The Miners printed a daily cycle low last Wednesday. They formed a swing low on Thursday and closed above the lower daily cycle band on Friday to confirm the new daily cycle. However, today’s close below the lower cycle band is a cause for concern.
In isolation today’s close below the lower daily cycle band signals the daily cycle decline and possibly a continuation of the intermediate cycle decline. However, gold is still developing bullishly and we need to take that into consideration.
Gold’s daily cycle broke above the upper daily cycle band and went on to peak last Monday on day 21. A brief decline saw gold print its lowest point last Wednesday, which was day 23. Gold regained the 50 day MA on yesterday and formed a swing low today. While we would like to see a clear and convincing swing low this does signal a new daily cycle.
Gold is developing bullishly. The first daily cycle broke above the upper cycle band indicating a new trend. The decline into the daily cycle low stayed above the lower cycle band, maintaining its bullish posture. Since the first daily cycle formed as a right translated cycle, our expectation is to see this new daily cycle go on to print a higher daily cycle high. And if gold goes higher the Miners should also follow suit.
Last week the dollar printed a failed daily cycle. The weakness we see this week appears to be setting up as another left translated daily cycle.
The dollar printed its lowest point last Monday, day 20. A swing low formed on Wednesday. The dollar closed above the lower cycle band on Thursday to confirm the new daily cycle. The dollar closed higher on Friday, but was halted by the 50 day MA.
The dollar closed lower on Monday and formed formed a swing high today. Since this would be only week 16 for the intermediate dollar cycle, there is plenty of time for the dollar to print one more failed daily cycle. The swing high today aligns with this scenario. A close below the lower daily cycle band will signal the daily cycle decline, which should lead into a failed cycle. And at the dollar continuing into its intermediate cycle low should lift the precious metals complex.