Gold Got Hammered

Gold got hammered overnight

Gold dropped 90 points to break below the previous daily cycle low on Monday. Breaking below the previous daily cycle low forms a failed daily cycle which extends the intermediate cycle decline. This could kick off a 5 – 7 bloodbath day phase to print the ICL.

However, gold is in its timing band for both a daily and weekly cycle low. A swing low would signal a new daily cycle and quite possibly the ICl. A break above 1765.70 will form a daily swing low. For those with a higher risk tolerance can use a close above the previous DCL of 1750.10 as a buy signal.

A Major Bearish Day For The Miners

The Miners delivered bearish follow through on Monday by breaking convincingly below the 200 day MA to close 4.29% lower for the day.

This should trigger a bloodbath phase for the Miners that can last 5 to 7 days – which would bring the Miners in the early part of their timing band for a daily cycle low. This just happens to coincide with the dollar beginning a new daily cycle.

The dollar printed a bullish reversal on Monday. This was day 23, placing the dollar in its timing band for a daily cycle low. Monday’s bullish reversal has eased the parameters for forming a swing low. A break above 92.79 will form a swing low to signal a new daily cycle. However, in the Weekend Report we will discuss how the dollar is declining into an intermediate cycle low which give us the expectation for the new daily cycle for the dollar to left translate and fail. A left translated cycle typically peaks by day 8, which aligns with the anticipated bloodbath phase for the Miners. So once the dollar forms a swing high, that will signal a potential DCL for the Miners. Which will be the next major buying opportunity for the Miners.

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Miner Odds


 

The Miners had been consolidating in a trading box for just over a month. They broke bearishly out of consolidation on Wednesday to form a failed daily cycle. Breaking below the previous DCL should trigger a bloodbath phase to the daily cycle decline that can last 5 to 7 days.  Instead, the Miners delivered a bullish surprise by printing a bullish candle on Thursday.

The Miners formed a swing low on Monday, testing the lower consolidation level. If the Miners are rejected here that should lead to the bloodbath phase. However, at 27 weeks the Miners are very deep in their timing Band for an intermediate cycle low. So if the Miners can close back in the consolidation box then the odds would shift to this not only been a new daily cycle, but a new intermediate cycle as well.

Possible Miner Daily Cycle Low

The Miners broke below the previous daily cycle low on Wednesday to form a failed daily cycle and confirm the intermediate cycle decline.

Wednesday’s Mid-Week Update we discussed that breaking below the previous daily cycle low should trigger a bloodbath phase to the daily cycle decline that can last 5 to 7 days. That may not happen.

The Miners printed a bullish candle on Thursday that nearly recovered Wednesday’s sell-off. Thursday’s bullish candle eases the parameters for forming a swing low. A break above 38.91 forms a daily swing low. With the Miners in their timing band for a DCL, a swing low and close back in the consolidation box would signal a new daily cycle.

The 7/25/20 Weekend Report Preview

The Dollar

The dollar broke below the previous daily cycle low on Monday to form a failed daily cycle. It then continued lower into Friday.
 

Breaking below the previous daily cycle low caused the dollar to enter a bloodbath phase, which can last 5 to 7 days. Friday was day 31, placing the dollar in its timing band for a daily cycle low. We will see when we look at gold and the Miners that their rallies accelerated once the dollar formed a failed daily cycle. And the precious metal sector will likely continue to rally until the dollar prints a swing low. The dollar currently is in a daily downtrend.  It will remain in its daily downtrend until it can close back above the upper daily cycle band.

Stocks

Stocks formed a bearish reversal on Thursday and delivered bearish follow through on Friday.

Stocks formed a swing high and closed below both the daily cycle trend line and the 10 day MA to indicate the daily cycle decline. Friday was day 28 for the daily equity cycle. This places stocks 2 days shy of its timing band for a daily cycle low. Stocks should cause the 10 day MA to turn lower before printing its DCL. Stocks are in a daily uptrend. They will continue in their daily uptrend unless they close below the lower daily cycle band.

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