Tuesday was day 12 for the dollar’s daily cycle and the buck continued to print higher highs.
Setting a new high on day 12 is shifting the odds towards this daily cycle forming in a right translated manner. The weekly dollar cycle is currently on week 16. The dollar will enter its timing band for an intermediate cycle low in two weeks.
Assuming that the that the current daily cycle will conclude as a right translated cycle in 2 – 3 weeks will take the weekly cycle out to weeks 18 or 19. Then the dollar will require one more daily cycle that sets a higher high before it fails to complete the intermediate cycle. Which will take the dollar out to weeks 23 – 26.
Typically when the dollar rallies gold stumbles. And when the dollar declines into an intermediate cycle low, gold rallies. So let’s now look at gold.
Gold printed a failed daily cycle last Thursday, which was day 14. Gold has since drifted sideways and today saw gold break above the declining trend line. Gold is demonstrating good relative strength as the dollar continues to set new daily highs.
A day 14 low is four days shy of the normal timing band for a daily cycle low for gold. I would like to see a clear and confining break of the declining trend line before we label Thursday as a daily cycle low. The fact that the True Strength Indicator is about to deliver a bullish crossover does support the notion of a day 14 low.
But even if Thursday was a daily cycle low, the cyclical outlook for gold is not promising.
Last week gold broke below the intermediate cycle trend line signaling its intermediate decline. At week 12, gold has another 6 weeks to go before it enters its timing band for an intermediate cycle low, which happens to coincide with the timing of the dollar rallying into an intermediate cycle peak. So there is plenty of time for gold to print one more, failed daily cycle.
If you are interested in gold’s bigger picture I discussed this in my Special Gold Report.
In this report I break down gold’s 8 year cycle. We also look at the evidence of a super cycle for gold. Then we look at what is currently unfolding with the dollar and how that will likely impact gold.
I would like to make this report available here. The Special Gold Report and a complementary 1 month subscription to the Likesmoney Premium Site is available for $30.
The complementary subscription will give you full access to the premium site. It includes:
1) The Weekend Report, which is posted usually Sunday mornings. It discusses Dollar, Stocks, Gold, Miners, The CRB Index, & Bonds in terms of daily, weekly and yearly cycles – Which includes the Likesmoney Cycle Tracker.
2)The Mid-Week Update. Posted on Wednesday’s– This is a review of the daily charts for the above mentioned asset classes.
3)Weekend Update look of the daily & weekly charts of Corn & DBA
4)Weekly Update of the Bullish Percentile Bingo
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The goal of the Weekend Report is to develop an on-going framework of expectations using cycle analysis.
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