Cycle Trading

Gold printed its lowest point back on August 16th. Which I believe to be an intermediate cycle low, however gold has not yet confirmed this.

Gold has been in a narrow range consolidation since the 8/16 Low. This bottoming process has been characterized by volatility surrounding the 10 day MA while gold has been contained by the declining 50 day MA. This has been frustrating for both bulls and bears as gold has been whipsawing back and forth. Which reminds me of the 2015-2016 bottoming process for gold.

The 2015 – 2016 bottoming process also was characterized by volatility surrounding the 10 day MA while gold kept below the 50 day MA, until 3 things happened.

First gold crossed above the 50 day MA to close above the upper daily cycle band. This was the first signal that gold ended its daily downtrend.

Second gold back tested the 50 day MA.

Third gold formed a swing low and closed back above the upper daily cycle band. Since the swing low formed above the lower daily cycle band, that triggered a cycle band buy signal. Then gold closing back above the upper daily cycle band confirmed a new daily uptrend.

Once the new daily uptrend was confirmed, gold began to rally.