Cycle Trading

The Miners signaled a new daily cycle on Monday.

The Miners printed their lowest point last Tuesday, day 17, placing them in the early part of their timing band for a DCL. The Miners were already exhibiting a huge bullish divergence on the oscillators by day 17. These bullish divergences ofter accompany cycle lows. Then on Monday the Miners closed above the declining trend line to signal a new daily cycle.

A swing low and trend line break in the timing band for a DCL are some of the signals that we look for to make a long entry. However, there are 2 reasons why I am not ready to label day 17 as the DCL.
1) gap fill /timing band
2) Daily down trend.

The Miners gapped lower following Labor Day Weekend. That gap lower has not been filled. Since the Miners are in the early part of their timing band for a DCL, a very possible scenario would be for the Miners to back-fill the gap and then continue lower.

The other concern is the the Miners are currently in a daily downtrend. They have been in this downtrend for the past two months. And they will remain in their daily downtrend unless they can close above the upper daily cycle band. So while the Miners could break above the Labor Day Weekend gap, they would still need to close above the upper daily cycle band to signal an end to the current daily downtrend.