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.
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