Cycle Trading

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Gold joined the rest of the precious metals and the Miners by forming a swing low today. This will likely mark its daily cycle low. The Miners delivered some bullish follow through to the swing low printed last Friday.

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The clear and convincing follow through makes today day 4 of the new daily Miner cycle. The left translated low printed on Thursday was a failed daily cycle, which signals an intermediate cycle decline.

The weekly cycle peaked on week 12, making last week week 14. The weekly TSI broke below the zero line, which we normally see during an intermediate cycle decline. The question is could this new daily cycle also mark a new intermediate cycle?

As it turns out, we will need to be open to this possibility. There have been 22 weekly cycles dating back to 2006. Eight out of those 22 weekly cycles ran between 12 – 16 weeks in duration. So if this new daily cycle breaks above the week 14 high of 25.22, it will form a weekly swing low signaling a new intermediate cycle.

On to bonds …

Wednesday was day 18 and bonds found support at the rising 50 MA. Bonds have entered their timing band for a daily cycle low. There is a possibility that a swing low can form here, maintaining a patter of printing higher daily cycle highs and higher daily cycle lows.

The weekly candle does look bearish. However the weekly trend line is still holding. If bonds do reverse off the daily 50 MA, then that should send bonds higher off the trend line support. Conversely, if the weekly trend line is breached, then that will confirm an intermediate cycle decline.