Just for a change, I'm writing this post about using the True Strength Index (TSI) indicator and the Negative Divergence SELL signal it generates. I'll show you 20 stock charts that say SELL loud and clear on their daily charts using the TSI Negative Divergence SELL signal. And I'm going to pretend that I sold short each of these stock symbols at the close on Friday, document the closing price of each throughout this week in the chart below, and recap the results next weekend.
My particular definition of a negative divergence is as follows: the TSI indicator has previously made a high which it has not surpassed as of last Friday. And, price on Friday was higher than the day of the previous TSI high. In simpler terms, Friday's price made a higher high while the TSI made a lower high.
The other part of my negative divergence definition is that the TSI can not have yielded a trend line break BUY signal between these two dates used for the negative divergence comparison. Another way of saying this is that the trend line break BUY signal trumps the negative divergence SELL signal.
For my 20 specimens I have selected a handful of ETFs, another handful of mining stocks and a third handful of randomly selected members of the S&P 500 index. They are presented here in alphabetical order.
Stocks go up and stocks go down. Using simple odds, about 10 of any 20 stocks would be higher a week later and the other 10 stocks lower. Considering that the market has been moving sharply and consistently higher, common sense suggests that maybe 15 stocks will be higher in a week and only 5 lower.
My expectation, however, is that the majority of these ticker symbols will indeed be lower this week. And I think there is a fairly good chance that nearly ALL of them will be lower.
It's going to be fun to see how this turns out.
OK - here is the table I will update each day. If the closing price on any day is higher than last Friday's close I will color it green. Alternatively, any day that a stock closes lower than last Friday's closing price I will color that closing price in red. My expectation is that most of the chart will be colored red.
The charts of each ticker symbol follows below so you can examine the TSI negative divergence that caught my attention.
20
Shorts/SELLS for the Week of February 6 - 10
|
||||||||
Ticker
Symbol
|
Friday’s
Close
|
Monday
|
Tuesday
|
Wednesday
|
Thursday
|
Friday
|
Change this Week | |
1.
|
ALL
|
$30.69
|
$30.63
|
$30.84
|
$31.00 | $30.91 | $30.97 | 0.91% |
2.
|
AMD
|
$7.08
|
$6.92
|
$7.13
|
$7.25
|
$7.24
|
$7.05 | 0.42% |
3.
|
AZO
|
$353.18
|
$350.76
|
$350.48
|
$349.15
|
$354.04
|
$354.10 | 0.26% |
4.
|
BAX
|
$57.04
|
$57.11
|
$57.02
|
$57.07
|
$56.80
|
$56.84 | 0.35% |
5.
|
BEN
|
$116.41
|
$116.22
|
$116.74
|
$116.70
|
$116.85
|
$116.10 | 0.27% |
6.
|
BIG
|
$43.59
|
$43.48
|
$43.91
|
$43.98
|
$43.84
|
$44.00 | 0.94% |
7.
|
BXP
|
$107.57
|
$107.25
|
$106.30
|
$106.00
|
$104.74
|
$103.78 | 3.52% |
8.
|
COPX
|
$15.78
|
$15.59
|
$15.28
|
$15.30
|
$15.47
|
$14.98 | 5.01% |
9.
|
DBC
|
$28.32
|
$28.46
|
$28.44
|
$28.57
|
$28.72
|
$28.45 | 0.46% |
10.
|
DRN
|
$66.64
|
$65.89
|
$65.58
|
$65.92
|
$64.36
|
$62.48 | 6.24% |
11.
|
ICF
|
$76.36
|
$76.02
|
$76.00
|
$76.05
|
$75.40
|
$74.69 | 2.19% |
12.
|
INDL
|
$31.53
|
$30.59
|
$29.46
|
$29.66
|
$30.32
|
$28.61 | 9.26% |
13.
|
MFN
|
$14.91
|
$14.83
|
$14.82
|
$14.71
|
$14.83
|
$14.91 | 0.00% |
14.
|
NCMGY
|
$36.83
|
$36.29
|
$36.42
|
$35.80
|
$36.11
|
$35.80 | 2.80% |
15.
|
PLTM
|
$21.33
|
$21.05
|
$20.90
|
$20.75
|
$20.67
|
$19.82 | 7.08% |
16.
|
SEA
|
$17.51
|
$17.60
|
$17.64
|
$17.66
|
$17.53
|
$17.29 | 1.26% |
17.
|
SWC
|
$14.37
|
$14.07
|
$13.82
|
$13.95
|
$13.95
|
$13.36 | 7.03% |
18.
|
URE
|
$60.68
|
$60.11
|
$59.98
|
$59.95
|
$59.15
|
$58.21 | 3.41% |
19.
|
XIV
|
$9.50
|
$9.61
|
$9.50
|
$9.28
|
$8.82
|
$8.08 | 14.95% |
20.
|
YINN
|
$24.97
|
$25.20
|
$23.56
|
$24.80
|
$25.40
|
$23.81
|
8.65%
|
15/20 = 75%
NYSE 57%
|
13/20 = 65%
NYSE 42%
|
13/20 = 65%
NYSE 41%
|
15/20 = 75%
NYSE 50%
|
15/20 = 75%
NYSE 73%
|
||||
1. ALL
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I've made a watch list with all these and am excited following along with you. I always enjoy and learn a great deal from your posts!!!
ReplyDelete-Aaron
Thanks John! ...and as our Gold/Silver?
ReplyDeleteTake this opportunity over the next couple of days to add to your physical Gold/Silver stores. I have - and I will continue to urge physical accumulation every time I see a daily cycle low forming.
Earn together with John!
Vincent
Thanks John. Looking is interesting. Bruce
ReplyDeleteThe $NYA50R (NYSE percent of stocks above 50 Day Moving Average Index) is in a very Overbought area is rip for a good correction. This can be added support for sell short..... StockCharts.com is my look see reference.
ReplyDeleteJohn,
ReplyDeleteCan youn add ADSK and track it? I shorted at 36, got squeeze a little bit. Seems match your standard.
Henry
You made a mistake posting on your record:
ReplyDelete197. CGR – Claude Resources – AMEX
Buy 1/30 at 1.41 – Sold 1/11 at 35.99
I would love to see CGR at 35.99 but that's sort of wishful thinking? LOL
Not sure why you sold CGR. You had the correct intentions when you bought it and talked about it initially. Now we're just scratching our heads wondering why you would dump for a couple of cents. Good luck, I'm holding all mine.
Hi John
ReplyDeleteI like reading your posts.
I was looking at the company VALV and thought it had some pretty interesting TSI readings. TSI lately has higher highs and higher lows.
The company is from China and has taken a dive from institutions selling it into an illiquid market; and fear of China accounting practices.
It seems fairly low to what it might be. I believe the company has more cash per share on hand then what the shares cost.
Anyhow I wondered what you thought.
Guy
GUY - looks great. I just bought a bunch at $1.15 and $1.18.
ReplyDeletethanks!