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Geez, it's not even September and look at those precious metal miners go! Before we get into the details of what I sold and bought today, let's take a fast look at the 10 stocks I claimed Sunday evening (2 days ago) were on the rocket launch pad are ready to head for outer space. I own(ed) the first four.
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In just two days:
1. ANO was $.88 and closed today $.92 Total gain = +4.54%
2. BAA was $1.70 and closed today $1.84 Total gain = +8.23%
3. BRD was $1.18 and closed today $1.19 Total gain = +0.85%
4. CDY was $1.11 and closed today $1.28 Total gain = +15.32%
5. CMIN was $.74 and closed today $.72 Total loss = -2.70%
6. NAK was $6.71 and closed today $6.81 Total gain = +1.64%
7. PAL was $3.19 and closed today $3.14 Total loss = -1.57%
8. RVMIF was $.285 and closed today $.285 No Change = 0%
9. SCCO was $30.09 and closed today $30.23 Total gain = +0.46%
10. TCK was $33.43 and closed today $33.38. Total loss = 0.15%
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This is Cardero Resource Corp (CDY). I sold another position today at $1.22 and have just one purchase remaining to sell sometime in the future.
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This is Banro Corporation (BAA). I set a limit order to sell BAA while I was off busy at work, but inadvertently had the mouse trap set to go off at $1.80, rather than the $1.90 price where I thought I had left the cheese. My bad. Oh, well. It's just money, after all. :) I easily forgive myself because I fully expect these kind of snafus to appear once in while now that I am back to work full-time and cannot see a computer the first 2.5 hours of the trading session.
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I bought some shares of DRD Gold Ltd Adr (DROOY) at $4.20 today. It has a trend line breakout of both the True Strength Index (TSI) and Money Flow Index (MFI) indicator. Also, the TSI as made the bullish ZERO crossover and volume looks like it is waking up.
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I really do not know a lot about the company other than it trades at a low PE of 5.5, pays a 1.63% DIVIDEND, selling at just less that .75X Book Value and has a float of only 38M shares. Those kind of numbers always get my attention and combined with the technical analysis, I hope this one is another winner.
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My other purchase today was of Coral Gold Resources (CLHRF) at $0.329. At the time I bought this, the TSI had broken out to the upside of the trend line - but by the close the turtle had put its head back inside the shell. First time I've ever seen that. Ha Ha.
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Again, some of the fundamentals about this company caught my eye. It closed today at 30 cents per share, but has a tangible Book Value of 57 cents per share. Small float of 32.5M, PE of 3.4, no debt, mining operation in California and Nevada. Between CLHRF and DROOY I've got to wonder if they remain "undiscovered" and "out of favor" when the gold bull takes off in September. I kinda doubt it. :)
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My TSI trading record has surpassed 200% in less than 3 months and has been updated.
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I bought Cardero Resource Corp (CDY) several times and today I sold 2 previous purchases for $1.17. CDY had a nice strong move today and I wanted to pocket some profit before it had time to think about taking some of it back. It looks like very short term it is due a pullback and perhaps I rebuy this bargain stock if it does.
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My TSI trading record has been updated.
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Click on the charts to ENLARGE
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This is a 4 Hour chart I just made of the US Dollar. I am still refining my understanding of charts like this, but what I see gives me great encouragement for the stock market. It would appear that the US Dollar is going to make one final inane attempt at a new high - which should push stocks down strongly tomorrow, by the way. If the US Dollar succeeds in making this marginal high I don't think it will last long because it will have created a negative divergence with the momentum indicator.
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The US Dollar made a negative divergence a week ago. The critical difference between then and now is that the momentum indicator this time will make a negative divergence right at the ZERO Crossover line. That means that when price falls, the momentum indicator will begin descending BELOW ZERO - and that should mark the Dollar's final high and the Dollar's fatality, once and for all. It should also mark the bottom in the stock market and the beginning of a powerful rally.
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This is a 4 hour chart of Direxion Small Cap Bull 3X Shares (TNA). I love this setup and if I am paying attention at the right time tomorrow, I will probably be back buying another slug of TNA.
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The True Strength Index (TSI) and Money Flow Index (MFI) are both moving with what I refer to as 'stealth'. That means that price is having difficulty going any lower but momentum and money flow are rising beneath the surface and out of ordinary view.
