A Few Thoughts on Gold

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Tonight we will take a look at the yearly gold cycle, something I cover regularly in the Weekend Report.

But first a few thoughts on the daily cycle: Gold did form a daily swing low today. That would make Thursday day 5 of the new daily cycle. So it appears that gold has just left behind a shortened, failed, daily cycle. Gold will likely react bullishly now that the dollar appears be in decline. But the yearly cycle is signaling that gold still needs seek out its yearly cycle low.

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The yearly gold cycle has peaked in March, which was month 3. The lowest point since then printed in June, which was month 6. The recent failed daily cycle signals that the intermediate cycle is in decline.

August is month 8 for the yearly gold cycle. I believe that gold still needs to print its yearly cycle low. Since a cycle low is, by definition, the lowest point following the cycle peak, then gold will need to break below 1240.20 to print its yearly cycle low.

Right now I expect gold to react bullishly as the dollar seeks out its daily cycle low. But since this current dollar cycle is likely to form in a right translated manner, then its next daily cycle should go on to print a higher daily cycle high.

As the dollar then rallies out of its daily cycle low, that should send gold into its final yearly cycle decline, breaking below 1240.20.

In Sync

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The dollar printed a bearish engulfing candle on Day 13. This has eased the parameters for forming a daily swing high. A break below 82.43 forms a daily swing high and could send the buck into a daily cycle decline.

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The bearish crossover on the True Strength Indicator suggests that the dollar is ready to decline into either a half cycle low or into its daily cycle low.

Lately stocks and the dollar have been trading in sync. And just as the dollar is signaling that it is ready for a breather, we see similar signs with stocks.

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Wednesday was day 12 for the daily equity cycle. After closing at all time highs, stocks have formed a daily swing high. A break of the trend line will signal, at the minimum, a decline into a half cycle low.

Gold appears to be catching a bid as the dollar and stocks seem ready for a breather.

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Being 4 days shy of the timing band for a low, I remain skeptical of a 14 day low. However gold did deliver a trend line break and a bullish TSI crossover. And both the Miners and the CRB also appear to be leaving behind daily cycle lows. A clear and convincing break above the declining trend line will force us to label day 14 as a daily cycle low.

Discussing the Dollar & Gold

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Tuesday was day 12 for the dollar’s daily cycle and the buck continued to print higher highs.

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Setting a new high on day 12 is shifting the odds towards this daily cycle forming in a right translated manner. The weekly dollar cycle is currently on week 16. The dollar will enter its timing band for an intermediate cycle low in two weeks.

Assuming that the that the current daily cycle will conclude as a right translated cycle in 2 – 3 weeks will take the weekly cycle out to weeks 18 or 19. Then the dollar will require one more daily cycle that sets a higher high before it fails to complete the intermediate cycle. Which will take the dollar out to weeks 23 – 26.

Typically when the dollar rallies gold stumbles. And when the dollar declines into an intermediate cycle low, gold rallies. So let’s now look at gold.

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Gold printed a failed daily cycle last Thursday, which was day 14. Gold has since drifted sideways and today saw gold break above the declining trend line. Gold is demonstrating good relative strength as the dollar continues to set new daily highs.

A day 14 low is four days shy of the normal timing band for a daily cycle low for gold. I would like to see a clear and confining break of the declining trend line before we label Thursday as a daily cycle low. The fact that the True Strength Indicator is about to deliver a bullish crossover does support the notion of a day 14 low.

But even if Thursday was a daily cycle low, the cyclical outlook for gold is not promising.

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Last week gold broke below the intermediate cycle trend line signaling its intermediate decline. At week 12, gold has another 6 weeks to go before it enters its timing band for an intermediate cycle low, which happens to coincide with the timing of the dollar rallying into an intermediate cycle peak. So there is plenty of time for gold to print one more, failed daily cycle.

If you are interested in gold’s bigger picture I discussed this in my Special Gold Report.

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In this report I break down gold’s 8 year cycle. We also look at the evidence of a super cycle for gold. Then we look at what is currently unfolding with the dollar and how that will likely impact gold.

I would like to make this report available here. The Special Gold Report and a complementary 1 month subscription to the Likesmoney Premium Site is available for $30.

The complementary subscription will give you full access to the premium site. It includes:

1) The Weekend Report, which is posted usually Sunday mornings. It discusses Dollar, Stocks, Gold, Miners, The CRB Index, & Bonds in terms of daily, weekly and yearly cycles ā€“ Which includes the Likesmoney Cycle Tracker.

