Cycle Trading

PRE-SUMMARY

The Miners broke below key moving averages and the lower daily cycle band on Friday. The breakdown signals the daily cycle decline, though the rising 200 day MA may still offer potential support.

The Miners had been consolidating above the 50 day moving average until Friday.

The Miners closed below both the 50 day moving average and the 10 day moving average on Friday to signal the daily cycle decline. The peak on day 5 indicates a left translated daily cycle formation, which is typically associated with weaker cycle structure. If the Miners break below the previous DCL at 85.46, then it would form a failed daily cycle and further weaken the intermediate cycle structure.

The Miners also closed below the lower daily cycle band on Friday. From a cycle perspective, the break below the lower daily cycle band is important. Closing below the lower daily cycle band ends the daily uptrend and begins a daily downtrend. What is clear is that momentum has weakened considerably following the rejection near the 100 resistance level earlier in the week. However, the rising 200 day moving average is now approaching and may provide an area of potential support. If so, then we would need to remain open to the possibility of an extended daily cycle scenario with Friday marking day 39.

Cycle Alignment:

Bearish