Cycle Trading

Gold had a big day today rallying for 2.57%

Some may think that perhaps today was the daily cycle low.
While it is a possibility, labeling today as a daily cycle low has several concerns:

1) In real time it certainly looked as if a daily cycle low printed on the Wednesday the 18th as shown below.

September 18th (Fed Day) saw gold print a big bullish reversal late in the timing band for a daily cycle low. The following day gold formed a swing low and had a declining trend line break. So in real time gold satisfied conditions to label September 18 as a daily cycle low.

However, lets set aside the fact that gold printed a bullish reversal late in its timing band and followed through with a swing low accompanied by a trend line break. What would it mean if today marked a daily cycle low?

Gold’s daily cycle runs 18 – 28 days from trough to trough. Only occasionally will gold go pass 28 days. So first off if today was a daily cycle low it would move the daily cycle low from merely being a day late to a 39 day cycle. A 39 day cycle would be an extreme outlier.

It also overlooks the fact that gold did continue lower today printing a lower high and a lower low.

And if you refer back to the second chart above, labeling today as a daily cycle low also overlooks the intermediate trend line break on day 25. That trend line break signals that gold is entered its intermediate cycle decline. An intermediate cycle decline requires a failed daily cycle. So labeling today as a daily cycle low would mean that gold did not print a failed daily cycle yet.

Of course, should gold break above intra day high of 1375 printed on September 19 then we would need to reconsider.

So while the price action today looked convincing that today hosted a daily cycle low

Unless gold breaks above 1375, I am not Convinced …