Gold – Still Waiting on a Trend

My apologies to Mick & Keith

This is the one chart to watch for gold’s next trending move. Gold is in a monthly triangle consolidation. In a triangle consolidation the cycle low can migrate to the apex of the triangle. A bullish close above the declining monthly trend line should result in a powerful trending move.

Update: Gold – The Next Trending Move

Back on 10/30 we looked at the big picture for gold.

We discussed that gold was in a monthly triangle consolidation and that a breakout of this multi- year consolidation should result in a powerful trending move.

Gold is breaking out.

A full report on gold, including the daily, weekly and yearly cycle can be found here.

Gold – The Next Trending Move

Gold closed below both the 200 day MA and the 10 day MA on Friday to signal the daily cycle decline.   Gold should go on to turn the 10 day MA lower as it seeks out its DCL.

But today, I want to focus in on the big picture.

Gold is in a monthly triangle consolidation. In a triangle consolidation the cycle low can migrate to the apex of the triangle. A break out of this multi- year consolidation should result in a powerful trending move.

The Big Picture

Occasionally it is beneficial to stand back and look at the big picture. This week we will do that with stocks and gold.

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

Gold is in a monthly triangle consolidation. In a triangle consolidation the cycle low can migrate to the apex of the triangle. A break out of this consolidation should result in a powerful trending move.

GBTC Continuing Weekly Uptrend

GBTC is in a weekly uptrend that has been characterized by highs forming above the upper weekly cycle band and lows forming above the lower weekly cycle band.

Since peaking in February, GBTC has been forming a weekly triangle consolidation pattern.

GBTC is in the process of forming a bullish weekly reversal off of the 10 week MA and is breaking bullishly above the declining weekly trend line. The bullish break above the declining trend line indicates that GBTC will remain in its weekly uptrend and triggers a weekly cycle band buy signal.

Miner Swing High

The Miners formed a daily swing high on Thursday.

We discussed that Tuesday’s bullish breakout of the mini triangle consolidation was a buy signal for Miners. However they have not been able to deliver any bullish follow through. While the Miners did close higher on Wednesday, they also printed an exhaustion candle. Then on Thursday they formed a daily swing high. Thursday was day 43 for the daily Miner cycle. That places them very deep in their timing band for a daily cycle low. A close below the 10 day MA will signal the daily cycle decline.

Gold Crossed The Line

We have been discussing gold recently here and here. Gold has finally crossed the line.

Gold crossed the declining trend line on Thursday to signal that it is in a new daily cycle. What I have discovered is that triangle consolidations obscure our daily cycle count and often causes the DCL to migrate to the apex of the triangle. Therefore we will label day 39 as our DCL making Thursday — day 3 for the new daily cycle. Gold is in a daily uptrend. The swing low formed above the lower daily cycle band which indicates that gold remains in its daily uptrend and triggers a cycle band buy signal.

Bullish On Gold

Gold printed its lowest point on day 25, following the day 20 peak. That would place gold in its timing band for a daily cycle low. But instead of continuing into a recognizable DCL, gold entered into a triangle consolidation. Triangles tend to obscure our daily cycle counts. Tuesday was either day 40 of an extended daily cycle or day 15 of a new daily cycle.

Either scenario appears bullish to me.

Scenario 1)
That day 25 was the daily cycle low, making Tuesday — day 15. Gold is already in an established daily uptrend. We would be waiting on a break of the declining trend line to signal of the continuation of gold’s uptrend.

Scenario 2
That Tuesday was day 40. At 40 days, gold would be late in its timing band for a DCL. So at this point, any decline into the final DCL should be brief and recovered quickly. A break of the lower trend line indicates scenario 2. Then we would be looking for a swing low to signal the new daily cycle.

Patience Grasshopper

Gold is forming a triangle consolidation following the move off of the late May low.

And we are waiting for a convincing break above the upper triangle stem to signal the next leg up for gold.

Gold has not delivered a recognizable daily cycle low since late May. And gold is in its timing band for a daily cycle low. One possible scenario would be for gold to make one more test of the upper triangle stem, be rejected, and then break convincingly below the lower stem as it declines into its daily cycle low.

Since gold is in a daily uptrend we need to be alert for the possibility for a bullish break. Gold has been unable to close above the 1430 level as it has been working through the triangle consolidation. If gold breaks above the 1430 level and closes convincingly above the upper triangle stem, then we would label day 17 as the DCL.

Joining the Party

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The commodities have been printing their yearly cycle lows. It began with oil.

CLY00 Commodity Futures Price Chart for Crude

Oil was in a triangle consolidation. Often times the cycle low forms in the apex of the consolidation, which was the case here. Oil put in its yearly cycle low in April

Gold, precious metals, the Miners and Copper all printed their yearly lows in June.

gold

miners

HGY

Granted the precious metals, except silver, have not printed a monthly swing low yet. But they are forming right translated daily cycles and behaving as if they are emerging from yearly lows.

Now it seems that Natgas and Agriculture is joining the party.

natgas

At 16 months, Natgas is forming a bullish monthly reversal.

ag

And we see at 14 months Ag is also printing a bullish reversal.

And this can all be summed up by the CRB Index

crb

The CRB printed its three year low in June 2012. It then printed a higher yearly low this past June and is now on week 9 of a new yearly cycle. The CRB has breached the declining multi-year trend line is on the verge of reclaiming the 50 MA.

A clear and convincing break above the declining multi-year trend line will signal a new bullish trend in commodities. I think that we will see a clear and convincing break when the dollar makes its clear and convincing break below its multi-year trend line.

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With the yearly cycle low forming in June that makes August month 2 of a new yearly dollar cycle. August has already formed a monthly swing high. On top of that, the dollar is on month 27 of its three year cycle and due to begin its journey into its three year low. A break of the grey trend line confirms that the dollar is moving into its three year cycle decline.

Often times the decline into the three year low is a rather nasty affair for the dollar
And a rather bullish time for commodities …

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