Bumpy Road, Continued …

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Last Thursday we discussed how one of the headwinds facing the Miners would be the dollar emerging from a daily cycle low.

The Miners might have begun sniffing out that scenario today …

So we begin with the dollar. We have been waiting on a break of the daily cycle trend line to confirm the daily cycle decline. The dollar delivered that trend line break on Monday.

1 $$$

Monday was day 26 which places the dollar in the later stages of its timing band to print a daily cycle low. While the dollar can still go lower, a break above 97.41 forms a swing low. Then a declining trend line break confirms the new daily cycle. The peak on day 21 has locked in a right translation to this daily cycle. So our expectation is to see the new daily cycle go on to print a higher daily cycle high.

2 gdx

The Miners printed a bullish reversal on Friday and followed that up with forming a swing low on Monday, but then closed lower on the day. With the dollar breaking below its daily cycle trend line I would have expected more from the Miners. But as we just mentioned, the Miners could be sniffing out the dollar’s impending daily cycle low.

The Miners have yet to confirm a new daily cycle. A close above the lower cycle band, currently at 15.40, would confirm the new daily cycle.

So it’s possible that we will see the Miners make one more break lower before printing its daily cycle low.

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