Thursday, May 26, 2011

Pre-Market BUYS -- DGP, SIL and GLDX

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In the pre-market this morning I was able to have all recent Tomorrow's Trades (Today!) BUY orders filled. I mistakenly set the SIL GTC buy to trigger at $24.70 rather than $24.60, so that is the price I payed.  DGP cost me $48.00 and GLDX was also the suggested entry price of $16.60.
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I will update my TSI Trading record for these purchases ASAP this morning.
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The US Dollar has taken another tumble overnight (down .45%) but appears, for now, to have stabilized and is consolidating its nocturnal haircut.
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28 comments:

  1. AGMay 26, 2011 at 9:27 AM

    IMF and UE statements just slammed the EURUSD and commodities. Its hard to trade when politicians are always flapping their mouths...

    ReplyDelete
  2. AnonymousMay 26, 2011 at 11:46 AM

    SMT guys are getting out of PM related & you are getting in?

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  3. ckpcMay 26, 2011 at 2:50 PM

    Not all SMT guys are getting out of PM's. I added to my positions on the pullback this morning. I don't understand why Gary bothered to lay out the story for PM's, the charts, bull/bear flags, BB crash indicators, etc. and then do an about face because of one night's action. Gary seems to be whipsawing all over the place this last month which makes it hard to trust his analysis.
    Silver is holding $37, gold is holding 1520 and they deserve a rest after the progress they've made over the last week. Since when is this not the normal pattern of things? Plus we are right in the middle of June contract settlements, so yeh, it's volatile. But, the bullish case for PM's doesn't look broken to me, "yet".
    What do you say, John?

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  4. John TownsendMay 26, 2011 at 4:07 PM

    AG - I hear what you are saying. I guess I try to have a time frame in my mind about how long the trade will take - and if it is something like a week or two, I tend to just ignore the noise of this or that "news" item. But if it is a trade I really don't want to own more than another day, then yes, these unexpected "news" flashes can really add stress to the experience.

    ckpc - well, Gary is almost always a few steps ahead of me so I tend to value his opinion more than my own. Having said that, I do not see any reason to sell at the moment - TSI wise - and so I will stick to my game plan until the TSI and other technical considerations tell me to run. And then, if I am smart, I will run.

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  5. DanMay 26, 2011 at 9:52 PM

    I am fully invested as of this morning, having converted some of my SLV to gdxj and then some. Although I also follow Gary, I believe he got spooked by the drop in silver overnight. That can really be the only explanation for his 180 degree reversal from his bullish stance the night before. Only time will tell I guess.

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  6. John TownsendMay 26, 2011 at 11:33 PM

    Dan -- I try to be always mindful of a saying I heard for the first time just this year. It is, "in the stock market there are NO certainties.....only probabilities".

    And my thought is that each of us has to weigh the evidence using our ability to perceive "reality", and determine how we will resolve this issue of probabilities with no certainties.

    For myself, I use the study of momentum (the TSI) as my tool for perceiving "reality". But certainly there are zillions of other strategies that work also. And some of these would include cycles, sentiment, other technical indicators, fundamentals, blah blah.

    In the end, however, I suspect that he who skillfully manages risk the best is he who does the best over time. And that perhaps the tools we use to perceive "reality" may not be quite as important as they appear.

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  7. SunmakerMay 27, 2011 at 8:47 AM

    We will have a run in GOLD until about the third week of July. Maybe take some profit first at $ 1555.

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  8. FungMay 27, 2011 at 9:19 AM

    Hi John,

    Are you watching the DXY to decide when to sell your gold stocks? If so, what level are you looking for?

    Thanks,
    Fung

    ReplyDelete
  9. John TownsendMay 27, 2011 at 4:51 PM

    Hi Fung -- yes, I am watching the DXY and trade it about a couple times a day. no, I will not use the DXY to decide when to sell my gold stocks. For starters, I do not know how to do that, so I will not try.

    I am, however, mindful of the DXY's technical condition via its TSI movement on various timeframes - so perhaps indirectly I am using the DXY.

    My main focus, however, is to use what I understand the TSI to be telling me about each individual mining position in play, and go from there.

    The Tomorrow's Trades (Today!) I intend to hold until they close, each and every one, successfully.

    However, when it becomes obvious to me that gold and the miners are throwing in the towel for good (D-wave), I will do the same and call for a halt to any of those trades still open. ie take losses/profits and move on.

    When the D-wave gets going the miners will go down and there is no use in holding through that. Indeed, I expect to then take a stab at shorting precious metals via DZZ, ZSL and DUST. I will be using the TSI to help me make those decisions, and not the DXY.

