Cycle Trading

On Monday we discussed how the bullish framework was developing for precious metals and the Miners. In particular we looked at the Silver Miners (SIL) and the Junior Miners (GDXJ) and noted how the printed a higher cycle high: https://likesmoneycycletrading.wordpress.com/2013/08/12/bullish-framework/

Well today the Gold Miners (GDX) joined the party.

Wednesday was day 5 for the daily Miner cycle. Today the Miners bounced right back from the weakness on Tuesday and printed a new daily cycle high that is higher than the previous daily cycle high. This establishes a new pattern of higher highs and higher lows. Assuming that this daily cycle will form as a right translated daily cycle means that the Miners will trend higher for another 2 -3 weeks.

Coal also printed a higher high over the past week.

Just like the Gold Miners, the Coal index printed a daily cycle low last Wednesday. Friday they broke out above the previous high and has been consolidating those gains this week above the breakout level.

And this is in spite of the fact that the dollar has rallied 3 out of 4 days since last week.

The dollar reversed after tagging the lower Bollinger Band last Thursday. Since then the dollar has rallied 3 out of 4 days. If the dollar breaks above 82.49, then we will shift to the second scenario of today being day 3 for the dollar. However, Wednesday saw the dollar print an inside day. If the dollar forms a swing high and heads lower then our first scenario of the dollar being on day 10 remains intact.

And when the dollar breaks below the 81 support level, then I suspect that our Miners will really jump for joy…