Further Evidence

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Last night we obseverd that gold was nearing its timing band to seek out an intermediate cycle low. A left translated daily cycle often leads to the intermediate cycle decline. Gold presented further evidence today that a left translated daily cycle is forming.

gld sh

The previous daily cycle peaked on day 18, formed a swing high the next day and closed below the upper daily cycle band. Closing below the upper daily cycle band confirms the daily cycle decline. Gold went on to print its lowest point on day 20, which was right in the timing band for a daily cycle low.

Then gold formed a swing low on last Wednesday that managed to close above the upper daily cycle band, signaling a new daily cycle. Gold then printed a bearish reversal on Thursday and formed a swing high on Friday, giving a warning signal of a possible early daily cycle decline. Gold delivered more bearish follow through on Monday. We can see that the True Strength Indicator also had a bearish zero line crossover, which is more evidence that gold has begun its daily cycle decline.

The bullish dollar also making things tough for gold.

1 $$$ daily

The dollar printed its lowest point on Friday, day 25. That places the dollar deep in its timing band for a daily cycle low. The dollar formed a swing low today, giving its first indication of a new daily cycle. A break of the declining trend line is necessary to confirm the new daily cycle. Since the dollar is deep in its timing band for an intermediate cycle low, a new daily cycle will likely result in a new intermediate cycle for the dollar.

And as we can see below, as the dollar rallies out of an intermediate cycle low, that tends to send gold into its intermediate cycle decline.

g $

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