior week.  Price thus far in this week's candle has opened well below its weekly pivot and has made a lower low, as price continues on the downside of the multi-month cycle.

We are well overdue to see a multi-month low, unless the dip down to the white MY MA four weeks ago was a MM low.   If that is the case (I don't believe that it is), it would be very bearish and mean another 6-8 weeks of downside until the MM low would be expected.   If we are still searching for an overdue MM low as I believe, price should bottom soon and allow price to rally into its next MM high projected for 1/22.

The daily chart shows price last week making a Monday high and Friday low, classic behavior of price on the downside of the MW and MM cycles.  We are overdue to see a MW low, and it is reasonable to expect that low to be seen soon.  The next MW high is projected for 1/22, and I would expect price to at least test the green MW MA before that high is seen.   Price closing above its daily pivot, then opening above its next daily pivot will be an indication that price is on the upside of the multi-day cycle.  Price trading above the MD MA and eventually turning that average upward will be an indication that price is on the upside of the multi-week cycle.

The hourly chart shows price on Friday making an early, slightly higher lower 24Hr low but again finding resistance at the daily pivot for its 24Hr high and selling off into the close.   Price found a lower 24Hr low in Sunday evening trading and has been rallying since.   We are in the timeframe to see a 24Hr high, and price appears to be having trouble with 24Hr MA/daily pivot resistance, indicating price is still on the downside of the MD cycle.  We are long overdue to see a MD low, but until price can overcome 24Hr MA/daily pivot resistance we must assume that the low has not been seen.  

Today is set up to be a trend day down, with price on the downside of the MM, MW and MD cycles.    Failure of price to decline throughout the day would be an indication that the overdue MD low has finally been seen, and would likely mean the overdue MW low has been seen as well.

Friday 1/8/16 - Today could be the start of a face-ripping rally

Price yesterday opened below its daily pivot and traded sharply lower, as we continued on the downside of the MD, MW, and MM (and multi-year?) cycles.  Price today has opened below its daily pivot, double-bottomed with yesterday's low and rallied up to its daily pivot.

Yesterday was the projection for the MW low.  We are either overdue for a MM low (short-term bullish but with long-term bearish implications) or early in the downswing of a new MM cycle (very bearish).  How far price rallies into its next MW high, projected for 1/22, should give us clues on where we are in the multi-month cycle.  First we must make a MW low, however.  While it is possible that the MW low came exactly on projection yesterday, it is also possible that yesterday was merely a MD low, and we will see one more MD cycle before the MW low is found.   In either case, I would expect price to visit the MD MA near 1982.  If we are still on the downside of the MW cycle, price will find resistance there and head lower; if we are on the upside of the MW cycle, price will be able to trade above the MD MA and lead that average higher.

The hourly chart shows price yesterday making its 24Hr high late a.m. under 24Hr MA resistance, behavior indicative of still being on the downside of the MD cycle.   Price then declined into an early, slightly lower 24Hr low just after the NY close.  We were able to trade above the 24Hr MA and daily pivot in overnight trading, a strong indication that yesterday's low was a multi-day low.   It is unclear whether price saw an early 24Hr high followed by an early 24Hr low just two bars ago.   If so, it would confirm yesterday as a MD low and mean price should rise throughout the day.   If we did not see a pre-market 24Hr high/low, then the 24Hr high is due late morning, and price should spend the rest of the day searching for its 24Hr low. In either case, I expect price to rally to the MD MA today before the 24Hr high is seen.

As mentioned above, it is possible that yesterday was also the MW low, and possibly even a MM low.   If so, we should expect a face-ripping rally; it is possible that we will see a MD high today or Monday followed by one more lower MD low before the MW low, however.   The interaction between price and the blue MD MA will tell us which to expect.  Going long here and taking partial profits at the MD MA would be a reasonable plan.

Thursday 1/7/16

The daily chart shows price yesterday making a lower high, lower low and lower close versus Tuesday, as price continues on the downside of the multi-week and multi-month cycles.  The multi-week low is projected for today, and while the global sell-off has all the makings of a climactic washout, we must remember not to trade based on projections, but upon price.  Price will find its MW low, likely this week, then rally above the blue MD MA, eventually turning that average upward to confirm that the MW low is behind us.  How sharply price rallies into its next MW high due at the end of January will help us shed light on where we are in the multi-year and multi-month cycles.

The hourly chart shows price making its 24Hr low yesterday just before the NY open then finding resistance at the 24Hr MA several hours later for its 24Hr high.   Price plunged lower in overnight trading as we continue on the downside of the MD, MW and MM cycles.  Price is currently trading above the gold Session MA, indicating that the 24Hr low has possibly already been seen.   A Session low will be due near the NY open (also the projected time for the 24Hr low), and a higher Session low would confirm that the 24Hr low has been seen.    It is likely that either today's 24Hr low or the next will be the MD low, and it is also likely that the next MD low will be the MW low.  

