Thursday, June 2, 2011

Pre-Market SALES -- DGP, NUGT and SIL

I was able to sell 3 of my 4 mining positions in the pre-market this morning. The 4th position will be sold at the market open.
I sold DB Gold Double Long ETN (DGP) for $49.25 and a 2.6% gain. Also sold Direxion Gold Miners 2X Bull (NUGT) for $32.88 and a 2.8% gain. And Global X Silver Miners ETF (SIL) for $25.00 and a 1.2% gain. That just leaves Global X Gold Explorers ETF (GLDX) to be sold at the open.
Overnight the US Dollar made another precipitous 50 basis point fall but gold essentially went no where and is now around $1541. My expectation is that the dollar will rally within a few to several hours and that likely will pressure the precious metals lower.
My TSI Trading record has been updated.


  1. I did something similar, with less luck. I got out with a small loss last night.

    Is this the start of the D-wave?

  2. Hi Fung -- assuming gold does not somehow take out the previous high of $1577, the D-wave began a month ago.

  3. Fung -- now that I give it a quick thought, I cannot say that the D-wave has begun. But I do think it accurate to suggest the intermediate weekly cycle has topped and more corrective action is in front of us. I do expect the precious metals to be strong this upcoming Fall.

  4. So, I guess I just have to take a "holiday" now and come back in October. :-)

  5. Fung -

    Don't take a holiday! John has some bearish strategies he is going to share in the days ahead! There is money to be made in "short" (i.e. inverse) ETF's, etc. The TSI will work equally well for these trades . . . you can make money in the markets whether they are going up . . . or going down.

    John - you lost me on your last two posts. Unless Gold moves beyond the previous high (after a correction), isn't the D-wave technically over? Or are you suggesting in the last post that this could still happen? Given all the bearish "emotion" in the markets right now (commodities bleeding, QE2 ending, etc), I'm having a hard time seeing how that could happen. What do you think the timing of the next "A" wave looks like?

    BTW - I managed to buy 6 metals/miners, including GLDX, the day you bought GLDX, that all had about the same setup (trend line break, positive divergence and zero crossing, etc.) I held them until Tuesday and sold when things started dropping Tues morning. Thanks to you, I made an average of about 3.5% in a week, and PAL brought me over 13%. That's darn satisfying in a week, and I'd have to say better than I have ever done before with any other method.

    You and this blog are the cat's meow! Really enjoy your stuff!

    Thanks much,


  6. Phil -- thank you for sharing your success with me (us). The entire purpose of my blog is to freely help people to acquire the skills to use the TSI indicator for successful deployment in real time in the real market to make money (and avoid losing their money, too). I am delighted with your recent trades and celebrate that you did even better than I. Your success, any success by my readers who use the TSI, is my success.

    D-wave thoughts: my hunch is that the $1577 high a month ago in gold was the top of the C-wave and the beginning of the D-wave. However, gold has not even touched the 50 dma since last February, let alone reached the 200 dma. My studies suggest that no D-wave has ever escaped reaching these levels. In my mind it is entirely possible that the C-wave has not concluded, nor has the D-wave begun. Rather, we are now going to get an intermediate weekly cycle correction - as occurs every 20-24 weeks - and continue north later this summer and into fall.

    What I can say with some certainty is that it is about time for a correction. If the correction is deep, then yes, we probably have been in the D-wave. But whatever the jargon, the TSI will show us when it is time to buy and when it is time to sell. And really, that is all that matters to me.

    Congrats again!

  7. TSI requires two parameter inputs. Wanted to ask you the best way to select such parameters.

  8. Anon -- the best way to select the two parameters is to decide whether you want to get the buy/sell signals with little lag time and accept that you will get knocked around by the volatility (which is what I generally do) or whether you are more interested in getting the bigger swings defined, with the caveate that the buy and sell signals will be a bit late.

    For driving the Porsche, use TSI (7,4). For the Mercedes, use (25,13). And if neither car is to your liking, you can customize your own car. Generally speaking, the larger the numbers used, the slower the response but also the more 'trending' the information.

    I hope this information helps.

  9. John,
    I've been using 2 screens, one with the TSI set to (7,4), the other with it set to (25,13). When using the (25,13) screen can I still use some of your buy sell techniques. Because one of the indicators may show a TSI of .4 while the others shows -.04. When TSI is above zero price is rising. Can you still use trend line break, or zero crossover's using (25,13) scale?
    Normally I just look at the moving average (set at 5) when looking at the (25,13) scale. Should I edit the plot guides on the (25,13) to match the (7,4) zero crossover?

  10. John,

    In your answer to Phil, you said "However, gold has not even touched the 50 dma since last February, let alone reached the 200 dma. My studies suggest that no D-wave has ever escaped reaching these levels". I have some difficulty to understand this. 50dma and 200dma are much below the price history. How can price reach them? Unless market is already going much down. So it looks to me that touching or reaching 50dma/200dma is a confirmation of D wave. But not touching yet does not mean that we are not in D-wave.
    Could you further explain that?

  11. Anon - I think I understand your thoughts and I agree with you. Nothing more to say.

  12. Hi Harry -- I don't know about editing the plot guides so they match. Something tells me that is NOT a good idea.

    Yes, you can use all the BUY/SELL techniques on TSI (25,13) as one would on TSI (7,4).

    In fact, the same techniques will generally work on any momentum indicator at any setting - TSI, Stochastics, CCI, ROC, Demand Index and so on.

    What I would like to figure out is how it is that momentum indicators give precise signals with trend line breaks. There as got to be a mathematical explanation, but I do not know what it is.

  13. Hi John,

    Any future buys this week, that we try to make some profit?

  14. Hi John,
    What is the best set-up for using TSI? Looking at weekly, daily, hourly charts? ..looking at Silver the TSI indicator gives me 1th and 6th technique = Sell, but the 3rd technique = buy..
    TSI (4,7), Avg 9, daily chart. Is there any ranking of best technique to use when they are contradicting each other?

  15. Anon - good questions, thanks for asking.

    The real certainty with the TSI is this: when the indicator is rising ABOVE ZERO, price is rising. when the indicator is falling BELOW ZERO, price is falling.

    In a perfect world, the ideal buy setup would be to buy when the weekly, daily, 4 hour, 2 hour, 1 hour and 30 min are all rising above ZERO.

    Of course, we rarely have this kind of setup, so then we have to go to some workarounds.

    The surest of the 6 techniques is this rising above or falling below ZERO concept. From my experience, the next most powerful technique is the trend line break followed by the positive/negative divergence.

    So for example, maybe the daily and 4 hour are below zero and rising, but have made a bullish trend line break or positive divergence. Rather than waiting for both to finally cross up through ZERO, one could take take this setup as favorable already. Then look to the 2 hour, 1 hour and 30 min to wait for them to all be rising.

    Of course there are a zillion variations of what I have just written. As always, there are no certainties in the stock market, only probabilities. So the challenge is to put as many probabilities in your favor before entering a trade, and then be able to recognize when the probabilities have turned out of favor.

    Applying all this to silver at today's close, the daily and 4 hour TSI (7,4) are BELOW ZERO but pointed up. Still Bearish. The 2 hour and 1 hour are ABOVE ZERO, but pointed down and close to a bearish ZERO crossover. Also Bearish. The 30 minute is pointed up but way below ZERO. Bearish.

    With these observations I cannot make a favorable case for buying silver at the moment. And guess what? I didn't buy silver today!

  16. @ Sir John,

    Very good you did not buy anything, wait probably until Thursday/Friday this week.


  17. I better wait for Monday!