Cycle Trading

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The Miners have started their daily cycle decline.

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Tuesday was day 18 for the daily Miner cycle. The Miners printed a huge bearish engulfing candle and lost a whopping 3.24% today. We still need a swing high to form and today eased the parameters for doing so. A break below 25.40 forms a swing high. Then we look for a daily cycle trend line break to confirm the daily cycle decline. The Miners should easily fill the first gap on the way to a trend line break They may or may not fill the second gap on the way to forming a daily cycle low.

Meanwhile trouble is brewing for stocks.

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Even though stocks set another all time high on Tuesday, a bearish engulfing candle printed as well. That has eased the parameters for forming a swing high. Should a swing high form and stocks break below the trend line that will signal that stocks have begun their daily cycle decline.

The transports also look ready to roll over.

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The transports did not confirm the higher high. A swing high has already formed and the transports are also threatening a trend line break.

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The Russell broke to a new daily cycle high today and then printed a bearish reversal. Any break lower will form a swing high. The Russell is also closing in on a trend line break.

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The Dow already formed a swing high on Monday. Today’s bearish engulfing candle has breached the trend line signaling a daily cycle decline. A clear and convincing break of the trend line will confirm the daily cycle decline.