1. Early Cycle Move:
Begins during the recession in response to stimulative economic policy and a bottoming and/or upturn in leading economic indicators. Occurs despite large excess inventories and low capacity utilization rates.

?2. Consolidation Phase:
Upside potential is capped by excess inventories and capacity, and commodity and share prices give back some or all of their gains. Continued demand growth draws inventories down toward critical levels, and idled capacity is restarted, pushing capacity utilization rates up to full effective levels.

3. Earnings Driven Phase:
Begins when excess inventories have been eliminated and capacity utilization has reached full effective levels, creating shortages of the commodities as demand continues to grow. Mining shares are driven to their cycle highs as commodity prices and earnings increase dramatically.

4. Contraction:
Begins as slowing economic and demand growth combines with rising production to result in growing surpluses and rising inventories.

Eoin Treacy's view

Here is a link to the full report.

The authors of the report take the view that mining shares remain in the consolidation phase not least because the industrial metal price moves that would improve earnings have not been sufficiently large to drive investor interest in the respective shares. 

The LME Metals Index found support this week in the region of the upper side of the underlying yearlong base and the 200-day MA. A sustained move below 3200 would be required to question medium-term recovery potential. If industrial metal prices continue to improve, the respective stock market sectors are more likely to sustain breakouts from their respective bases. 

Sherritt International for example rallied to break a progression of lower rally highs in March, spent the last few months ranging and has returned to test the region of the 200-day MA. It will need to continue to find support in the C$4 area if medium-term recovery potential is to continue to be given the benefit of the doubt.