Cycle Trading

Gold’s daily cycle peaked on Friday, day 13 and today we see that gold formed a swing high off that peak.

Tuesday was day 15 for the daily gold cycle. Gold enters its timing band for a daily cycle low in three days. While gold needs to have a trend line break to confirm a daily cycle decline there was a bearish TSI crossover.

The decline into a daily cycle low will reveal a lot about gold. A peak on day 13 offers a possibility that this cycle will form as right translated. However, if this is the first daily cycle of a new yearly cycle then gold should not breach the previous low of 1321.50.

The Miners may be giving a hint as to what to expect with gold.

The daily Miner cycle peaked on day 6 and was consolidating along the daily cycle trend line. Tuesday saw a decisive downside break of the trend line.

With a downside break of the daily cycle trend line, the Miners have locked in a left translated nature to this daily cycle. A left translated cycle holds the distinct possibility of breaching the previous daily cycle low of 256.20.

If the Miners managed to not break below the previous daily cycle low, then that signals the yearly cycle low has been left behind.

The dollar had a Bollinger band crash last Wednesday. The bounce out of that crash brings the dollar to either day 15 or possibly day 4 of a new daily cycle.

Looking at the dollar’s daily cycle over the past 3 years you will notice that after a daily cycle has peaked no counter trend rally lasted longer than 4 days without initiating a new daily cycle. A break higher by the dollar delivers a trend line break and signals that day 11 marked a new daily cycle.

Now here is something that I found interesting, bonds are on day 18 and have entered the timing band for a daily cycle low.

Recall that bonds printed a yearly cycle low on March 8th. Now bonds are at knocking on the door of printing a failed daily cycle. A failed daily cycle signals an intermediate cycle decline.

A swing low forming here keeps the intermediate cycle rally alive. And keep in mind that lately stocks sold off in the face of bonds rallying.