Cycle Trading

The strength of the current daily dollar cycle is forcing us to consider that this new daily cycle is also a new intermediate cycle as well.

About 80% of left translated daily dollar cycles peak on or before day 8. We were expecting the dollar to form a left translated cycle, that should have rolled over by now. Instead we have a dollar that has just set a new cycle high on day 10. Setting a daily cycle high this late begins to shift the likelihood of this forming as a right translated daily cycle. Monday also saw the dollar break above the previous daily cycle high. While it was not a “clear and convincing break” it did set a higher high.

So this was either week 2 or week 12. If this is week 2 that means the dollar left behind a 10 week intermediate cycle. The previous two intermediate cycles ran 13 weeks and 6 weeks respectively, so a 10 week cycle is not so out of line. This may be attributable to volatility associated with the three year dollar cycle topping.

However, this dollar strength did not seem to bother gold.

Tuesday was day 18 for the daily gold cycle. Gold has broken below the daily cycle trend line, confirming the daily cycle decline. The bullish engulfing candle makes it look like today was the daily cycle low. A break above 1416.2 forms a daily swing low.

So while gold was up 1.12% for the day, gold’s shiny little friend gained over 3% today.

Both silver and gold printed bullish engulfing candles today. Silver did lead gold out of the yearly cycle low and looks ready to continue.

Getting back to the dollar. Let’s just say that this is week two for a new intermediate cycle. That would push our expectation for the intermediate low out from late October or early November to late December or early January.

That will give precious metals more time to rally — which is the silver lining …