Nov 06, 2012 - Election Day

Today was election day. From early this morning, the markets began to speak. Metals rallied, the dollar began to falter, and stocks rallied. I mentioned yesterday that there could be a lot of volatility today.. and we got it.


First off, the dollar fell from it's highs. Yesterday could have very well been the daily cycle top. If that is the case, in order to confirm it, we need to create a swing high and fall back below the daily cycle trendline. That swing high was not created today. My stockcharts price showed today's candle low at the exact price as the low of yesterday's candle. Tomorrow will give us the story.

Gold launched out of it's bottom today. It created a swing low and found resistance at it's daily cycle trendline. However, it did manage to poke above for a short period. Because of this swing low, today will become day 1 of the new daily cycle. This was week 25 of gold's intermediate cycle so we're in the timing band for an intermediate cycle low. Gold's promising action today could be pointing out that we had a top in the dollar. 

The same action occurred in silver today. We pushed all the way to the top of the channel, found resistance, and bounced off. Yesterday's low was a probably DCL and today is likely to be day 1 of the new daily cycle. This could also mark the Intermediate cycle low for both metals.. but that will not be known until next weeks weekly close. We'd need to form a weekly swing low to confirm. 

GDX price action bounced off of the lower trend of the channel today. This is a big bull flag and once it breaks, it should move pretty quickly. 

Let's see what kind of follow through we get over the next few days. It should be interesting to see how markets react to the results of the election today. But as you can see, I'm calling this the bottom based on the strong moves off of the lows and because of the timing band of the cycles. 

As I type this, the $USD has already fallen to $80.53, which is below the $80.55 needed to form the swing high. Things could start getting very interesting really quick as the dollar falls into it's next intermediate cycle low.. which will consequently put us into the timing band to also create our yearly cycle low.

Grab your bags.. this train is leaving the station.