    I hope to soon do a new post/article about D-waves so we can all examine some of the facts and proceed as informed investors (or polite debaters of the *facts*). Thanks for your excellent question Fung.

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  10. SpideyMay 27, 2011 at 6:34 PM

    I've sold my precious metal positions based on Gary's moves and the 4 hour GLD TSI trendline break. Ahh did it too early, o well.

    His other trade looks good though. Looks like an ideal TSI setup today. Trend line break & zero crossover. Hows it look John?

    http://tinypic.com/r/6r840o/7

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  11. John TownsendMay 27, 2011 at 7:30 PM

    Hi Spidey - IBB daily TSI setup looks good, I agree. I guess whether one should invest in this depends on your time horizon for holding the trade, and the alternative opportunities available.

    IBB has appreciated about 10% in the past 6 months. If locking up your funds for another 6 months and earning a 10% return is fine, it is an excellent prospect. Also, since last June a year ago, IBB total appreciation exceeded 20% by a smidge. A 20% annual appreciation is excellent.

    In the 12 months preceding the most recent 12 months, IBB basically flatlined with an $80 price tag = 0% gain (ZERO appreciation).

    Maybe there is excellent reason to believe IBB will start to outperform its past year's pace. Hopefully it does better than the year previous when it returned essentially 0%.

    Beats me.

    Now if your interest is a relatively short term trade, you may be able to queeze a 6-12%% gain out of this in a month. Maybe. And maybe not.

    I am not familiar with the research and fundamentals of IBB, so I honestly plead ignorance and offer respect to others who are familiar with the issue. But just looking at it on my own technical basis, it looks OK as long as one's relatively short term expectations are extremely modest and conservative.

    Hey, you asked. I could be entirely wrong, but I will not be buying IBB. I hope it trades to $150 by Christmas, but it will not matter to me one way or the other if it does, except to cheer for its owners.

    ReplyDelete
  12. SpideyMay 27, 2011 at 9:32 PM

    Thnx for the really insightful input, much appreciated!

    I am rooting for you too! I've actually tried to find ads on your site to support your site but I don't see any which isn't a bad thing =P

    Btw, really looking forward to your d-wave trades!

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  13. AnonymousMay 28, 2011 at 10:45 AM

    John: I'ver heard of people "buying", or, I suppose, selling pre-market. How does one do that please? It would be a very useful capability to have.

    THANKS! and all the best to you.

    ReplyDelete
  14. John TownsendMay 28, 2011 at 11:25 AM

    Hi jhn -- I use Interactive Brokers and they allow me to specify whether or not I wish my offer to be considered in the pre or post market. By default, I believe they make the trade request available only when the regularly scheduled is open.

    I also use Scottrade for a retirement account. They too will do your trade in the pre or post market, but I believe you have to make that trade request *at the time* the pre or post market are open....otherwise Scottrade just handles the trade during normal market hours.

    I guess the clue, no matter which broker you use, is to find when/how they will execute the trade for you in the after hours. This requires, obviously, and extra step but if so motivated, it is worth it.

    eg. I have seen how a particular stock of mine closed at the end of one day and realized it was probably going to be toast the next day. But with the ability to trade pre market, not everyone thinks as I do, so I am able to sell the position - sometimes at an incredible price - before the true supply/demand of the bigger market takes price to where it should be. And I have done this more than once.

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  15. AnonymousMay 28, 2011 at 5:44 PM

    Thanks, John. That is a very valuable option to have. I'm thinking about opening a couple of accounts with Interactive Brokers very soon.

    Enjoy the long weekend! And your Big Summer Vacation is only days away, I believe!!!!!

    I assume you'll be using this summer to write your TSI Masterwork??? ;^)

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  16. AnonymousMay 28, 2011 at 9:42 PM

    Where do you get the Demand index chart? Is there any web site to provide it free?

    ReplyDelete
  17. AnonymousMay 29, 2011 at 4:43 AM

    Hi John

    I've been visiting your blog for two years or more and would like to congratulate you on how successful you've been with your trades. The TSI and your other tools seem to work very well most of the time. I was wondering how long you plan to remain a school teacher rather than a full-time trader!!

    Thanks very muuch for all the helpful information you post. I appreciate it!

    Ian

    ReplyDelete
  18. John TownsendMay 29, 2011 at 5:03 AM

    jhn -- yes, I plan to do a lot more writing and research this summer which I will post to this blog, and very much looking forward to it!

