Cycle Trading

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After the 40 point day on Thursday, gold printed a higher high on Friday. Friday’s narrow range day eases the parameters for forming a swing high.

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Monday gold printed an inside day. Gold has gained over 80 points over the past 13 days and is a bit overbought. Gold may need to consolidate for a few days in order to allow the 10 day MA to catch up to it.

Gold is also encroaching on an important pivot.

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The 1320 level has acted as a support and a resistance level over the past year and gold is once again testing that level. The True Strength Indicator is also at a level that has seen other gold cycles turn lower.

I think that either we will see this act as resistance once again sending gold into a brief daily cycle decline. And then the next daily cycle break through this level.

The other scenario is to see gold break through this now and then backtest the 1320 level during the impending daily decline.

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The Miners printed a new daily cycle high once again at day 17 assuring us of a right translated daily cycle. The Miners will enter the timing band for a daily cycle decline on Tuesday. I expect to see the first gap filled and a break of the daily cycle trend line should see the second gap filled.