Cycle Trading

Gold has provided some follow through in the overnight to the bullish reversal printed on 12/31.

This morning we see that gold has formed a swing low off the day 18 candle. Gold also broke the declining daily trend line in a clear and convincing manner which will make today day 1 of a new daily cycle.

The bigger question is if this new daily cycle is initiating a new intermediate cycle or not?

The weekly cycle count does offer two interpretations. That this is either week 27 or week 11. We cannot say with certainty what the weekly cycle count is. However there are other observations that we can make with certainty.

Since gold printed a lower low this week, the earliest a weekly swing low can form will be next week. Over the past several months gold has been twice rejected by the declining (blue) weekly trend line. Until gold breaks above the declining (blue) trend line — it hasn’t. So we are waiting on a break above the declining (blue) trend line to signal a break in trend.