The cash market overshot a 2 day cycle projection of 1196 in the late going yesterday and even though it pulled back in the closing moments, 2 and 5 day cycle indicators remained on the buy side.
The S&P futures pushed a little higher overnight in Asia, reaching the declining 5 day cycle centerline, with the 2 day cycle staying in a flat up phase. The Spoos failed to cross the centerline, and within the last hour 2 day cycle indicators fell to the sell side. The Spoos dropped back below the 2 day cycle centerline now at 1192.75, and moving sideways. The price is holding at the next 2 and 5 day cycle lines down, at 1186.50 and 1183.50. If those break, the next support would be the 2 day cycle outer ribbon at 1169-74, and the bottom of the 5 day cycle channel at 1166. If they drop below those bands, the crash would be on.
On the other hand if they hold at 1183-84, then the rangebound pattern would continue. The key to any upside would be the ability to clear the declining 5 day cycle centerline now at 1196.
Time would favor the 2 day cycle turning down here leading to a move to the lower support lines over the course of the day. 2 day cycle indicators would need to reverse to the upside. If they do so from a higher low than yesterday, that could lead to a rally.
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Gold’s 2 day cycle is in an up phase. The price of gold is above the 2 day cycle centerline at 1683, but below the still declining 5 day cycle centerline at 1698. The direction of the break from those parameters should signals the next significant move.
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