The following is an excerpt from the Weekend Report
Gold declined rather steadily from late October through 12/31. During that time a bullish divergence was developing on the True Strength Indicator.
Gold printed its daily cycle low 12/31. Gold printed a higher high on Friday, which was day 7. There are two things that we are looking for gold to do during this daily cycle. The first thing is to see if gold forms a right translated cycle. Setting new highs past day 14 swings the odds towards this being a right translated cycle. The second thing that we are looking for is to see if gold can break above 1267.50. Breaking above that level would see gold form a higher high, thus breaking the pattern of lower highs.
The first thing that I noticed on the weekly chart is that gold held above the June low. Not only did the gold hold above the June low but rocketed higher after testing that low. The weekly swing low and break of the declining (blue) trend line does signal a new intermediate cycle. A break above the (black) declining trend line will signal a significant trend change is at hand.
Backing out the weekly chart we can see that breaking above the black declining trend line breaks an over year long down trend.
And a break of that declining trend line will return gold back to a bullish posture …
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