Cycle Trading

Tuesday saw gold stop short of forming a monthly swing low. Wednesday saw gold break above the 1423.60 level. This forms a monthly swing low which is a significant milestone in rebuilding bullish case for gold. The monthly swing low helps to confirm a new yearly cycle for gold.

As tempting it may be to add to positions due to gold forming a monthly swing low a more opportune time may just be in front of us.

The first cycle peaked on day 17 and then declined over the next 10 days. Gold is currently on day 15 of its second daily cycle. Gold is getting overbought and is approaching the timing band for a daily cycle low. The bearish reversal printed today has eased the parameters for forming a daily swing high. A break below 1417.20 forms a daily swing high. And a break of the accelerated (red) trend line signals a daily cycle decline for gold. A break below the blue trend line confirms the cycle decline.

The Miners appear to be leading gold into a daily cycle decline.

The Miners printed a bearish reversal on Tuesday and followed through to the downside on Wednesday. The swing high and trend line break signals a daily cycle decline.

Both gold and the Miners daily cycle can last up to 28/29 days. We will keep watch for a swing low accompanied by a declining trend line break to mark the daily cycle low.

Since both gold and the Miners daily cycle will very likely form as right translated daily cycles, our expectation is the impending new daily cycle to print a higher daily cycle high.

So, once a daily swing low is confirmed things should be SMOKING …