The daily equity cycle peaked on day 39. It declined until last Thursday, day 41. And now has printed three straight gains.
The decline into the day 41 low did not break below the daily cycle trend line, which is something that we look for to confirm a daily cycle decline. Therefore I suspect that stocks are forming a mini bear flag before resuming their daily cycle decline.
Stocks printed 206 million for Selling on Strength numbers on Tuesday. While not a precise timing tool, the 206 million Selling on Strength does agree with our cyclical framework that a daily equity low is still out in front of us.
Meanwhile gold continues to be volatile.
Gold printed a bearish reversal on Monday. Today gold printed a bullish reversal. Nearly 30 points separate Monday’s highs from Tuesday’s lows. Closing near the high of the day eases the parameters for gold to form a swing low. Since this is too early in the daily cycle to print a daily cycle low, gold may be in the process of forming a half cycle low and setting the daily cycle trend line. A break above today’s high of 1273.50 forms a swing low and signals that a half cycle low has been left behind. One possibility is that gold could stall out in this range for the next several days.
But gold did print a strong Buying on Weakness number today. If gold is in a new intermediate cycle, then this daily cycle should form in a right translated manner. The Buying on Weakness numbers seem to suggest with that there is still some upside to this daily cycle.
The intermediate bond cycle peaked on week 21. It declined to its lowest point last week and has started off this week in a weak manner. The breach of the weekly trend line signals an intermediate cycle decline.
The new daily bond cycle has rallied weakly out of the day 20 low that printed last Tuesday. Now a daily swing high has formed off the day 4 peak. A break below 110.85 forms a failed daily cycle, confirming the intermediate cycle decline.