It is not often we see gold show two consecutive shallow and time based Cycle Lows.  But that’s exactly what we’re looking at here, a Cycle Low which has occurred both early in the Cycle count and with only a minimal price retracement.  Within the weekend report, I outlined my preferred expectation, which was to brace for at least a mild decline back to $1,300.  That expectation was based purely on prior Cycles behavior, as we know from experience they’re most likely to dictate future action.

This past weekend, I also pointed out that breaking above $1,355 at this point was always going to confirm a new Daily Cycle.  The lack of a clear Cycle Low confirms that the flat 10 day period was “the decline” into a Cycle Low.  Typically these types of Cycle Lows within an uptrend have bullish implications.  They indicate that buyers have overwhelmed the profit taking sellers at a point where the sellers normally (DC decline) far outnumber the buyers.  Generally, if it were a confirmed bull market, this development would be a signal to get heavy into long positions with the expectation of yet another stellar Daily Cycle.

My hesitation of course is that we don’t have a “confirmed bull market trend” in place, even though I called an end to the bear market 6 months ago.  The worst case here should at least result in 5-8 sessions higher, especially since the dollar is ready to fall into a scheduled ICL.  But remember, the past 6 (3rd Daily Cycles) have all ended as significantly Left Translated Cycles.  They all topped early and fell sharply; all of them were weak almost from the start.

Gold must be in a bull market (on the cyclical Cycle time-frame) in order for this 3rd Daily Cycle to form Right Translated.   As the dollar could find an ICL within 5 sessions, I urge caution here.  We know 3rd Daily Cycles are often "irrational" and we just don’t have recent sustained up-trend history behind gold.

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