Hammer Time …

o hammer time

The dollar printed a bullish hammer today.

DXY00 | Commodity Futures Price Chart for U S D

The dollar’s daily cycle peaked on day 12 and has been in decline since. Monday was day 19 and the dollar printed a bullish reversal today closing near the highs of the day. This eases the parameters of forming a swing low. At day 19, the dollar has entered its daily cycle low timing band. THe dollar’s timing band can stretch to day 28. A break above 81.308 forms a swing low. A break of the declining cycle trend line confirms a new daily cycle.

Should Monday prove to be the daily cycle low, then the dollar leaves behind a right translated daily cycle. That would confirm that that the August pivot marked an intermediate cycle low.

A new daily cycle for the dollar would likely provide headwinds for gold.

gold

Gold broke below the low gold set on Friday. That negates Friday’s bullish reversal and extends its daily cycle to day 27.

Gold needs to form a daily cycle low within the next 3 sessions if it hopes to maintain a bullish nature. The other thing that we are watching is to see if gold stays above the August low of 1272.90. While the break of the intermediate cycle trend line signaled an intermediate cycle decline, a break below the previous low confirms it.

So while gold printed a lower low than Friday, the Miners managed to form swing low.

Miners

Here is where I will remind everybody that a swing low does not guarantee a daily cycle low, but a daily cycle low cannot form with out one šŸ™‚ A rallying dollar could send the Miners lower. Still, if Friday winds up as the daily cycle low, then we need to see a break of the declining trend line to confirm a new daily cycle.

Lately we have been witnessing that the Miners have been trading inversely to stocks.

spx

Stocks came within 5 handles of its all time high and reversed lower into the close. Stocks maybe filling the gap from this morning before moving higher. However, a break below 1691.7 forms a swing high and a break of the daily cycle trend line would signal something more ominous is afoot.

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