Cycle Trading: Piecing Together Gold & Oil
The pieces are coming together pointing to a daily cycle turn for gold.
Gold printed its lowest point on Wednesday, day 23, following the peak on day 6. That places gold in its timing band to form a daily cycle low. Gold did form a swing low on Thursday. A swing low does not guarantee a daily cycle low, but a daily cycle low cannot form without one. Two of the previous 4 daily cycles did stretch out to at least day 28, so there is the possibility of gold breaking lower here. However, a close above the lower daily cycle band will signal a new daily cycle. Then a break of the declining trend line will confirm the new daily cycle. Pieces are also coming together pointing to a turn lower for oil.
Thursday was day 37 for the daily oil cycle, placing oil in its timing band to seek out a daily cycle low. There is a bearish divergence developing on the True Strength Indicator the often heralds a change. Also the bearish candle today has eased the parameters for forming a daily swing high. A break below 49.22 will form a swing high. The a break of the daily cycle trend line will confirm the daily cycle decline.