Cycle Trading

Last week we looked at the weekly dollar and discussed how the dollar still had a little wiggle room below the declining weekly trend line. It looks like we should see a resolution this week.

We are still uncertain if week 15 hosted an early intermediate cycle low. A clear and convincing break above the declining weekly trend line would signal that week 15 was the intermediate low.

The daily chart does not provide much clarity on the intermediate cycle count. The dollar continues to close below the upper daily cycle band which indicates a daily down trend. Also, the dollar did form a swing high today, potentially setting up a left translated cycle formation.

However gold’s reaction to the dollar forming a swing high warrants caution.

So on a day where the dollar declines we would expect to see some bullish signs for gold. Instead gold delivered four bearish signs.

We see that
* Closed below the upper daily cycle band
* Formed a daily swing high
* Breached the daily cycle trend line
* Formed a bearish TSI Crossover

Unless gold can recover in the overnight, it appears that gold has begun its daily cycle decline.