Cycle Trading

Summary

• Dollar
  • Rejected at the 10 day and 50 day moving averages on Wednesday
  • Formed a swing high with bearish follow-through Thursday
  • Still in a daily downtrend
  • Swing high below the lower daily cycle band = cycle band sell signal
  • Dollar drop fueling precious metal strength
• Silver
  • Broke out of consolidation on Tuesday
  • Bullish continuation Wednesday and Thursday
  • In a daily uptrend
  • Breakout = cycle band buy signal
• Gold & Miners
  • Both broke out of consolidation on Thursday
  • Both remain in daily uptrends
  • Breakouts = cycle band buy signals

The Dollar: Rejected at Resistance, Bearish Follow-Through

The dollar had been crawling sideways under the 50 day moving average — until Wednesday. On Wednesday, price was rejected by the converging 10 day moving average and 50 day moving average, forming a swing high. The bearish momentum continued into Thursday, confirming the breakdown. The dollar remains in a daily downtrend. A swing high forming below the lower daily cycle band signals a continuation of the existing downtrend and triggers a cycle band sell signal. The immediate impact of this breakdown has been a strong rally across precious metals.

Silver: Consolidation Ends with a Three-Day Bullish Surge

Silver had been consolidating below resistance — until Tuesday. On Tuesday, silver broke bullishly out of consolidation, and delivered strong bullish follow-through on Wednesday and Thursday. Silver is in a daily uptrend. A breakout from consolidation confirms the continuation of the uptrend and triggers a cycle band buy signal.

Gold and Miners: Bullish Breakouts Hit Together

Both gold and the Miners had been coiling beneath their respective resistance levels — until Thursday. On Thursday, both markets broke decisively out of consolidation, launching bullish continuation moves. Gold and the Miners are each in a daily uptrend. Their breakouts signal further continuation of the uptrend and generate cycle band buy signals for both markets. Stops can be set below the breakout.