Cycle Trading

Last night we discussed how the Miners appear to have left behind a daily cycle low. Gold now appears to be following the leader.

This is the second straight day that gold has printed a bullish reversal. While gold is two days shy of its normal timing band, gold has been known to print 16 day lows. A break above 1299 forms a swing low and will likely mark the daily cycle low. A bearish break of the dollar would certainly complement a new daily gold cycle.

And as we discussed last night, the dollar is still caught in between the declining 50 day MA and the daily cycle trend line forming a mini triangle. A bullish break for the dollar will likely be bearish for gold. And a bearish break of the dollar will likely be bullish for gold.

And if stocks do turn lower that could drive more money into gold.

Tuesday is currently the highest point for the daily equity cycle. Thursday saw stocks form a swing high off of Tuesday’ candle. While its too early to say if the daily cycle is ready to roll over, there are some warning signals beginning to show. One signal is the True Strength Indicator is beginning to roll over. Another signal was delivered with the Selling on Strength print today.

Stocks printed 113 million Selling on Strength print today. As stocks approach their intermediate peak we will likely see more and bigger S.O.S. days.