Cycle Trading

Gold’s daily cycle has stretched to to double the normal length as it printed a lower low on Monday, day 45. But the bullish reversal into the close signals that a bottom is at hand.

Monday’s bullish reversal has eased the parameters for forming a daily swing low. A break above 1167.90 will form a swing low to signal a new daily cycle. Next gold will need to close above the 10 day MA and then close above the declining trend line to confirm the new daily cycle.

I believe that gold’s bullish close can be attributable to the dollar breaking lower on Monday.

The dollar printed a bullish reversal on Thursday, day 23, which was right in its timing band for a daily cycle low. While I would prefer to see a clear and convincing break of the declining trend line to confirm a new dollar cycle, the dollar did close above the upper daily cycle band on Friday. So Monday’s drop by the dollar sets up a possible left translated daily cycle formation. Which could lead to a failed daily cycle for the dollar and that would confirm the intermediate cycle decline.