Cycle Trading

In the Weekend Report we discussed how gold formed a weekly swing low signaling a new intermediate cycle.

Part of the rationale that gold did form an intermediate low included gold closing convincingly above both the 50 day MA and the upper daily cycle band. Also gold closing above both the 50 week MA and the 10 week MA supports a new weekly cycle scenario.

However, Monday’s drop in the Miners is a warning signal that the intermediate low for gold is yet to come.

Recently the daily Miner cycles have been stretching 27 – 33 days so a peak on day 10 can surely result in a left translated daily cycle. Monday’s swing high and 1.61% drop signals the daily cycle is beginning its daily cycle decline. A close below the 10 day MA will provide more evidence that the daily cycle decline has begun. Then a close below the lower daily cycle band will indicate that the Miners are continuing their intermediate cycle decline. Last week we discussed how the accumulated 818 million Selling on Strength indicated of a left translated cycle formation. And this aligns with our yearly cycle count for the Miners.

The yearly Miner cycle peaked in February and then printed its lowest point in May, month 5, which is too early for a yearly cycle low. Since cycle low is defined as the lowest point following the cycle peak, then the Miners will need to break below the May low of 20.89 in order to complete its yearly cycle decline.

So if gold loses both the 10 week MA and the 50 week MA then that would indicate that this is week 11 and gold is continuing its intermediate cycle decline.