Gold Confirms New Daily Cycle

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Gold printed its lowest point last Friday, day 29, following the day 20 peak. While gold formed a swing low on Monday, it did not confirm a new daily cycle until Thursday.

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Gold did break higher on Wednesday, gaining over 2% and breaching the declining trend line. Gold delivered bullish follow through on Thursday by breaking higher to close above both the declining trend line and the 50 day MA to confirm the new daily cycle.

Gold began to close below the lower daily cycle band as it was seeking out its daily cycle low. That ended the daily uptrend and began a daily downtrend. Thursday’s rally fell short of breaking above the upper daily cycle band. If gold is turned lower here and closes back below the lower daily cycle band then gold will have established a daily downtrend. But a close above the upper daily cycle band would end the daily downtrend and signal that gold is re-establishing its daily uptrend.

Gold Facing Strong Headwinds

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The dollar printed a bullish reversal off of the support of the 50 day MA on Monday.

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Monday was day 26 for the dollar’s daily cycle. That places the dollar in its timing band for a daily cycle low. Monday’s bullish reversal eases the parameters for forming a daily swing low. A break above 101.25 will form a swing low. Then a break above the declining trend line will confirm the new daily cycle.

The dollar has established a daily uptrend. If a swing low forms then the dollar would have managed to avoid closing below the lower daily cycle band during its daily cycle decline. Which means that the dollar would remain in a daily uptrend.

Despite the dollar’s bullish reversal, gold formed a swing low on Monday.

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Gold printed its lowest point on Friday, day 29. That placed gold with in its timing band for its daily cycle low. It is a bullish sign that gold managed to form a swing low as the dollar printed its bullish reversal.

However, gold faces some strong head winds now that a swing low has formed. Gold will need to break above the 50 day MA just to get started. Then break above the declining trend line, which is aligned with the declining 10 day MA, in order to confirm the new daily cycle.

Something that we need to watch is that gold had closed below the lower daily cycle band as it declined into its daily cycle low. That ended gold’s daily uptrend. If gold rallies here and it does not manage to close above the upper daily cycle band before rolling over, then it will establish a daily downtrend.

The 3/10/17 Weekend Report Preview

The Dollar
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Friday’s break below the daily cycle trend line confirms that the dollar is in a daily cycle decline.

The dollar peaked on day 19, which assures us of a right translated daily cycle formation. The dollar also managed to close above the upper daily cycle band during this daily cycle. That ended the daily downtrend and indicated that February hosted an intermediate cycle low. Friday was day 25 for the dollar’s daily cycle. That places the dollar in its timing band for a daily cycle low. A swing low will signal a new daily cycle. The dollar is in a daily uptrend and will continue in its uptrend until it closes below the lower daily cycle band

Stocks
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The daily cycle peaked on day 40, locking in a right translated daily cycle formation.

Stocks printed their lowest point on Thursday, following the day 40 peak. The swing low on Friday indicates a new daily cycle. A close above the 10 day MA will signal a new daily cycle. Stocks continue to close above the upper daily cycle band, indicating a daily uptrend. Stocks will remain in its daily uptrend until it closes below the lower daily cycle band.

Normally we would like to see break below the daily cycle trend line before looking for a daily cycle low. But this daily cycle is extremely right translated and it did not happen. Setting aside the trend line break there are other signals that help to determine a daily cycle low. Timing band is one of the criteria. Also normally present in a daily cycle decline is the True Strength Indicator delivering a bearish zero line crossover also along with the formation a weekly swing.

The entire Weekend Report can be found at Likesmoney Subscription Services

The Weekend Report discusses Dollar, Stocks, Gold, Miners, Oil, & Bonds in terms of daily, weekly and yearly cycles.
Also included in the Weekend Report is the Likesmoney CycleTracker

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You can email me at likesmoney@gmail.com to receive a sample copy of the Weekend Report

Miner Divergence

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Gold is in a daily uptrend. The daily uptrend is characterized by peaks occurring above the upper daily cycle band and lows forming above the lower daily cycle band. Gold should remain in a daily uptrend until it closes below the lower daily cycle band.

