Possible Turning Points


Following the big drop on Wednesday, stocks closed higher on Thursday.


The daily equity cycle peaked on Tuesday, day 35, then dropped over 1.8% on Wednesday to close below the lower daily cycle band to confirm the daily cycle decline. While stocks printed a lower low, they did close higher on Thursday. At 37 days, stocks are in their timing band for a daily cycle low. The higher close helps to ease the parameters for forming a daily swing low. A break above 2375.74 forms a swing low to signal a new daily cycle. I would like to see a close back above the 50 day MA before we label day 37 as the daily cycle low.

Gold also reversed on Thursday.


Thursday was day 7 for the daily gold cycle. While gold printed a higher high, gold closed lower on the day, easing the parameters for forming a daily swing high. A break below 1246.20 will form a daily swing high. A close below both the 200 MA and the 50 day MA would signal that the daily cycle decline has begun. Cycles usually print a left translated, failed daily cycle in order to complete its intermediate cycle decline. A peak on day 7 would indicate a left translated cycle formation signaling that gold is continuing with its intermediate cycle decline. Gold would need to break below the previous daily cycle low of 1214.30 to form a failed daily cycle.


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