Miner Warning

While closing above the upper daily cycle band on Tuesday and Wednesday begins a daily uptrend for the Miners, Thursday’s swing high signals a concern.

This is week 26 for the intermediate Miner cycle and the Miners have not yet printed a failed daily cycle to confirm the intermediate cycle decline. So Thursday’s daily swing high following the day 7 peak sets up a possible left translated daily cycle formation. There is a bearish RSI pattern the is beginning to emerge and we can see that the TSI has begun a bearish pattern of lower highs and lower lows. And with this being week 26 for the intermediate cycle, the late January Gap will likely begin to exert a gravitational pull, sending the Miners into their intermediate cycle decline. A close below the 10 day MA will indicate that the Miners have begun their daily cycle decline. Then a close back below the lower daily cycle and will end the daily uptrend and continue the intermediate cycle decline.

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Miner Balance

The previous 2 daily Miners cycle were stretched at 44 days and 45 days respectively. Since cycles tend to balance out the Miners are due for a shortened daily cycle.

The Miners peaked on day 7, formed a swing high, and then closed below the 10 day MA – managing to turn it lower to signal the daily cycle decline. The Miners printed a bullish reversal on Thursday, day 17, which is on the early end of its timing band for a daily cycle low. A break above 22.18 forms a swing low to signal a new daily cycle. And since the Miners are in a daily uptrend, if a swing low forms above the lower daily cycle band then the Miners will remain in their daily uptrend and trigger a cycle band buy signal.

A possible left translated daily dollar cycle appears to by the wind beneath the Miner’s wings.

Thursday was day 10 for the daily dollar cycle. The dollar once again ran into resistance at the 97 level. Thursday’s bearish reversal has eased the parameters for forming a swing high. A break below 96.77 forms a swing high to signal the daily cycle decline. And since the previous daily cycle was a shortened daily cycle that favors the current daily cycle stretching to balance out the cycle counts. Then a peak on day 10 could lead to a left translated daily cycle formation which would align with the dollar still seeking its yearly cycle low, which I plan to discuss in the Weekend Report.

Miner Warning – Revisited

We looked at the Miners on Monday noting that the bearish engulfing candle that formed on Monday has good odds of sending the Miners into their daily cycle decline.

So far the Miners have resisted.

Day 33 still remains as the daily cycle peak. But the Miners have finally closed below the 10 day MA, signaling that they are beginning their daily cycle decline. Being so late in their timing band for a daily cycle low does not leave much time for a daily cycle decline. So at this point I am not expecting the Miner’s daily cycle decline to last too long. But it should last long enough to break below the (blue) daily cycle trend line before printing its DCL.

It is worth noting that the Miners have been in a daily uptrend. Therefore, once they beak below the accelerated (black-dashed) trend line, if a swing low forms above the lower daily cycle band than would mean that would trigger a daily uptrend buy signal.

Miner Warning

The Miners printed a bearish engulfing candle on Monday.

Monday was day 35 for the daily Miner cycle. That places the Miners deep in their timing band for an daily cycle low. At this point in the daily cycle, the bearish engulfing candle has good odds of triggering the daily cycle decline. A close below the 10 day MA will signal the daily cycle decline. The Miners should break below the blue trend line before forming their DCL.

There is also a warning developing on the weekly chart.

This is week 17 for the intermediate Miner cycle. The Miners managed to close above the 50 week MA last week. But should the Miners form a weekly swing high and close below both the 50 week MA and the 200 week MA, that will indicate a false breakout and signal the intermediate cycle decline. A break below 20.56 forms a weekly swing high.

Miner Break Through

The Miners broke convincingly above the 200 MA on Tuesday.

Tuesday was day 23 for the daily Miner cycle. The new high on day 23 assures us of a right translated daily cycle formation. However, 23 days places the Miners in their timing band for a daily cycle decline. There is a bearish divergence that is developing on the True Strength Indicator that we normally see as a cycle nears its peak. The large 226 million Selling on Strength is another indicator that the daily cycle is near its peak. Therefore we are watching for a swing high accompanied by a break below the accelerated daily cycle trend line to signal the daily cycle decline.

