By now you know that my swing trading approach is to focus on the 5-6 Month Intermediate Cycle Low (ICL) to establish positions. It seem’s that everything that I track has the 5-6 month low to low cycle. Sometimes the ICLs come sooner at 4 months or later at 7+ months but the average is 5-6 months.
Everything also has a Yearly Cycle Low (YCL) which is nothing more than two 5-6 mont ICLs. Cycles longer than one year, however, vary by asset. The USD and Bonds have a 3 Year Cycle low to low and Stocks have a 7 Year Cycle low to low. Gold’s longer Cycles include a 4 Year Cycle and an 8 Year Cycle, which is simply two 4 Year Cycles back to back.
My 28 year Gold chart below shows Gold’s 8 Year Cycle pattern using the Purple Cycle tool on Stockcharts. Cycles, however, are not exact, in terms of Time so I have added my Blue Arrows showing you that I believe Gold’s last 8 Year Cycle low came in early 2016 closer to year seven. The chart also shows a Blue Fork, that while not technically correct (handle does not attach), it does show you the long term Price channel I am tracking.
Why is this important? If Gold’s 8 year low to low pattern holds, the next one should be in the 2024 time frame. I also believe the USD’s longer 15 year Super Cycle has topped in Year 9 in early 2017. If correct, we should see downside price action in the USD for another 5 years, give or take a year. While the inverse correlation for the USD and Gold does not always hold, my expectations are that it will for much of the next 4-5 years as the USD moves into its longer term 15 year low. If correct, my expectations are that Gold will easily take out its previous high from 2011.
Thought it would be useful on the last trading year of what has been an absolutely crazy year, to review what lies ahead, based on the fifth K wave thesis.
It appears as though the next leg up in the metals and mining sectors, has commenced, and should run well into 2018 and possibly 2019, before another mid cycle correction. 2022 seems to be the place to take some chips off the table, waiting for the 2023 mid cycle low to play out. The final blow off leg up from 2023 into 2026 peak could be epic, similar to the peak in 2011. 15 years apart. 15 year super-cycle peaks.
For those following this K wave, we have about 9 good years left in it, although 2023 could be gut wrenching. After 2026/27 peak, find a beach somewhere and let it all go, as its done until the next low in 2060. Most of us will not be around then, so leave a note for your kids and grand kids!
Meanwhile the end of month closing today for the $CDNX, indicates a break out, targeting next level of around 1600 on the index, or a double from here. Timing perhaps in mid 2019 or about 18 months. By 2026 it should be at least double that again, around 3200, at least, or possibly a new high. Lets see.
Meanwhile enjoy friends and family over the next few days. Maintain the moral high ground. Tell the truth always. And aim high for 2018. Most importantly, take responsibility, transcend the noise and enjoy the game.