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The daily gold cycle peaked on February 27th. After tagging the 200 day MA, gold formed a swing high and then closed below the 10 day MA last Wednesday to confirm the daily cycle decline. While gold has declined for 5 sessions, gold remains above the lower daily cycle band therefore maintaining its daily uptrend.

The same cannot be said for the Miners …

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The daily Miner cycle peaked above the 200 MA back on February 8th. The Miners promptly formed a swing high the next day as it lost the 200 day MA and has been in decline since. The Miners closed below the lower daily cycle band on February 27th, ending its daily uptrend. It has since continued to close below the lower daily cycle band, establishing that it is now in a daily downtrend.

The Miners are oversold and late in their timing band to print a daily cycle low. Once a daily cycle low forms if gold breaks higher then the Miners will surely follow. But the bearish Miner divergence from gold may be sniffing out trouble from the dollar.

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The dollar’s daily cycle peaked last Thursday, day 19, which indicates a right translated daily cycle formation. The dollar has formed a daily swing high but still needs to break below the daily cycle trend line in order to complete its daily cycle decline.

So once the dollar breaks below the daily cycle trend line that should ignite precious metals to rally. The dollar’s right translated daily cycle formation has us expecting a brief decline to be followed by a rally into a new, higher high. Once the dollar begins to rally into a new daily cycle, that has the potential to cause the precious metals to form left translated daily cycles and begin their intermediate cycle decline.

Risk/Reward

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The Miners closed below the lower daily cycle band for the second straight day. There is a risk that the Miners are beginning a daily downtrend.

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The Miners printed a narrow range lower low on Tuesday. At 22 days, that places the Miners in their timing band for a daily cycle low. So a swing low could signal a new daily cycle. A break above 23.42 will form a daily swing low.

By breaking below the day 24 low, there is a risk that the Miners printed a failed daily cycle and is beginning a decline into an intermediate cycle low. And based on the weekly cycle count, a decline into an intermediate cycle low from this point could last up to 14 or more weeks.

But there is the potential for a reward here. Since the narrow range day has eased the parameters for forming a daily swing low, a long position can be entered with a stop below Tuesday’s low, therefore minimizing risk.

The potential for reward rests with the possibility that day 24 was not the daily cycle low which would make Tuesday day 46. That would make this a right translated daily cycle, We would therefore have the expectation to see the Miners print a higher daily cycle high.

Gold Lynch Pin

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Gold has entered a new bull market. But the lynch pin to determining gold’s short term direction rests with the dollar.

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The dollar printed its lowest point on week 24, following the week 20 peak. Week 24 does place the dollar in its timing band to print an intermediate cycle low. The dollar is currently testing the declining weekly trend line. A clear and convincing break above the declining weekly trend line will confirm that week 24 hosted the intermediate cycle low. Whether or not the dollar breaks above the declining weekly trend line will be determined by the translation of the dollar’s daily cycle.

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Day 9 remains as the daily cycle peak, which favors a left translated cycle formation. The dollar needs to break convincingly below the daily cycle trend line to confirm the daily cycle decline. The dollar still is in a daily downtrend. Therefore once the dollar breaks convincingly below the daily cycle trend line that should lead to the dollar breaking below the previous daily cycle low of 99.19 to form another failed daily cycle, which should send gold higher.

However, if the dollar regains the 50 day MA and breaks to new highs, then that will change the translation of the daily cycle to a right translated formation and signal that week 24 hosted the intermediate cycle low. And if the dollar breaks to new highs, that should send gold into its daily cycle decline.

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The new high on day 19 assures us of a right translated daily cycle formation and signals that gold has entered its timing band for a daily cycle decline. A swing high will likely send gold into its daily cycle decline. But, if the dollar continues its daily cycle decline that should provide the fuel to allow gold to break above the 200 day MA.