2)The Mid-Week Update. Posted on Wednesday’sā€“ This is a review of the daily charts for the above mentioned asset classes.

3)Weekend Update look of the daily & weekly charts of Corn & DBA
4)Weekly Update of the Bullish Percentile Bingo
5) Frequent (just about daily) updates of my proprietary FAS Buy/Sell Indicator

The goal of the Weekend Report is to develop an on-going framework of expectations using cycle analysis.

For the Likesmoney Special Gold Report and 1 Month Trial Subscription click here.

Breakthrough

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Monday was day 12 for the daily equity cycle and stocks broke out to new highs by breaking through the 2000 level for the first time ever. The intra-day high of 2001.95 breaks through the important 2000 psychology level.

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Stocks are in the first daily cycle of a new intermediate cycle. The first daily cycle of a new intermediate cycle usually forms in a right translated manner. Therefore we expect to see stocks form a peak after day 20.

Stocks did close off the intra-day high. Stocks have also become a bit stretched above the 10 day MA. So after breaking through this important level, stocks may need a breather.

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Above is a two year look at the S&P. You will notice that the True Strength Indicator has reached a level that has previously seen stocks turn lower. Should a bearish TSI form, then stocks are likely to head into a half-cycle low. But since stocks are in their first daily cycle, stocks are likely to recover and press on to new highs, once again.

And NATGAS broke above its declining cycle trend line today.

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NATGAS printed a daily cycle high on August 12th. It then printed it lowest point since the 12th last Monday, 8/16. After consolidating for a few days NATGAS finally broke above the declining trend line to confirm today as day 5 of a new daily cycle.

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I continue to believe that NATGAS is leaving behind a yearly cycle low. NATGAS found support at the 200 month MA and has been struggling to break through the $4 level. With the “fresh legs” of a new daily cycles I suspect that we will see NATGAS break above the $4 level and then go on to break above the declining monthly trend line to confirm a new yearly cycle.

Special Gold Report – A Look at the 8 Year Cycle

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Today I provided my subscribers with a special report on gold.

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In this report I break down gold’s 8 year cycle. We also look at the evidence of a super cycle for gold. Then we look at what is currently unfolding with the dollar and how that will likely impact gold.

I would like to make this report available here. The Special Gold Report and a complementary 1 month subscription to the Likesmoney Premium Site is available for $30.

The complementary subscription will give you full access to the premium site. It includes:

1) The Weekend Report, which is posted usually Sunday mornings. It discusses Dollar, Stocks, Gold, Miners, The CRB Index, & Bonds in terms of daily, weekly and yearly cycles ā€“ Which includes the Likesmoney Cycle Tracker.

2)The Mid-Week Update. Posted on Wednesday’sā€“ This is a review of the daily charts for the above mentioned asset classes.

3)Weekend Update look of the daily & weekly charts of Corn & DBA
4)Weekly Update of the Bullish Percentile Bingo
5) Frequent (just about daily) updates of my proprietary FAS Buy/Sell Indicator

The goal of the Weekend Report is to develop an on-going framework of expectations using cycle analysis.

For the Likesmoney Special Gold Report and 1 Month Trial Subscription click here.

The 8/22/14 Weekend Report Preview

The Dollar
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The dollar printed a new daily cycle high on Friday. A new high on day 10 has shifted the odds of this daily cycle forming in a right translated manner.

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The timing band for a daily cycle low begins on day 18. So with Friday being day 10, this daily cycle can run another 2 to 3 weeks before printing a daily cycle low.

Stocks
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Stocks found support at the 50 day MA on Monday and powered through this week to print a new, all-time high on Thursday.

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Friday was day 10 for the daily equity cycle. A swing high did form on Friday. Usually the first daily cycle of a new intermediate cycle forms in a right translated manner. So any break of the daily cycle trend line will likely lead to a half cycle low.

The entire Weekend Report can be found at Likesmoney Subscription Services

The Weekend Report discusses Dollar, Stocks, Gold, Miners, The CRB Index, & Bonds in terms of daily, weekly and yearly cycles.
Also included in the Weekend Report is the Likesmoney CycleTracker

To subscribe: http://likesmoneysubscriptionservices.wordpress.com/

For subscribers click here.