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If the US Dollar does indeed make one last futile stab at a rally tomorrow, that will push TNA down to something south of $32. Perhaps even to a new low around $31.40. Meanwhile, the TSI is nearing a bullish ZERO crossover....moving higher and higher. Without hesitation I would buy TNA if it starts to go below $32. Problem is I am so busy at my work that I may miss the opportunity. Maybe I will put in a limit order for $31.40, just in case I get lucky when I am not able to watch it. :)
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I remember watching the old rocket launches from Cape Canaveral on TV with Walter Cronkite doing the play by play narration. As a kid it never quite made sense to me that the rocket was blasting off from Florida but for some reason, somebody in Houston, Texas needed to be consulted for launch instructions and permission.
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Rocket launches are indeed fun to watch. I guess the closest thing we can get to that these days is to watch precious metal stocks rocket launch. Not the same thing, I know, but if you own the stock launching you will feel that same awe inspired lump in your throat.
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I sifted through over 100 mining stocks this afternoon to find those that were on the launch pad and appear ready to head for outer space.
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I will list these in alphabetical order. Those rockets with the highest odds of not turning into duds are those with a trend line breakout of both the True Strength Index (TSI) and Money Flow Index (MFI) indicators, AND a positive divergence in place AND a ZERO line crossover of the TSI indicator. Its difficult to find stocks that meet all THREE of these criteria simultaneously, but I managed to find four. And I was really pleased to see that I already own three of the four. Lucky me!
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With no further fanfare, here are the 10 rockets with their engines rumbling on the launch pad.
Click on the charts to ENLARGE
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Rocket #1
Anooraq Resources Corp (ANO)
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Rocket #2
Banro Corporation (BAA)
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Rocket #3
Apollo Gold Corp (BRD)
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Rocket #4
Cardero Resource Corp (CDY)
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Rocket #5
Constitution Mining Corp (CMIN)
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Rocket #6
Northern Dynasty Minerals Ltd (NAK)
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Rocket #7
North American Palladium (PAL)
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Rocket #8
Revett Minerals Inc. (RVMIF)
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Rocket #9
Southern Copper Corp (SCCO)
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Rocket #10
Teck Resources Limited (TCK)
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A couple days ago I bought another position in Direxion Small Cap Bull 3X shares (TNA) at $32.70 and I decided to cut it loose today at $36.00. My options now are to see if we get a bit of a pull back and then redeploy that capital, or simply find something else that the True Strength Index (TSI) and Money Flow Index (MFI) indicators suggest is ready to rock and roll.
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Without a doubt in my mind, gold has completed its previous daily cycle and today was Day 3 of the next 20-24 day daily cycle. And, without a doubt in my mind, today was just Day 2 of the next 36 - 44 day daily cycle for the stock market. The point is that we are very early now in both the gold and stock market daily cycles and should expect the next couple of weeks to be extraordinarily strong.
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My TSI trading record has been updated.
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Click on the chart to ENLARGE
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I had an email request to take a look at silver, so here are a couple charts with a few comments.
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First, let's take a look at the bigger picture of the WEEKLY chart of iShares Silver Trust ETF (SLV).
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It appears to me that SLV stopped just short today of breaking out to some wide open blue sky. Nice BUY signal from the TSI last week. Money Flow is healthy and steady. Also, a ZERO line crossover. I would think this rally is just getting going (slight understatement)
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Click on the charts to ENLARGE
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Here is SLV on a DAILY chart. True Strength Index (TSI) and Money Flow Index (MFI) trend line breakouts with today's price movement. Interesting that SLV just jumped over the downward sloping trendline overhead. A lot of times when you see this it means price is never coming back again to fill the gap. Considering today is only Day 1 of gold's daily cycle, I consider this a strong possibility. Also, gold just did the same thing the other day leaving a gap open at $1205 that I suspect will never be filled......at least not for a long long time.
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Exciting day today! Gold put in the daily cycle low yesterday and accomplished a swing first thing this morning. Today was Day 1 of a fresh new daily cycle for gold. These tend to run in length from about 20-25 days. Without a doubt in my mind this daily cycle will take gold to new ALL-TIME HIGHS.
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This daily chart is of DB Gold Double Short ETN (DZZ). This short term trade made sense on the notion that gold would fill in the gaps below $1205 and retest the monumental $1200 price, but it was not to be. Just to keep everybody off balance gold zipped down to $1210 yesterday and zipped right back up to $1230. That, my friends, was the extent of the correction. Anyway, I took a 2.3% loss and did a lot of buying to make myself feel better :)
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Click on the charts to ENLARGE
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This second daily chart is of Cardero Resource Corp (CDY), which I bought more shares of at $1.02. Believing as strongly as I do that the bottom is in for gold, and also, or nearly also for the stock market, I could not resist buying even more of this stuff. The wedge I have drawn on the chart will be broken soon and knowing that this stock sells for .6X Book Value gives me confidence to think the break will be to the upside.
