Leaving the Station

0 leavubghttp://postimg.org/image/7su10a0b9/

The Miners gapped above the 25 level about three weeks ago and then have been consolidating sideways since. Wednesday saw the Miners break out of the consolidation level marking day 1 of a new daily cycle.

GDX day 1http://postimg.org/image/7366qstg5/

The daily Miner cycle peaked on day 24. A swing high and a break of the accelerated (dashed) daily cycle trend line occurred on day 25.

Confirmation of the daily cycle decline occurs with a break of the daily cycle trend line. That did not happen here. Tuesday, day 27, was the lowest point since the day 24 peak. It did not break below the (blue) daily cycle trend line and fill the gap that was left behind. I believe that it speaks to the bullishness of the Miners that there was only the accelerated trend line break. The break to a new high confirms today as day 1 of a new daily cycle.

And I believe that what is unfolding in the dollar is providing a tailwind to the Miners.

$$$ dailyhttp://postimg.org/image/7366qstg5/

An argument can be made that July 1st was day 37 of a stretched daily dollar cycle. I believe that it was day 17 of a failed dollar cycle. Regardless if it was day 17 or day 37 it is undeniably a daily cycle low.

Emerging from that low the dollar quickly broke above the 50 day MA and the 200 day MA on day 2 and then reversed and closed below the 200 MA. Today saw the dollar close below the 50 day MA in a clear and convincing fashion and is only 10 c away from forming a swing high.

If the day 2 remains as the cycle peak, then daily cycle will form in an extremely left translated manner. Which would have high odds of forming a second consecutive failed daily cycle — which means an intermediate cycle decline for the dollar.

And a falling dollar should help to propel this train …



2 thoughts on “Leaving the Station

  1. I’m having a hard time with this analysis. Gold hasn’t broken out from it’s range, and the US dollar seems to be putting a half cycle low. The volume on the miners is also unconvincing. Will be interesting to see if we get a follow through tomorrow.

  2. Pingback: Cycle Trading

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