Miner Concerns

The Miners printed a bearish reversal on Tuesday.

The Miners have been in the declining phase of the intermediate cycle since June. That has been characterized by the weekly RSI 05 becoming embedded in oversold. Another characteristic of the declining phase of the intermediate cycle is a quick bearish reversal once RSI reaches overbought — which we see happening. Tuesday’s bearish reversal has the Miners threatening to lose the 50 week MA. If the Miners deliver bearish follow through and close below the 50 week MA that will set the Miners up for a left translated weekly cycle formation which will continue the declining phase of the intermediate cycle.

Miner Stop

The Miners have been contained by the 200 day MA since losing it in June. 

The Miners broke above the 200 day MA on Wednesday and delivered some bullish follow through on Thursday. Closing above the 200 day MA indicates a change in trend and stops can be raised to the 200 day MA. The Miners are currently in a daily uptrend.  The Miners will remain in their daily uptrend unless they close back below the lower daily cycle band. 

Miner Confirmation

The Miners formed a bullish engulfing candle on Wednesday.  

The Miners printed their lowest point on Wednesday, day 25, placing them in their timing band for a DCL. Wednesday’s bullish engulfing candle closed back above the 50 day MA which may have marked the DCL. While the Miners formed a swing low on Thursday, we really need to see a close above the declining trend line to signal the new daily cycle.

Then the Miners will need to close above the 200 day MA in order for a trending move to develop.

Potential Miner Buy Signal

The Miners formed a bullish reversal on Monday.

Monday was day 23 for the daily Miner cycle. That places the Miners in the early part of their timing band for a daily cycle low. The Miners retraced to the 50% fib level then formed a bullish reversal off support from the 50 day MA. That eases the parameters for forming a daily swing low. A break aboveh 32.01 will form a swing low. The Miners are in a daily uptrend. If they form a swing low above the lower daily cycle band then they will remain in their daily uptrend and trigger a cycle band buy signal.

Major Resistance for the Miners

We discussed last week how there is a change in behavior for the Miners. RSI being embedded in overbought along with the Miners closing above the upper daily cycle band are characteristic of a new intermediate cycle.

The Miners lost the 200 day MA in June and have been unable to close back above it. For the past few days the Miners have been consolidating the break above the 50 Day MA. If (once) they break higher, then 200 day MA is the next area of major resistance for the Miners. The odds that areas of resistance turning a cycle lower increase as the daily cycle matures, so there is a good chance that the 200 day MA will be a short-term top for the Miners.

Miner Consolidation

The Miners have been consolidating below the July – 54 day DCL for the past 3 weeks.

The drop into the August 25 day DCL caused the 10 day MA to drop steeply. Consolidating below the July DCL is allowing the 10 day MA to flatten out, which it needs to do before it can begin to turn higher Once the 10 day MA begins to turn higher, the Miners will need to break above this resistance level in order for this rally to gain traction.

Miners Print Lower Low

The Miners printed a lower low on Thursday.

Printing a lower low on Thursday negates Wednesday’s swing low and extends the daily cycle decline.

Thursday was day 18, placing the Miners in the early part of their timing band for a DCL. A swing low is required to mark the DCL. Printing a lower low on Thursday means that the earliest the Miners can form a swing low will be on Friday. A break above Thursday’s low of 32.47 willl form a swing low. As we discussed on Wednesday, the Miners need to close above the previous daily cycle low of 32.87 to increase the odds that DCL has formed.

Miner Swing Low

The Miners formed a swing low on Wednesday.

The Miners printed their lowest point on Tuesday, day 16 — which is a bit early to expect a daily cycle low to form. However, Wednesday’s swing low indicates that day 16 may be an early DCL. If the Miners can deliver bullish follow through and close above the previous daily cycle low of 32.87, that will increase the odds that day 16 was the DCL.

And if day 16 turns out to be the daily cycle low. It also has a chance to mark the intermediate cycle low.

The Miners Were Close — But No Cigar

Since printing the day 54 low, the Miners had been coiling below the 10 day MA until Wednesday.

The Miners closed above the 10 day MA on Wednesday. They delivered bullish follow through on Thursday by closing above the upper daily cycle band to signal that day 54 was the DCL.  Closing above the upper daily cycle band signals a new daily uptrend. The Miners are close, but no cigar. The Miners will need to break above both the 200 day MA and the 50 day MA in order for a trending move to develop.

Miner Expectations

The Miners formed a swing low on Wednesday and closed above the 10 day MA on Friday to signal a new daily cycle.

What are the expectations for this new daily cycle?

The above chart is a look at the last 9 years for the Miners.

Highlighted are the rallies that began during the summer months (late May through early September).

Hope history repeats itself.