Loading ...Gold Cycle Update
Gold has a longer-term Intermediate Cycle that, on average, makes a major Intermediate Cycle Low (ICL) every 22-28 weeks measured low to low (or around 6 months). Within its longer Intermediate Cycle, Gold has 3 to 4 shorter term Trading or Daily Cycles that last, on average, 23-29 trading days low to low.
With that as background, I took profits on my leveraged NUGT position late last week as it was getting late, in terms of Time, in short term Trading Cycle #3 (TC3) for both Gold and GDX. You see, last Friday was Day 24 for both Gold and GDX, so yes, it is getting late. Attached is a link to my Weekend update along with a chart on GDX from today’s close that signals that GDX is now likely moving into TCL3. If correct, I have what should be strong support near, or just below, the 50ma where I am expecting TCL3 to form so we shall see.
https://surfcity.co/2020/07/12/gold-the-usd-weekend-update-59/
Note that GDX formed both a swing high and closed below it’s 10ma and my TC3 uptrend line. The combination of these three events this late in a Trading Cycle is usually a very strong signal that a short term Trading Cycle has topped.
What’s the timing band for a swing low to form? Are you expecting a low this week or should we expect a longer bottoming. How many daily cycles are left in this intermediate cycle?
Yes. How do cycles work? Great questions.
Every TA methodology, except Cycles, focuses exclusively on Price action. Cycles is the only approach that combines Time with Price to help me set my stop levels (e.g. GDX, etc.).
Mmmm. It’s like the inverse of PnF charts.. where they focus JUST on price… no time.
Patrick, I use both Time and Price in my work.
Based on the Time both Gold & GDX spent moving higher in Trading Cycle #3, I am expecting short term TCL3 to form either late this week out to the middle of next week.
Great information Surf.
Readers here need to consider adding Cycles to their TA .
Nobody does it better
https://surfcity.co
I agree, cycles are extremely helpful. The problem I find is that whilst the 8/16 year cycles are great for a big picture roadmap, I struggle with cycles on daily/weekly timescales. The pullback into the cyclical lows in a bull market can be too shallow to make it worth bothering with them. It’s often not clear, until it’s too late, whether you’re going to be left or right translated. The cycles are definitely there, but their length (in time) varies, and their depth can be large or small. Every time I try to trade one, it pointless because I exit when it’s clear we’re moving into a cyclical low – it then turns up before I can get back in at a lower price point. I find the technical chart and associated indicators more helpful. I guess I need to get better at analysing the smaller cycles, but I do find it frustrating.
NS… I share the same thoughts.. but was too lazy to write that down… I followed Novast and some others doing time cycle on smaller time frames. Seems to go by soo fast. I think it’s for day traders and swing mostly. Yeah, maybe with practice you’ll get better, but I find soo much noise on smaller time frames, everything is less precise.
I like the big bigger cycles, even if off by a month or 2, wont change much for a position trader, when used in a weight of evidence approach.
I’ll keep poking around cycles ICL, DCL, and all those other initials.. such a fascinating technique I’ll have to deep dive later on.
Comes back to fetch techniques that fit your emotional profile.. and not try to make them fit. You need to believe what you are doing works.. to have the conviction to respect it.
Northstar, the major long term lows (the 6 month ICL or Intermediate Cycle Low) are definately worth tracking. Also if you use leverage like NUGT or JNUG, the shorter Trading Cycles are also worth tracking.
And from the words of Richard Russell: “The problem with cycles is where are they when you need them”.
About 15 years ago one thing I wasted lots of time on was pretend-trading short-term cycles except doing the opposite. When things were going way way off from what cycles would seem to suggest, I’d take a (pretend) position against the cycles. I would amass significant amounts of (pretend) money, typically without having my (pretend) stops hit too soon. I never tried it in reality. Probably wouldn’t work. Probably would get wiped out pretty quickly.
I don’t have time to try it in this lifetime. I don’t have an easy way of getting data cheaply. (There are just these stupid sites that give you their charts and stupid squiggly lines not the raw data enabling you to make really good charts yourself). I don’t have the statistical software I used to have and don’t have time to learn the opensource statistical software I want to learn. So I’m not going to do it. But I amassed a tidy fantasy fortune when things went against short-term cycles.