Gold Uptrend

Gold is demonstrating a bullish change in behavior.

Prior to printing the late December DCL, gold was in a pattern of printing lows below the lower daily cycle band. That is characteristic of a daily downtrend. Since the late December low that pattern has changed. Gold is now forming highs above the upper daily cycle band and lows are now forming above the lower daily cycle band. This is characteristic of gold being in a daily uptrend. Gold will remain in its daily uptrend unless it closes below the lower daily cycle band.

The Sky Is Falling

Stocks closed below the previous DCL on Thursday to form a failed daily cycle. 

Stocks continued lower on Friday to close below the 200 day MA. Friday was day 32, placing stocks in their timing band for a DCL. A swing low and recovery of the 200 day MA would signal a new daily cycle. Stocks are currently in a daily downtrend. They will remain in their daily downtrend unless they close back above the upper daily cycle band.

In the Weekend Report I discuss how the failed daily cycle impacts the status of the intermediate cycle as well as the status of the yearly cycle.

Bearish Behavior

Stocks continued lower on Tuesday.

Stocks broke below the day 24 low on Tuesday to extend the daily cycle decline. Stocks also closed below the lower daily cycle band on Tuesday. Closing below the lower daily cycle band ends the daily uptrend and begins a daily downtrend. Closing below the lower daily cycle band also indicates that the intermediate cycle decline has begun. A break below the previous daily cycle low of 4495.12 will form a failed daily cycle, confirming the intermediate cycle decline.

Miner Rejection At the 50 MA

The Miners were rejected by the 50 day MA on Tuesday.

Tuesday was day 8 for the daily cycle. A peak on day 8 would indicate a left translated daily cycle formation. Which aligns with the Miners currently being in a daily downtrend. If the Miners form a swing high below the upper daily cycle band then they will remain in their daily downtrend and trigger a cycle band sell signal. A break below 31.07 will form a daily swing high.

The 12/18/21 Weekend Report Preview

The Dollar

The status of the daily cycle is not clear.

While the dollar formed a swing high and closed below the 10 day MA on day 22, it did not do ‘enough’ for us to label day 22 as the DCL. It has been 3 weeks and the dollar has been crawling along the 10 day MA, no doubt due to the heavy manipulation in the currency markets. So we may need to turn to the weekly chart for more clarity. (The weekly chart can be found in The Weekend Report) What is clear is that the dollar is in a daily uptrend and will remain so unless it closes below the lower daily cycle band.

Stocks

It is concerning that since forming its DCL, stocks have been unable to deliver any bullish follow through.

We need to keep in mind that stocks are on month 21 for the yearly cycle. Which means that stocks are way overdue for a yearly cycle decline. Stocks formed a swing high on Friday. A close below the 50 day MA will trigger our stop. Then a close below the lower daily cycle band will end the daily uptrend and begin a daily downtrend, potentially beginning the yearly cycle decline.

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The Weekend Report discusses Dollar, Stocks, Gold, Miners, Oil, & Bonds in terms of daily, weekly and yearly cycles.
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Miner Rally

The Miners formed a swing low on Thursday.

The Miners broke below the day 46 low on Tuesday then delivered bearish follow through on Wednesday.  Wednesday was day 54, placing them very deep in their timing band for a DCL.  The Miners formed a bullish reversal on Wednesday which eased the parameters for forming a swing low.  The Miners then formed a swing low on Thursday that closed above the declining trend line and turned the 10 day MA higher so we will label day 54 as the DCL.   The Miners are currently in a daily downtrend. But a close above the upper daily cycle band will end the daily downtrend and begin a new daily uptrend.

Boom Goes The Dynamite

While stocks formed a swing low on on Monday, they were contained by the 10 day MA.

Boom.

Stocks gapped above the declining trend line to end up rallying for 2.07% on Tuesday to signal the new daily cycle. Stocks also closed above the upper daily cycle band on Tuesday. Closing above the upper daily cycle band ends the daily downtrend and renews the daily uptrend.

Stocks are heading into the most bullish time of the year. If stocks can quickly breakout above the all-time high of 4743.83, that could trigger a melt-up phase.

Gold – Triple Convergence

Gold formed a swing low on Friday.

Gold printed its lowest point on Thursday, day 44, placing it late in its timing band for a DCL.  Gold formed a swing low on Friday. A close above triple convergence of the 200 day MA, the 50 day MA, and 10 day MA will have us label day 44 as the DCL. Gold is currently in a daily downtrend. Gold will remain in its daily downtrend unless it closes above the upper daily cycle band.

Stocks Deliver Bullish Follow Through

We discussed last week that stocks needed to close above the declining trend line to confirm the new daily cycle.

Stocks closed convincingly above the declining trend line on Thursday then deliverered bullish follow through on Friday and Monday to close above both the 50 day MA and the upper daily cycle band. Closing above the upper daily cycle band ends the daily downtrend and begins a new daily uptrend. Closing above the upper daily cycle band also indicates that the intermediate cycle low has been set.

The decline into the ICL has stretched the ‘elastic band’ lower. A quick recovery of the all time highs could trigger a final melt-up phase.

Stocks Need To Cross The Line

While stocks closed above the 10 day MA last week to signal a new daily cycle …

…stocks still need to close above the declining trend line for confirmation that day 31 was the DCL. Instead, stocks formed a lower swing high on Monday. Stocks are currrenrlty in a daily downtrend. Forming a swing high below the upper daily cycle band signals a continuation of the daily downtrend and triggers a cycle band sell signal.