Déjà vu, again …

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Bonds printed the huge bearish reversal on October 15th. Six days later bonds broke below the 120 level and have been trading in a tight 2 point range since.

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It is now day 16, Bonds are just 2 days shy of its timing band for a daily cycle low. With each passing day I believe that the gravitational pull of the impending daily cycle low makes it likely that we will see a bearish break out of this consolidation. A break below 118.13 produces a failed daily cycle confirming that bonds are in an intermediate cycle decline.

The dollar has also been trading in a tight range for over two weeks now.

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The dollar has performed a masterful job obscuring its daily cycle count. My best guess is that day 22 is the daily cycle peak. It remains to be seen if day 23 is the daily cycle low.

If the dollar breaks above the day 22 high of 88.37 then I would be inclined to label day 23 as the daily cycle low. A clear and convincing break below the day 23 low of 87.23 will force us to label day 18 as the daily cycle low. (Which was something that we considered here).

Last night we discussed that gold may be allowing the 10 day MA to catch up before breaking through the declining 50 day MA

gold

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Gold began the day by breaking lower. Gold went on to tag the 10 day moving average and then recovered and closed higher for the day. Today was day 10 for gold’s daily cycle. Gold’s daily cycle still remains bullish. I think that gold is waiting on the dollar to begin its final decline into its daily cycle low to make a break higher. A close above the declining 50 day MA would be very bullish and would signal that gold is in a new intermediate cycle.

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