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Little by little I am going to learn about the Gold/GDX cycles and if you like, you can watch me in my 'discovery' process.
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This first daily chart is of GDX - the miners. It is primarily a look back at last summer 2009. Using the True Strength Index (TSI) indicator as a guide, I attempted to decipher and dissect the daily cycles.
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Three simple observations.
1. The daily cycles appear to me to be somewhere around 36 to 42 days.
2. The summer months are BORING with a small range of only 6 points. Kinda difficult to trade your way to riches with that doldrum action.
3. GDX maintained a nice upward sloping trend line.
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Click on the chart to ENLARGE
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This second daily chart of GDX brings us up to our current date. Again, I have attempted to figure out the daily cycles and identify their location, guided by the TSI indicator.
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Well, we observe GDX again obeying a nicely rising uptrend. And it appears that the intra day range, so far, is a mere 7 points. Perhaps we are near the bottom end of that 7 point range right now.
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Whereas the first chart identified daily cycles in the range of 36 to 42 days, this chart has a couple cycles within range at 34 and 40 days, but the currently completed (?) daily cycle, at 30 days, seems curiously short.
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So again, I cannot help but wonder if we drop down one more time......creating a cycle that is within the "normal" range of 36 to 42 days. Today, Wednesday, would be day 35 by my count. I imagine we should have our answer by the end of this week. If we were to drop down one more time, that would present a rather low risk entry point considering the summer doldrum range and the completion of a "normal" daily cycle.
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I am going to be on the road ALL DAY Thursday.... but hope to be back online Friday.
Click on the chart to ENLARGE
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