You can email me at likesmoney@gmail.com to receive a sample copy of the Weekend Report

Decision Point

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On Monday we discussed how gold had little wiggle room before coming to a decision point. Well today gold made a decision and broke lower.

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Thursday was day 14 for thee daily gold cycle. Gold broke lower today losing the 200 day MA and also closing below the previous daily cycle low. That confirms a failed daily cycle. And at 14 days, gold can go lower for another 4 to 11 days.

And the other takeaway today is that gold broke lower on a day that the dollar printed a bearish reversal.

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Thursday was day 9 for the daily dollar cycle. While the dollar printed a higher high, it also printed a bearish reversal outside of the Bollinger Band. Despite the dollar’s weakness, gold maybe telling us a big move is in store for gold, which we can see on the weekly chart.

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The intermediate gold cycle peaked on week 5. The failed daily cycle on week 11 signals that gold has entered its intermediate cycle decline. And at week 11, gold as another 6 more weeks until it enters its timing band for an intermediate low which can extend out to week 25. That is enough time to allow for the current daily cycle and one additional daily cycle to unfold.

Food for Thought

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Gold’s daily cycle peaked on day 5. The bearish follow through to Tuesday’s trend line break confirms that gold has entered its daily cycle decline.

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Wednesday was day 13 for the daily gold cycle. Gold still have 5 more days before entering its timing band for printing a daily cycle low. And they day 5 peak has locked in a left translated nature to this daily cycle. Therefore our expectation is to see this daily cycle peak below the previous daily cycle low of 1281.00

However it is prudent to acknowledge that the 200 day MA lies 7 points south of today’s close. And a bullish reversal off the 200 day MA could signal an early daily cycle low. And the relative strength in the Miners makes it easier to consider this possibility.

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The Miner’s daily cycle peaked on day 6 with Wednesday being day 11. And even though gold is in a confirmed left translated daily cycle decline, the Miners seem to have found support at the 26.50 level and appears to have a date with the rising 50 day MA. A bullish reversal off the 50 day MA that closes the gap would deliver a bullish signal and will force us to consider that an early 12 day daily cycle low has occurred.

Verification

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The dollar broke out to a new high on Tuesday.

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The dollar failed to deliver a break of the daily cycle trend line as it sought out its daily cycle low. But it did breach the accelerated (red) trend line. The accelerated trend line breach deep in the timing band for a DCL coupled with a break to new highs verifies 8/08 as a 27 day, right translated daily cycle low. And that makes Tuesday day 7 of the new daily cycle.

The dollar’s strength sent gold lower today.

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Tuesday was day 12 for gold’s daily cycle. Gold peaked on day 5 then drifted sideways. Yesterday gold tested the daily cycle trend line. Today’s trend line breach signals that gold has now entered its daily cycle decline. With a day 5 peak, gold appears to have locked in a left translated nature to this daily cycle. That gives us the expectation that gold will break below the previous daily cycle low of 1281.00. With gold on day 11 we could see gold trend lower for the next 7 to 15 sessions.

And it is not too surprising that the day that gold breached its daily cycle trend line (signaling an intermediate decline) is the same day that stocks confirmed the new intermediate cycle.

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Tuesday was day 8 for the daily equity cycle. Stocks have now been up 6 of the last 8 days. The break of the declining weekly cycle trend line verifies that stocks have left behind an intermediate cycle low. Following a right translated intermediate cycle has us expecting to see this new intermediate cycle go to print a higher weekly cycle high.

Wiggle Room …

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Gold has been forming a mini weekly triangle consolidation over the past 4 weeks. As gold approaches the apex of its triangle, it is running out of wiggle room.

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Gold has entered week 11 of its intermediate cycle. There are some definite bearish signals which include a weekly swing high, a bearish crossover on the True Strength Indicator and a bearish zero line crossover on the TSI.

Still the weekly chart shows that gold regained the weekly 50 MA two weeks ago and has maintained it since. Gold is approaching the point for a break in consolidation that should lead to a multi-week move. Perhaps we can glean gold’s intentions from the daily chart.

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Gold’s daily cycle peaked on day 5 and then formed a daily swing high. Today saw gold loose the 50 day MA and deliver a zero line crossover, which are signals of a daily cycle decline. A break of the daily cycle trend line confirms the daily cycle decline. And a break of the daily cycle trend line will lock in a left translated nature to this cycle and signal the intermediate cycle decline. And at week 11, gold could see an another 6 – 14 more weeks of downside.