Gold Price Intermediate Cycle Update
NOTHING is certain or guaranteed in Markets….ever. Anyone who tells you otherwise is a charlatan.
That said, within Bressert’s Cycle framework the norm is that a new Intermediate Cycle in any asset should test or breach the Intermediate Cycle downtrend before topping and those are my expectations based on my current analysis on both Gold and the USD.
With that as background, my Gold chart shows these expectations.
- Will Gold test or breach the Yearly Cycle downtrend line on my chart? The high probability answer based on cycle norms is yes.
- Will gold breach this line and turn back down or move up and make a higher high than 2016 before topping in this Intermediate Cycle? Really? If I had that level of clairvoyance, I would never have a losing trade…
- Cycle analysis combined with standard TA is all about developing a trading framework based on probabilities. Sorry, but I am no magician but playing the probabilities has worked out nicely for me. Cut your losers quickly and let your winners run.
An Intermediate Cycle Low (ICL) is the best time to buy any asset given that you sold near the top and have capital to deploy along with the mental courage to pull the trigger at the low. Most Traders buy near highs and sell in despair near ICLs. Cycle analysis is the tool we need to understand bearish investor sentiment at market lows in order to have the courage to buy at those cycle lows when most are selling in panic.
“When your Yelling, you should be Selling and when you are Crying, you should be Buying.” That is, in essence, what this service is all about if you stick with me (…last year was my best trading year ever). My goal is to be buying when there is blood in the streets. Will you have the courage to follow?
So this is one reason I kept the recent Gold position additions in GDX and AGQ rather small as we are already 1.5 months into a new Intermediate Cycle and the miners are already up over 34%. This is NOT your best entry point. Ok, enough posturing and onto the Chart.
Gold is bouncing along above the 10ema and should move higher out of a Half Cycle Low if my analysis is correct. My plan is to take profits when I see signs of topping, probably up near the 1250 to 1260 level where I expect Trading Cycle #2 to top out. Out of the TC2 low, will TC3 make a higher high? It may well be possible but Time will tell…
The bull continues with equities but we are close to topping before moving into a DCL
I want to draw your attention to the SPX time adjusted “echo” year chart again which indicates 16 Feb and 29 Feb as a key turn dates…these dates have been fairly reliable within + or – a day in the past.
I suspect that equities may turn down at the same time as the USD so we may have another day of anxiety but gold is holding its own during this wait!