Today we came within an eyelash of taking out the price level I identified as the swing high for the US Dollar and the basis on which I proclaimed the top of the US Dollar's current daily cycle - further defining this occurrence as EXTREMELY BEARISH.
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And, today we also came within an eyelash of taking out the price level I identified as the swing low for Gold which I used to proclaim as the beginning of a bullish new daily cycle for Gold.
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Wow, those were close calls.
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This evening I got to looking at the chart of Gold and well, I got to wondering about something. I wondered how often the True Strength Index (TSI) indicator called the daily cycle lows for gold in the past. And, I wondered how well the Money Flow Index (MFI) indicator called the daily cycle lows for gold in the past.
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So I made this chart and, heck, this is getting interesting. It turns out that the TSI did an incredibly great job of calling nearly every single daily cycle low to the day for the past year.
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Just as amazing to me......so did the Money Flow Index (10).
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Take a look at the chart and you will see I have identified the date of the daily cycle bottoms just under price, and the date of the TSI and MFI indicators just under their bottoming spike.
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So what is this 'another possibility', you ask? Well, I wonder if the price of gold is going to trade just a tad LOWER than what I think is the daily cycle low price of $1315, thus creating a positive divergence with the TSI indicator as it has done three times in the past year, THEN gold is going to take off.
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Also, check out the current reading of the MFI (10). At 20.19, that sure looks like a bottom to me....or darned close.
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And a third observation. Price is only 10% above the 200 dma. Even the little run up we had last December made it to +25.3%. Surely this is not the top for gold. No way. C waves do NOT end with a whimper - EVER. There is more upside to come!
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Maybe you see something on this chart that I have missed or worse yet, misinterpreted. Please let me know, for goodness sakes! tsiTrader@gmail.com
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John,
ReplyDeleteI always here this A wave, B wave, C wave. How do you identify these waves? Where can I get more materials to read?
Thanks,
BJ
http://thetsitrader.blogspot.com/p/gold-secular-bull-c-wave-data-and.html
ReplyDeleteBJ - I found this information on, uh, my website.
http://thetsitrader.blogspot.com/2010/08/golds-abcd-patterns-from-2002-2010.html
ReplyDeleteAnd I found this information at the same place.
which software shows TSI indicator?
ReplyDeletewww.FreeStockCharts.com
ReplyDeleteThanks John.
ReplyDeleteAlso I think in below post in last picture you have D little differently than your other post. 2008-2010. Therefore A and B of current waves are also shown little differenty. But in previous picture it shows differently.
http://thetsitrader.blogspot.com/p/gold-secular-bull-c-wave-data-and.html
Well done,John! Looks like your swing low on gold was right on! I bought a few of the stocks you mentioned the other day but unfortunately was too chicken to buy AGQ! Please update us when you see another opportunity to buy AGQ. Should be interesting next week. The stock I asked about the other day,CUI.V, was up another 22% today so I'm pretty happy too.Have a good weekend and thanks for your work.
ReplyDeleteI got out of AGQ at 102.5. Very surprised that it was so strong on Friday!
ReplyDeleteYash - I knew of that error and was kinda lazy about getting it fixed until this morning. Thanks for the reminder.
ReplyDeleteJake - Yeah, the swing low call on gold was right on....but was not verified until the strong day we got on Friday. CUI.v looks like it was up 25% on Friday. You got yourself a winner there Jake!
Fung - I will be getting back into AGQ this week. IMO, the party for silver is just beginning.