With today being the swing low candle on the dollar, that marks day 1 of a new daily cycle. As mentioned before, I'm expecting left translated bearish cycles.. due to the draw from the intermediate and yearly cycle decline pulling price down. What this means is that the dollar rally out of the bottom will be short lived. I believe the earliest the dollar could top is on day 4 and perhaps the longest it could go is on day 8. So, let's settle it in the middle and say the dollar will top on day 6.. deal? That gives us until about next Wednesday to find a top in the dollar and a low in metals.
For some reason.. my live charts that I use to track real time prices throughout the day posted a much different looking candle than my stockcharts subscription. I'll post both for your review.
Here's a look at the long term dollar. I have posted this one before.. but we need to keep up with the progress. You can see there's a huge HnS in play. A break of that neckline in the coming weeks will push the dollar down to find support much much lower than where it currently sits.
Gold confirmed today that it is moving into it's daily cycle low. As we approach the timing band for lows, one requirement is to break through the daily cycle trendline. You can clearly see on the chart today that gold sold off heavily breaking this trendline. Now we must sit and wait for gold to search out it's final low. Today marked day 16 of the daily cycle. Remember, the typical daily cycle runs 20-28 days. This means we have atleast 4 days of downside left.
Here's a technical look at gold. You can see the fibo levels in play for support and resistance in this current up-leg. For a while I thought there was an iHnS forming, but it looks like this daily cycle low has invalidated that idea.
Silver is also on day 16 of it's daily cycle. It too is now confirmed to be searching out it's daily cycle low. One thing to note, is that silver rose a higher percentage than gold in this up-leg, and that has kept silver's iHnS in play. After the technical selloff today, silver was quickly bought pushing price back above that neckline. Will it be a significant player? Only time will tell. Today's candle is a big hammer candle.. but I do not believe that we will see a follow through to the upside here. I believe this is just a false painting of the charts because of the blunder with the large sell in gold today.
Let's look at Miners..
GDX gap'd way down at the open today.. only to make up the gap and close in the positive. There's not much to add today.. other than we need to focus on regaining the prior channel. It's trying.. and I remain long term bullish on miners. I own Mar '13 $55 calls.
HUI is also trying to regain it's previous trending channel. If it can and gold can sustain a rally, HUI will easily test the top of it's channel.. if not higher to test the previous highs in the $600's.
This is why I am long term bullish on miners. Look at the gigantic rallies that miners have posted over this bull. Gold is not a bear.. and miners will not be a bear either. The 200 DMA has been a big player. What has happened everytime that price has corrected below the 200 DMA?
Stocks are chugging along. Since we've recently regained traction above the 200 DMA from the bottom, it's only natural to retest as support. With the dollar daily cycle on the rise, this would be an easy target for price to look for support. Don't let the bears wash you out if it pierces through for a short period.. it's all part of the game.
Here's a possible outlook in stocks as we move into the new year. They're due for a deep 15 month cycle low. Perhaps we can retest highs before we need to begin the intermediate decline.
Hang tight and let the cycles work. I remain bullish in metals and miners through the Jan-Feb time frame. Stocks are due for a deep 15 month cycle low going into Feb-Mar so we'll need to be out of our miners by then as the heavy selling will take a toll. The dollar will be due for it's yearly cycle low in this time frame as well.
“Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance. The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves…” – Jesse Livermore
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