Cycle Trading

Last night we discussed how gold was leading the precious metals. Well the Miners broke out of consolidation today joining the party.

The consolidation following the second daily cycle peak is unfolding much like the first daily cycle. With Wednesday being day 9 there is still plenty of time and it would not surprise me to see the Miners test the next resistance zone at the 30 level.

Bonds delivered a clear and convincing follow through to the confirmation of a new daily cycle.

Bonds had a big day, gaining 1.44%. The True Strength Indicator has now crossed above the zero line, adding further confirmation of a new daily cycle. Following a right translated daily cycle bonds should now go on to print a high that is higher than the previous daily cycle high.

And as bonds rally, we see stocks continue to sink. You will notice that bonds bottomed on Friday, March 7th, the same day that the daily equity cycle peaked.

Thursday was day 25 for the daily equity cycle. Where bonds printed a bullish engulfing candle today, stocks printed a bearish engulfing candle. Stocks now have a clear and convincing follow through to the trend line break which signals a daily cycle decline. Also notice that there is a bearish zero line crossover on the True Strength Indicator. A zero line crossover is another signal that stocks have entered their daily cycle decline.