Cycle Trading

Pre-Summary

Gold has reclaimed the 10-day moving average after forming a swing low, building evidence that the current decline may have reached its Daily Cycle Low. At the time of this writing, a close above the 10-day moving average is still needed to signal the Daily Cycle Low.

As we discussed previously, Gold has entered the Daily Cycle Low timing band and outlined the evidence needed to identify the next Daily Cycle Low. Since then, Gold has formed a swing low and reclaimed the 10-day moving average, building evidence that the current decline may have reached its Daily Cycle Low.

At the time of this writing, however, the trading day is not yet complete. While Gold is trading above the 10-day moving average, it has not yet closed above it. A Daily Cycle Low is signaled only after a swing low forms and Gold closes above the 10-day moving average.

Today’s price action represents an important step in that process. If Gold can hold above the 10-day moving average into today’s close, Day 46 would be signaled as the Daily Cycle Low. Until then, the evidence continues to improve, but the signal has not yet been given.

Cycle Insight

Cycle analysis is built on evidence, not anticipation.

Reclaiming the 10-day moving average is an encouraging development, but it is only one part of the process. A Daily Cycle Low is signaled only after both a swing low forms and Gold closes above the 10-day moving average. Waiting for both conditions helps remove emotion from the analysis and keeps the focus on what price has actually accomplished rather than what it might do.