Cycle Trading

Gold delivered some bullish news this morning.

Gold broke above the day 7 high this morning. Monday is day 13 for the daily gold cycle. By printing a new high on day 13, gold has now shifted the likelihood of this daily cycle forming as a right translated cycle. And a right translated cycle formation will mean that this is the first daily cycle of a new intermediate cycle. It is no coincident that gold is rallying as the dollar is rolling over.

The dollar printed a 21 day, daily cycle low on 3/26/15. After emerging out of that daily cycle low, the dollar peaked on day 3, formed a swing high on day 5, and delivered more bearish follow through on Friday. A break below 96.17 will form a failed daily cycle, signaling that the dollar has entered its intermediate cycle decline. With Monday being day 7, the dollar will need 2 to 3 more weeks before printing its daily cycle low.