Bull or Bear …

oo

Gold’s daily cycle peaked on day 9 and today was day 20. Gold has locked in a left translated nature to this daily cycle.

GCY00 Commodity Futures Price Chart for Gold C

While a left translated daily cycle is a bearish signal, what I am watching is the 1251.70 level which was the previous daily cycle low. A break below 1251.7 produces another failed daily cycle. And that would have me thinking that week 16 was not an intermediate cycle low. At 16 weeks, that was on the early side for an intermediate low.

GCY00 Cweekly

Since gold was contained by the declining weekly trend line, breaking below the previous daily cycle low would signal that gold is still in the intermediate cycle decline that began in June. That would make this week 20, which is right in the normal timing band for an intermediate cycle low.

After rallying for ten days, the dollar has now stalled out at the 81.50 level, which is just below the 200 MA.

$ USD

Tuesday was day 12 for the daily dollar cycle. The dollar currently has a 10 day peak, which more likely indicates a right translated is forming. The dollar is also encroaching its daily cycle trend line. A break below the trend line will signal that the daily cycle is in decline.

$ USD 2 year tsi

Backing out the daily chart two points immediately occur to me. The first thing that occurs to me is the True Strength Indicator is at a level that has seen the dollar reverse, in most cases. The second thing is that the 200 MA has been a significant resistance/support line. The dollar tends to break the 200 MA and overshoots it. Then there is an obligatory back test of the 200 MA. Well the dollar broke below the 200 MA in September and now is in the process of backtesting the 200 MA. A rejection of the 200 MA will send the dollar down into its yearly cycle decline and likely send gold rallying…

Free Image Hosting at www.ImageShack.us

Advertisements

2 thoughts on “Bull or Bear …

    • gw,

      I have been (slowly) working on a “jump start” document to help bring people up to speed.

      Here is an excerpt regarding translation:

      Cycles & Translation

      Right & Left Translated Cycles

      A cycle is defined by the lowest points of a price series centered around a cycle peak

      Translation —

      The translation of the cycle refers to when the cycle peaks. A peak to the right of center is a right translated cycle. A peak to the left of center is a left translated cycle.

      Cycle

      Right Translated Cycles – peak after the center of a cycle. Since the cycle peaks after the midway point its spends most of its time in ascent and the least of its time in descent. Therefore right translated cycles are associated with an uptrend, printing higher highs and higher lows.

      Left Translated Cycles – peak prior the center of a cycle. Since the cycle peaks prior the midway point its spends the most amount of its time in descent and the least amount of its time in ascent. Therefore left translated cycles are associated with a downtrend, printing lower highs and lower lows.

      left & right translated

Leave a Reply

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

WordPress.com Logo

You are commenting using your WordPress.com 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 )

Google+ photo

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

Connecting to %s