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.