Friday 2/5/16

The daily chart shows price yesterday making a higher high and higher low but slightly lower close versus Wednesday's candle.  Price today has opened below its daily pivot and is currently trading slightly below yesterday's close.  It appears that the MD MA is providing resistance to price; if so, that would indicate that Monday was indeed the multi-week high and that price should fall into its next MW low, projected for 2/11.  Bulls would love to see a sideways move into this low, with the MW MA providing support for price; were this to occur it would indicate that price is on the upside of the multi-month cycle.   If price is instead on the downside of the MM cycle, the MW MA will not act as support and price should take out the January lows before its next MW low is seen.  The next several days hold little upside potential but the possibility of a large downward move should the MW MA support not hold.

 

 

 

The hourly chart shows price yesterday making its 24Hr low on daily pivot support just before the NY open.  Price then surged higher to retest the overnight highs, making an extremely early lower 24Hr high.  This lower 24Hr high confirmed the prior high as a MD high, and since it was a lower MD high than the Monday MD high, it confirmed Monday as a MW high.   Readers of this blog should re-read this paragraph to fully grasp it, as it contains the logical flow of a lower daily cycle high confirming a prior multi-day high, and a lower multi-day high confirming a prior multi-week high.  The same logic applies to higher timeframe charts (and thus higher timeframe cycles), and obviously applies in reverse to cycle lows rather than highs.

It is unclear whether we have seen another 24Hr high made five bars ago; while this would be far earlier than projection, the daily cycle has been making shorter highs and lows the last several days, and the downward bend of the gold Session MA supports the notion that price is now searching for its 24Hr low.  As mentioned above, bulls want to see the MW MA provide support for price as it searches for its MW low.   If it does, we could continue to see early 24Hr highs and lows as price chops sideways into its MW low.  A break of MW MA support should instead lead to a significant move down over the next several trading days.