Cycle Trading

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We discussed here last Tuesday that our expectation for Bonds would be to form a left translated daily cycle. That appears to be unfolding.

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The chart above is an updated chart from the Weekend Report. It shows that bonds are in their 5th daily cycle. While bonds printed a new intermediate high in this 5th daily cycle, the True Strength Indicator is developing a bearish divergence which is signaling an intermediate cycle decline.

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The day 3 peak was followed by a a swing high on Friday and a bearish follow through today. A bearish crossover on the TSI will further confirm that the daily cycle is in decline. And a break below the previous daily low of 110.54 will confirm that the intermediate cycle is in decline.

I believe that gold is also setting up for a bearish follow through.

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The daily gold cycle peaked on day 7 and is currently on day 17. This mini triangle that gold is in is getting closer to the point of resolution. Gold will enter its timing band for a daily cycle low on Tuesday. Due to the aging daily cycle count the odds are getting greater by the day that this will now resolve bearishly.