Friday, July 9, 2010

Always Curious, Always the TSI Student

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This morning I decided 'I' needed to follow-up on last night's yellow flag post by discovering if the TSI failed to give me advance warning of the precipitous drop in gold, or if the situation was, as usual, 'operator error' or, more generously, 'operator oversight'.
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This chart is GLD daily.  Where the price action was TSI validated I marked with green.  The first warning sign yielded a yellow line.  The second warning sign was red.  The third clue that things were really progressing badly was given a bold maroon line.  The TSI support line was at .13 and drawn as a horizontal white line.
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The upshot is that the TSI gave me two warnings, and a trend line break - all signals given within 2 full days BEFORE the drop.  Geez, I don't know what else the TSI could have done to help me except use a hammer on my head, you know what I mean?  (I should now keep a hammer beside my computer to remind me of this.....LOL).
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OK, so now what?  Well, as long as the TSI continues to go lower each day, price will go lower.  Nothing too complicated to understand about that.  
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Either GLD is going to break down further, and the TSI will obligingly continue south, or if this consolidation region is going to hold then the TSI will first go sideways and then start heading up towards ZERO.  Unless a guy has a crystal ball, which I DO NOT, it is a coin flip.  Talking to myself - there is no sense in selling or adding any positions when flipping coins.
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Click on the chart to ENLARGE




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