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Cycle Trading

It’s About Time

http://imageshack.com/a/img849/529/94cz.jpg

We discussed here on Tuesday that the Miners printed a huge bearish engulfing candle and lost a whopping 3.24% on the day. (Below is Tuesday’s chart)

http://imageshack.com/a/img841/6563/f79mw.jpg

Tuesday the Miners entered the timing band for a daily cycle low. Following the bearish reversal we needed to see 2 things to confirm the daily cycle decline:
1) A break below 25.40 to form a swing high.
2) A break of the (solid blue) daily cycle trend line to confirm the daily cycle decline.

So far neither has happened.

http://imageshack.com/a/img823/3678/02qlt.jpg

This daily cycle decline is beginning to look more like a correction in time instead of price. This sideways consolidation is shortening the gap between price and the daily cycle trend line. And for each passing day this continues increases the probability of this correction only filling the first gap but not the second.

5 responses to “It’s About Time”

  1. Jim (@hamvestor) Avatar
    Jim (@hamvestor)

    To me the GDX chart looks like it’s consolidating before another move up. What are the chances that neither gap will fill on this cycle?

    Reply
    1. likesmoneystudies Avatar
      likesmoneystudies

      It’s possible. However, I think this is just trying to draw in some more bulls before a break down into the final daily cycle decline.

      Reply
  2. trondtveten Avatar
    trondtveten

    Likes, what about possible window-dressing before 1.st of July? Funds don’t want to show the ‘hated’ gold or miners in their bi-annual or annual reports. Last year gold bottomed on the last day of June.. Next major bottom was on the last day of December.. So maybe a daily cycle bottom might come on Monday.

    Reply
    1. likesmoneystudies Avatar
      likesmoneystudies

      Good observation. Gold did bottom on the 28th but still delivered a 2.62% gain. The Mines actually bottomed on 6/26/13 and delivered a 7.46% gain on 6/28th.

      Reply
      1. trondtveten Avatar
        trondtveten

        Ok! Maybe that’s because the daily cycle at that time, in contrast to now, was quite old – 28 days? That previous bottom on 20th of May. Have heard that if they buy after noon on the last trading day (annually/bi-annually) it will not appear on their inventory report.. (They usually want to buy the positions back again as soon as possible..).

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