    Anon -- the only free website with the Demand Index, that I am aware of, is www.ThinkorSwim.com

    Hi Ian -- thanks for the encouragement and kind words. I plan to teach school at least one more year and then we'll see about retirement.....

    I am looking forward to seeing how much better I trade this summer without the obligation of going to work every day.

    ReplyDelete
  19. gilbert500May 29, 2011 at 9:51 AM

    Hi John,

    Im going to start fallowing TSI starting tuesday,
    it looks i missed all the fun. Any suggestion would you recommend me and also any prediction what is going to do TSI in the near future.

    Thank You, Gilbert from NJ.

    P.S. love to chat with more in the future.

    ReplyDelete
  20. DouglasMay 29, 2011 at 10:52 AM

    Hi John

    Fascinating site. I recently lost 2/3 of my gold & silver paper profits so I've been looking around for a better way to see how the markets might behave. I didn't BTW do badly. I just could have done much better. Your TSI methodology looks very good.

    I am not a new investor but lack expertise in charts. Can you point me to a place/book/whatever where I can educate myself re the details of setting up charts. For example, you use TSI 4 7 & TSI 13 25. What do these mean and why select these particular values? Ditto re Bollinger band 20 2.

    Thanks for your input to your blog.

    Doug

    ReplyDelete
  21. John TownsendMay 29, 2011 at 12:50 PM

    Hi Gilbert -- every day is new with new opportunities for those who look for them. I don't think you have missed anything. For myself, I sincerey avoid kicking myself when I see good trades that I was not involved with. There are literally thousands of stocks that trade every day and it would be entirely insane for me to concern myself with all those *missed opportunities*.

    For starters one has to know what they are looking for in advance, so when they see it they know what to do. That's why it is a great idea to trade on paper (not use real money) and sharpen your skills and strategies before entering hand-to-hand combat.

    Doug -- I started out using the free software at www.stockcharts.com I would put a chart of a stock on the screen then add indicators to it to see what they did. Then I would change the numbers used by the indicators and see what that did.

    Then I would read the online description of each indicator (Chart School)and try to understand the purported purpose of each indicator. Then I bought a book my John Murphy (Technical Analysis of the Financial Markets) and read it cover to cover 5 times. And on and on. Then on and on, some more.

    And after all this study, I still study/tinker with indicators at least a couple hours each day. For me it is an activity like paper trading. No real risk but a great way to test out new ideas.

    Doug, you will discover that there is not one indicator that is always correct. Nor is there some magic combination of indicators that works in all situations all the time.

    But I hope you do discover that while it is impossible to trade stocks with outcome *certainty*, you can trade stocks with a very favorable *probability* of success. And that is what I am always trying experience - putting as many factors of the odds in my favor as I am capable.

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  22. DougMay 30, 2011 at 4:20 AM

    Thanks for the sound advice John. I'll be re-reading my John Murphy book. It's been a few years since I read it. And I'm off to StockCharts.com to work on my education there.

    ReplyDelete
  23. gilbert500May 30, 2011 at 10:25 AM

    Hi John,

    Do you think i should go in on NUGT,DGP,SIL,GLDX
    on Tuesday. I mist your 05/26 call.

    ReplyDelete
  24. John TownsendMay 30, 2011 at 3:02 PM

    Hi Gilbert -- honestly, I would not buy any of these on Tuesday. I think they have gone up days and days and days and will get taken down in a couple/few days.

    I certainly am not going to do any new buying this week, for what it's worth.

    ReplyDelete
  25. 23t870May 31, 2011 at 4:35 AM

    John,

    With stocks emerging from a daily cycle low, I would think that this is a good week for some new trades.

    ReplyDelete
  26. SunmakerJune 1, 2011 at 4:24 PM

    May 26, 2011 11:33 PM

    Well, I thought GOLD would go to $ 1555, seems it stopped $ 5 earlier. I think coming Friday will be a great buying day!

    ReplyDelete
  27. John TownsendJune 1, 2011 at 9:27 PM

    Sunmaker - I do not have a crystal ball, but if gold starts to slip further I sincerely hope you will consider selling. This little rally we had is looking very much like wishful thinking and a fakeout. Buy signals at today's close on shorting the miners and silver - which I may begin doing myself tomorrow. Please, be cautious and wary of a big change on the way.

    ReplyDelete
  28. SunmakerJune 2, 2011 at 10:46 AM

    Hello Lord John, thank you very much for your respond.

    I also have no crystal ball, but I studied history and I have a plan, I will go 100 % long at around $ 1505-1510 on Friday.

    I expect GOLD to trade above $ 1700 after mid July, with the $$$ making a major low.

    ReplyDelete

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