Cycle Trading

The Miners printed their lowest point on Thursday. That was day 22, placing the Miners in their timing band for a daily cycle low.

The Miners did form a swing low on Friday. It was a rather weak swing low. We would like to see at least a close above the declining 10 day MA in order to confirm a new daily cycle.

So while we are waiting for confirmation of a new daily cycle I thought it would be interesting to look at the charts of the top 4 weighted Miners that make up GDX and see how they are behaving.

Barrick Gold is behaving much like GDX. A swing low has formed. There is also a bullish divergence developing on the True Strength Indicator. So this behavior is constructive.

Goldcorp did form a clear and convincing swing low. Monday it appeared that Goldcorp then backtested the swing low. So this behavior is constructive as well.

NEM formed a clear and convincing swing low on Friday. It then delivered bullish follow through on Monday by closing 44% higher, which is bullish.

FNV formed a clear and convincing swing low on Friday. It then delivered bullish follow through on Monday by closing above the 10 day MA, as well as the lower daily cycle band. These are signals that the daily cycle low for FNV has formed.

The takeaway is cautious optimism.