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Cycle Analysis... a way of looking at price action.
Probably best to do the ES so it will be familiar to those visiting the thread and they can compare your analysis to their own.
Although the 6E, which I also follow, has the same behavioral characteristics it is evolving in a different way. The 6E is in a Multi-Year downtrend while the ES remains (so far) in a Multi-Year uptrend.
"If you don't want random outcomes, don't make random decisions."
In this chart the white circles highlight the way in which the behavior of the 24 Hr ma reveals the turn of the Multi-Day Cycle, a phenomenon mentioned in the quote above and in earlier posts. Also mentioned earlier in the thread was the principle that the structure of a Dominant Cycle is built out of the Minor Cycle. In this case the Multi-Day / 24 Hr cycle pair. On a 360 Min chart, 4 bars represent the 24 Hr time frame. Look at these two MD Cycle Lows and you will see that it took 4 bars to put in the base that turned the Higher Time Frame Cycle.
If you compare these side by side charts with a critical eye you may notice that on the left the MDL was found on the blue area of MD Cycle Support while on the right, price had to push lower, breaking MD Support, to find its Low. The area of MD S/R is the backbone of the MW rotation. Support on the way up and resistance on the way down. On the left that backbone did not break until several days later. On the right it broke yesterday.
The MW High on the left was put in after breaking above MW resistance (Scroll earlier in the thread to see this).
Boxes inside of boxes.
Just as the 24 Hr S/R is the backbone of the MD rotation, and MD S/R is the backbone of the MW rotation, MW S/R is the backbone of the Multi-Month rotation. That in the earlier making of the Multi-Week High price lingered for several days before rolling over is a consequence of the Multi-Month Cycle making its turn. The larger the cycle the more time it takes. The 24 Hr Cycle can turn in a few hours. The MD Cycle takes @ 24 Hrs to turn as discussed above. The MW takes several days and the Multi-Month takes several weeks.
So, although the high on 5/30 was a MD and MW High and those cycles began to rollover, there was still some residual upside momentum in the MM and when it completed the turn out of its High, the MM downside pressure was then added to the MW and the MD downside pressure and you had the dramatic drop that began on 6/9.
The Multi-Week High that was put in on the right hand chart was made against MW resistance and not above it as the earlier cycle high had done. MW resistance is the backbone of the MM Cycle and because it held, price is still on the backside rotation of the MM Cycle. When price pushed up into this MW High it did so against the downward pressure of the MM Cycle and when the MW turned its downward pressure was added to that of the MM backside pushing price lower than before to find the MD Low and in doing so, breaking the MW backbone earlier than before. A left translation. When this MD Cycle attempts to rotate higher it will be doing so in the face of the combined MW and MM downsides.
How price behaves reveals the status of the various cycles across Higher and Lower Time Frames.
The Summation Principle.
A video was posted earlier in the thread to explain this for those who watched it.
I generally end posts with this: Ask questions, Get answers.
That questions have not been asked leads me to believe that what is being discussed is common knowledge and this suggests that the thread is probably serving no real purpose.
Good luck, Be careful.
"If you don't want random outcomes, don't make random decisions."
Spent the day riding the 6E down and did not look at the ES until just now.
"When this MD Cycle attempts to rotate higher it will be doing so in the face of the combined MW and MM downsides."
This comment was made on Friday in anticipation of the Multi-Day Cycle finding the resistance that would turn it lower, which it did in the Overnight trading. The curious similarity with the move up out of the MDL and the initial push up out the MW Low is what is prompting this post. High to High duration of 9 bars followed by a sizable 2 bar drop of 90 and 112 points and then a strong reversal bar higher.
Will price continue to follow thru in the same manner? I have no idea. If it does then today's low will stand as a MDL and as has been mentioned, MW Cycles are usually comprised of three MD Cycles suggesting the possibility of a Higher MW Low as well and a run higher to test the prior MW High at 3950. This potential MD / MW Low, if it stands, has a Double Bottom pattern with the prior MDL.... a pattern typical of a MW Low.
That being said, it is common behavior when you have a new bar, in this case the July Monthly candle, for price to initially make a move towards its Pivot to test it for Support or Resistance... 3872.25. And furthermore, when in a downtrend a candle is going to make its Low towards the end of that bar's life... a lower closing bar... and accordingly, it will make its High towards the beginning of that bars life.. it will push higher after it opens to test resistance. There is also a new Weekly bar who's Pivot has yet to be tested at 3839.50... just above today's Close.
To get to the Monthly Pivot price will have to break the Top of the Multi-Day Donchian Channel ( blue line ) and that behavior is characteristic of the upside of the MW Cycle. To do that price will break the areas of resistance represented by black downtrend line and the Weekly Pivot. When I see that happen and the trend of the MD Cycle turns higher, a higher MDL will get me long.
"If you don't want random outcomes, don't make random decisions."
The clock is running out on the 24 Hr Cycle and if this flag is going to resolve higher it will do it soon.
You can see price rotating evenly around the Sienna 6 hr ma, the Minor / Component Cycle of the 24 Hr Cycle, a confirmation of the validity of the 6 Hr Minor Cycle duration.
"If you don't want random outcomes, don't make random decisions."
Once price does what you think it might do the next problem is to decide if your expectations will continue to hold true.
As I look at these things, the behavior of described above is a separate issue from the cyclical price rotations that is the subject of this thread.
I never said it would be easy.
