The Miners Join The Party


 

The Junior Miners broke out of consolidation on Tuesday. The Miners joined the party on Wednesday.

The miners had been in a multi month consolidation since peaking in September. Over the past couple of weeks they were being squeezed by the declining 10 day MA and the rising 50 day MA. The Miners rallied on Tuesday then delivered bullish follow through on Wednesday by closing convincingly above the declining trend line. Closing above the declining trend line confirms that that day 55 was an extended DCL

After rallying strongly for the past three days the Miners got a bit stretched above the 10 day MA. They may need to crawl along the declining trend line in order to allow the 10 day MA to catch up to price. The Miners are in a daily uptrend and closing above the declining rend line should trigger a trending move.

Miner Risk/Reward


 

On Monday we discussed that a break below the (red) trend line would send the Miners into a daily cycle decline.

The Miners printed their lowest point on Tuesday, which was day 55, placing them late in their timing band for a daily cycle low. The Miners formed a swing low on Wednesday, off of support from the 50 day MA. The Miners then delivered bullish follow through on Thursday to signal a new daily cycle. A close above the 10 day MA will have us label day 55 as the DCL.

Long positions can be entered with the stop being placed below Tuesday’s low. Until the Miners break above the upper trend line there is a risk of being whipsawed as the Miners continue to work through the multi month consolidation. Waiting on a break above the declining trend line will reduce the risk of being whipsawed at the expense of missing out on part of the potential rally.

Miner Traction

The Miners have been consolidating since the big summer rally.

Since December the Miners have been printing lower highs and higher lows. These triangle consolidations can obscure our daily cycle counts. A break below the (red) daily cycle trend line should send the Miners to seek out their daily cycle low. But a break above the upper (blue) stem should allow for the Miners to start to get some traction.

Miner Uptrend


 

The Miners closed above the upper daily cycle band on Tuesday.

The Miners printed their lowest point on day 41 to place them late in their timing band for a daily cycle low. Then they formed a swing low on and closed above the 10 day MA last week. The Miners delivered bullish follow through by closing above the upper daily cycle band on Tuesday. This indicates that day 41 was the daily cycle low. Also, closing above the upper daily cycle band resumes the daily uptrend. The Miners will remain in their daily uptrend unless they close below the lower daily cycle band.

Miner Daily Cycle Decline


The Miners

 
The Miners broke bearishly out of consolidation on Wednesday.

The Miners delivered bearish follow through on Thursday, which was day 38, placing them late their timing band for a daily cycle low.  The Miners should break below the daily cycle trend line in order to form its pending daily cycle low. The peak on day 34 locks in a right translated daily cycle formation, which aligns with the Miners being in a daily uptrend.  They will remain in their daily uptrend unless they close below the lower daily cycle band.

Miner Resilience

When we looked at the Miners on Monday we noted that they late in their timing band band for a daily cycle low and that the oscillators had started to diverge. The Miners appeared to be ready to begin their daily cycle decline. So with the dollar rallying on Tuesday the Miners demonstrated bullish resilience.

The dollar broke below the previous daily cycle low on last week on day 12, which is too early to expect a daily cycle low. The dollar formed a swing low on Thursday and rallied again on Tuesday. Since the dollar’s daily cycle low can stretch to 26 – 30 days, Tuesday’s rally may just be setting up the declining trend line for the dollar as it declines into the pending daily cycle low.

And I think that is what the Miners were sniffing out on Tuesday.

The Miners have been consolidating the since becoming stretched above the 10 day MA as a result of rallying strongly into the year’s end. This allowed the 10 day MA to catch up to price. And if the dollar does compete its daily cycle decline that should ignite the Miners to break bullishly out of consolidation.

Miner Consolidation

The Miners have been consolidating the past 4 sessions after becoming stretched above the 10 day MA as a result of rallying strongly into the year’s end.

Monday was day 35 for the daily Miner cycle. That places them late in there timing band for a daily cycle low. There are bearish divergences developing on the oscillators which usually precede a daily cycle decline. A break below 29.01 will form a daily swing high to signal the daily cycle decline.

The bigger picture is that the Miners are pushing up against a multi year resistance zone. With the Miners being late in their timing band for a daily cycle decline, the Miners will likely need to print a daily cycle low before any breakout can be sustained.

Miner Breakthrough

The Miners broke through the declining trend line on Monday.

The Miners printed their lowest point on last Wednesday, which was day 25. That placed them in their timing band for a daily cycle low. While a swing ow formed on Thursday, they closed down 1.27% on Friday — likely due to options operation shenanigans. However the Miners delivered bullish follow through on Monday, closing convincingly above the declining trend line to confirm day 25 was the daily cycle low. The Miners also closed back above the upper daily cycle band to resume their daily uptrend and trigger a cycle band buy signal.

Miner Buy Signal


 

The Miners delivered a cycle band buy signal on Thursday.

The Miners printed their lowest point on Wednesday, which was day 25. That places them in their timing band for a daily cycle low. The Miners found support from the 50 day MA on Wednesday and printed a bullish engulfing candle which recovered the 10 day MA. They delivered bullish follow through by forming a swing low on Thursday to signal the new daily cycle. A close above the upper daily cycle band will confirm the new daily cycle. The Miners have been in a daily uptrend. Forming the swing low formed above the lower daily cycle band indicates that they remain in their daily uptrend and signals a cycle band buy signal.