Heading into the final trading day of February, the
monthly chart shows price having made a lower high and lower low than January,
with price trading just above the monthly pivot and last month's close. With
price trading below the yearly pivot and MM and MY MAs (and those MAs flattening
or already moving lower), it is obvious that price has been on the downside of
the multi-year cycle. As has been discussed numerous times in this blog, the
question remains whether we have been on the downside of a cycle whose peak was
in May and are searching for an overdue MY low, or whether we saw a second,
early, lower MY high in November and are on the downside of a fresh cycle whose
MY low would not be expected until the end of the year.
Only price action can let us know the answer to
that question. If price is still searching for an overdue MY, that low should
obviously be made soon (and perhaps was seen earlier this month). Price should
then close above its monthly pivot, then trade above the MM and MY MAs and turn
those averages upward. Failure of price to do so would indicate that we are
still on the downside of the MY cycle, and the longer we remain on the downside
of the MY cycle the more likely it is that we are on a fresh MY cycle and the
decline should be expected to continue into year-end.
The weekly chart shows price last week finding support on the rising MW MA and making a higher low and higher high and close versus the prior week. Price early in this week's candle has opened above its weekly pivot and has thus far made a higher low and lower high. Last week's behavior was indicative of price being on the upside of the multi-month cycle. Similar to the monthly chart, there is a question of whether price is searching for an overdue MM high or whether we had seen an intervening MM cycle (marked with "?") and the MM high is not due until 3/25. As always, when the MM high has been seen, price will trade below the MW MA and that average will turn lower.
The fact that price was able to trade above the
monthly pivot and MM MA is a bullish sign, as those higher timeframe reference
points should have provided resistance for a MM high if price were on the
downside of the multi-year cycle. While trading above these levels is no
guarantee that price is now on the upside of the MY cycle (and it should be
noted that price is not above these levels on the important monthly chart), it
does give some hope to the bulls in an otherwise bearish chart. Should price
find support at these levels for the next MM low due early May, it would
indicate that price is indeed on the upside of the MY cycle.
The daily chart shows price last week making a
Wednesday low and Friday high as it continues to ride MD MA support higher. I
believe we are overdue to see the MW high, and price appears to be finding
resistance at the 50% retracement level of the decline from the November MM
high. If I am correct, a MW low is projected for the end of this week, and
price should decline into this low. Should price instead continue to work high,
I will be more willing to accept the fact that price last week saw a MW high and
low made (marked with "?"). This latter scenario would be extremely bullish and
lend more credence to the idea that price is now on the upside of the MY
cycle.
The hourly chart shows price Friday before the NY
open making a 24Hr (and likely MD) high, and falling throughout the day until
finding its 24Hr low on MD MA support in Sunday evening trading. Price has
rallied in pre-market trading this morning, but we are overdue to see a 24Hr
high. The daily pivot should provide resistance for this 24Hr high if price is
on the downside of the MD cycle, and price should take out the overnight low if
price is on the downside of the MW cycle. Until price breaks Session MA
support, however, we must assume that price remains on the upside of the 24Hr
cycle. Decisive trading above the daily pivot would negate the bearish outlook
for today, as it would hint that the overnight low was also a MD
low.
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