Cycle Trading

The dollar lost the 50 day MA today in a clear and convincing manner.

The dollar’s daily cycle broke above the 50 day MA on day 7 and peaked on day 8. It managed to stay above the 50 day MA for the next three sessions. Today the dollar sliced right through the 50 day MA and also the rising 10 MA. I am going to go out on a limb here and say that the dollar has confirmed its daily cycle decline. With a peak on day 8 it appears that this daily cycle will form as a left translated cycle. Left translated cycles typically form lower highs and lower lows signaling that the way for the dollar is down.

Bonds delivered a bearish follow through to the swing high formed on Monday.

The daily bond cycle peaked on Friday as it breached the 200 day MA. Bonds lost the 200 day MA on Monday which signaled a daily cycle decline. The bearish follow through and close below the lower cycle band confirms the daily cycle decline. And like the dollar, a peak on day 8 is characteristic of a left translated cycle. This signals that bonds are likely to print a failed daily cycle.

As the dollar and bonds confirmed cycle declines today, gold is signaling a new daily cycle.

The daily gold cycle peaked on day 11 and then printed its lowest point on day 18. Tuesday saw gold close above the declining trend line which signals a new daily cycle. Gold is still being contained by the 50 day MA. A clear and convincing close above the 50 day MA will confirm a new daily cycle for gold.