I would like to offer this update to the results of the Tomorrow's Trades (Today!) service I started 5 weeks ago and highlight a pair of new trades for tomorrow morning.
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I have recommended a total of 18 stock purchases in the past 5 weeks, each with a specific buy and sell price. To date 9 of the trades have successfully closed, and 9 trades are still waiting for the suggested sell price to be hit.
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In this timeframe, the HUI mining index has appreciated 2.5% for an annualized gain of 26%.
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If the 9 currently open trades had been closed at todays closing prices, with those results added to the 9 already successfully closed trades, the capital gain would be 5.3% for an annualized gain of 55%. I made this calculation assuming that 10% of one's capital was devoted to each trade, and there were never more than 10 trades open at any one time.
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For the first five weeks of this service the results suggest that my trades have slightly more than doubled the performance of the HUI mining index. So, I'm off to an OK start.
I have a couple of trade ideas for tomorrow. The first one is Cardero Resources Corp (CDY).
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Click on any chart to ENLARGE
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One of the "truths" of the True Strength Index (TSI) indicator is that when it is rising above the ZERO line, price is always rising. On this daily chart of CDY I have drawn a rectangle on the time frames that this "truth" was demonstrated. With today's price action the TSI began to rise above the ZERO line and I think the odds are very high Cardero's price is now going to follow though.
The other stock featured for tomorrow's trade is Endeavour Silver Corp (EXK). Again I have identified the time frames when the TSI indicator was rising above ZERO with rectangles. EXK appears primed to continue higher in the very near term.
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To read the details of tomorrow's trades click Tomorrow's Trades (Today!).
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To review the spreadsheet of past trade ideas and outcomes click see previous trades.
This is today's daily chart of the HUI miners index. The TSI indicator has begun to rise above ZERO and this bodes well for the beginning of a new rally in the mining stocks.
Finally, a brief look at the daily chart of the US Dollar (/DX). I am using this opportunity to demonstate the other "truth" about the TSI indicator. And that truth is that when the indicator is falling below ZERO, price is always falling. I have drawn a rectangle around those occassions on the chart.
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The US Dollar TSI has an overhead trend line that it needs to break if it is going to get into rally mode. So far, quite the opposite is happening. The TSI is gently rolling over under the overhead trend line and if/when it crosses down through the ZERO line, its bye bye US Dollar.
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John,
ReplyDeleteGreat work. I find the TSI really compelling.
I am starting to reference it on stocks that I am trading as an extra confirmation.
B.T.W.
Is there a way to scan for set ups using the TSI?
Thanks
$$$ - I have spent years and thousands of hours tinkering with every indicator known to man. When I discovered the TSI 4 years ago I knew (believed) I had found something very very special and there is no other indicator that I would think to use to replace it.
ReplyDeleteI don't know of a way to scan for set ups using the TSI. My way of doing this is to use FreeStockCharts and draw trend lines on the indicator for each individual stock that interests me. The trend lines stay in place, forever, until one erases them, anyway. Then I flip through my charts each day and see how they look. Kinda like fishing, I have the baited hook in the water and each day I check to see if I caught a fish. Perhaps not high tech, but that is how I scan for set ups using the TSI. And it works well for me.
John,
ReplyDeleteI was fishing around today and wanted your comments on this chart.
http://i54.tinypic.com/2mflxqx.png
If I am beginning to understand the TSI, this looks to me as a trendline break combined with a zero line crossover.
$$$ - you are indeed correct. That was a textbook TSI (7,4) trend line break that occurred right at the ZERO crossover. You are going to be making money consistantly now if you keep this up! And POT closed above the 50 dma today, which was a very good sign.
ReplyDeleteThe textbook setup occurred when price was about $56. Now it is $59 - so the easy 5% of the trade is history. Also the TSI now reads 49 and a couple days ago, recall, it read ZERO. So a good chunk of momentum has already been spent.
Is POT still a buy? I guess it could be. But I know from lots and lots of research that your odds improve considerably if you buy near the ZERO and not when it is already 49.
There are a kazillion stocks out there and now that you know exactly what you are looking for, you will do very very well. Congrats!
John,
ReplyDeleteYou made a very important point that in my enthusiasm for finding a set up I overlooked.
You pointed out that the set up occurred when the TSI was approaching zero where now it reads 49. And of course that means 5% is left on the table.
AndI also surmise that this 5% is the easiest part of the trade.
Thank you for your insight.
I do plan to further my studies.
GPL looks to be setting up nicely
ReplyDeleteThe TSI is sloping higher and is about to make a second crossover the zero line
I'm trying to use the UUP on streamingcharts.com to view the TSI action. Looks like it broke above your trendline but has turned back down. So do we just adjust our trendline higher to this recent high now? And hows this action look to you?
ReplyDeleteOh, and also how do we determine the parameters of the short and long period for the TSI indicator?
Thanks John!
Spidey - yeah, that really blows my mind to see how decisively the dollar broke up through that downtrend line and now the dollar is lower than it was yesterday. Incredible. I am just going to keep the trendline on the chart as it. The TSI (7,4) daily now shows 5 consecutive red candles beneath - like watching a rod of iron bent....
ReplyDeleteNot sure what your question about long and short parameters is about. I use 7,4 and also like 25,13.
Hi, any thoughts on miner $BAA (banro)? Its dropped a lot and has even broke the 200dma.
ReplyDeleteThanks. Love the blog.
Look at a 60 minute (or less) chart for GDX, SLV, GLD (sloppier). Over the last 7 trading days, they've formed a very nice Cup & Handle pattern, and the upside breakout is soon to occur.
ReplyDeleteParty on, John!!
jhn - nice find!
ReplyDeleteAnon - i am guessing BAA's recent decision to raise a bunch of money by selling more shares of its stock has something to do with the recent poor performance of the stock. thanks for being a reader of mine!