Bearish Follow Through

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Gold delivered bearish follow through on Tuesday.

gold

While Tuesday could be day 12, I think that it is likely day 29 for the daily gold cycle. Gold broke lower today, closing below the 10 day MA. Gold also closed below the upper daily cycle band signaling that gold is in its daily cycle decline. Gold should break below the cycle trend line in order to complete its daily cycle decline.

But where I believe that gold is only declining into a daily cycle low, I believe something more sinister is afoot with bonds.

tlt weekly

Bonds have formed a weekly swing high. This is week 18 for the intermediate bond cycle. Which places bonds in the timing band to seek out an intermediate cycle low.

tlt daily

Bonds formed a daily swing high on Monday. Tuesday saw bonds close convincingly below the daily cycle trend line to signal that bonds have begun their daily cycle decline. With Tuesday being only day 12, bonds have another 6 days before entering its timing band for a daily cycle low. So bonds could trend lower for the next 1 to 2 weeks. A peak on day 10 could still yield a left translated cycle formation. Therefore we need to watch for a break below the previous daily cycle low of 131.84. That would form a failed daily cycle.

And there are bigger implications for bonds on their yearly and 3 year charts which I plan to cover in the Weekend Report.

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