Cycle Trading

Today gold printed a bullish reversal late in its timing band.

This certainly looks like a daily cycle low.

Gold has been in decline since late October. This decline has been contained by the declining trend line. Gold’s daily cycle has extended past the normal timing band. A swing low has a good chance of marking the daily cycle low. Already if the after-hours gold has formed a swing low. We need to see a break of the declining trend line to confirm a new daily cycle.

The Miners have a similar set up. They also have been in decline since late October and are past their normal timing band for a daily cycle low. A break above 210.29 forms a swing low. Then a break above the declining trend line will confirm a new daily cycle.

Now let’s take a look at what is happening with NATGAS.

NATGAS printed a 31 week intermediate low in August. The declining trend line break from last week confirms the early November pivot as a shortened 13 week intermediate cycle low.

Since a failed 28 day cycle low printed in early November, NATGAS has trended higher. After tagging the daily cycle trend line last week, NATGAS rocketed higher. Today saw NATGAS gap up and print a doji outside the upper Bollinger Band, printing a higher daily cycle high. This daily cycle may have peaked today.

When the Money Flow Index has retreated from the 80 level accompanied by the TSI reversing from this level has consistently signaled a cycle decline.

NATGAS is early in a new intermediate cycle. I expect this daily cycle to form as a right translated daily cycle, printing a higher low and that should provide a safe entry point.