Cycle Trading

The Miners formed a bullish reversal on Tuesday.

Tuesday was day 23 for the daily Miner cycle. That places the Miners in the early part of its timing band for a daily cycle low. Tuesday’s bullish reversal has eaed the parameters for forming a swing low. A break above 38.86 forms a swing low to signal a new daily cycle.

The bigger picture is that the September low occurred on week 27, which makes it likely that the September daily cycle low was also the intermediate cycle low. Notice that RSI became oversold in September. Now RSI has quickly reversed from oversold conditions — which is characteristic of the advancing phase of a new daily cycle.

Strategy 1 – Buy the swing low. With the Miners in the early part of their timing band for a DCL, buying the swing low yields the best possibility for gains using Tuesday’s low as the stop.

Strategy 2 – Buy the close above the 10 day MA. Closing above the 10 day MA increase the odds that day 23 is the DCL, again using Tuesday’s low as the stop.

Strategy 3 – Buy the break of the declining trend line. Once again the trade off is more assurance at the expense of a further stop.