Cycle Trading

Pre-Summary

Gold has been declining for three weeks and is still searching for its daily cycle low. But the more important development may be taking place on the monthly chart, where Gold is testing whether the Month 19 low will ultimately mark its yearly cycle low.

Gold printed its lowest point in June, month 19, placing it very deep in its timing band for a yearly cycle low. Gold subsequently formed a monthly swing low. However, despite the strength of the rally, Gold has remained contained by the 10 month MA. That makes the 10 month MA an important level. A close above the 10 month MA will indicate a continuation of Gold’s monthly uptrend and signal a monthly cycle band buy signal — in which we will then label month 19 as the YCL.

But confirmation remains outstanding. The shorter timeframes help explain why.

Gold peaked on week 8 and has now declined for three consecutive weeks. A peak on week 8 would indicate a left translated weekly cycle formation. However, Gold remains in a weekly uptrend and is testing support around the rising 10 week MA. At the same time, Gold is still seeking its daily cycle low. Gold printed its lowest point on day 34, placing it in its timing band for a DCL. While Gold formed a swing low, it has remained contained by the 10 day MA. A close above the 10 day MA is still needed to label day 34 as the DCL.

This is why the monthly chart matters.The daily decline is occurring inside a weekly pullback, while the weekly pullback is occurring as Gold tests whether the Month 19 low will become its yearly cycle low.The cycle framework does not require us to predict how that battle will resolve. The higher timeframe tells us where the important battle is taking place. The lower timeframes will provide the evidence.

Current Framework

Monthly: Uptrend → Month 19 YCL candidate → close above 10-month MA labels the YCL.

Weekly: Uptrend → Week 8 potential left-translated peak → watch support around the 10-week MA.

Daily: Uptrend → Day 34 DCL candidate → close above 10-day MA labels the DCL.