Gold Still Masking it Intentions


With the dollar in a new daily and quite likely new intermediate cycle it seemed that this would have doomed the daily gold cycle. But gold is still managing to mask its true intentions.

$ GOLD daily

It is still unclear if the day 20 pivot on February 28th is a daily cycle low. A break below the day 20 low of 13919.30 shifts the likelihood that February 28th was a daily cycle low and Thursday was day 14.

However a break above Thursday’s high of 1335.50 forms a swing low. If that happens then that keeps alive the extended daily cycle scenario.

The daily equity cycle appears to be leaving behind a shortened daily cycle.

$ SPX Sharp Charts Workbench Stock Charts com 2

The daily equity cycle peaked on day 21 and broke below the daily cycle trend line on day 24. Friday was the lowest point since the daily equity cycle peaked on day 21. Monday formed a swing low and now stocks appear to be finding its footing. A bullish divergence is developing on the True Strength Indicator.

A 26 day daily cycle low is early for the normal timing band, but not without precedent. The trend line break and TSI reading leads me to label Friday as a daily cycle low. A break to new highs will confirm a new daily cycle.

Getting back to gold, despite the big rally in the dollar, gold’s daily cycle has not failed. And maybe the reason why is that the dollar is still destined to decline into its three year cycle low.

$ USD big

Our frame work for the dollar calls for a decline into a three year cycle low. As we can see above, once the dollar breaks below the 200 MA it contains the dollar in its final drop into its 3 year cycle low.

$ USD daily

Thursday was day 5 for the daily dollar cycle. The dollar rally was halted today by the 50 MA. Since the daily cycle is still young, we are likely to see the dollar break through the 50 MA. And then less than one percent above is the declining 200 MA.

So something that we will be watching for is to see if the 200 MA contains this rally.

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