Bonds Seeking a Bottom …

0 bonds

Bonds have been in a falling since early May.


Bonds last formed a right translated daily cycle in May and has since left behind 4 straight left translated, failed daily cycles.

Since the last daily cycle low that printed on August 21, a bullish divergence has emerged in the Money Flow Index and on the True Strength Indicator signaling a pending change.

tlt 2

Bonds printed a bullish reversal today. A closer look reveals that the previous daily cycle low printed at 101.84. Today’s low was 102.19. A break above today’s high of 103.31 would form a swing low. If today turns out to be the daily cycle low, then bonds would be forming the first higher low since May.

So while bonds appear to be getting their footing, the dollar signaled that it has entered its primary cycle decline.

DXY00 | Commodity Futures Price Chart for U S D

Wednesday was day 16 for the dollar’s daily cycle. A break of the daily cycle trend line confirms the dollar’s daily cycle decline. The dollar does not enter its timing band for a daily cycle low for another two days. The timing band for the low can stretch to day 28.

Gold’s daily cycle could also stretch to day 28.


Wednesday was day 24 for gold’s daily cycle. Gold did not demonstrate too much excitement over the dollar breaking below its daily cycle trend line. However gold did have a narrow range day that made a (slightly) lower low. That eases the parameters for forming a swing low. A break above 1368. 30 forms that swing low. A break above the declining cycle trend line confirms a new daily cycle.

Then gold would be ready for the next leg higher …


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s