Cycle Trading

The dollar tanked overnight.

The dollar peaked on Wednesday, which was day 9. Thursday, in the overnight, the dollar has fallen out of bed. It formed a swing high, broke the daily cycle trend line and lost the previous 6 days of gains. The dollar has entered its primary daily cycle decline. While a day 9 peak starts to indicate a right translated cycle should form, the overnight action suggests another failed daily cycle is in progress.

And look at gold’s reaction.

Gold looked like it printed a daily cycle low on Tuesday. The swing low and declining trend line break in the overnight confirms a new daily cycle.

The question is if this new daily cycle signals a new intermediate cycle or not? For that we turn our attention to the weekly chart.

The intermediate gold cycle peaked on week 9 with this week being week 16. A weekly swing low is needed to mark the weekly cycle bottom. Since gold printed a lower low this week, the earliest a weekly swing low can form will be next week. The other signal that we are looking for is a declining intermediate cycle trend line break. A trend line break accompanied with a weekly swing low confirms a new intermediate cycle.