Monday 2/8/16

The monthly chart shows price thus far in February making a lower high and higher low with price trading below the yearly pivot, monthly pivot and MY and MM MAs.  This is behavior indicative of price being on the downside of the multi-year cycle.  The only uncertainty is whether we are still on the downside of the same MY cycle that saw the May MY high, or did we see a MY low in August followed by an extremely early lower MY high in November.  The first scenario means we are very overdue to see a MY low made, while the second scenario means we will not be due to see another MY low until the year's end.  Neither scenario is bullish, but the latter scenario is far more bearish.

The weekly chart shows price last week making a higher high and higher low but a sharply lower close versus the prior week.  Price early in this week's candle has opened below its daily pivot and the MW MA and has taken out last week's low, behavior indicative of being on the downside of the multi-month cycle.

The uncertainty in the weekly chart is where (or if) the multi-month highs and lows have been seen.  It is possible that we saw a December MM low followed by a weak January MM high, but it is more likely that the late January low was the MM low or that the MM low has yet to be seen; the question in this latter scenario is whether last week saw a weak MM high. There is still a chance that the MM high is still in front of us, or even that the MM low is still in front of us, but we are already overdue to see the MM high; last week's being the MM high fits very well with the projected date of the MM high, and the monthly pivot which provided resistance to last week's high is a likely place for the MM high to be seen when we are on the downside of the multi-year cycle.  This scenario is extremely bearish for stocks, as the next MM low would not be expected until March.

The daily chart shows price last week making a Monday high and Friday low, classic behavior in a downtrend.  Price early in today's candle has opened below its daily pivot and has made a lower high and lower low and is trading below all higher timeframe pivots and MAs.  This is behavior indicative of price being on the downside of the multi-week cycle (and likely MM and MY cycles).  A MW low is projected for Thursday.  Whether price will take out the prior January MW low or will make a higher MW low is obviously uncertain.  A higher MW low would confirm the January low as a MM low, while price taking out this low would obviously indicate that price is still searching for its MM low.  We are extremely overdue to see a MM low, as the last confirmed MM low was in August.  It is possible, as mentioned above, that we have already seen a stealth MM low and MM high since then, but it is not a certainty. 

The hourly chart shows price on Friday making a 24Hr high at MD MA resistance and declining into the NY close.  Price then rebounded in overnight trading to make an early 24Hr high under daily pivot resistance before breaking sharply lower several hours ago.  Price likely saw a Session high last hour and should now trade lower to take out the morning's lows.  A 24Hr low is not projected until after the close; with price also on the downside of the MD cycle, we should expect a very negative day for stocks.