I decided to try my hand at a day trade, as there is no school for me to teach this week (thank heavens). I bought Anooraq Resources Corp (ANO) at $1.45 in the premarket. I noticed that platinum had had quite a strong advance overnight and that this development did not seem to be reflected in the price of this stock. Lucky guess, as it resulted in a quick 6.9% day trade gain.
Click on any chart to ENLARGE
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I have been waiting to see when gold and silver would show me their hand. I have been thinking they were coming in for a landing and then perhaps a brief correction. And that is still a possibility I suppose. But the powerful move we are seeing today with the entire precious metals complex has me thinking it is well past time to remove this Proshares UltraSilver ETF (ZSL) hedge from my portfolio, take the loss, and see if my mining positions will now resume their advance.
Finally, this is a chart of the E Mini S+P 500 continuous contract just a few minutes ago. I guess the question for the moment is whether this little pennant/triangle on the 15 minute chart is going to break downward as a continuation pattern, or if it finally resolves to the upside. The underlying True Strength Index (TSI) indicator has formed a promising positive divergence. But call me skeptical as I believe strongly that this market, sooner or later, is going to have one heck of a big correction.
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My TSI Trading record has been updated.
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Your previous posts indicated you thought the market was in for a correction. Being in agreement I had placed a short term bet on a downturn. What number would the S&P have to hit to the upside for you to consider it a breakout to the upside of the pennant? I'll need to exit my position and put it back into silver miners at that point. Thanks.
ReplyDeleteWell you have succeeded in asking a very tough question and a very good question. I am not looking at a pennant formation and pondering your question, but looking at the momentum (TSI) and I've got to tell you, I am a bit stumped, unfortunately.
ReplyDeleteFor myself and for this moment, I continue to believe that the stock market is living on borrowed time - though it is painful to hold that view while I continue to see the thing creep higher. It could be that this low volume public dominated week is going to pop with a big bang in the next week or two. But in the meantime there are so many trades better than to be short this rising tide.
Really tough call, sorry to say. I'll look into doing a post later this morning and see if I can make a chart that sums up the way I see the situation. I hope that will give you some direction for making the best decision for your situation.