Cycle Trading

Are precious metals ready to show their hand? Precious metals have been in an intermediate cycle decline since late August. They printed a daily cycle low last Tuesday. But was it also an intermediate cycle low?

If it was just a daily cycle low we would expect a daily cycle peak on or before day 8. However, if this is a new intermediate cycle then metals should rally past day 12 or longer.

Last week was week 16 for the intermediate gold cycle. Since gold printed a lower low last week, a break above last week’s high of 1326.10 will form a weekly swing low. And a weekly trend line break confirms a new intermediate cycle.

The Miners seem ready to show their hand as well.

The Miners bottomed last Monday, prior to gold. That makes today day 6. The Miners are right up against the declining trend line as well as the resistance at the 25 level. If the Miners were to rollover, or at least backtest the low, this would be a good point to initiate a move lower.

If the Miners were to reverse here and break below the daily cycle low, then that indicates another 3 -4 more weeks of decline. However, a successful back test holding above this recent low would be a bullish development. That would mean a higher low has formed. Of course breaking above the resistance level at 25 and the declining trend line would signal a new intermediate cycle.

Palladium had good day today suggesting the intermediate low has been left behind.

Palladium tends to lead gold. We see that Palladium formed its intermediate low in September. In October it delivered a higher low and last week broke out to a higher daily cycle high. Monday saw palladium provide some bullish follow through …

… and perhaps giving a hint to its hand …