Bearish Follow Through

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Last night we looked at how the Miners were rejected by the declining trend line. Today they delivered more bearish follow through.

gdx

The daily Miner cycle peaked on Friday, day 4 as it tagged the declining trend line. Monday saw the Miners form a swing high, but found support at the 50 day MA. The Miners lost that support today closing down 1.83% for the day. This daily cycle is in trouble. A break below 20.21 forms a failed daily cycle. With the Miners on day 6 we could see the Miners decline for up to another 3 to 4 weeks.

Bonds also delivered some bearish follow through today.

tlt

The daily bond cycle peaked on day 6 as it closed just above the 50 day moving average. Now that appears to be a bull trap because bonds formed a swing high the next day, losing the 50 day MA. Bonds broke below the daily cycle trend line on Monday in a clear and convincing manner with more bearish follow through today. Bonds are in jeopardy of forming a failed daily cycle. A break below 125.67 forms a failed daily cycle. With today being day 10 means that bonds trend lower for 2 to 3 more weeks before printing a daily cycle low.

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2 thoughts on “Bearish Follow Through

  1. GDX could break the 20.21 level tomorrow and possibly form a white candle. This could also produce a nice positive divergence on your red TSI signal line. Then up GDX could go to fill the 1st [of many] gap at 21.56-21.69.
    [Thanks for all your nightly posts πŸ‘+1 and your very clever headlines. πŸ’‹ ]

    • Kim,

      This is quite possible. The joker in the deck is the dollar. If the dollar decides to use Friday’s jobs report as an excuse to break decisively into an intermediate cycle decline then precious metals should fly.

      LM

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