Cycle Trading

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Tonight we could discuss how stocks formed a swing high today and could possibly be beginning its daily cycle decline.

Or we can look at how on day 23 gold has closed for the second consecutive day below the 10 day MA, signaling a daily cycle decline.

But instead I want to focus tonight on the CRB.

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Back in April the CRB’s daily cycle peaked on day 24 and the declined into May printing a 35 day right translated daily cycle. The ensuing daily cycle peaked on day 9 — which set the declining intermediate trend line, then proceeded to print a left translated, failed daily cycle low on day 19.

This recent daily cycle broke above the declining intermediate trend line in a clear and convincing fashion to declare a new intermediate cycle. Then it peaked on day 12 before rolling over into the current daily cycle decline. Then the CRB broke below the previous daily cycle low today producing a second consecutive failed daily cycle.

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Some may argue that a second consecutive failed daly cycle should extend the intermediate cycle decline. So let’s look at that.

On week 21 the CRB broke below the 200 MA. The following week it formed a clear and convincing swing low and declining trend line break during the timing band for an intermediate cycle low. The daily cycle that followed broke above the the declining trend line and then went on to print a high that was higher than the week 15 high of the previous intermediate cycle. All of this strongly supports week 21 as being the intermediate cycle low.

However trying to keep an open mind, if the CRB went on to immediately print a new daily cycle that breaks above 6/27 high of 313.27 then we would be forced to relabel our cycle count. But the evidence supports a failed intermediate cycle on week 5. Which means we could see the CRB trend lower for the next 10 to 15 weeks.