Miner Swing

We recognized on Tuesday that conditions were becoming favorable for the Miners to print a daily cycle low. The swing low that formed on Thursday potentially marks day 1 for the new daily cycle.

The Miners printed their lowest point on Wednesday, day 16, which is a bit shy of the normal timing band for a daily cycle low. However Thursday’s swing low caused the Miners to close convincingly above the 10 day MA which signals a new daily cycle. A break above the declining trend line is needed to confirm a new daily cycle. But with the 200 day MA just above the declining trend line, I would like to see a close above the 200 MA for confirmation of a new daily cycle.

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Miner Divergence

Gold closed loser on Tuesday.

Gold broke below the previous daily cycle low to form a failed daily cycle which confirms the intermediate cycle decline. Tuesday was day 29 for the daily gold cycle, placing it in its timing band for a daily cycle low. At this point a swing low accompanied by a close above the 10 day MA would signal a new daily cycle.

Instead of following gold lower, the Miners demonstrated some bullish divergence by closing higher on Tuesday

Tuesday was also day 29 for the daily Miner cycle. The Miners printed a bullish reversal off of support of the 50 day MA. That eases the parameters for forming a daily swing low. A break above 22.37 forms a swing low to signal a new daily cycle.

This sets up a low risk opportunity for the Miners. The Miners are getting deep in their timing band to print a daily cycle low. That increases the odds that a swing low will mark the daily cycle low. So if the Miners do form a swing low, a stop could be placed just below the 50 day MA.

Miner Rejection

The Miners had formed a swing low on Thursday, the 26th. But we still needed confirmation that the Miners had begun a new daily cycle.

The above chart was from Thursday’s report where we discussed how we wanted to see a close above the triple resistance of the 10 day MA, the 200 day MA and the declining trend line before we label day 25 as the DCL.

That has not yet happened.

The Miners did close above the 200 day MA on Friday but was contained by the 10 day MA. Then the Miners were rejected by the 10 day MA on Monday to drop close to 2% on the day. That makes Monday day 28 fo the daily Miner cycle, placing them deep in their timing band for a daily cycle low. Which increases the odds that the next swing low will mark the daily cycle low.

But the other thing that we are looking at is for the dollar to begin to decline into its daily cycle low.

The dollar did form a daily swing high on Monday. A peak on day 8 does potentially set up a left translated daily cycle formation. However the dollar also closed higher on Monday.

So here is what we are looking for:
1) A swing low on the Miners to signal the daily cycle low.
2) Then a close above the triple resistance of the 200 day MA, 10 DMA and the declining trend line.
2) Bearish follow through on the dollar sending it into its daily cycle decline.

Minor Opportunity

The Miners formed a swing low on Thursday.

The Miners printed their lowest point on Wed, day 25. That places them in their timing band for a DCL. So Thursday’s swing low potentially signals a new daily cycle.

The Miners are in a daily uptrend. Since a swing low formed above the lower daily cycle band that indicates that the Miners remain in their daily uptrend. It also triggers a daily uptrend buy signal

However, the Miners are up against triple resistance in the form of the 10 day MA, the 200 day MA and the declining trend line. Therefore close above this triple resistance area will confirm a new daily cycle and confirm the daily uptrend buy signal.

Miner Timing Band

The Miners formed a swing high on Thursday.

Thursday was day 21 for the daily Miner cycle. And 21 days places them in their timing band for a DCL. (A case could be made that the 13 day DCL is part of this daily cycle making Thursday day 34). At this point any bearish follow through will signal that the daily cycle is in decline. We will need to keep in mind that the Miners are in a daily uptrend. Therefore, once they begin their daily cycle decline, if they form a swing low above the lower daily cycle band they will remain in their uptrend.

The dollar rallying out of a daily cycle low is, in part, causing this volatility in the Miners.

The dollar’s daily cycle peaked on day 7. A swing high formed on day 8. The dollar also closed below both the 50 day MA and the 10 day MA on day 8 confirming the daily cycle decline.

The dollar printed its lowest point on Tuesday, day 14, which is normally too early to expect a daily cycle low. However the dollar formed a swing low on Wednesday and then delivered bullish follow through on Thursday. The dollar managed to close above both the 10 day MA & the 50 day MA on Thursday which will have us label day 14 as the DCL.

Miner Bounce

The Miners formed a swing low on Friday then closed above the declining 10 day MA on Tuesday to confirm that this was day 3 for the new daily cycle.

Often extended cycles are balanced by shortened cycles, so it is not out of the question to see a 13 day – daily cycle low form following a 40 day – daily cycle.

So what the Miners did is print a failed daily cycle low on 2/09. The day 13 low on 3/01 is higher low, which signals that not only are the Miners beginning a new daily cycle, but they are also embarking on a new intermediate cycle.

