Cycle Trading

Sunday night we looked at the dollar and how it has begun to deliver bearish surprises.
After today’s action, it bears repeating …

The chart from Sunday night (above) highlights the bearish surprises that the dollar has been delivering recently.

Today the dollar delivered another bearish surprise.

Today’s bearish surprise aligns with what we discussed on Sunday, that the dollar has reached an inflection point in its 15 year super cycle.

Friday was day 20 for the daily dollar cycle. The swing low that formed on Tuesday began to make it look like Friday was the daily cycle low for the dollar. But the swing low that gold formed today makes me think that the dollar is continuing its daily cycle decline.

Gold formed a swing low and closed above the upper daily cycle band, confirming today as day 1 of the new daily cycle. The fact that gold began a new daily cycle today makes me think that today was day 24 for the dollar’s daily cycle.

We need to keep in mind that gold’s intermediate cycle is beginning to age. This is the 4th daily cycle for gold, which makes it likely to form as a left translated cycle.

So it’s quite possible to see gold rally for a few days as the dollar searches for its daily cycle low. Once the dollar prints that low and begins to rally, that will likely send gold into a failed daily cycle, which would lead to the intermediate cycle decline.