Cycle Trading

The Miners formed a swing low on Monday.

After peaking day 13, the Miners broke lower, printing their lowest point last Tuesday which was day 20. The Miners have been caught in a daily down trend. They will remain in a daily down trend until they can close above the upper daily cycle band. Even though the Miners have rallied since Tuesday, the drop last Tuesday was so severe that only today did the Miners form a swing low. They also closed above the declining trend line and above the lower daily cycle band to confirm a new daily cycle.

The weekly cycle is beginning to see some bullish development.

The Miners formed a weekly swing low today. Last week was week 19, which places the Miners in their timing band to print an intermediate cycle low. The weekly swing low that formed today signals that the Miners may have left behind an intermediate low. A weekly close above the 200 MA would help to confirm a new weekly cycle.

Stocks appear to be struggling to leave behind a daily cycle low.

Stocks printed their lowest point last Wednesday, which was day 43. That placed stocks deep in their timing band to print a daily cycle low. The accompanying swing low and declining trend line break signal a new daily cycle. The weak close today calls into question whether or not stocks left behind a 43 day, daily cycle low. We still would like to see a close above the lower daily cycle band to eliminate any doubt that last Wednesday hosted a daily cycle low. However, if stocks break lower here we would be forced to acknowledge that the daily cycle has extended lower.