Miner Rally

The Miners closed higher on Monday.

The Miners ran into resistance at the declining 50 day MA last Wednesday. They drifted lower until closing for a gain on Monday. At 19 days, that does place the Miners in the early part of their timing band for a daily cycle low. But since 15 out of the previous 18 daily cycles stretched past 19 days if a swing low forms off of Monday’s bullish reversal, we will label Monday as a half cycle low.

Miner Outlook

Gold formed a swing low on Tuesday.

Gold printed its lowest point on Friday, day 30, placing gold in its timing and for a DCL. Tuesday’s swing low saw gold close above the 10 day MA, causing it to turn higher to signal that day 30 was the DCL. Due to the proximity of the 50 day MA, we would like to see a close above the declining 50 day MA to confirm the new daily cycle. And if a new daily cycle is confirmed that would mean that gold printed a higher low — the beginnings of a new uptrend.

The Miners did signal a new uptrend on Tuesday.

The Miners printed their DCL in mid September, which I believe was also the ICL. On Tuesday they closed above the upper daily cycle band. Closing above the upper daily cycle band ends the daily downtrend and indicates a new daily uptrend.

I believe that both gold and the Miners are sniffing out a potential top in the dollar. I plan to cover all of the short term and longer term cycles for the dollar in the Weekend Report.

Miner Reversal

The Miners have closed above the declining trend line and have begun to turn the 10 day MA higher which confirms that Wednesday was day 6 of the new daily cycle.

The Miners have also formed a weekly swing low.

The Miners printed their lowest point on week 31, placing them deep in their timing band for an ICL. We now have confirmation of a new daily cycle so the weekly swing low signals that the Miners have also begun a new intermediate cycle.

The Miners had been in consolidating for over 20 months before finally breaking down and declining into what should end up being their yearly cycle low. The long consolidation should yield a strong trending move. I think that the move into the cycle low is got everybody on the wrong side of the boat and the weekly swing low above the previous yearly cycle low is a signal that this is about to reverse.

Miner Downtrend

The Miners signaled a new daily cycle on Monday.

The Miners printed their lowest point last Tuesday, day 17, placing them in the early part of their timing band for a DCL. The Miners were already exhibiting a huge bullish divergence on the oscillators by day 17. These bullish divergences ofter accompany cycle lows. Then on Monday the Miners closed above the declining trend line to signal a new daily cycle.

A swing low and trend line break in the timing band for a DCL are some of the signals that we look for to make a long entry. However, there are 2 reasons why I am not ready to label day 17 as the DCL.
1) gap fill /timing band
2) Daily down trend.

The Miners gapped lower following Labor Day Weekend. That gap lower has not been filled. Since the Miners are in the early part of their timing band for a DCL, a very possible scenario would be for the Miners to back-fill the gap and then continue lower.

The other concern is the the Miners are currently in a daily downtrend. They have been in this downtrend for the past two months. And they will remain in their daily downtrend unless they can close above the upper daily cycle band. So while the Miners could break above the Labor Day Weekend gap, they would still need to close above the upper daily cycle band to signal an end to the current daily downtrend.

Miner Bear Trap

The Miners printed their lowest point this week, week 30, placing them deep in their timing band for an ICL.

A weekly swing low is required as part of the confirmation of a new intermediate cycle. A break above 18.35 forms a weekly swing low. The Miners are in a weekly downtrend. They will remain in its downtrend unless they close above the upper weekly cycle band.

Gold did not follow the miners lower and break below the previous yearly low. Therefore I believe that the Miners are forming a bear trap, getting everybody on the wrong side of the boat.

And after such a lengthy consolidation, once this reverses this should ignite a powerful move higher.