Wednesday 1/6/16

Price yesterday made a hammer-like candle on trendline support just two days shy of the projected date of the multi-week low, giving hopes that perhaps the MW low was seen on Monday.   Trading today has dashed those hopes as price opened above its daily pivot but has sold off sharply and taken out Monday's low.  The MW low is projected for tomorrow; an early low (today) would make for a fairly usual Wednesday MW high/low, while an extension beyond tomorrow would obviously be more bearish.

The hourly chart shows price yesterday making a higher 24Hr low in pre-market trading, indicating Monday's low was a multi-day low.  Price was unable to move above its daily pivot or the prior 24Hr high, however, a sign of extreme weakness that hinted at the large drop to come. We are now in the timeframe to see a 24Hr low, but with price again on the downside of the MD, MW and MM cycles, it would not be surprising to see this low extend in time.  The 24Hr high is projected for late afternoon.

Tuesday 1/5/16

The daily chart shows price yesterday opening below its daily pivot and moving sharply lower, taking out the mid-December low before rallying slightly to close on the trendline formed from prior multi-month lows.  Price today has again opened below its daily pivot and is trading below yesterday's close.  

Price is certainly on the downside of the multi-week and multi-month cycles.  A MW low is projected for Thursday, but the bigger concern is the MM cycle; it is likely that we are overdue to see the MM low, meaning the impending MW low will most likely also be the MM low.  There is a slim chance, however, that we are on a new MM cycle whose low would not be expected until early March.  Price is currently testing the MY MA on both the monthly and weekly charts; if price is on the upside of the MY cycle, price should find support at this level.  Failure to do so would again give bears hope that the multi-year low has not yet been seen.

The hourly chart shows the steep decline yesterday until noon, when price found its 24Hr low. Price then rallied above its 24Hr MA and daily pivot in overnight trading where it made its 24Hr high.  While that high was just barely above the daily pivot, the fact that we were due to see a multi-day low combines to make it likely that yesterday was a MD low.  If so, price would be expected to make a higher 24Hr low by noon today, and in fact it may already have done so several hours ago.   If so, price should take out the overnight high and move higher throughout the day in search of its 24Hr high (and likely its MD high).  The confluence area of the MD MA, MW MA and monthly pivot near 2038 would be the logical place for those highs to be found.

Monday 1/4/16 - Happy New Year?

As we open 2016, the monthly chart shows price in December having made a lower high, higher low, and lower close versus November's candle.  Price closed the month below its monthly pivot (bearish) but above the MM and MY MAs and above the 2015 yearly pivot (bullish).  The MM MA also turned upward in December, which would seem to indicate that the August low was a multi-year low and price should be on the upside of a new MY cycle.

Price has started off this first day of 2016 on a down note, with the futures now showing price trading below its new monthly pivot, new yearly pivot, and MM MA and trying to find support on the MY MA.  Much like the bullish Monday Low/Friday high scenario often discussed on the daily chart, it is not unusual for a monthly candle in an uptrend to start the month off with weakness, establishing the candle's low early in the month and closing near its highs.  There is no guarantee that this is what will occur, but we should not react too negatively to today's action.

The weekly chart shows price last week having made a higher low and higher high but lower close versus the prior week, seemingly finding resistance at the MM MA.  Price early in this week's candle has opened below its weekly pivot and is trading sharply lower, testing the MY MA and approaching the mid-December low.   That mid-December low has stood as the potential multi-month low, but if it is taken out then the picture becomes more confusing.  Was it a MM low, and last week saw us make an early MM high under MM MA resistance?  Or was mid-December merely a MW low and last week a MW high, and price is still searching for its MM low?   I lean toward the latter, as price never saw a higher MW low to confirm the December low as a MM low.

The daily chart shows price last making what appears to be a MW high on Wednesday. Frequent readers know that Wednesdays are rarely the high or low of a week, but when they are they usually mark a MW high or low.  So price is on the downside of the MW cycle with a low not projected until 1/7.   The green trendline drawn from prior MM lows has thus far failed to provide support, a somewhat worrisome failure, though it could still provide "soft" support should price rally above it by day's end.

As mentioned above, it is unclear whether the Mid-December MW low was also a MM low; price certainly is not behaving as if it was, however, as it easily sliced through all higher-timeframe pivots and MAs that should have provided support if price was on the upside of the MM cycle.  With the status of the MY and MM cycles unclear, and price definitely on the downside of the MW cycle, there is greater than normal risk for price to continue declining sharply for most of this week.

The hourly chart shows price making a multi-day high after Tuesday's NY close and declining relentlessly into today's pre-market trading.  Such forceful moves in either direction make designating 24Hr highs and lows difficult, as the daily cycle is overwhelmed by the combined strength of the MD and MW cycles.  We are currently either in the timeframe to see a 24Hr low or grossly overdue to see such a low.  We are also in the timeframe to see a MD low, but with the MW low not due until late in this week and no higher timeframe support to force an earlier turn, I would expect any rally to be very short-lived and likely to be capped at resistance near 2040. A break of the gold Session MA to the upside should indicate that price has found its 24Hr low.