Miner TSI Divergence

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The Miners gapped higher today. The Miners last printed a cycle low on March 23rd. The Miners have rallied since closing consistently above the upper daily cycle band indicating that the Miners are in a daily uptrend.

gdx

The Miners formed a swing high last Wednesday and then printed a second bearish candle on Thursday, day 15. While there may be a chance the day 15 marked a shortened daily cycle low, I think that it is more likely that day 15 set the daily cycle trend line.

The Miners have not yet closed below the upper daily cycle band, which would indicate that the Miners have begun their daily cycle decline. Also the is a bearish divergence developing on the True Strength Indicator which is another signal of an impending correction. A swing high and trend line break would confirm a daily cycle decline.

Something to keep in mind is that the Miners have now left behind two lower gaps. Once the Miners correct we will watch to see if these gaps fill.

Bonds do not display any divergence on the True Strength Indicator.

tlt

The daily bond cycle peaked on day 18 and then printed its lowest point last Thursday, day 23. Bonds delivered a clear and convincing trend line break on Friday, that closed above the upper daily cycle band, to signal a new daily cycle.

Bonds formed a swing high on Monday and drifted lower again today, breaking below the day 23 low. We need to watch to see if bonds reverse and break above Friday’s high. Since a cycle cannot fail and then go on to print a higher high, if bonds break above the Friday high of 132.16 that would mean that the daily cycle decline extended out to Tuesday. However, if bonds deliver more bearish follow through and break below the 50 day MA, then would confirm that day 23 hosted the daily cycle low and that bonds are now in an extremely left translated, failed daily cycle.

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