A Pause to Refresh …

April 8, 2013

Gold shot up by almost 30 points on Friday forming a swing low.

That swing low on day 30 is very likely the daily cycle low, making Monday day 2 of a new daily cycle.
After the robust gain on Friday, it is only natural for gold to need a breather.

Gold should not violate Friday’s low and today offered an opportunity to jump in if you missed out on Friday. This is very likely day 2 of a new daily cycle of a new intermediate cycle. The expectation is for gold to trend higher for the next 12 – 18 weeks. A break below Thursday’s low would signal that the yearly cycle low has yet to be printed.

Bonds also seemed to be taking a pause to refresh after last week’s big move broke the declining yearly cycle trend line as shown below.

Not only is April is month 1 of a new yearly cycle for bonds, but also appears to be month 1 of a new three year cycle. The previous 3 year cycle was a right translated cycle setting up an expectation for the new 3 year cycle to print a higher cycle high.

So bonds formed a swing high on Monday

At day 20, bonds are in the timing band for a daily cycle low.
Bonds should break the daily cycle trend line to confirm a daily cycle decline before beginning the next leg up.

5 responses to “A Pause to Refresh …”

PT

April 8, 2013

What is the word on the mining sector, LM? Are they aligned with gold’s cycle or moving independently? Is the there a count for their cycle? Thanks for all you do.

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1. likesmoneystudies
  
  April 8, 2013
  
  Sorry to overlook it tonight. I covered it in the Weekend Report and not much changed.
  Thursday was day 20 and it looks like a daily cycle low was printed. Friday formed a swing (weak) swing low. Today in all likelihood was day 2. We need to see a a break of the daily cycle trend line for confirmation. A stop can be placed below Thursday’s low if you did not want to wait on confirmation.
  
  Reply
  1. PT
    
    April 9, 2013
    
    So essentially, metals and miners are aligned now. Day two, Daily Cycle one, beginning a new intermediary cycle, and a new yearly cycle . . . if the stars have finally come together for this truly beaten-down sector. That’s a mouthful, I know, but do I have it right?
    
    Certainly the CFTCs, which were very positive for gold, silver, and pessimistic to the dollar, Friday, may have pointed the way.
    
    Let me know if I have all that right from paragraph one, OK, LM? Lastly, how do metals and miners cycles differ, if at all?
  2. likesmoneystudies
    
    April 9, 2013
    
    PT
    “So essentially, metals and miners are aligned now. Day two, Daily Cycle one, beginning a new intermediary cycle, and a new yearly cycle . . . if the stars have finally come together for this truly beaten-down sector. That’s a mouthful, I know, but do I have it right?”
    
    That is a very good, succinct summary.
    
    Metals tend to have an inverse correlation to the dollar (and the debasing of the dollar is a fundamental driver for the gold bull).
    The Miners also have an inverse correlation to the dollar but also tend to be correlated to equities.
    But I admit that the equity correlation has not been there since November.
    
    The Miners can also march to their own beat.
    In late October of 2008 the Miners began to rally in the face of the equity melt down.
    
    Again, during the intermediate equity correction in the summer of 2011, the Miners peaked.
PT

April 9, 2013

One follow up, LM: So we need the DXY to pass under 82.03 to confirm a failed DC, right? That’d mean the IC is in a confirmed decline. You have mentioned a YCL in the dollar. If the above confirm, when can the dollar’s YCL be expected? TIA.

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