Cycle Trading

We discussed here yesterday that gold is in its timing band for a daily cycle low. So we are now hunting for a swing low to signal a new daily cycle. Another thing we were watching for was for the dollar to form a swing high. Today the dollar delivered a swing high.

Tuesday was day 22 for the daily dollar cycle. The dollar is in its timing band for a daily cycle low so today’s swing high has good odds of beginning the daily cycle decline. A break of the daily cycle trend line will confirm the daily cycle decline. And a decline into its daily cycle low should allow gold to find its legs and form a swing low, signaling a new daily cycle.

Gold did post a gain today, but would still need to rise over 30 handles to form a swing low. Silver, on the other hand, is less than 1.2% away from forming a swing low.

Silver typically leads gold out of lows. So a swing low in silver would indicate that a gold swing low will soon follow.