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The third chart is a 4 Hour Chart of Anooraq Resources Corp (ANO) and my accumulation of additional shares at $0.85. I've been watching the price of platinum lately and it seems to be in bull mode along with gold, running from $1485 to $1540 today. ANO is a platinum miner and while it did not catch fire with the underlying metal today, I have no doubt that it will, and possibly with a vengeance.
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Finally, I never thought I would do this, but I bought another slug of Direxion 3X Small Cap Bull Shares (TNA). This 2 Hour Chart locates my decision point at $32.70 to BUY. We had both TSI and MFI trendline breakouts, two positive divergences in place between the True Strength Index (TSI) indicator and price movement, and nearly a positive ZERO crossover. Kinda difficult to lose with this kind of setup, in my book.
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The stock market daily cycle is in the range of 40 trading days. Today was Day 38 and if not the bottom of the cycle, well, it's just a matter of time now. My expectation is that TNA will, at the minimum, close the open gap at $41.32 during this cycle and probably go much higher than that.
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Finally, here is an inspirational bit of information about the seasonality of gold . Of the 12 months of the year, the one with the strongest returns for gold is, by far, September. Second and third place belong to December and January, fourth is May.
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If you are going to invested in mining stocks, NOW is the time to load up (in my opinion). I have!
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My TSI trading record has been updated.
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I just wanted to give readers a quick update on the 2 hour pre-market activities of the dollar, stock market and gold with this post. You, of course, should decide for yourselves what will happen next. I have my coin out and ready to flip it. Call it in the air?
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The is the US Dollar on a 4 hour chart. I have been skeptical about this run-up in the dollar and, well, though my daily timing was not correct, I still do not believe it will last. But flip a coin because though death appears certain, there is an escape route still open with a strong push to higher price.
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Click on the charts to ENLARGE
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This is the SP-500 on a 30 minute chart. This is a good example of what I sometimes see and I call it the 'stealth' setup. On the surface it appears that price is going nowhere but under the surface momentum is quietly turning from negative to positive. The ZERO crossover, of course, is where momentum turns positive but we are not there yet.
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Flip a coin. When momentum reaches ZERO will price break through or will momentum then turn negative and continue the correction?
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This is a Gold on a 1 hour chart, 2 hours pre-market. Despite the sharp rally yesterday and some follow through overnight, momentum is still in BEAR country (below ZERO).
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Honestly, I do not know what to make of very short term gold at this moment. That commodity has a mind of its own. The bull does a great job of keeping as many riders off his back as possible by maneuvers such as yesterday. Flip another coin, and you call it.
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For myself, I believe the bottom is in, or virtually in, for both the stock market and gold. And I am going to trade with that as my guiding belief.
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I had purchases of Direxion Small Cap Bull 3X Shares (TNA) on two separate days, coincidentally at the same price of $35.70, and I sold both of those positions just after the open today for $36.77. I wanted to start freeing up some money for the purchase of more miners, and this was a good way to do it.
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As I am now not able to see a computer for the first 2 hours of trade (due to my job), I took a wild guess on how high TNA may run and got very lucky - missing the top by 8 cents.
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I am also finding out that my school district internet blocks me from doing any uploading or posting to this website. So, I take pictures of my trades as best I have time and will now be uploading them after school when I get home.
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Click on the charts to ENLARGE
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My first purchase today was DB Gold Double Short ETN (DZZ). When I bought DZZ, gold was trading around $1226. I believe that gold will eventually bottom just below $1200 so I thought I may as well try to make some money while I wait. This 4 hour chart of DZZ does have a True Strength Index (TSI) indicator break of a trend line, but no BUY signal from the Money Flow Index (MFI), as yet.
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My other purchase today was of Anooraq Resources Corp (ANO). As I understand it, Anooraq mines primarily platinum. A looksee of platinum showed it smashed down on strong support of $1500, so I really don't see platinum going any lower, nor do I see ANO going any lower.
