Relative Strength

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Gold dropped over 1.4% today as it continued its decline into its daily cycle low.

gld weekly

Today’s drop caused gold to break below its intermediate trend line. This signals that gold has entered its intermediate cycle decline. A close below the intermediate trend line will confirm the intermediate cycle decline.

gold

Tuesday was day 22 for gold’s daily cycle. Gold is in its timing band to print its daily cycle low. Despite gold’s large drop today, as long as gold forms a daily cycle low above the previous daily cycle low of 1103.80 then it will maintain its pattern of printing higher daily cycle highs and higher daily cycle lows.

Compared to gold’s big drop today, the Miners displayed good relative strength.

4 gdx daily

The Miners printed an inside day that managed to hold above both the 50 day MA and the lower daily cycle band. Since the Miners have not closed below the lower daily cycle band, should they form a swing low tomorrow, they would have maintained their daily uptrend and formed a bullish divergence to gold.

Other commodities are developing bullishly. Last week we discussed how oil had confirmed a new daily cycle. Today we can see that oil has delivered some bullish follow through.

5 oil

Today was day 5 for oil’s daily cycle. After regaining the 50 day MA on day 1, oil needed to consolidate that gain for the past few days. Today oil broke out higher. Oil managed to close above the upper daily cycle band which signals that oil is in a daily uptrend.

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