Cycle Trading

The Miners formed a swing high on Tuesday following Monday’s Gravestone Doji.

Not all swing highs mark a cycle peak, however a cycle cannot peak without printing a swing high. The Miners did deliver a clear and convincing swing high today that saw the Miners give back over 4% on the day. Tuesday was day 15 for the Miners daily cycle, which places the Miners 3 days shy of their timing band for a daily cycle low. A break of the daily cycle trend line will confirm the daily cycle decline.

The Miners have been closing above the upper daily cycle band, indicating that the Miners are in a daily uptrend. While we expect to see a break of the daily cycle trend line during the correction, as long as the Miners remain above the lower daily cycle band then they will remain solidly in a daily uptrend. Perhaps today’s swing high was the Miners sniffing out a potential daily cycle low on the dollar.

The dollar printed a lower low on Tuesday. A swing low is necessary to mark the daily cycle low. While our daily cycle count is unclear, two signals are the signals are beginning to emerge that are consistent with a daily cycle low.

Both the RSI and the True Strength Indicator have reached levels that have signaled other daily cycle lows. At this point the dollar needs to break above 96.85 to form a swing low. Then a break of the declining cycle trend line will confirm a new daily cycle.