Gold & Silver’s Weekly Trend Patterns Remain Bullish; 90/10 Rule of Cycles Could Trigger Sharp Advances as Stocks Projected to Plunge into late-Aug.
07/17/19 Weekly Re-Lay Alert – Seismicity & the 90/10 Rule of Cycles: “A great deal can be learned from studying cycles in various arenas. Principles and phenomena observed in one arena often apply in others… and vice-versa. That is the primary reason that I will discuss cycles in diverse topics like geopolitics, geophysics. flood & drought recurrence, and social/religious/civilization epochs.
The 90/10 Rule of Cycles – another way of describing a parabola (but within a predefined period of time) – is one of those principles. Synergy of cycles is another. These principles converged in late-June and projected a spike in seismic activity in late-June – mid-July, just as instability hedges like Gold, Silver & Bitcoin were signaling culminating rallies. Coincidence?
Major earthquakes continue to break loose, with four on July 12 – 15 (6.1 in Japan, 6.6 in W. Australia, 7.3 in Indonesia & 6.2 in Papua New Guinea) as other signs of instability roil the markets. More is still likely.
Stock Indices rallied into mid-month, peaking on July 15 and reversing lower. That fulfilled intra-month uptrends and some daily & weekly cycles. The Nasdaq 100 tested and held monthly resistance, while rallying into mid-month, the textbook scenario for an intra-month uptrend. All the indexes have sold off with the DJIA, ESU & NQU neutralizing their daily uptrends on today’s close (while ESU neutralized its intra-month uptrend).
Other indexes have also seen pivotal action with the Transports spiking higher into July 16 after turning short-term bullish on July 12. As a result, its daily cycle inverted and created a 19 – 22 day low-low-low-(high) Cycle Progression with the July 16 peak.
Both the Transports and Russell 2000 continue to trace out weekly 21 MAC action that is indicative of a ‘b’ wave peak and start of ‘c’ wave decline. Meanwhile, the NYA (NYSE Index) retested its Sept. 18 high and initially peaked just below it. That high is well below its late-Jan ’18 peak, maintaining a sequence of descending tops.
From a little broader perspective, stocks are nearing the time (based on 4-year, 2-year, monthly & weekly cycles) when a significant correction has been forecast.
Those cycles project a multi-month low in late-Aug. (possibly stretching into Sept. ’19 in some indexes) with the majority of selling expected in the weeks immediately preceding that cycle low (similar to Dec. ’18 and closely related to the sell-off of Aug. 2015).
Since the 4Q ’18 peak, the DJIA has corroborated that with a consistent 11 – 12 week high (Oct. ’18) – low (Dec. ’18) – low (Mar. ’19) – low (Jun. ’19) Cycle Progression that next comes into play on Aug. 19 – 30 and is more likely to time an intermediate low.
Of added interest, a low in late-Aug. ’19 would arrive 8 months from the late-Dec. ’18 bottom. In many cases, a market in transition (in this case, a topping process that is shifting from the uptrend of 2016 – 2018 and more significantly – the uptrend of 2009 – 2018) will begin to mimic opposing cycles – with prevailing cycle highs starting to govern intervening lows, and vice-versa.
An 8-month cycle has been one of the most consistent cycles for the past few years, helping to pinpoint the Sept. ’18 highs and the recent late-April/early-May ’19 highs (in several stocks and indexes). Those ~4-month rallies into late-April split that ~8-month cycle in half.
Once again, proxy stocks like NFLX (which has given uncanny signals since mid-’18) are acting as the proverbial canary in the coal mine, peaking in early-July while perpetuating a 9-week/~2-month low-high-high-(high) Cycle Progression. If it drops below 353.88 by July 19, it would turn its weekly 21 Low MAC down.
It is in an intra-month downtrend and needs a daily close below 362.30 to turn its daily trend down. A July 19 close below 358.85 would neutralize its intra-year uptrend and provide a more decisive sign of an intermediate peak.
All of this action identifies the next two days as being fairly decisive – with the potential to turn daily trends down and signal multi-week highs…
Gold & Silver have resumed their advances in line with their daily & weekly trend patterns and weekly HLS. As described last week, they were ‘in the optimum position to see new rallies’.
Since they did not spike higher on Monday, Gold & Silver extended their rallies with Silver turning its intra-month trend up after mid-month. This has allowed Silver to attack its multi-month upside target (16.100/SI), which is just below its primary wave objective (rally = rally at ~16.150/SIU).
A 1 – 2 week high could be seen during the next phase of the 6 trading-day short-term cycle in Gold, discussed last week (and the midpoint of the overriding 12 trading-day cycle) on July 19. That cycle is also an 8 calendar-day low (6/17) – high (6/25) – high (7/03) – high (7/11) – high (July 19) Cycle Progression.
Silver is poised to perpetuate an intermediate cycle that has averaged 18 – 19 trading days in duration. That has created an 18 – 19 trading-day low (3/07/19) – low (4/04/19) – low (5/02/19) – low (5/28/19) – high (6/21/19) – high (July 17 – 19, ’19) Cycle Progression.
The XAU remains the most bullish and is reinforcing its underlying strength and the cyclic potential to extend this rally into Aug. ’19. It pulled back to begin July, dropping precisely to support at 80.50 – 80.76/XAU where an intra-month bottom was expected. That has allowed it to surge above 88.19, fulfilling the other intra-month objective and turning the monthly 21 MAC up.
The upside target for this latest rally remains at ~91.00/XAU – where the monthly Raw SPR and Intra-month PLLR converge with other targets & resistance.”
Gold extending multi-week consolidation in sync with weekly trend pattern. New 1 – 2 week high now likely, before entering August ’19 cycles, when culminating surges are expected. Silver, Platinum & XAU concur, with rallies projected to last into/through Aug. ’19. XAU monthly trend signal is also crucial, but cannot be triggered until Aug. 30.
Would a (projected) Stock Sell-off – into late-August ‘19 – Spur New Gold Rally?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.