TNA purchase - $36.45

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Well, that was quite a melt down, wasn't it?  Geez.  I didn't think they would ever stop selling.
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Anyway, today was the end of the second quarter and I've got to think the motivation to continue selling tomorrow will be different.  If you wanted or had to sell, well, today was your day. 
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But tomorrow is a new day and a lot of those folks who sold today have a lot of cash in their accounts to reinvest tomorrow.
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So I bought TNA, which is a 3X bullish ETF.  Basically, it is a bet that the stock market goes up but, if correct, it goes up 3 times faster.  Now the flip side, of course, is that if the stock market goes down, TNA will go down 3 times faster than the stock market.
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I wrote a post about this not too long ago, but I will mention it again now.  The miners are in a secular bull market.  Over time, over years, they continue and will continue to go up.  The stock market, however, is in a secular long term bear market.  And over time it will go down in price.
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If you own a mining stock and continue to hold it, it will (should) make a nice return for you.  In other words, and only in my humble opinion, this is not to sell.
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Click on the chart to ENLARGE
                                                              

A Study in Short Selling - Jaguar Mines (JAG)

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When I drew this trend line on Jaguar Mines (JAG) this morning I never in my wildest dreams thought that today the price would drop to that line.

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I cannot find any bad news to account for this incredible drop.  So let's think about how this may have been the perfect setup for some deep pocketed short sellers.

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First there is the higher high in price that yielded a lower high on the True Strength Index (TSI).  Then on very heavy volume, JAG made an even higher high, not by much, which totally exhausted all the buying pressure. The TSI was reading 68, then 47, then 22.   In effect, someone with a lot of shares sold to everyone at the top, then turned right around and shorted their purchase, apparently without mercy.

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Honestly, I had never thought about this TSI setup in terms of short selling, but I will in the future!

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Click on the chart to ENLARGE

Richmont Mines (RIC) - purchase $4.50

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Richmont Mines (RIC) hourly chart has the kind of setup I look for.  Price consolidates sideways to slightly down as the True Strength Index (TSI) rises and approaches a breakout of the ZERO line.
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The fundamentals for this company are very compelling and this is a stock to hold onto if a short term trades is not available.
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Click on the chart to ENLARGE

Miners Breakout

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This is a better way to start the day than yesterday.
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The Kitco projected miner earnings link has been updated with fresh information and charts.
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Click on the chart to ENLARGE

Tuesday Evening Charts

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Four charts this evening with a few modest thoughts.
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First, the US Dollar ETF proxy, UUP.
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The Dollar has a lot of sway with the direction of the stock market - not so sure it has the same effect on gold, however.
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As you can see, the daily TSI is below ZERO but curling skyward.  I can only hope and pray that it does not break that TSI down trend line.
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Click on the chart to ENLARGE

                                                               
Second, let's take a look at the SP-500.
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Today's horrendous downdraft in price moved the TSI considerably, but it is still holding out for a bottom soon with a divergence in place.  The divergence could always get run over, of course.  But I am guessing it would take another day like today to do it.
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Click on the chart to ENLARGE

                                                               

Third, the daily chart of GLD.

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Daily chart is still positive and the TSI is in bullish territory, but looking mighty tired.

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Click on the chart to ENLARGE

                                                              

Fourth and finally, the miners (HUI).

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Looking a little more alive to me than gold, in fact.  See what you think.

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Click on the chart to ENLARGE

Sold Capital Gold Corp (CGC) $4.10

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I decided to take a 1% loss on CGC to lighten my exposure
to this weak stock market.  I bought CGC yesterday for $4.14.
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My TSI trading record has been updated to reflect this sale
and my purchase of some SWC this morning at $12.20.

Retest of Today's Lows - SP-500

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We appear to have just concluded a retest of this morning's lows and should be headed higher now.
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Click on the chart to ENLARGE

SWC (Stillwater Mining) update

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Let's take an updated look at one of the most volatile mining stocks, SWC.
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This is a Daily chart.  A while back I speculated that SWC could be forming an inverted Head and Shoulders pattern.  That still looks like a possibility, to me.
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On of the instructive things to observe is that when price makes a very sharp dramatic move - as today - the TSI does not.  Knowing that can be helpful.
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Click on the chart to ENLARGE

                                                            
This is SWC on the hourly chart.  The divergence is in place and I continue to expect this stock to reverse direction.
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These large gap days are, of course, very emotionally charged and panic and fear can get in the way of thinking clearly.  At least, it can for me.  But logically, this stock should reverse direction.  Time will tell, right?
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Click on the chart to ENLARGE

10:07 am est Update

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The stock market SP-500 is indeed getting clobbered (so is my buy of SWC).
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The technical analysis piece of this looks good so I am just going to sit back and watch the show.  When the panic abates we should get one heck of a relief rally and that may be a good time to evacuate the premises - before that darned bear returns for more.
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Click on the chart to ENLARGE

SWC buy at $12.20

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The nice thing for my readers is that they get to see if/how this works with me using my own money, instead of theirs :)
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Well, I sure hope the parachute opens before I hit the ground.
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Click on the chart to ENLARGE

Edging Towards the Door

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Let's look at three charts pre-market Tuesday.  GLD, HUI and SPX.
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GLD, to be honest, has got me nervous.  The chart has made a rising wedge pattern that usually does not turn out well for the bulls.  Our happy trampoline may develop a tear in the flooring and it could prove hazardous to one's portfolio to overstay their welcome.
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Click on the chart to ENLARGE