Notice that after price broke above the MD Donchian Channel Top and tested the Monthly Pivot it got a fairly good rejection. This rejection is to be expected on the first test of a valid area of Higher Time Frame S/R... the Multi-Day Cycle pushing up looking for its next High and encountering the Monthly Pivot.
This rejection does not mean it will or won't break this resistance but it is a confirmation of the validity of the quote above. Notice the level of the Donchian Channel Top at the break (yellow arrow) and that these last two body highs are at that level and not above it. Notice the POC's of these two candles are in their wicks... until price gets above and can hold above this area it is reasonable to assume these High Volume Nodes represent selling.
What now?
Price is on the upside of a MD Cycle. The White ma is the backbone of this upside move and will provide Support until the MD Cycle rolls over. The MD High will also be a 24 Hr Cycle High. On this 360 Min chart the 24 Hr Cycle can be seen as a 4 bar rotation. Until proven wrong, I'm considering the last bar from yesterday to be a 24 Hr Cycle High and the current bar which will close at the time of the NY Open is the 3rd bar from that High. As mentioned in earlier posts, a MD Cycle is constructed out of 24 Hr component cycles, and the turn of the MD will usually involve 4 of these bars.
Speculation.
Price pops after the NY Open and makes another run at the Monthly Pivot and fails to break resistance and reverses lower, putting in the 4th bar... the next 24 Hr High and a Double Top. Look out below.
Or. Price spends a few hours chewing thru resistance and then pops higher, possibly reaching 3970 (this was a mistype and should have been) 3907 or so in the push out of the Open, right translating this MD Cycle as the Multi-Week Cycle Upside kicks in and lifts price.
In other words.... it could go up.... it could go down.
You are welcome.
"If you don't want random outcomes, don't make random decisions."
Partially got the behavior that was expected. A pop higher at the NY Open but spent all of 4+ minutes dealing with the sellers at the Monthly Pivot instead of taking longer as mentioned....
...and exceeded the 3907 by 7 points and then ended the session 7 points below the target.
The earlier comments described price as being on the Upside of the MD Cycle and with the NY Open, the 4th bar from the prior 24 Hr Cycle High. In other words, price was going to push higher out of the Open looking for the next 24 Hr High. The where of that High was the subject of the Speculation. In earlier posts it has been discussed that on the Upside of the 24 Hr Cycle, price will find support in the area of the 6 Hr Pivot, 6 Hr ma and the Middle of the 6 Hr Donchian Channel. A test of that area at 07:34 got me Long at 3858.75. When price hit the target area and a POC began to develop on a 15 Min basis at 3907.75, the trade was exited.
At 22 Hrs from the prior 24 Hr High price is in the window for a correction and the overnight trading will likely be when that turn occurs. The High Volume Node of this 24 Hr Globex Session was 3904.25 with price closing below that level.
"If you don't want random outcomes, don't make random decisions."
The 24 Hr Cycle correction occurred in the Overnight and the prior bar on this 360 Min chart is a candidate for the next 24 Hr Cycle Low.
On these candles there is a Sienna hash which is each bars Pivot. The quote above shows the S/R role this pivot plays in understanding where we are in the 24 Hr Cycle. When this screen grab was made price was above this last bar's pivot.... 24 Hr Upside... but as of this posting price has broken the Pivot as well as the other markers of the 6 Hr time frame and fell to test the 24 Hr Pivot. Tests of 6 Hr S/R are an integral part of the 24 Hr Cycles behavior. Tests of 24 Hr S/R ( 24 Hr Pivot. 24 Hr Donchian Middle, 24 Hr ma ) are an integral part of the Multi-Day Cycle behavior. When you see price break 6 Hr Support and test 24 Hr Support you are seeing the Multi-Day Cycle probing Support and testing the status of its Upside momentum.
Comments have been added above the last bar questioning if this bar might be the next 24 Hr H and possibly mark the turn of the MD Cycle. If it is then 24 Hr Support will break and price will test lower.
"If you don't want random outcomes, don't make random decisions."
24 Hr Support gave it up... strengthening the MD Cycle turn argument. Notice that price has fallen to the Monthly Pivot and this is the first test of that area for Support after breaking above it yesterday just after the NY Open. Reasonable to expect a bounce but the conclusive evidence of a MD turn will be a test of the underside of what had been 24 Hr Support. If on the MD backside price will find resistance.
"If you don't want random outcomes, don't make random decisions."
When price does not follow expected behavior when viewed from a Cycle Analysis perspective the result is ambiguity. That price has apparently put in a Higher Multi-Week Low argues the Upside of the Multi-Month Cycle and if this is so then the Lows of 3 and 4 weeks ago would be a MM Low... a MM Low that occurred considerably earlier than projected.
When Higher Time Frame Cycles turn the Minor / Component Cycle will experience increased volatility as the range narrows the buyers and sellers contest control over price movement. Think of any consolidation period where there are sudden and frequent up and down moves. Scale that behavior up to the Multi-Week and Multi-Month time periods and you have to look at the cycle that Dominates the behavior of these two time frames.
The Multi-Year Cycle.
Is the MY Cycle in a turn out of its Low? It's a definite maybe based on being in the window where these turns can occur. I would prefer to see it push deeper into the Middle of the band where more solid support is expected to be found and that would 300 - 400 points below current price. But perfection is illusive and it is also not necessary in order to extract money out of the markets.
Keep in mind that this particular story is not finished until this 3 Month bar closes in September and much can change over that time period.
"If you don't want random outcomes, don't make random decisions."
