Tuesday, November 2, 2010

SOLD MGH - $1.37 BOUGHT SIL - $20.70 and SRCH $0.69

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I was fortunate to get an unexpected pop in the shares of Minco Gold Corp (MGH) today and I decided to sell my entire position in MGH and use those funds for something a little more silver related.  I bought half of my MGH position just yesterday so the 14.2% gain today was a tribute to the effective timing of the True Strength Index and a whole lot of luck.  As you can see from this chart, MGH should continue to do very very well.
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Click on the charts to ENLARGE
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Freeing up money from MGH allowed me to take a healthy stake in the Global X Silver Miners ETF (SIL) at $20.70.  My intention at the moment is to hold this position for the duration of the silver parabolic, assuming there is one this month.  
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It looks like my timing might be pretty good, as SIL has made a fresh trend line break of the True Strength Index (TSI) and Money Flow Index (MFI) indicators above the ZERO crossover.  
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My present goal is to begin shifting towards an emphasis on silver in my portfolio, hence the purchase of Great Panther Silver (GPRLF) yesterday and Global X Silver Miners ETF (SIL) today.
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While looking for something else silver to buy today, I saw this setup and knew I could not pass it up......even though it is not silver related.  This is the daily chart of Searchlight Minerals Corp (SRCH) and my purchase at $0.69.   SRCH has a tangible Book Value of $1.02 and sells at about 65% of Book Value.  The stock traded 100% higher ($1.38) just 6 weeks ago and has been severely pulled down - for no fundamental reason that I can figure out.
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Anyway, what really caught my eye was the technical setup.  This thing has all 4 of my ideal buy signals going at the same time.  Trend line break of the TSI and MFI indicators, a new ZERO crossover and the springboard effect of an underlying positive divergence between the TSI indicator and price movement.   Its really unusual to get this ideal of a setup and I could not resist.  Let's see how it turns out, OK?
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As an aside, I was encouraged with the price action of gold today.  Gold nearly got pushed into making a swing high last Tuesday, but it survived the test at $1320.  Then today gold was threatening to make a swing high if it traded much below $1350.  It got close, but survived the test as buyers again did not allow gold to slip.  The US Dollar, kinda to my surprise, could not hold $77 and closed sharply lower at $76.74.  I don't know who knows what, but this is the kind of price action that I find very promising going into the FED announcement tomorrow afternoon.  Good Luck to all!
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My TSI Trading record has been updated.

6 comments:

  1. Hi John,
    Looking ate Gold and Silver today, it seems Gold will broke 1315 no ?
    What is your opinion about the evolution till now ?
    Thanks

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  2. until now - or now?

    now i think gold will continue on its merry way much higher.

    until now - just the nonsense of trying to not get blindsided by extreme government manipulation

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  3. Thanks John :-)

    My post was sent to early :-)

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  4. Wow. Incredible market today. I bought some AGQ at near $99 yesterday. I wished I had bought more. Sold them all today @112.5. Looking to get back in after a pullback.

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  5. Wow,John! You're really on a roll! I see you sold great panther already. I'll be checking back to see if you get back into AGQ...maybe small pullback coming?

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  6. I appreciate your post, thanks for sharing the post, i would like to hear more about this in future

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