Gold Intermediate Cycle : Surfing for a Wave Trough.
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Based on Time and Price action I am seeing, I am expecting the next Intermediate Cycle Low (ICL) for Gold and PM’s either in mid-May (this week or next?) or it could move into mid-June. Why the one month variation? That is about the time needed for one of Gold’s shorter term Trading Cycles (22-29 days Low to Low on average).
The Price and Time action on Gold’s longer Intermediate Cycle, however, is clearer than the shorter Trading Cycles right now. Based on Gold’s last confirmed short term Trading or Daily Cycle Low (TCL or DCL) in March near $1196, we are possibly on day 41 of TC3. I simply hate long counts like this and whenever I see them I often explore multiple possible counts as they are outside the norm. I will also say that long TC counts are often seen near the end of Gold’s longer Intermediate Cycle.
As my normal timing band for Trading Cycle Lows (TL Low or TCL) is 22-29 days, this is either a very long Trading Cycle or perhaps we had a stealth TC Low in April on day 18. That would make this day 23 of TC4.
Bottom line, however, I don’t see Gold’s longer Intermediate Cycle Low stretching out past mid-June.
My last point here is that picking the exact bottom is not always necessary as long as you moved much of your PM portfolio to Cash near the Cycle top (see my 2nd chart). If you look at my Portfolio Tracker, my last long trade in GDX was stopped out at $24.20 on February 10th, and the Intermediate High in GDX was two days earlier on Feb 8th, near $25 and change. I did not sell my entire portfolio back then but I sold a good bit of it over the next few days.
While I have not taken a long portfolio trade just yet, about a week ago, I set up some “Stink Bids” on a number of not so liquid Junior mining stocks based on Price Channels I had on each of them. Several of these stink bids have hit over the last two days.
Will this be at the exact Low? I am not sure but I do know that they are much much lower than where I sold them back in early February. For reference, see my 3rd chart on GDXJ which shows it has retraced almost its entire gain out of the Dec 2016 Yearly Cycle Low (YCL).
In Summary : Cycles may not be sexy like some of the other Technical Analysis we use but the whole point is to sell near the top and buy near the lows of the Intermediate ( 5 to 6 month) repeating cycles. This is my M/O. Buy low sell high, with an in depth understanding of the natural rhythm of the markets, you will have many more winning trades and many less losers.