Stepping out over the line

December 27, 2012

The Miners have been looking bullish over the past few days.

They printed what appears to be a daily cycle low last Thursday, 12/20.

A swing low was formed the next day.

Today is the 4th day in a row the Miners have posted a gain.

The last time the Miners post 4 straight gains was back in September.

After rallying for 4 days, the Miners are right up against the declining cycle trend line.
A break above this line confirms a new daily cycle.

With confirmation of a new daily cycle, I think this will also mark a new intermediate cycle

Following the three year low was a shortened intermediate cycle.

I was reluctant to label it as such since this was the first 10 week IC I have seen and therefore assign a low probability that it occurred.

The more I study it the more it makes sense to label it as a 10 week intermediate cycle.

Then that will make last week week 21 and very likely an intermediate cycle low.

A break above 440.63 forms a weekly swing low.

A break above the declining trend line confirms a new intermediate cycle.

BTW since we looked at palladium yesterday I thought that it was worth a look again today:

Palladium is breaking out to new highs.

As we discussed last night, palladium seemed to have been leading gold since November and appears to be doing so again …

Gold has now posted four straight gains.
Like the Miners, we are waiting for a declining cycle trend line break to confirm a new daily cycle.

I would like to remind everybody that we have seen gold get off to slow starts as everybody is once bitten and twice shy as a new daily cycle begins …

3 responses to “Stepping out over the line”

Gregory Ewanizky

December 27, 2012

Happy holidays thanks for your work. Is there any scenario in cycles that there was a gold top last last year? I think that if stock topped out here then the dollar will be pressured higher , putting a lot of pressure on gold. Thanks again Greg

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1. likesmoneystudies
  
  December 28, 2012
  
  Gregory,
  
  A scenario in cycles that would be congruent with gold topping last year involves gold moving down into a 4 year or 8 year low.
  
  Gold just printed a 4 year low last May. So from a cycles perspective, gold is a long way from topping.
  
  Another cycle that will impact gold is the dollar cycle.
  
  The dollar just printed its 3 year low last May.
  
  A yearly cycle low printed in February, 2012.
  
  The 3 year cycle looks like it peaked in July and has been in decline since.
  
  I have a question of whether a yearly dollar low printed in September or not.
  
  A break above the declining trend line would indicate it did.
  
  If the trend line holds, then a break below September lows indicates the yearly low is still in front of us.
  
  Now the dollar is on month 19 of the 3 year cycle.
  
  If, in fact, the 3 year cycle has peaked, then that suggests another 18 months of dollar decline is ahead of us.
  
  In summary, the 4 and 8 year gold cycles do not suggest a top is in.
  
  And since one of the fundamental drivers of gold is the debasement of the dollar, 18 months of decline also supports a bullish outlook on gold.
  
  B.T.W.
  
  There is a very bullish scenario that could be developing for gold.
  
  It is possible that a yearly cycle low for the dollar did print in September.
  Then the yearly dollar cycle topped in 2 months in November and a break below September’s low indicates a failed yearly cycle…
  
  Reply
Friday December 28, Is a rational long term gold investment thesis possible?

December 28, 2012

[…] From a cycle standpoint and for those that have not yet read it, this may be worth your time: Stepping out over the line | Cycle Trading While the author is bullish, I guess one could argue that the rejection at the declining cycle […]

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Stepping out over the line

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3 responses to “Stepping out over the line”

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