Trend Line Breaks

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The market delivered some trend line breaks on Monday.

Let’s begin with gold.

1 gld dialy

The daily gold cycle peaked on day 25. While a daily swing high formed the next day, gold essentially traded sideways until Monday when gold broke below the daily cycle trend line to confirm the daily cycle is in decline. Gold has averaged about 33 days for its last 10 daily cycles. So with Monday being day 30 that places gold right in its timing band to print a daily cycle low. One possible scenario would be for gold to form a daily cycle low at the convergence of the 200 day and 50 day MA.

Bonds have a similar set up.

2 tlt daily

The daily bond cycle peaked on day 25 and formed a swing high two days later. Like gold, bonds did not break below the daily cycle trend line to confirm its daily cycle decline until Monday. The last 7 daily cycles have averaged 27 days so with Monday being day 9 that places bonds in their timing band to print a daily cycle low. Once a swing low forms it would have good odds of marking a daily cycle low. Then a break above the declining trend line would confirm the new daily cycle.

So while both gold and bonds broke below their daily cycle trend lines, stocks broke convincingly above its daily cycle trend line.

3 spx daily

Stocks printed an extended 58 day, daily cycle low on March 27th. Emerging from the extended DCL, stocks breached the daily cycle trend line on day 7. However stocks did not deliver a clear and convincing trend line break until Monday. Monday was day 19 for the daily equity cycle. A break above the day 7 high of 2378.36 will shift the odds towards a right translated daily cycle formation. And if a right translated daily cycle forms, then we would need to reevaluate if 3/27 actually hosted an ICL.

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