Price yesterday made a higher high but slightly
lower close versus Wednesday's candle, as price found resistance at the monthly
pivot/MM MA confluence. Price thus far today has opened below its daily pivot
and has made a lower low, action indicative of being on the downside of the
multi-day cycle.
The multi-week high is projected for next Tuesday,
but it is very possible that the higher timeframe resistance saw that high made
yesterday. This will not be known for sure until we see how price interacts
with the blue MD MA.; if price finds support at the MD MA then price is still on
the upside of the MW MA and price will try again to break MD MA/monthly pivot
resistance before finding its MW high. Failure of the MD MA to provide support
will indicate that the MW high has been seen.
I should stress that while the double-bottom of MW
lows and the ability of price to trade well above the weekly pivot and MW MA
argues that price has been on the upside of the multi-month cycle, it does not mean
that all is well for the bulls. The MM low was so overdue that it is
very possible that yesterday could have been the overdue MM high. Longs should
strongly consider exiting or hedging their positions here, and swing traders
could take a low-risk bet on a potentially sharp market decline with a stop
above yesterday's high. Trades with such a high reward:risk ratio are rare (and usually losers), but the potential demands they be taken.
The hourly chart shows price yesterday making its
24Hr high just above the monthly pivot and then falling into its 24Hr low at
daily pivot support. Price then traded sideways overnight before rising to find
an early 24Hr high under the resistance of the new daily pivot, behavior indicative of being on the downside of the MD cycle. A 24Hr low is
projected for early afternoon, and I would expect price to test the blue MD MA
before that low is seen. If price is also on the downside of the MW cycle,
price should be expected to test the green MW MA in the coming
days.
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