A Miner Downtrend

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The Miners formed a swing high on Monday.

Monday’s swing high broke below the daily cycle trend line to close below both the 50 day MA and the 10 day MA. This signals that the daily cycle is now in decline.

Monday was day 10 for the daily Miner cycle. A peak on day 9 can often result in a left translated daily cycle formation. A break below the previous daily cycle low of 22.91 would form a failed daily cycle and confirm that the intermediate cycle is in decline.

The Miners began to close below the lower daily cycle band prior to printing the day 59 DCL. This began their daily downtrend. Since the Miners failed to close above the upper daily cycle band before forming their daily swing high, they remain in their daily downtrend. The Miners will continue in their daily downtrend until they can close back above the upper daily cycle band.

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A Miner Rally

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Last week we discussed how the Miners formed a daily cycle low. We also discussed that the dollar emerging out of a potential yearly cycle low would likely cause a left translated cycle formation. So today I wanted to take a follow up look at the Miners.

The Miners did close above the 50 day MA on Friday and provided more bullish follow through on Tuesday. However the Miners printed 170 million SOS on Friday and 108 million SOS on Monday. Typically these types of Selling on Strength numbers are associated with an intermediate cycle decline.

Tuesday was day 6 for the daily Miner cycle and the Miners printed another higher high. But, Tuesday’s bearish engulfing candle eases the parameters for forming a swing high. Since the Miners are already in a daily downtrend, a swing high here will allow the Miners to remain in their daily downtrend. A break below 23.53 would form a daily swing high. The Miners will continue in their daily downtrend unless they close above the upper daily cycle band.

A Miner Low

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The Miners formed a daily swing low on Tuesday.

Tuesday’s swing low formed off of the day 59 low, which places the Miner very deep in their timing band for a daily cycle low. Therefore Tuesday’s swing low has good odds of being the day 1 of the new daily cycle.

There are other indicators that signal Tuesday was day one of the new daily cycle. First off the Miners formed a swing low off of support for the 200 day MA. Another signal is that the Miners closed above the lower daily cycle band. There is also bullish divergences developing on the daily oscillators that we see at cycle lows. Now we need to see a close above the declining 10 day MA to confirm Monday as the daily cycle low.

Assuming that the Miners confirm the new daily cycle, what is happening with the dollar will likely cause headwinds for the Miners.

The dollar has formed a monthly swing low off the month 16 low. That places the dollar deep in its timing band for a yearly cycle low. So the monthly swing low has a good chance of marking the yearly cycle low, meaning that the dollar is beginning a new yearly cycle. And the dollar emerging into a new yearly cycle will likely have a deflationary effect on the Miners.

Smoke ’em if you got ’em

The Miners delivered a swing low on Monday

The Miners printed their lowest point on Thursday, which was day 52. The Miners came close to printing a swing low on Friday, but no cigar. The Miners only had 1 daily cycle longer than 52 days over the past 2 years, which occurred in March at 53 days.

So Monday’s swing low has very good odds of marking the daily cycle low. A close above the 10 day Ma will confirm the new daily cycle.

On Sunday I discussed my reservations of the Miners for this new daily cycle. Having stated that I now want make some observations:

1) A swing low deep in the timing band for a daily cycle low is a buy signal.
2) Since the Miners are in a weekly uptrend, there exists the possibility of a bullish surprise.

Close, But No Cigar

The Miners came close to forming a daily swing low on Friday.

Close, but no cigar …

The Miners rallied on Friday to gain 1.12% on the day. While the Miners failed to form a daily swing low, they did regain the 50 day MA and close above the lower daily cycle band delivering the first signals that day 52 hosted the daily cycle low.

So a swing low has good odds of forming the daily cycle low, which is a buying signal. But there are some signals developing that indicate that the Miners have begun an intermediate cycle decline.

The Miners closed below the lower daily cycle band Thursday and Friday, which signals the start of the intermediate cycle decline. On the weekly chart we can see that the Miners have formed a weekly swing high and delivered a break below the weekly trend line. Both of which indicate that the Miners are in an intermediate cycle decline. And this is before the dollar beings to rally out of its intermediate cycle low.

The dollar printed its lowest point on week 31, placing it deep in its timing band for an ICL. So while a new daily dollar cycle has begun, the dollar still needs to form a weekly swing low and break above the declining weekly trend line to confirm a new intermediate cycle. And if the dollar’s intermediate rally begins to develop some traction, that will surely send the Miners lower.

Hunting a Miner Buy Signal

Monday was day 49 for the daily Miner cycle, placing the Miners late in their timing band for a daily cycle low.

The last 3 daily miner cycles ran 53, 39 and 45 days respectively. Which means that once the Miners form a swing low, it will have good odds of forming the daily cycle low. Ideally speaking the Miners should break below the (blue) daily cycle trend line in order to complete its daily cycle decline. But at this point a swing low and a bullish crossover on the 30 line on RSI will signal a new daily cycle.

Uptrends & Downtrends

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The Miners have been closing above the upper daily cycle band to signal that they are in a daily uptrend. They will continue in their uptrend until they close below the lower daily cycle band.

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The Miners printed another higher high on Thursday. At 43 days the Miners are very late in their timing band to print a daily cycle low. The True Strength Indicator is beginning to rollover signaling that a daily cycle decline is imminent. The new high on day 43 assures us of a right translated daily cycle formation. Therefore once a decline into a daily cycle low begins, the decline should be brief and then we can expect the Miners to go on to break out to new highs.

And the dollar collapsing is, in part, driving the Miners higher.