The status of the intermediate cycle chart is not clear, therefore does not help us determine if the Miners have begun a new intermediate cycle. But if the Miners can close above the 50 day MA and break above the previous daily cycle high of 23.15 then we would be forced to label this low as an intermediate cycle low. But the status of the intermediate dollar cycle has me thinking that this will only be a miner bounce.

The intermediate dollar cycle is giving us mixed signals.

One the one hand, the dollar has formed a weekly swing low off the week 23 low, placing it in its timing band for an intermediate cycle low. That and the bullish divergence developing on the weekly TSI signal that the dollar has begun a new intermediate cycle. So if the dollar is rallying out of its intermediate cycle low then that will likely result in the current daily Miner cycle to left translated and continue its intermediate cycle decline.

But if week 23 is not the ICL for the dollar, then the dollar would likely break lower in order to complete it intermediate cycle decline. And if the dollar needs to complete its intermediate cycle decline that would likely send the Miners higher.

Miners Setting Up for a Major Decline

The Miners closed above both the 200 day MA and the 50 day MA on day 3 to confirm the new daily cycle. It has been downhill since then.

The Miners lost both the 50 day MA & the 200 day MA on Friday. The Miners continued lower on Tuesday forming a daily swing high. The peak on day 3 sets up an extremely left translated cycle formation. The Miners also closed below both the 10 day MA and the lower daily cycle band on Tuesday. This signals the daily cycle decline and a continuation of the intermediate cycle decline. And with Tuesday being only day 7, the Miners could trend lower for another 10 – 20 days before printing their daily cycle low.

I suspect part of the reason the Miners are heading lower is that the dollar seems to be emerging from an intermediate cycle low.

The monthly chart shows that the dollar’s monthly decline has been halted by the 200 month MA. Now the dollar is in its timing band for both a daily and intermediate cycle low. The dollar formed a daily swing low on Tuesday. Coupled that with the support from the 200 month MA makes likely that a new daily cycle will also trigger a new intermediate cycle.

Pin Action

The dollar tagged the 200 month MA on Thursday.

The 200 month MA is a major support level. And with the dollar deep in its timing band for a daily cycle low, that has good odds to trigger a cycle low.

Thursday was day 40 for the daily dollar cycle. That places the dollar late in its timing band for a daily cycle low. Thursday’s bullish reversal off of support from the 200 month MA has eased the parameters for forming a daily cycle low. A break above 89.42 forms a swing low and signals a new daily cycle.

The dollar potentially printing its DCL has caused some pin action in other asset classes.
Precious metals was certainly one of the areas …

In real time day 27 looked as if it hosted a very mild DCL. I have been skeptical of a DCL label primarily due to the Miners not turning the 10 day MA lower. However, the bearish engulfing candle that formed on Thursday is much more likely to be the daily cycle top. A break below 23.98 forms a daily swing high. Then a close below the 10 day MA will signal the daily cycle decline.

And there is a similar set up with oil.

Since oil did not close below the 10 day MA on day 28 I believe that makes Thursday day 32 for the daily oil cycle. At 32 days, that places oil in its timing band to seek out a daily cycle low. Thursday’s bearish print eases the parameters for forming a swing high. A break below 65.08 forms a daily swing high to signal the daily cycle decline.

Miner Decline

Wednesday’s bearish reversal off of the day 23 high eased the parameters form forming a swing high. The Miners delivered bearish follow though on Thursday by breaking lower to form a swing high.

The Miners also breached the daily cycle trend line and ended up closing below the 10 day MA to signal the daily cycle decline. A close below the daily cycle trend line will confirm the daily cycle decline. The Miners are in a daily uptrend. So if the Miners form a swing low above the lower daily cycle band they will remain in their daily uptrend.

The dollar rallying out of what appears to be a DCL is sending the Miners lower.

Wednesday was day 34 for the dollar’s daily cycle, placing it late in its timing band for a DCL. A swing low formed on Thursday to signal a new daily cycle. A close above the declining 10 day MA will confirm a new daily cycle. The dollar is in a daily downtrend. If the dollar forms a swing high below the upper daily cycle band it will remain in its d daily downtrend.

Miner Update

On Monday we discussed how the Miners had formed a weekly swing low off of support from the 200 week MA to indicate that week 22 was the intermediate cycle low. The Miners have provided more evidence that week 22 hosted the ICL.

The Miners have now broke above the declining weekly trend line. Since week 22 is in the normal timing band for an intermediate cycle low, the declining trend line break provides further confirmation that the Miners are now in week 1 of their new intermediate cycle.

And what I believe is helping the Miners to rally out of an intermediate cycle low is the dollar beginning its final intermediate cycle decline.

The dollar printed its lowest point following the week 9 peak. A brief counter-trend rally followed where the dollar managed to regain the 200 week MA. However the dollar has now convincingly lost the 200 week MA. This is week 15 placing the dollar 3 weeks shy of its timing band for an intermediate cycle low. The dollar needs to break below the week 12 low of 92.43 in order to complete its intermediate cycle decline. And with the dollar declining into its intermediate cycle low, that should help to propel the Miners higher.