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.