Looking at the Evidence

00

Did gold just leave behind a daily cycle low?

gold?

Before we try to answer that question, I want to first look at the Miners.

GDX Sharp Charts Workbench Stock Charts com 20

I believe that the Miners did leave behind a daily cycle low for the following reasons:
1) Swing High — There is a swing high off the day 18 peak.
2) Trend Break — There is a clear trend break on day 19.
3) Timing Band — Friday was the lowest point since the day 18 peak. Day 22 sits right in the timing band for a daily cycle low.
4) Bullish TSI Crossover — You will notice the previous 2 daily cycle lows the TSI dipped below the zero line prior to the bullish crossover. Daily cycle lows tend to be accompanied by a dip below the zero line before a bullish TSI crossover. Currently the TSI did (briefly) dip below the zero line and now appears to be ready for a a bullish crossover. A break to new highs will confirm a new daily cycle.

Now let’s go back to the gold chart.

$ GOLD Sharp Charts Workbench Stock Charts com

1) Swing High — There is a swing high off the day 18 peak.
2) Trend Break — There is a clear trend break on day 18.
3) Timing Band — Friday was the lowest point since the day 18 peak. Day 20 is in the timing band for a daily cycle low.
4) Bullish TSI Crossover — You will notice the previous 2 daily cycle lows for gold saw the TSI dipped below the zero line prior to the bullish crossover. However that did not happen here. But there may be a good reason why. And that reason just may be how bullish gold has been.

It was not too apparent during gold’s first daily cycle out of the December low. That first daily cycle out of the December low saw gold up 10 out of 21 days. However consider this. The second daily cycle was very bullish with gold closing higher 15 out of 21 days. Gold tends to accelerate into its intermediate cycle peak and that is what we may be witnessing here. So until proven otherwise, we will label Friday as a 20 day daily cycle low.

On to bonds.

TLT daily

The previous daily bond cycle peaked on day 22 and printed a right translated daily cycle low on day 29. Since it formed a right translated daily cycle, our expectation was to see this daily cycle go on to print a higher daily cycle high. Bonds accomplished that task today. But the True Strength Indicator is getting rather stretched.

TLT Sharp Charts Workbench Stock Charts com 20

Historically speaking, the TSI has reached a level that, when accompanied by a bearish TSI crossover, has seen a correction in bonds. So a swing high here could initiate a daily cycle decline. A break below 108.64 forms a swing high.

Advertisements

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