Miner Divergence …

May 9, 2012

Equities were down again today.

Wednesday was day 44 of the equity daily cycle.
Today was the second straight day equities started out down and rallied into the close.
Today equities also tested the 1340 level.
A break below the 1340 level would reset the intermediate cycle count.

At 44 days, equities are on the outer edge of the timing band for a low.
The SPY printed a 72 million Buying on Weakness yesterday and was on top of the BOW list late at one point today.

Another signal that an equity bottom may be in is the bullish divergence witnessed by the miners today.

It is common enough for the Miners to bottom ahead of equities.
And that looks like what they were doing today.
The Miners printed a bullish engulfing candle today on day 12 of the daily cycle.
The Miners daily cycle normally runs 12 – 19 days from trough to trough.
A break above 415.81 forms a swing low.

A snap shot of some individual miners also suggest a bottom may be in.

Perhaps the Miners are sniffing out a daily cycle top for the DX

The DX peaked today around 9:15, then proceeded to sell off.

Around 10 AM the HUI realized the dollar topped and rallied.

Some things to keep in mind:
1) Equities are getting late in the timing band to print a low
2) The Miners have just entered their timing band for a daily cycle low
3) Gold is in its timing band for a daily cycle low
4) As discussed in recent reports, the dollar is expected to top soon and print a failed daily cycle.

7 responses to “Miner Divergence …”

Stock Rocket

May 9, 2012

Kabam! – Im in the miners hard as of this morning LM.

Looks like some great levels to buy here….for a trade – on this last leg higher in equities.

Reply
Jack Dog

May 9, 2012

Likesmoney,
Was looking for a semi truck, but guess a wheelbarrow will do.
Dollar back to where it was last night!
Thanks, Jack Dog

Reply
trondtveten

May 10, 2012

The problem is that the DX broke through very hard resistance at 80, the level of which figured in one of your previous excellent long term Dollar analysis as a major support and resistance level.over years. Now that resistance turns into support, and it is maybe today resting on its ‘new platform underneath’…

Reply
1. likesmoneystudies
  
  May 10, 2012
  
  trondveten,
  
  You are right, that 80 level has been a critical level.
  
  I think this is going to force Ben Bernanke to reveal his hand.
  
  Reply
ALEX

May 10, 2012

Thanks LM

HUI broke the $415.81 level for a swing low confirmation ( But does it matter if it breaks it and then closes under it ? Does that indicate a failure of any sort -IF IT CLOSES under it today ?…or just a little battle of the bulls & bears , still a swing low until proven otherwise ? THX

Reply
1. YesLetsDiscuss
  
  May 10, 2012
  
  ALEX,
  
  Yes, it looks like HUI will have a swing low as long as it doesn’t go below yesterday’s low in the next couple hours. Its quite far away. This does increase the probability of a new DC.
  
  I guess the confirmation will come next week with a weekly swing low. That would indicate a new IC as well. I hope that happens across the board – Metals, Miners, Broad Market.
  
  Reply
likesmoneystudies

May 10, 2012

As long as the HUI does not make a lower low today, then we have a swing low.
Then we look for a break of the declining cycle trend line.
A weekly swing low is also on our watch list.

Reply