Cycle Trading

We have been watching the 1267.7 and 1211.7 levels to see which direction gold would choose. Gold chose a direction on Wednesday.

After back testing the developing declining cycle trend line gold broke lower. Gold continued lower overnight breaking below the the previous daily low printing a failed daily cycle. the timing band for a daily cycle low is still 7 days away. This suggests that gold will continue lower for another 7 to 15 days.

Part of why gold broke lower was due to the bullish response the dollar had to the FOMC.

Wednesday was day 5 for the daily dollar cycle. The dollar broke above the day 2 higher printing a higher daily cycle high. Already in the overnight the dollar is higher still.

Our framework calls for the dollar to continue into a yearly and three year cycle low. Our cyclical expectation is to see the dollar continue to print left translated, failed daily cycles heading into its intermediate cycle low. Since most left translated dollar cycles peak on or before day 8, we will keep a close eye on the dollar.

Stocks had a bullish break out closing to a new all time high.

The daily equity cycle peaked on day 36. Wednesday was the lowest point since the cycle peak so therefore we will label Wednesday day 49. Stocks broke below the declining cycle trend line in a clear and convincing fashion to signal a new daily cycle. Now we need to see a swing low to confirm a new daily cycle. A break above 1811.08 forms a swing low.