Cycle Trading

We see that our framework for the dollar and precious metals continue to develop.

Let’s start with the dollar:

The dollar sliced through the daily cycle trend line today.

Monday was day 23 for the daily dollar cycle and places the dollar in the timing band for a daily cycle low. A break above 83.37 would form a swing low possibly marking the daily cycle low.

Now stocks may have responded to the dollar dropping down today by printing a reversal and closing at the height of the day.

Monday was day 31 for the daily equity cycle. While on the early end,stocks are in their timing band for a daily cycle low. A break above 1640.42 forms a swing low. A break of the declining cycle trend line would confirm a new daily cycle. If a new daily cycle is confirmed we can expect to set a new higher daily cycle high before rolling over into an intermediate cycle low.

The Miners continue to build their bullish framework. Usually a left translated daily cycle would have rolled over by day 8. Monday was day 9 for the daily Miner cycle and the Miners printed a new cycle high. I do believe that a new yearly cycle began on May 18 and therefore this daily cycle should form as a right translated daily cycle peaking on or after day12.

The Miners may find some resistance with the 50 MA. If the yearly cycle low has truly been left behind then the Miners should be able to break through the 50 MA.

Gold also continues to rebuild its bullish framework. Monday saw gold bounce off the daily cycle trend line and regain almost all that it gave back on Friday. Gold is also forming an ascending triangle.

If gold is truly rebuilding its bullish framework then it will need to break above the previous daily cycle high of 1487.80 in order to print a higher high. By doing so would break the pattern of lower lows and lower highs.

So when gold breaks above 1487.80, that will be the key …