Cycle Trading

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Gold has formed a weekly swing low this week.

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Last week was week 18 and gold printed a lower weekly low. At 18 weeks, gold has entered its timing band for an intermediate cycle low. But there is enough time in the timing band for gold to print one more failed daily cycle. So we need to turn our attention to gold’s daily cycle to see if it is forming in a left or right translated manner.

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Tuesday was day 6 for the daily gold cycle. While gold did manage to print a higher high, gold did close lower for the day. Gold is getting close to decision time for this daily cycle. Right translated daily cycles typically rally past day 8, so that is something that we are keeping an eye on. The other thing that we are watching is the declining 50 day MA. If gold can regain the 50 day MA that would be a bullish signal that would indicate a new intermediate cycle is underway. Consequently rejection by the declining 50 day MA would indicate a left translated cycle is forming.

The CRB appears may be finding its footing.

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Tuesday was day 15 for the CRB’s daily cycle. While the CRB printed a lower low, it also reversed and closed higher for the day. This has eased the parameters for forming a swing low. The CRB will not enter its timing band for a daily cycle low for 3 more days but after 5 consecutive failed daily cycles I would not be surprised by a shortened daily cycle. A break above 276.91 forms a swing low and then break above the declining trend line would confirm a new daily cycle.