Cycle Trading

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Gold has been forming a mini weekly triangle consolidation over the past 4 weeks. As gold approaches the apex of its triangle, it is running out of wiggle room.

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Gold has entered week 11 of its intermediate cycle. There are some definite bearish signals which include a weekly swing high, a bearish crossover on the True Strength Indicator and a bearish zero line crossover on the TSI.

Still the weekly chart shows that gold regained the weekly 50 MA two weeks ago and has maintained it since. Gold is approaching the point for a break in consolidation that should lead to a multi-week move. Perhaps we can glean gold’s intentions from the daily chart.

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Gold’s daily cycle peaked on day 5 and then formed a daily swing high. Today saw gold loose the 50 day MA and deliver a zero line crossover, which are signals of a daily cycle decline. A break of the daily cycle trend line confirms the daily cycle decline. And a break of the daily cycle trend line will lock in a left translated nature to this cycle and signal the intermediate cycle decline. And at week 11, gold could see an another 6 – 14 more weeks of downside.