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The dollar has been closing below the lower daily cycle band, which indicates that the dollar is in a daily downtrend. The dollar will continue in its daily downtrend until it can close above the upper daily cycle band. With 7 of the previous 9 daily cycles stretching pass 30 days and Thursday being only day 25, there are good odds for the dollar to continue lower for the next 2 to 3 weeks before printing a final daily cycle low.

Bullish Behavior

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The Miners broke out above the previous daily cycle high on Monday. This is bullish behavior confirming that the Miners are in a daily uptrend.

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I have received some emails asking whether or not day 21 was the DCL. Since the daily cycles have been stretching, I have been in the camp that day 21 was a half cycle low. But using our cycle band tool allows us to focus on the uptrend instead of the daily cycle count.

The Miners closed above the upper daily cycle band and the 200 day MA on 7/26 to deliver the first indication that the Miners were beginning a daily uptrend. The Miners soon retraced some of that move and formed a half cycle low on day 21. Since the Miners did not close below the lower daily cycle band they remained in their daily uptrend. The Miners closed back above the upper daily cycle band on 8/10 to affirm the new daily uptrend. The Miners will continue in its daily uptrend until it closes below the lower daily cycle band.

What I believe is, in part, driving the Miners higher is the falling dollar.

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The dollar broke below the previous daily cycle low on Friday to form a failed daily cycle. On Monday they delivered bearish follow through by breaking lower. Monday was day 18 for the dollar’s daily cycle. The dollar’s daily cycle has been stretching of late where 8 of the last 10 daily cycles stretched past 30 days, with the most recent stretching to 50 days.

Here again we can use our cycle band tool. The dollar has been in a punishing downtrend characterized by peaks below the upper daily cycle band and troughs below the lower daily cycle band. The dollar will remain in its daily downtrend until it closes above the upper daily cycle band.

Uptrends

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Tonight I wanted to look at some different stages of uptrends, beginning with stocks.

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Even though stocks formed a swing high on Wednesday, they remain firmly in a daily uptrend. This uptrend is characterized by peaks above the upper daily cycle band and troughs above the lower daily cycle band. Stocks will remain in their daily uptrend until they close below the lower daily cycle band.

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Gold began to close above the upper daily cycle band before breaking lower last Friday. Gold printed its lowest point on Tuesday, day 21, but did not close below the lower daily cycle band. Now that gold has closed back above the upper daily cycle band on Wednesday, this establishes that gold is in a new daily uptrend. Gold should remain in its daily uptrend until it closes below the lower daily cycle band.

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The Miners also began to close above the upper daily cycle band prior to peaking on day 16. Like gold, the Miners did not close below the lower daily cycle band on Tuesday. If he Miners can now close back above the upper daily cycle band it too, will have established a new daily uptrend.

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Conversely, the dollar’s decline into the YCL is stretching its daily cycles resulting in a punishing daily downtrend. The downtrend has been characterized by peaks below the upper daily cycle band and troughs below the lower daily cycle band. Even though the dollar has formed a swing low and appears to have begun a new daily cycle, the dollar will remain in its daily downtrend until it can close above the upper daily cycle band.

And I believe that this punishing decline into the YCL is part of a bigger shift on the dollar that I discuss in the Special Report, Death of the Dollar – The Gold Train Update.

In this Special Report, Death of the Dollar – The Gold Train Update. we will take an updated look at the driver of the gold train — the dollar. We will look at were the dollar is in its yearly cycle, 3 year cycle and its 15 year super cycle. We will look at the DNA markers that signaled the previous dollar bear markets and show that those markers have been triggered again.

I would like to make this report available here. The Gold Train Update and a complementary 6 week trial subscription to the Likesmoney Premium Site is available for $15.

The complementary subscription will give you full access to the premium site. It includes:

1) The Weekend Report, which is posted usually Sunday mornings. It discusses Dollar, Stocks, Gold, Miners, Oil, & Bonds in terms of daily, weekly and yearly cycles – Which includes the Likesmoney Cycle Tracker.

2)The Mid-Week Update. Posted on Wednesday’s– This is a review of the daily and weekly charts for the above mentioned asset classes.

3)The Weekend Updates take a look of the daily & weekly charts of GYX, Copper, NATGAS & XLE.

4)Weekly Update of the Bullish Percentile Bingo

5) Frequent (just about daily) updates of my proprietary FAS Buy/Sell Indicator

The goal of the Weekend Report is to develop an on-going framework of expectations using cycle analysis.

For the Likesmoney Special Gold Train Update and 6 week trial subscription offer click here.

Current subscribers can access the report here.

Miner Suspicion

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On Wednesday the Miners broke bullishly from being squeezed by the 50 DMA & the 10 DMA. The Miners broke above the 10 DMA, 50 DMA & the 200 DMA. They also closed above the upper daily cycle band to signal an end to the daily downtrend.

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This breakout reminds me of the June breakout.

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June 6th the Miners broke above the 10 DMA, 50 DMA & the 200 DMA. They also closed convincingly above the upper daily cycle band to signal an end to the daily downtrend. But the Miners delivered a bearish signal on June 6th by printing 356 million in SOS. That eventually lead to the Miners dropping over 9% and printing an extended 45 day DCL on 7/10/17.

This makes me suspicious of the current breakout.

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Prior to Wednesday there had been 897 million in Selling On Strength. Wednesday the Miners printed another 289 million in SOS. This has me suspicious of a repeat performance.

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While the Miners did print a higher low on July 10th, I will need to see a clear and convincing break above the declining trend line to be persuaded that the Miners are in a new daily uptrend.