Cycle Trading

As we discussed this morning the dollar tanked in the overnight. It continued to sell off on Thursday.

Thursday was day 10 for the daily dollar cycle. The dollar broke through the daily cycle trend line in a clear and convincing manner today to signal a daily cycle decline. The dollar also broke below the previous daily cycle low confirming that this is a failed daily cycle. At day 10, we could see the dollar sell off for up to another 2 to 3 weeks.

Gold broke above its daily cycle trend line today in a clear and convincing manner.

Gold printed what appeared to be a daily cycle low on Tuesday. Thursday gold reacted to the dollar tanking by rallying close to 3%. The swing low and trend line break confirms that today was day 2 for a new daily cycle. Could such a powerful start indicate a new intermediate cycle?

This week is week 16 for the intermediate gold cycle. Gold did print a lower weekly low this week. Therefore the earliest gold can form a weekly swing low will be next week. Gold is also right up against the declining weekly trend line. A weekly swing low accompanied with a weekly trend line break confirms a new intermediate cycle.

Bonds also delivered a clear and convincing trend line break today.

Bonds followed up Wednesday’s bullish reversal by forming a swing low and trend line break. This confirms today as day one for a new daily bond cycle.