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Cycle Trading

Miner Potential

The status of the daily Miner cycle is not clear.

The Miners printed its lowest point on day 27, placing them in their timing band for daily cycle low. They proceeded to form a swing low the next day to signal a new daily cycle. But then the Miners were rejected by the declining 10 day MA last Wednesday have remained contained by the 10 day MA since then. This has caused the Miners to form a mini triangle consolidation. A bullish break out of the triangle consolidation would have us label day 27 as the daily cycle low. A close above the converging 50 DMA and 200 DMA would confirm the new daily cycle.

2 responses to “Miner Potential”

  1. Bo Avatar
    Bo

    Likesmoney, I am expecting that this DC, if we are in a new DC, will fail and be left translated to seek out an ICL. Is your expectation the same?

    Reply
    1. likesmoneystudies Avatar
      likesmoneystudies

      Bo,

      That is my expectation as well. The Miners are in the early part of their timing band for an ICL. They will need to form a weekly swing low in order to mark the intermediate cycle low. A break above 25.50 forms a weekly swing low, which is over 16% above Monday’s close. Then they will need to break above the converging 50 week MA and 10 week MA. Essentially that drop into the week 18 low was so dramatic that the Miners will likely need to consolidate that drop, in order to flatten out the dropping 10 week MA, before it can rally in earnest.

      However, the potential game changer is the Fed. Their announcement on Monday to unleash its balance sheet and purchase an unlimited amount of Treasurys and securities could change all of that. As I am replying right now, the premarket price for GDX is 23.88. So GDX is making a bullish break. Long positions can be entered using the rising blue trend line(on the daily chart) as the stop. The stop can be adjusted upwards once GDX closes above the 50 day MA. A close back above the upper daily cycle band would then begin a new daily uptrend and indicate that the intermediate cycle low has been set.

      Reply

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