Well, I could not resist. I finally broke down and bought a new mining position. For several days I had been short the US Dollar with futures contracts, but covered them early this morning. Flush with more cash I guess I just got back into the buying mood.
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Click on the chart to ENLARGE
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This is a daily chart of Great Panther Silver (GPL) which I bought for $3.26 today. If you are wondering which True Strength Index (TSI) indicator buy signal I used to make this purchase, well, I don't have a name for it. At least not just yet, but I am open to suggestions.
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The signal I used today is just the opposite of the one I do have a name for - the nose bleed. The nose bleed sell signal is when the TSI (7,4) reaches such a high stratospheric level that the only thing one can do is sell because that kind of momentum is impossibly unsustainable. The TSI (7,4) is at such a high altitude that compared to all readings in the past year, it beats them all. And, the high altitude, of course, causes a nose bleed. If you don't sell right away the profits you could have pocketed will be bled from your account. Absolutely true.
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Before buying I did a quick check of the latest projected earnings data for GPL available at Kitco.com, and that checked out (see chart for that data). And I checked for the latest news to account for the huge sell-off, but found nothing in particular. Then I looked at the daily volume and that sold me on the stock. The volume for yesterday and today was in excess of 7M shares - each day. For a stock with a float just over 100M, that is a lot of selling. My conclusion, believing that smart money sells into strength, was that this amounted to dumb money panic selling. Hey, I don't mind buying under those conditions at all.
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Just for yucks I noted the price of silver bullion on the chart at three price points. Need I say any more?
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My TSI Trading record has been updated.
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/quotes_special.gif)
Glad to see this. I bought some more at 3.57 thinking it wouldn't fall this far! I think it will be back up to about 4 pretty soon though. It seems to like that spot for the last month or so.
ReplyDeleteSo you couldn't help taking some of your recent profits and going back into the market for another round. John, you are so honest and so real. But, this does look good on the GPL. I just want to say that GPL might have just suffered from a technical breakdown from a descending triagle. Take a look at EXK and FVI.TO. It looks like they broke down from symetrical triagles. And there are more mining stocks that look similar. I hope these stocks are not predicting lower metals prices, but just the shorts pushing them down before the big run up.
ReplyDeleteThank you for the compliment Monty. fwiw, in today's after market my position appreciated $575 - so that's nice change for an hour's work. But I didn't sell.
ReplyDeleteAnyway, this evening's session opened 2 hours ago and the US Dollar opened gap down 30 cents - which I found astounding. Yes, I bought that and rode it up a ways before jumping off the fire truck with a few more coins.
But my point really is this US Dollar is absolutely sick. I honestly do not see what Ben can do that is going to stop the selling. Heck, I'm not sure he really cares, for that matter. God help us, please.
So John if the dollar really does founder (as you have been predicting a waterfall for sometime), then how is that likely to affect the blow off top we are about to see with the metals? Will they still have a retrace of their progress even if the dollar is in the ICU and not coming off the ventilator anytime soon?
ReplyDeleteThanks
Beto
Good morning Sir John.
ReplyDeleteOne of the BEST blog I know.
John -- I recently discovered your posts. Your silver analysis was/is insightful and intriguing. I can't wait to see what happens with GPL. I would NEVER have considered buying when you did... Best of luck. I'm going to be watching and hopefully be amazed. == Doug
ReplyDeletegold miner:thank U John.I bought today 20000 sh of GPL at aver price 3.30.up nicely today.hopefully GDX begin it,s nice at least 5% bounce.
ReplyDeleteHow do the tsi's look on gold n the miners? I'm itching to add lol
ReplyDeleteGPL up 15% today. Decent call there John. Congrats!
ReplyDeleteAnon -- the TSI (7,4) has not quite broken the trend line and given a buy signal. MFI (10) has, however. These kind of emotional markets can be tricky to predict, but things do look very good with the US Dollar utterly disgusted with Ben's appearance today.
ReplyDeleteI bought GPL a few weeks ago at $3.97 and was happy to see it under $4.00. It rocketed up today big time after "The Ben Bernank's" press conference. Thanks Helicopter Ben. My mining shares and physical just blasted off!
ReplyDeleteAre you watching gold or miners for the buy signal? BTW awesome trade on GPL.
ReplyDeleteThnx John
Good job I popped in to see you earlier today John. Read the rationale leading up to you taking the plunge with GPL and it inspired me to have a dip myself. Actually bought GPR.TO at CAD$ 3.17 - equivalent to $US3.28 I think - trading mostly in the loonie these days. Will definitely pop in again later to see if you've got another tasty dish lined up! - it actually set me off on a mini-buying spree once I saw the action taking place. Many thanks, not just for that tip but for being such a good egg! (Old Anglo-Saxon)
ReplyDeleteCheers, Geoff.