Same Dilemma …


Gold was hammered and lost over 30 points in the pre-market.

1 am gold

We discussed two the concerns regarding gold in the Weekend Report.
1) That gold has not delivered a clear and convincing trend line break so Friday was either day 5 or day 27.
2) Friday’s SOS on the Junior Miners possibly indicating that gold’s decline was still imminent

1 gold daikly

Today’s drop did not see a trend line break but one should be forth coming but the SOS by the Juniors on Friday was prescient. So assuming we get a clear and convincing trend line break here, it seems that we are faced with the same dilemma, is gold on day 6 or day 28.

If gold is on day 28, then it is getting late in its timing band and a daily cycle low should occur sooner than later. Today’s decline stopped just shy of a support zone as well as breaching the daily cycle trend line. Over the next few days if gold can breach the daily cycle trend line and form a bullish reversal off the rising 50 day MA, then the possibility exists that this was an extended daily cycle and a stop can be placed just below the 50 MA..

However if day 22 was the daily cycle low then that makes Monday day 6.

2 gold 22 RT

And if Monday was day 6, then gold has formed a failed daily cycle. A failed daily cycle would signal that the intermediate cycle is in decline. And at week 6, that leaves 12 – 16 weeks for gold to seek out its intermediate low.

So, if this intermediate cycle is still in ascent then the 50 & 200 MA should act as support during this daily cycle decline. If gold loses these two moving averages, then it is likely that the intermediate decline has begun.


5 thoughts on “Same Dilemma …

      • Yes, I saw the weekly swing high. If, in fact, this is the failed daily cycle scenario then that leaves gold with 12 — 16 to seek out its intermediate cycle low.

      • I doubt it. We’ve only had 1 daily cycle (that hasn’t even broken trend line yet) of the usual 5 daily cycles nested between ICL. By your scenario, this intermediate cycle is EXTREMELY left translated (1 up + 4 down daily cycles), and I just don’t buy it. My thinking is that this intermediate cycle will turn out to be an EXTREMELY strong intermediate cycle that will likely decisively break resistance at $1570.

  1. If $GOLD fails to make a higher high AND the $USD fails to break its IC trendline from the early May lows then the entire range from July ’13 to December ’13 May be in jeopardy. Add to the fact that equities are moving into the euphoria phase while the ECB is actively seeking a weaker Euro.

    What Goldman Sachs wants Goldman Sachs gets meaning their 2014 price target of $1050 is like to be hit by year end. I see a parabolic blow off top in equities while the metals and miners plunge into the CAPITULATION PHASE of this bear market as 12 months of buyers get flushed along with everyone else trapped long who bought back in 2010, 2011 and 2012.

    With EVERYONE selling at the same time as Goldman Sachs, the Chinese Government and anyone else looking to stack physical gold we might even blow through $1050 and drop to Jimmy Rogers often talked about target of $850.

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