Hummmm...... Strike 3, I'm Out?

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Things just keep getting curiousier and curiousier. Gold making a daily cycle of just 14 days?  Huh? I've seen *one* cycle that was 16 days, but common'. Who writes the rules for these bull markets, anyway?
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And what about that picture perfect head and shoulders on the daily chart of the SP-500?  With my good furtune, it's just a mirage.
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Yes, I've been looking to smack that fastball and park it in the bleachers, and instead the curve ball has just left me looking.  And looking pretty bad at that.
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Hey, there is no sugar coating this one. Gold, silver and the miners just picked up their secular bull market game and waved to me in their rear view mirror.  (That's the best view of Texas, too, by the way).
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Well, let's look at some charts and see what they say. Since the whole precious metal thing revolves around gold, we'll start there with three charts, then move to silver, the dollar and my TZA nemesis, the SP-500.

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The True Strength Index (TSI) indicator has done an admirable job of spotting the bottom of the past several intermediate cycle corrections in gold. This first chart is a weekly of the World Gold Index (XGLD). The slower trending TSI (25,13) has not turned up yet, but honestly it will do so a few weeks late, so no surprise there. The faster TSI (7,4) has indeed turned up and if that holds through this Friday's close, I would think this has been the bottom.
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Click on any chart to ENLARGE

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Next let's turn to a daily chart of the World Gold Index (XGLD) and see what we can figure out.
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The thing that has me shaking my head is the daily cycle that may well have completed last Friday in just 14 days. Incredible. I've studied these daily cycles in detail back about 3 years, at least.  Never seen one shorter than 16 days and the past several we had recently were closer to 30 days.
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I noted the % each intermediate weekly cycle was able to climb above the 200 dma and it appears this cycle was like the previous two - in the 14-16% range.  This fact alone makes me very suspicious that we have not seen the C-wave top. Yes, silver went parabolic, but not gold. And gold is the one that drives the train, not silver.
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Now on the daily chart of gold, the TSI (25,13) has been brutally accurate on nailing the exact bottom of gold's intermediate cycles (white circles).  It's reading both last Friday and today (Tuesday) was unchanged at -0.07. But in another day or two it may rise, and at that point I will be more confident of our future direction. There was a positive divergence on the faster TSI (7,4) as a result of Friday's sharp price drop.  I suspected that was going to be trouble and looking at what happened today, well, it was.

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Next let's take our third look at gold through the lens of the daily Gold Continuous Contract (GC). We note that the TSI is still below ZERO and that increases the threat of a final sell-off on the horizon. Without a ZERO crossover, we also note the absence of a significant trend line break or positive divergence. Again, when these signals fall into place we will be much more certain of future direction.
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This software is ThinkorSwim. Over this past long weekend a friend/partner of mine named Garry, and I wrote the computer script to create these two new indicators. The indicator on the bottom tells when each of the TSI (7,4), TSI (13,7) and TSI (25,13) are rising (green) or falling (red). Presumably, when all three TSI magnifications are rising together or falling together it should make for a good trading opportunity.
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The other indicator is what appears to be the TSI on the price chart. Indeed, that is what it is. But in this case, I made it so that all three TSI magnifications are in that single line. In a way, the single line on the price chart is what the 6 lines in the bottom panel are doing.
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Garry and I began first by getting this to work with 3 stochastic settings.  The results were very impressive. But then we morphed that work over into indicators using the TSI instead of stochastics, and well, there is no comparison. 

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Well, let's move on and have a look at the 60 minute Silver Continuous Contract Chart (SI).  We note that silver had a huge rally today and was just starting to take a breather after hours when I snapped this shot.  Silver reminds me of a wild cat - it just does what it wants. If I had to guess I would think it makes it to $36, having begun this rally around $34, then pulls back to the midpoint consolidation area that we see at $35. But I never knew a wild cat to care about what I think, so be warned. If gold proves to have bottomed I will run from this kitty kat as fast as I can.

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Now our good old July 4th patriotic friend the U.S.Dollar Continuous Contract (DX).  This daily chart shows us a text book daily cycle completion - 21 days with the top arriving on Day 16. Right translated and bullish. Price came right down to the rising uptrend line of price and bounced higher, concluding one daily cycle and beginning one anew.
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The TSI is starting out closer to ZERO than the previous 2 daily cycles, which is favorable. Everything on the chart squares and looks reasonably bullish.
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But the question nagging me is, what is going on with gold, silver, other commodities and the stock market. Have they somehow figured out that this dollar daily cycle is going to turn out to be a ruse? If the dollar dropped for a couple of days it would break through that uptrend line, turn the TSI south below ZERO, make a failed and bearish left translated daily cycle and most assuredly send the other aforement investment vehicles soaring.

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Well finally, let's take a look at the daily chart of the Standard and Poors 500 (SP-500).  Here is that head and shoulders pattern I mentioned earlier. Almost to the day it is a nearly perfect symetrical pattern. The other thing I note is that the TSI (7,4) seems to call it a day when it gets much higher that 0.60. Today's reading was 0.62.
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So once again, I want to believe what I see on the chart - but if the dollar is going to fail and soon, who knows how high this thing will go?  The pattern be damned. I sure don't know ... the crystal ball is very dark.  I do know it has not been a good time to own TZA, that is for sure.
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So, think positive.  It is going to be way easier to make money once the direction of things is cleared up.