Miner Concerns

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In bullish markets surprises come to the bull side.
In bear markets surprises come to the bear side.

I think that the Miners are in a bull market, but there is no denying that the Miners delivered a bearish surprise on Monday.

1 gdx daily

The Miners printed a swing low on Thursday off of Wednesday’s bearish reversal. But as we discussed in the Weekend Report, the Miners needed to break above the declining trend line in order to confirm the new daily cycle. Instead the Miners broke below the previous daily cycle low to form a failed daily cycle. And a failed daily cycle indicates that the longer term intermediate cycle is rolling over.

I have received some emails asking if instead of Monday being day 21 of the second daily cycle, is it rather day 45 of an extended daily cycle?

2 gdx 45

Two of our tools (timing band and cycle bands) indicate that day 24 hosted a daily cycle low. So let’s set those two tools aside to consider that Monday was day 45 of a stretched daily cycle. There would still be a concern over this bearish surprise because the 5.35% drop has caused the Miners to close convincingly below the lower daily cycle band to indicate that the intermediate cycle is rolling over.

A possible trigger to the intermediate Miner cycle rolling over would be if the dollar is preparing to form a right translated daily cycle.

$$$

As we discussed on Sunday, Day 9 remains as the daily cycle peak for the dollar, which favors a left translated cycle formation. The dollar needs to break convincingly below the daily cycle trend line to confirm the daily cycle decline. But once again, after breaking below the daily cycle trend line the dollar recovered and closed higher. If the dollar regains the 50 day MA and breaks to new highs, then that will change the translation of the daily cycle to a right translated formation and signal that week 24 hosted the intermediate cycle low. And if the dollar breaks to new highs, that should send gold & the Miners lower.

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