Cycle Trading

Gold had a downside breakout of consolidation.

We now await a swing low and trend line break to confirm a new daily cycle.
And a new daily cycle could signal a new intermediate cycle

Friday ended week 19 for gold’s intermediate cycle.
Gold closed below the 1600 level.

While a new daily cycle could signal a new intermediate cycle, consider that gold’s weekly cycle can extend to 25 weeks.

So there is a possibility that there could be one more daily cycle is needed for the current weekly cycle to find its bottom.

But when the current intermediate cycle bottoms, that should signal the start of a new yearly cycle.

I had thought that February marked the yearly low for gold (1).
Now I am beginning to think that the yearly low is still out in front .
That means the current monthly count is month 16.
It is not unusual for gold’s yearly cycle to stretch to 16 or 17 months.

This scenario takes into consideration that there is a monthly pennant forming and the resolution of this consolidation will mark the first month of the new yearly cycle.

The Miners appeared to have printed a reversal on Wednesday.

Then they formed a daily cycle low accompanied with a trend line break on Thursday.

That would make Friday day 2 of the new daily cycle and this is the 19 th week of the current intermediate cycle.

Over the past 5 years, the Miners weekly cycle found its intermediate cycle low between 14 – 20 weeks 73.33% of time (11/15).

The weekly candle did print a lower tail that may be a signal of a bottom.
The HUI would need to break above 424.72 to form a weekly swing low.

Keep in mind that even if a weekly swing low is not formed this week, the HUI has not had a weekly cycle exceed 20 weeks over the past 5 years.

The yearly cycle is still in decline.

The yearly cycle for the Miners stands at 11 month.
The timing band for a yearly cycle low is 8 – 14 months, so the Miners are right in the heart of their timing band.

This past week the Miners managed to breach the 400 level before closing above it for the week.
The 400 level has been a significant support/resistance level.
We will need to keep an eye on it to see if the HUI can manage to bounce off of it.

I plan to post one more part, likely tomorrow.
So …