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ANO has been corrected some 25% just since the beginning of this month. This 4 hour chart impressed me with a trend line break of both the TSI and MFI, as well as a positive divergence of the TSI with respect to price. At TSI -0.31, we are certainly NOT at the ZERO crossover stage, but I can be patient with so much else solidly in place.
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Some nice people have asked me where I come up with my trading ideas. The short story is that I have about 100 mining stocks in my www.FreeStockCharts.com portfolio. I cycle through them in my free time, drawing trend lines on some and look at the interesting ones at various time frames so I can get a sense as to what is going on.
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I keep a few stocks in my head as looking "almost ready" and revisit them often to see what they are doing. When everything finally falls in place for one of them, I just buy it. There is not too much emotion to it other than I say to myself "oh goodie, this finally looks promising". Then I have to babysit the thing until the TSI and MFI tell me it is time to sell, and I sell. That is pretty much all there is to it.....day after day.
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My TSI Trading record has been updated.
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This post will contemplate the direction of the S&P 500 early on this week using the True Strength Index (TSI) and Money Flow Index (MFI) indicators with analysis of the S&P 500 ETF SPY, the NYSE $TICK, TBT which is a short ETF for the 20+ year Treasury Bonds, the VIX volatility ETF VXZ, and the US Dollar ETF UUP.
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This has been a fun project as I have brought in so many different ways to view how the S&P 500 is setup for opening trade tomorrow (Monday) morning.
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Let's begin with a peek at the S&P 500 ETF SPY. Using the TSI and MFI indicators I decided to use the 1 hour time setting so as to pick up a signal....which in the case of both indicators, is a BUY signal.
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Click on the charts to ENLARGE
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Next, let's look at a 4 hour chart of the NYSE $TICK indicator. Using a little cut and paste magic, this chart has the TSI (7,4) readings displayed across the bottom of the chart and the SP-500 roughly correlated in time above the indicator. Not surprisingly, when the $TICK indicator reaches an extremely negative reading, the S&P index has become prepared, at least temporarily, for a change in trend to the upside.
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We notice that last Friday's trade indeed pushed the TSI evaluation of the $TICK to an extremely negative reading. This suggests, based on previous occurrences, that we should have a day or two rally to work off the extreme oversold condition.
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Now let's look at the long bond and see if we can figure something out.
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This is a 4 hour chart of TBT which is a 2X short ETF of the 20+ year Treasury Bond.
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TBT will fall when interest rates are falling and when the demand for owning 20+ year Treasury Bonds is rising.
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In this chart we note the two buy signals given by the TSI momentum indicator and the Money Flow Index indicator. So I would imagine that TBT will now rise, which means that the demand for owning Treasury Bonds will fall.
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Further, if the demand for owning Treasury Bonds falls, where does that money go that is taken out of the bond market? Well, some of it goes into the stock market and so, I think we may have another confirmation that the S&P should rise early this week.
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Here is a chart of the VIX volatility ETF VXZ. Generally, when volatility increases, stocks are falling in price and, when volatility decreases, stocks are rising in price.
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While VXZ does not yet have a trendline break in place, it does sport a negative divergence between its price movement and the TSI momentum indicator. In my book (that I have not yet written), that is a solid SELL signal. And, the trendline breaks look to be not a matter of if, but when.
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It appears that VXZ is on a sell signal. If VXZ falls in price, then the S&P 500 should go up. Wow, we have now gotten the same bullish signal for the stock market by looking at this 4 different ways. Surely the stock market will go up on Monday and maybe even Tuesday.
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But wait! Now enters the biggest baddest elephant of the entire circus- the US Dollar. This is a 4 hour chart of UUP, the ETF proxy for the US Dollar.
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The US Dollar has been on a tear northward lately, causing the stock market all kinds of grief. Let's see if this bad boy is ready to fall, and give stocks some relief.
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Hummmm Let's see. Sell signal in the Money Flow Index. That did not bring the elephant to his knees. A negative divergence between the TSI momentum indicator and the price movement of the US Dollar. That should do it.
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But no trendline break yet, darn it. And the US Dollar has made a 38.2% retracement of its fall from glory, but what if the elephant has just enough wind in those mighty lungs to scream out a dying cry for the 50% retracement level?
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Surely it is not going to do that, is it? I mean, if it does, all the people in the stock market are going to panic and sell, sell, sell like the sky is falling for sure. And the smart money is going to take the dumb money's stock and pick their pockets like they always do. Oh, I hope not again this time. I really hope the elephant just lies down and takes a long sleep (but I'm not counting on it, just yet).
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