Miner Divergence

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Gold is in a daily uptrend. The daily uptrend is characterized by peaks occurring above the upper daily cycle band and lows forming above the lower daily cycle band. Gold should remain in a daily uptrend until it closes below the lower daily cycle band.

gld

The daily gold cycle peaked on February 27th. After tagging the 200 day MA, gold formed a swing high and then closed below the 10 day MA last Wednesday to confirm the daily cycle decline. While gold has declined for 5 sessions, gold remains above the lower daily cycle band therefore maintaining its daily uptrend.

The same cannot be said for the Miners …

gdx

The daily Miner cycle peaked above the 200 MA back on February 8th. The Miners promptly formed a swing high the next day as it lost the 200 day MA and has been in decline since. The Miners closed below the lower daily cycle band on February 27th, ending its daily uptrend. It has since continued to close below the lower daily cycle band, establishing that it is now in a daily downtrend.

The Miners are oversold and late in their timing band to print a daily cycle low. Once a daily cycle low forms if gold breaks higher then the Miners will surely follow. But the bearish Miner divergence from gold may be sniffing out trouble from the dollar.

$$$ daily

The dollar’s daily cycle peaked last Thursday, day 19, which indicates a right translated daily cycle formation. The dollar has formed a daily swing high but still needs to break below the daily cycle trend line in order to complete its daily cycle decline.

So once the dollar breaks below the daily cycle trend line that should ignite precious metals to rally. The dollar’s right translated daily cycle formation has us expecting a brief decline to be followed by a rally into a new, higher high. Once the dollar begins to rally into a new daily cycle, that has the potential to cause the precious metals to form left translated daily cycles and begin their intermediate cycle decline.

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