Cycle Trading

Gold broke below the previous daily cycle low on Monday confirming a failed daily cycle. A failed daily cycle signals an intermediate cycle decline.

Gold printed a narrow range day on Tuesday that did break below Monday’s low. Gold has eased the parameters for forming a swing low. A break above 1318 forms a swing low. Then a break of the declining trend line will confirm a new daily cycle. Since gold’s intermediate cycle is at 12 weeks, gold will need to print one more daily cycle to enter into the the timing band for an intermediate low. Therefore our cyclical expectation would be to see a left translated daily cycle form here peaking on or before day 8. Then gold should continue its decline into an intermediate cycle low.

The CRB Index may also be forming a daily cycle bottom.

I believe that the CRB printed a stealth daily cycle low on day 31. Following the day 31 low, the CRB went on to peak on day 8 and then decline. The CRB broke below the day 31 low on Thursday, which was the lowest point following the day 8 peak. Thursday was day 17 and places the CRB in the timing band for a daily cycle low. A break above Thursday’s high of 301.94 will form a swing low.

But if I am correct that day 31 was a stealth daily cycle low, then this was a failed daily cycle which signals an intermediate cycle decline. Therefore we should see the next daily cycle form in a left translated manner printing another failed daily cycle.

The reason why we expect the next daily cycle to fail is that the weekly cycle is only on week 11. It will take at least one more daily cycle to bring the weekly cycle into the timing band for an intermediate cycle low.