Cycle Trading

Equities and commodities were smacked down today.

If equities would break below 1340, that would clearly establish this as an intermediate cycle sell off.

Tuesday saw equities break below the April 10 pivot (day 24) and leave behind a long lower tail. Now if equities get a reversal above the 1340 level, I believe that it strengthens the case that April 10 was not a daily cycle low – but a half cycle low.
So we should see a continued sell off to firmly establish this as an intermediate cycle low or a swing low and break above the declining trend line to confirm a new daily equity cycle.

Now let’s look at gold’s daily cycle

Tuesday was day 23 for the current gold daily cycle.
The timing band for a low runs about 18 – 26 days.
So at day 23, gold can print a daily cycle low any day now.
After such a big move down, I would prefer that Wednesday be a narrow range day the prints a lower low to ease the parameters for a swing low.

Let’s turn to the gold weekly cycle

Gold is currently on week 19 of the intermediate cycle.
Gold’s weekly cycle runs 18 – 25 weeks from trough to trough.
So gold could trend lower up to another 6 weeks

So the next daily cycle for gold could either be the concluding daily cycle for the intermediate cycle.
Or
The first daily cycle of the new weekly cycle.

We may get a clue to that from the dollar.

I know we discussed in the weekend report the possibility of this being week 29 with the potential of an upside break out.
I have not ruled that out, yet.
It depends if the current daily cycle has already peaked or not.

The dollar is currently in the third daily cycle of the current intermediate cycle.
The first two daily cycles were left translated.
The previous daily cycle also was a failed daily cycle – one of the signals of an intermediate cycle in decline.

The current daily cycle has a current peak at day 5 with today printing a lower high and lower low, producing a swing high.

If this daily cycle is going to fail, then it should peak by day 10 and may have already done so yesterday.

The current weekly cycle peaked on week 2.
It broke below the intermediate cycle trend line on week 8, which also signals a weekly cycle in decline.

So, while the storm clouds are here as equities and commodities are in the midst of a sell off, if the dollar turns lower here (or this week), that will be the silver lining to spark an equity and commodity rally.