I'm beginning to think that Monday may have marked the last daily cycle low and the short term rally we are seeing may end up being a failed and very left translated daily cycle. We'll just have to see how it plays out as we are still in the timing band for a daily cycle low.
The swing low today on the dollar probably did mark the most recent cycle low. If the dollar continues higher from here it's going to add pressure on the stock market. As if all the negatives I've gone over for the last couple of weeks aren't enough?
It's hard to see in the chart but MACD has now crossed over and is heading higher for gold while the opposite is true for the S&P. I've got to say I would rather buy into a correction that's running out of steam (gold) than a counter trend rally that's starting to fade (S&P).
Finally a look at the gold bull from the beginning. I've shaded the first two phases of the bull market. I think there's a good chance gold is just now starting the third speculative phase. Once gold closes back above $1000 I think it's going to be game on, so to speak.
One thing I did want to point out was the size of the last two C waves. Both were proportional to the preceding consolidation and both lasted at least a year. Notice that both also formed a midpoint consolidation about half way thru the rally. I suspect we will see something similar this time to.
The size of the current consolidation suggests this C wave should take gold to $1500-$2000.
One can fight with the bear market in stocks if they are so inclined but the easy money will always be to just take a position in a bull market and hold on.
Personally I have no desire to try and second guess the volatile swings in the stock market to make tiny profits (if I'm lucky) when I can get rich by just taking a position in the gold bull and holding on.
Heck its a lot more relaxing being outside climbing everyday while I let the bull do it's thing than glued to my computer trying to scratch out a dollar here and there fighting with a bear market.
Besides I guarantee that market timers, even the really good (or more likely lucky) ones are never going to make even a fraction of what one will make by just riding a bull market to completion.