Major Trend Change For Miners

The Miners tested the 200 day MA on Thursday.

The Miners printed their ICL in early March. The first daily cycle peaked just below the 200 day MA. The resulting daily cycle decline saw the Miners backtest the declining multi month trend line. The Miners rallied off of the declining trend line and now are testing the 200 day MA. A close back above the 200 day MA will signal a major change of trend.

Daily Cycle Decline

Stocks closed below the 10 day MA on Tuesday to signal the daily cycle decline.

Stocks printed their lowest point on Tuesday, day 42. That places stocks in their timing band for a daily cycle low. Stocks should break below the daily cycle trend line in order to complete their daily cycle decline. However, we may need to be open to the possibility that this is all the correction that we will get at this time.

After consolidating for 3 days, the Banking Index formed a bullish engulfing candle and closed at a new all time high.

The Transports also broke bullishly out of a short consolidation to close at a new all time high.

Stocks have been in a strong daily uptrend. If stocks form a swing low above the upper daily cycle band then they will remain in their strong daily uptrend and trigger a cycle band buy signal. A close above the day 39 high of 4218.78 will have us label day 42 as the DCL.

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.

Time To Raise Stops

After consolidating for the past two weeks, stocks broke bullishly out of consolidation.

Thursday was day 39 for the daily cycle. That places stocks in their timing band for a daily cycle decline. Instead, stocks backtested the 10 day MA then broke out to a new all-time high on Thursday. This allows us to construct an accelerated trend line.

Stocks have been going vertical since the March DCL. Stops can be raised to the pivot that was formed by backtesting the 10 day MA Р4174.12

Stocks Lose The 10 Day MA – Again

Stocks lost the 10 day MA on Tuesday, regained it on Wednesday, then lost it again on Thursday.

Thursday was day 34 for the daily equity cycle. That places stocks in their timing band for a daily cycle decline. There are bearish divergences developing on the oscillators that often precede a cycle decline. We will use a break below Tuesday’s low of 4118.38 to signal the daily cycle decline. Stocks should then go on to break below the (blue) daily cycle trend line as they seek out their daily cycle low. Stocks are currently in a daily uptrend. They will remain in their daily uptrend unless they close below the lower daily cycle band.

Stocks Deliver Bearish Follow Through

After forming a daily swing high on Monday, stocks delivered bearish follow through on Tuesday.

Tuesday was day 32 for the daily equity cycle. That places stocks in their timing band for a daily cycle low. Closing below the 10 day MA signals the daily cycle decline. Stocks should go on to break below the (blue) daily cycle trend line as it seeks out its daily cycle low. Stocks are currently in a daily uptrend and will remain so unless they close below the lower daily cycle band.

Signals Indicate Caution For Stocks

Stocks delivered caution signals on Monday.

Monday was day 31 for the daily equity cycle, placing stocks in their timing band for a daily cycle low. There had been bearish divergences developing on the oscillators that yielded to bearish crossovers on Monday. Stocks also formed a daily swing high on Monday. At 31 days, a close below the 10 day MA will signal the daily cycle decline. Stocks should then go on to break below the daily cycle trend line as it seeks out its daily cycle low. Stocks are currently in a daily uptrend and will remain so unless they close below the lower daily cycle band.

Miners Deliver Major Trend Line Break

The Miners delivered a major trend line break on Thursday.

Since printing the March 3rd DCL the Miners have gone on to print a higher high and a higher low. Closing above the long term down trend line indicates that March 3rd was not only a daily cycle low, but an intermediate cycle low as well. And with this being a new intermediate cycle, we could see the Miners trend higher for the next 10 to 15 weeks before the weekly cycle peaks.  Which is something I plan to further discuss in the Weekend Report.

Miners – The Big Picture

On Tuesday we discussed how the Miners are in the advancing phase of a new intermediate cycle. Tonight we will look at the longer term picture.

The Miners were on a brutal decline that began last August. The Miners printed their lowest point in March which was month 12. That places the Miners in their timing band for a YCL. The Miners have formed a monthly swing low to signal the new yearly cycle. The Miners will need to break above the declining monthly trend line to confirm the YCL. Then they could close above the 10 month MA as it rallies out of its YCL. The Miners are in a monthly uptrend. Since the swing low formed above the lower daily cycle band that signals that they will remain in their monthly uptrend and trigger a monthly buy signal. 

The Miners Crossed The Line

The Miners closed above the declining trend line on Monday.

After peaking on January 5th, the Miners formed a swing high and has been in decline ever since. The printed their lowest point on day 67, which placed the Miners very deep in their timing band for a DCL. The Miners formed a swing low then closed above the 10 day MA last week to signal a new daily cycle. Closing above the declining trend line on Monday confirms the new daily cycle. A close above the 50 day MA would indicate a change of trend.

The big picture is that the Miner broke out above a major multi resistance level and is not backtesting that zone. A close above the 50 day MA would signal a successful backtest of the the resistance/support zone indicating that the Miners are ready for the next leg up.