                                                                    
Here is the current hourly chart of the miners index - HUI.   The negative divergence yesterday played out as it should have.  I admit to being excited (there is a word that means 'emotional' as opposed to 'technically detached') that the HUI was attempting a very important breakout.  Shaking my head that I still do not 'get it' that the TSI is more accurate than I am.  
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Anyway, the current picture suggests the next move will be down for the miners.
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Click on the chart to ENLARGE

                                                       
Here is the SP-500, pre-market.  OK, not going to get 'emotional' and just going to tell myself what this chart says 'technically detached' - though my gut twists with the anxiety of seeing the futures down so sharply before the open.
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The TSI says this negative gap opening will not hold.  Price will make a lower low and the TSI will not even come close to making a lower low.  This setup is basically the exact same and opposite direction of another we saw a couple weeks ago.  I have identified this previous example on the chart as well.
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Well, let's all see if this gap down opening should have been aggressively bought, not joined.
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Click on the chart to ENLARGE         

TSI Trend Lines

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You can draw trend lines on the True Strength Indicator (TSI) and get a pretty decent buy or sell signal from it.
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This first chart is Stillwater Mining (SWC).  It appears, at least for this moment, that SWC is about to dodge the bullet of selling pressure and resume heading north.
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Click on the chart to ENLARGE






                                                                     

                                                               
This is Capital Gold Corp (CGC).  In this instance it is unknown whether the TSI trend line will be broken or not.  It would be better for me if the trend line held :)
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Click on the chart to ENLARGE

 This is Coeur D'alene Mines (CDE).  And an example of what can happen when the TSI trend line if broken.  Great sell signal if you are trading and not holding for a longer term period.
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Click on the chart to ENLARGE         












                                                              

Rocket Launch (Cover your ears)

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The miners (HUI) look about ready to lift off and if they succeed, gold will launch right after they leave earth.
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The TSI is now making a lower high and the HUI a higher high - so this may well back fire.
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It backfired.  A better set-up will be required, obviously.  Back to the drawing board before another attempt  :)
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Click on the chart to ENLARGE


WHILE WE WAIT
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Here are three charts of stocks either breaking out or thinking about breaking out.


First, MGH
Second, RIC
Third, SWC


Click on the chart to ENLARGE        

                                                                        

Playing on a Golden Trampoline is Just Fun

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Sometimes we humans take ourselves and our investments a bit too seriously and it would do us well to take a step back, and smile.
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This chart is the price action of Gold for at least the past 6 weeks.  You know, to me it looks as happy as a kid playing on a trampoline.  Of course there are up and downs, but what fun would there be without that?  
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The TSI does a nice job of smoothing out the trajectory of things and if you allow yourself to use your imagination, you can pretend, just for a moment, that you are on that trampoline.
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Only when Gold price action starts to get grumpy should we worry about this coming to an end.  Something like a break of the white trend line would definitely get my attention.
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Click on the chart to ENLARGE

Hummm...... Which Stock to Choose?

There are the 15 mining stocks I follow from those published by Bill Matlack each week at Kitco.  I have chosen these particular stocks because, in my judgment, they currently have the most explosive projected earnings of the lot. This table looks at the performance of these stocks during three recent gold rallies.
Kitco’s Most Explosive		Dec ’07 – Mar ‘08	Gain %	Sept ’09 – Dec ‘09	Gain %	Apr ’10 – July ‘10	Gain %
		Actual Performance		Actual Performance		Actual Performance
$GOLD		$800 - $1030	28.75%	$950 - $1225	28.95%	$1100 - $1250	13.69%
1.	GBG	$2.25 - $3.75	66.66%	$1.30 - $1.80	38.46%	$1.70 - $1.85	8.82%
2.	CDE	$40 - $50	25.00%	$18 - $24	33.33%	$16 - $17	6.25%
3.	MFN	$12 - $13.50	8.33%	$10 - $11	10.00%	$9.50 - $9.50	0.00%
4.	SWC	$10 - $22	120.00%	$7 - $10	42.85%	$13 - $13	0.00%
5.	ANV	$6 - $6	0.00%	$8 - $15	87.50%	$17 - 22	29.41%
6.	GSS	$3 - $4.25	41.66%	$2.75 - $3.75	36.36%	$4.00 - $4.60	15.00%
7.	GOLD	$35 - $55	57.14%	$57 - $90	56.14%	$80 - $98	22.50%
8.	SSRI	$35 - $40	14.28%	$18 - $25	28.00%	$19 - $19	0.00%
9.	RIC	$3 - $4.25	41.66%	$3 - $3.75	25.00%	$4 - $4.50	12.50%
10.	EXK	$3.50 - $4.60	31.43%	$2 - $4	100.00%	$3.25 - $3.70	13.84%
11.	NGD	$5 - $9	80.00%	$3.50 - $3.50	00.00%	$4.50 - $6.50	44.44%
12.	JAG	$9 - $14	55.55%	$9 - $12.50	43.21%	$10 - $10	0.00%
13.	AGT	$.50 - $.75	50.00%	$.37 - $.55	48.65%	$.33 - $.31	-6.00%
14.	CGC	$2.75 - $3.10	12.72%	$2.50 - $4	60.00%	$3.60 - $4.20	16.66%
15.	CGR	$1.40 - $1.40	0.00%	$.55 - $1.30	136.00%	$1.15 - $1.15	0.00%
The ‘07/08 rally was 4 months.                   As you can see, every stock has its own little personality. The 2009 rally was 3 months.                      Also, they don’t all move at the same time.  Some are leaders Apr ’10 to July ‘10 was 3 months.                and some are laggards.   I wish you well in your study.