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.

Oil Loses The 10 Day MA

Oil was running into resistance at the 50 day MA for the past week before closing below the 10 day MA on Thursday.

The bigger picture shows that oil is a pattern of forming lower highs and lower lows. A break below the 67.00 support level will signal the daily cycle decline. The peak on day 8 indicates a left translated daily cycle formation that aligns with oil being in a daily downtrend. Oil will remain in its daily downtrend unless it closes above the upper daily cycle band.

Gold Held Support

Gold ran into resistance at the 200 day MA on Tuesday, then formed a swing high on Wednesday, closing below the 50 day MA.

However, gold did not deliver bearish follow through. Instead, gold formed a bullish reversal on Thursday — closing above support from the converging 50 day MA and 10 day MA. Thursday was only day 13 for the daily gold cycle, leaving gold up to 2 to 4 weeks before printing a DCL. So there is plenty of time for gold to make another leg higher. A swing low here will set gold up for a potential break above the 200 day MA. Long positions can be entered (or added to) on a swing low, using the converging 50 day MA and 10 day MA as the stop.

Gold Breaks Through Resistance

Gold broke through a key resistance level on Thursday.

After peaking on day 11, gold formed a swing high and then was contained by the 10 day MA — until Thursday. On Thursday gold opened above the 10 day MA and went on to close above both the 200 day MA and the 50 day MA. This established a new high on day 21, which shifts the odds towards a right translated daily cycle formation. Gold also closed above the upper daily cycle band on Thursday. Closing above the upper daily cycle band ends the daily downtrend and begins a new daily uptrend.

Oil Delivers Bullish Day

On Tuesday we noted that Oil was running into resistance at the 66.50 level.

Oil closed above the 66.50 level on Thursday. Another possible area for resistance is the day 39 high of 67.02. But with oil only on day 4 for its new daily cycle, oil should have the energy to break though this resistance level. With oil being in a daly uptrend, a break above the day 39 high should result in a trending move.

The Nasdaq Breaks Through Resistance

On Monday we noted that the Nasdaq was running into resistance at the 10 day MA and 50 day MA.

We concluded that the Nasdaq needed to break above the resistance from these moving averages in order for this daily cycle advance to gain traction. The Nasdaq delivered bullish follow through on Thursday.

The Nasdaq backtested the day 41 low on Wednesday, forming a double bottom. On Thursday, the Nasdaq broke above the 10 day MA to close above the 50 day MA. This caused the 10 day MA to begin to flatten out so we will label day 41 as the DCL. The Nasdaq may still need to consolidate in order for the 10 day MA to flatten out some more before it can turn higher. You will notice that back in April the Nasdaq needed another 10 days after initially closing above the 50 day MA before the rally gained any traction.

Miners Deliver Bullish Response

The Miners ran into resistance just below the 200 day MA. They had been in decline — until Monday.

The Miners printed their lowest point on Friday, day 41, placing them in their timing band for a DCL. Monday’s swing low signals a new daily cycle. A close above the 10 day MA will have us label day 41 as the DCL. Since the Miners were in a daily uptrend, Monday’s swing low signals that the Miners will remain in their daily uptrend and triggers a cycle band buy signal.

The bigger picture shows us that the Miners delivered a bullish response to the backtest of the declining multi-month trend line. A close back above the 200 day MA will signal a major change of trend.

Gold Update

We will begin tonight with a look at gold’s chart from 12/22/20.

Back on 12/22 we noted that gold  ran into resistance at the declining intermediate trend line and then lost the 50 day MA.

Since then gold has found support at the rising 10 day MA and has regained the 50 day MA.  Gold needs to break above the declining intermediate trend line in order to confirm that November 30 the was the ICL which should result in a trending move.  

Miner Squeeze Play

The Miners ran into resistance at the declining 50 day MA on Wednesday.

The Miners are being squeezed by the declining 50 day MA and the rising 10 day MA. A close back above the 50 day MA would signal that this is the first daily cycle of a new intermediate cycle. But bearish follow through and a break of the daily cycle trend line would indicate a continuation of the intermediate cycle decline. The Miners are in a daily downtrend. But a close above the upper daily cycle band will end the daily downtrend and begin a new daily uptrend.