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.

Stocks Form A Daily Swing High

Stocks formed a daily swing high on Wednesday.

Stocks peaked on Monday, day 12. They closed lower on Tuesday and once again on Wednesday, forming a daily swing high.  Stocks did get stretched above the 10 day MA and this may simply be stocks declining into a half cycle low which will allow for the 10 day MA to catch up to price.  But there could be another explanation.

Stocks have been forming this megaphone topping pattern.  Resistance from the upper stem could be sending stocks lower.   A possible strategy is to exit based on the swing high. If this turns out to be a half cycle decline and then one could reenter on a swing low.  This would protect any gains from a deeper sell off.  But if stocks deliver a bullish surprise and close above the upper stem, then long positions can be reentered using the upper stem as the stop. 

Resistance

Stocks ran into resistance at the 50 day MA.

Stocks formed a swing low on Friday then closed above the declining trend line on Monday to confirm the new daily cycle. While stocks are running into resistance at the 50 day MA, it is not likely that the new daily cycle has topped here. Going back to 2014 the earliest a daily cycle topped was at 8 days. Notice that during the daily cycle decline stocks found support at the 50 day MA and needed on consolidate for 8 days prior to breaking below. So it stands to reason that some consolidation is needed now before stocks can continue to rally.

Miner Divergence

The Miners broke out above short term resistance to a new daily cycle high on Monday.

The Miners are in a daily uptrend and will remain so unless they close below the lower daily cycle band. However, there are bearish divergences developing on the oscillators, which often herald the daily cycle decline. With Monday being day 30, that places the Miners in their timing band for a DCL. So we will need to be suspicious of any swing high going forward. And if the Miners reverse Monday’s gains and close back below the short term resistance that would signal the start of the daily cycle decline.

Stock Print Bearish Reversal

Stocks broke out to a new daily cycle high on Monday before forming a bearish reversal to close lower on the day.

Last week stocks coiled above the 3150 resistance level. Friday’s bullish close appeared to set the stage for another leg higher for this daily cycle. That all changed on Monday. Stocks formed a bearish reversal on Monday. If stocks delivered bearish follow through and close below the 3150 resistance level that would signal the daily cycle decline. In the Weekend Report I will explain why this could lead to an intermediate cycle decline.

Is Oil Ready To Cross The Line?

Oil ran into resistance at the 200 day MA last week on day 17. Oil then formed a swing high on and lost both the 10 day MA and the 50 day MA on to signal that the daily cycle decline has begun.

Oil printed it s lowest point on Thursday, day 20, which is early for a DCL. Oil should have continued lower for another 2 to 4 weeks before printing its daily cycle low. But oil delivered a bullish surprise on Friday by forming a swing low and recovering the converging 10 day MA and the 50 day MA. Oil then delivered bullish follow through by retesting the 200 day MA again on Monday.

Oil is currently in a daily uptrend. There is a bullish RSI pattern beginning to emerge. And there is a bullish crossover on the TSI. If oil closes above the 200 day MA we will label day 20 as the daily cycle low.

Oil Runs Into Resistance

Oil ran into resistance on Wednesday.

Oil has been rallying out of the day 44 DCL. Oil did manage to close above the 200 day MA on day 4 only to lose it the next day. And since day 4, oil has been contained by the dual resistance of the 200 day MA and the 50 day MA. The bearish reversal that formed on Wednesday indicates that oil has being rejected by the dual resistance from the 200 day MA and the 50 day MA. Oil formed a swing high on Thursday and closed below the 10 day MA to set up a left translated daily cycle formation. Oil is currently in a daily downtrend. Since oil formed its swing high below the upper daily cycle band, oil will remain in its daily downtrend.