Cycle Trading

Gold broke below its intermediate cycle trend line today.

At day 25 gold is beginning to get to the later stages of its daily cycle timing band. Gold also breached its lower Bollinger Band. Each passing day brings us a greater likelihood of gold forming a daily cycle low. Of course, a swing low accompanied by a declining trend line break signals a new daily cycle.

But gold breaking below its intermediate trend line is concerning. We will need to be prepared for the possibility that gold has entered its intermediate cycle decline. Of course a break below the previous daily cycle low confirms the intermediate cycle decline.

If gold ends up printing a right translated daily cycle, we would expect it to be followed by a daily cycle printing a higher high. However, gold has demonstrated a tendency of printing a lower high following a right translated cycle that sets the weekly cycle peak.

So we will need to proceed with our eyes wide open …