Cycle Trading

The Fed caused a lot of market volatility on Wednesday with the .25% rate cut.
The Miners dropped 4.78% on Wednesday but then rebounded on Thursday.

On Thursday the Miners rallied over 5% to engulf the body of Wednesday’s candle. Thursday was day 22 for the daily Miner cycle. That places the Miners in their timing band for a DCL. Thursday’s bullish recovery eases the parameters form forming a swing low.

The Miners have been in a strong daily uptrend. Despite the 4.78% drop on Wednesday, the Miners did not close below the lower daily cycle band so therefore they remain in their daily uptrend. And the RSI bullish reversal is characteristic of the advancing phase of the intermediate cycle. A break above 27.95 will form a swing low. And not only will the Miners form a swing low, but forming a swing low will cause them to break above the declining trend line to signal a new daily cycle. And if the swing low forms above the upper daily cycle band that will also trigger a cycle band buy signal.

And let’s not forget that the Miners just broke out of a multi year consolidation. Minimally, I believe that the Miners should test the 31 level before this intermediate cycle tops.

I believe that the Miners big gain can be attributed to the weakness in the dollar on Thursday.

The dollar printed a bearish reversal on Thursday. With the dollar being in its timing band for a daily cycle low, Thursday’s bearish reversal has good odds of signaling the daily cycle decline. But the strong reaction in gold and the Miners suggest that this may not only be the daily cycle top, but also an intermediate cycle top to the dollar. And if the dollar finally begins to decline into an intermediate cycle low, that would be bullish for precious metals.