Cycle Trading

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We will begin tonight looking at something that I do not spend much time on here but I do include an update on in the Weekend Report: Oil.

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Since peaking above 107 in June, oil has been locked in a steady yearly cycle decline. Oil has now printed two straight failed daily cycles and currently sits in the timing band to print a daily cycle low. Since August there has been a bullish divergence developing on the daily True Strength Indicator. Now late in the timing band for a daily cycle low we see that Oil has printed a bullish reversal on big volume. There is a good likelihood that oil printed a daily cycle low. A swing low and a break of the declining trend line is needed to confirm a new daily cycle. And for those of you that read the Weekend Report will know that this new daily cycle could also mark a new yearly cycle.

I think that gold is also seeking out its yearly cycle low. In order to decline into a yearly cycle low, there needs to be a failed intermediate cycle. Today gold printed a failed intermediate cycle.

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Gold’s weekly cycle peaked on week 5 and is currently at week 14. There is enough time left in the intermediate cycle to allow for one more failed daily cycle to print for gold.

But here is something to keep an open mind about — Gold has now printed its lowest point of the year following the peak in March. So, technically speaking, gold could be in the process of forming a yearly cycle low. Therefore gold could deliver a bullish surprise once a daily cycle low prints and launch into a new intermediate mediate cycle.