Miner Update

The Miners printed their lowest point on 10/15. The Miners finally closed above the 10 day MA on Thursday and delivered bullish follow through on Friday to signal that 10/15 was day daily cycle low.

But the Miner got a bit stretched above the 10 day MA and saw some profit taking on Monday and Tuesday, which allowed the 10 day MA to catch up to price. But the Miners closed for a gain on Tuesday. If the Miners deliver bullish flow though and form a swing low off of Tuesday’s candle, that will allow us to construct the daily cycle trend line.

And the Junior Miners also looked bullish on Tuesday.

Like the Miners, the Junior Miners saw some profit taking after tagging the 50 day MA. But where the Miners only closed higher, the Junior Miners printed a bullish engulfing candle signaling that the Juniors are ready to trend higher.

Miner Action – Revisited

Last week when we looked at the Miners it was week 24, which placed the Miners in their timing band for an intermediate cycle low. The Miners formed a bullish weekly reversal last week which eased the parameters for forming a weekly swing low.

This week the Miners formed a weekly swing low.

This week’s weekly swing low signals that last week was the intermediate cycle low. We still need to see the Miners break above the declining weekly trend line for confirmation.

The Miners are currently in a weekly uptrend. Forming a swing low above the lower weekly cycle band means that the Miners remain in their weekly uptrend and also triggers a weekly cycle band buy signal. And a break above the Multi Year Resistance level would indicate a resumption of the Miner bull market.

Miner Action

The Miners have trending lower swing early September and the daily cycle count has become obscured. I have Tuesday as being day 22, which places the Miners in the early part of its timing band for a daily cycle low. A swing low formed on Thursday which signals that Tuesday marked the daily cycle low.

Since the daily cycle count is not clear we will look at the weekly chart.

The weekly chart clearly shows us that the Miners peaked on week 18 then formed a weekly swing high on week 19. The Miners went on to print their lowest point this week, which is week 24. That places the Miners in their timing band for an intermediate cycle low. A weekly swing low accompanied by a break above the declining weekly trend line would have us label week 24 as the ICL. And a break above the Multi Year Resistance level would indicate a resumption of the Miner bull market.

Miner Action

The Miners backtested the 10 day MA on Thursday.

The status of the daily Miner cycle is not clear. The Miners printed a low on September 13th and then printed a lower low on October 1st. So while it is not clear if Day 18 was the DCL or it extended to October 1st, what is clear is if the Miners break above the declining trend line then we will label October 1st as a daily cycle low. In the Weekend Report I plan to discuss the implications now that the Miners have also formed a weekly swing low.

Change of Expectations

Cycle analysis allows us to develop an on-going framework of expectations. Confirmation of our framework of expectations allows us to determine the risk of an asset. When our framework of expectations are not met, then we need to determine why and then possibly change our expectations.

Stocks closed below the 50 day MA on Tuesday and then delivered bearish follow through on Wednesday to set stocks up for a bloodbath phase, which can last 5 to 7 days. It appears that the Fed intervened to on Thursday to prevent the bloodbath phase with stocks printing a bullish reversal on Thursday. This was a change of expectations that has ramifications on the longer term, intermediate cycle. Thursday was day 42, placing stocks late in their timing band for a daily cycle low. Stocks formed a swing low on Friday and closed above the 50 day MA to indicate a new daily cycle.

In my special report, A Change of Expectations, I will discuss this change from our framework of expectations. We will look at both the daily and weekly charts and how this change impacts our framework of expectations going forward.

The Miners were also set up to decline into an intermediate cycle low. Instead, they printed a bullish weekly reversal. So, I also plan to discuss how the Miners did not follow through on expectations this week and will look at how this can play out going forward.

I would like to make this Special Report available here. The Special Report, A Change of Expectations, and a complementary 6 week subscription to the Likesmoney Premium Site is available for $20.

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

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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.

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Current subscribers can access the report here.

Miner Failure

We observed here that when the Miners closed below the lower daily cycle band on September 9th that they were beginning their intermediate cycle decline. We also discussed here how a bearish RSI pattern was beginning to emerge, which was another signal of the pending intermediate cycle decline.

The Miners broke below the previous daily cycle low on Monday to form a failed daily cycle which confirms that intermediate cycle decline. Monday was only day 11 for the daily Miner cycle. Which means that the Miners should trend lower for another 2 to 4 weeks before printing its intermediate cycle low.

The only thing that is not in agreement is the bullish divergence that we see developing on the True Strength Indicator. Typically these bullish divergences signal that the cycle low is near. In the Mid-Week Update I plan to break down where the Miners are in their intermediate cycle and what this bullish divergence may be telling us.

Miner Suspicion – Confirmed

Last week we suspected that the Miners were going to form a left translated daily cycle to continue its intermediate cycle decline. This week we can see that our suspicions were confirmed.

The decline into the day 18 DCL caused the Miners to close below the lower daily cycle band, which indicates the intermediate cycle decline. And during the declining phase of an intermediate cycle RSI reverses quickly when overbought which we see at (1) and (2). The peak on day 7 sets the Miners up for a left translated daily cycle formation. The Miners closed below the 50 day MA on Wednesday. On Thursday they delivered bearish follow through by closing below the 10 day MA to signal the daily cycle decline and a continuation of the intermediate cycle decline.

Miners Suspicion

The Miners printed their lowest point on Friday, following the peak on day 11. Friday was day 18, placing the Miners in the early part of its timing band for a daily cycle low.

The Miners formed a swing low and closed above the 10 day MA on Tuesday to indicate a new daily cycle. So while the Miners are in the early stages of a new daily cycle they are on week 20 for their intermediate cycle. And allowing 6 to 8 weeks for the new daily cycle to run its course will bring the Miners deep in their timing band for an intermediate cycle low. Therefore we are suspicious that this new daily cycle will left translate and failed to usher in the intermediate cycle low.

The daily chart shows a bearish divergence on the oscillators at (1) and that the Miners closed below the lower daily cycle band at (2). The weekly chart, which I will detail in the Weekend Report, shows that last week the Miners formed a weekly swing high and closed below the 10 week MA. The these are all indicators that the Miners have begun their intermediate cycle decline.

Miner Rejection — Update

Last Thursday we looked at the Miners and discussed how they were forming a bearish weekly reversal candle at the multi year resistance zone.

Last week was week 18 which places the Miners in their timing band for an intermediate cycle decline.

This week’ chart (below) shows that the Miners are delivering bearish follow through.

The Miners have formed a weekly swing high and they are breaking below the 10 week MA signaling that the intermediate cycle decline has begun. At 19 weeks, the Miners can decline for another 3 to 6 weeks before forming its intermediate cycle low.

Miner Rejection

The Miners formed a daily swing high on Thursday. Thursday’s swing high caused the Miners to close below both the daily cycle trend line and the 10 day MA to signal the daily cycle decline.

But I think that something more sinister than a daily cycle decline is unfolding.

The Miners are forming a bearish weekly reversal candle this week at a multi year resistance zone.

This is week 18 for the intermediate Miner cycle, placing them in their timing band for an intermediate cycle decline. If the Miners are rejected by the multi year resistance level and form a weekly swing high next week, that will signal the intermediate cycle decline.