Gold Smackdown

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Gold was smacked down today giving up over 27 points which was 2.18%. As dramatic as Thursday was, the fate of this daily cycle for gold is still undetermined.

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Gold printed a daily cycle low on December 4th. Emerging from that low, gold’s daily cycle peaked on day 4. And gold is now in-between the day 4 high and the daily cycle low. This is just noise until gold picks a direction by breaching one of these levels.

The dollar may have formed a daily cycle low today.

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Thursday the dollar formed a swing low off the day 15 print. A day 15 low may be a bit early, but it is not without precedent. A break above the declining accelerated (red) trend line signals a new daily cycle. A break above the black declining trend line confirms a new daily cycle.

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The daily equity cycle peaked on day 36 and printed a convincing fake out low on day 39. After a bounce that failed to make a new high, stocks broke lower. Here are three things that I look for to mark a daily cycle low.

– A daily cycle correction usually lasts 7-15 days.
– 5 Day RSI gets oversold at most daily cycle lows
– Lower Bollinger Band breach

From the day 36 peak, stocks have now declined for 10 days. Stocks also breached the lower Bollinger Band today and we also see that RSI 5 is oversold.

Having satisfied the above, any swing low now will likely mark the daily cycle low. A break above 1782.99 forms a swing low.


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