But if week 24 did host the dollar’s intermediate cycle low, then gold’s 200 day MA will likely act as resistance and send gold into its daily cycle decline. But a week 24 intermediate low for the dollar could still be bullish for gold. The dollar still needs to complete its yearly cycle decline. Therefor it is likely that the dollar’s next daily would form as a left translated, failed daily cycle. A left translated failed dollar daily cycle would help to fuel gold to rally into its intermediate cycle peak.

Text Book Set Up

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The dollar formed a bearish reversal on Wednesday that failed to close above the 50 day MA. That is a text book set up for a decline into a daily cycle low.

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The dollar delivered bearish follow through on Thursday and formed a swing high. A peak on day 9 can still result in a left translated failed daily cycle.

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The dollar is also in a text book set up for a daily downtrend. A daily downtrend is characterized by peaks forming below the upper daily cycle band and lows printing below the lower daily cycle band. Wednesday’s bearish reversal not only closed below the 50 day MA, it also closed below the upper daily cycle band to maintain the daily downtrend. A break below the previous daily cycle low of 99.19 will form a 2nd consecutive failed daily cycle as the dollar seeks out its yearly cycle low.

In the Weekend Report I plan to break down where the dollar is in its weekly, yearly, 3 year cycle and its 15 year super cycle.

Potential Inflection Points

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The dollar has been in a daily downtrend that has been characterized by peaks printing below the upper daily cycle band and lows forming below the lower daily cycle band. The dollar reached a potential inflection point on Tuesday.

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Tuesday was day 8 for the dollar’s daily cycle. Left translated daily cycles typically roll over by day 8. The dollar is also up against resistance from the 50 day MA. A swing high here should send the dollar into its daily cycle decline.

Bonds also appear to be at an inflection point.

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Bonds closed above the upper daily cycle band on day 9 trying to re-establish its daily uptrend. It has since formed a swing high and trended lower. Bonds did print a reversal off of the daily cycle trend line on Tuesday. Closing below the 10 day MA and forming a bearish zero line crossover on the TSI are signals that the daily cycle is in decline. Bonds will need to form a swing low here to avoid breaking below the daily cycle trend line, which would confirm the daily cycle decline.

Bearish Dollar Signals

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In the Weekend Report we looked at how the dollar’s weekly cycle set-up has us expecting a left translated daily cycle formation. Today I want to point out some bearish dollar signals

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First off I want to point out that the dollar has established a daily downtrend. It will remain in a downtrend until it can close above the upper daily cycle band.

Second, the True Strength Indicator has reached a level that has previously seen the dollar’s cycle roll over.

The next signal looks at the money flow. For this we need to switch to the ETF UUP

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There has been a huge bearish money flow as the dollar is in the process of printing a lower high.

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The was a similar huge bearish money flow the last time the dollar printed a lower high before its declining into its yearly cycle low.

And the dollar is in its timing band to seek out its yearly cycle low…

The Weekend Report Preview

The Dollar
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The dollar closed above the declining trend line on Thursday and delivered bullish follow through on Friday to confirm the new daily cycle.

Friday was day 6 for the daily dollar cycle. The weekly cycle has us expecting a left translated daily cycle formation. Therefore it is likely that the dollar will be turned lower at the declining 50 day MA. The dollar has established a daily downtrend. It will remain in a downtrend until it can close above the upper daily cycle band.

Stocks
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Stocks broke out to a new high on Thursday and then delivered bullish follow through on Friday to lock in a right translated daily cycle formation.

Friday was day 27 for the daily equity cycle. Stocks are 3 days shy of entering its timing band for a daily cycle low. With stocks breaking higher that allows us to add an accelerated trend line (red dashed). Stocks continue to close above the upper daily cycle band remaining in its daily uptrend. Stocks will continue its daily uptrend until it closes below the lower daily cycle band.

The entire Weekend Report can be found at Likesmoney Subscription Services

The Weekend Report discusses Dollar, Stocks, Gold, Miners, Oil, & Bonds in terms of daily, weekly and yearly cycles.
Also included in the Weekend Report is the Likesmoney CycleTracker

For subscribers click here.

You can email me at likesmoney@gmail.com to receive a sample copy of the Weekend Report