Thursday, August 5, 2010

BUY GOLD @ $86.05

I bought Randgold Resources Ltd (GOLD) for $86.05.  As you can see from the chart, GOLD had an 'emotional outburst' today.
Apparently the CEO, in the course of telling analysts that he thought gold (the metal) would hit $1500 in 2011 and proudly proclaiming that his company earned 82% more in NET PROFIT over last year, also mentioned that he was lowering his company's gold production guidance by at most 5 %.  
Well as you can see from the chart, this information totally scandalized 'the professionals' who hit their Blackberry phones with furious orders to sell.  Heck, I think it's kinda funny actually.  
Let me get this straight.  Gold is going to $1500, the company has totally got its act together making money, and it's time to sell over a less than 5% drop in production for the last 4 months of the year?  Are you serious?  
Anyway, I bought as much as I could and I am fairly sure that with a little patience this will be another profitable trade.
Click on the chart to ENLARGE


  1. John,

    I wish to thank you for your sharing of information in your TSI blog. To help you stay as informative as possible, I have noticed that you sometimes refer to negative divergence when I think you mean positive divergence. For instance, you bought GOLD but not because the tsi was indicating weakness (negative divergence), but because it indicated hidden strength with positive divergence. But your chart speaks of negative divergence.

    But understand this isn't a criticism. I really appreciate what you do. If ever I go through a day without making a minor error, I'll tell you about it, but don't hold your breath.

    a grateful watcher of your blog

    joe pavia

  2. Hi John,

    It is impressive that you have been able to gain ~50% in profit per month on capital invested with a handful of tools that most of us can use. Please let me know if you've seen similar performance in your trading over a longer term or if it varies considerably from period to period.

    Thanks and best regards,

  3. Joe - you are absolutely correct! I have a habit of calling things negative divergences when they really are positive divergences. I catch myself sometimes, but other times it is out of mind, out of sight (and wrong).

    Thank you so much for graciously correcting me. I appreciate that and perhaps your kind and gentle reminder will come to the forefront of my little brain the next several times until I am cured of this 'error of my ways'.

    Speaking of errors, I sold CGR too early a couple days ago, and NGD too early today......but how about that MDW today?

    Can't win 'em all, no matter what! But let's all keep trying. Thank you Joe!!

  4. Neil - to be very honest, what you see me doing here is about the way it is all the time when I am trying.

    Actually, I have done much better than this for months and months at a time but I was also being more aggressive and I suppose I caught a few lucky breaks - who is to say.

    I have all these eyeballs on me here so I tend to be a little more careful, a little more cautious and I try to dose myself with humility, though I suppose I don't always succeed there, either.

    Folks, I really am simply doing the best I can. I am trying to model the trading techniques - the decision-making process - as I go. I have a pretty good idea how each of these trades I take (with my real money, to be sure) will play out, but we all know there are NO CERTAINTIES in this game. Anything can and will happen.

    I think it makes it easier to be successful when one has a solid understanding of TSI, a bull market, and all day to contemplate your chess moves.

    It will be much more challenging for me once I am teaching school all day. But I've done it before and the results were, I assure you, the same.

    Maybe if I keep this website going (somehow) and continue to post my trades, it will help me stay motivated.

    Having money, believe it or not, has never been a strong motivator for me. But accepting a personal challenge to compete against myself has always worked quite well. :)

  5. Hi John,

    That is very impressive. You should be running a hedge fund! :-)

    What would you recommend in terms of the percentage of capital you should keep at hand in cash vs. be invested per trade campaign.

    Thank you again for sharing your system and for helping folks out. Wishing you a good teaching and trading period.


  6. Thanks Neil for your kind words.

    Cash? What's that? I have 'da money all in the market, all the time.

    As soon as I hit the button to get out of one thing I take those funds and put it into the next thing I find.

    As you can see from my record, right now I am holding 5 different stocks. This is the 'careful John' trader.

    Otherwise I would probably have just 2 or 3.....all in, and the funds divided more on how strongly I felt about the risk/opportunity than some cut and dried equivalence. I would also be a little more inclined to hold the positions longer than with the 5 stock concept.

    Hey, you ask some great questions Neil. I think you should be a TV interviewer or newspaper reporter, how about that?

    Best to YOU.

  7. John,

    What's cash? LOL.

    Yes, interviewer or student.