Monday, February 6, 2012

Sold CGR - $1.47 - Short List Update

This morning I became more skeptical of the rise in the S&P 500 while watching gold take a $60 nosedive, so I decided to sell my largest position - which also had a modest gain - and head towards the sidelines. This is a daily chart of Claude Resources Inc (CGR) which I sold for $1.47. I will continue to hold a substantial position of CGR in my retirement account as I am very persuaded, for now, that this company has both excellent earnings prospects and long term value.

My TSI trading record has been updated.

The list of 20 short/SELL trades, based on the True Strength Index (TSI) indicator's negative divergence SELL signal has been updated to include today's closing trade. It turns out that 57% of the NYSE stocks closed lower today, while 75% of those stocks I listed also closed lower. If you would like to review that data, click here, then scroll down the page a bit to reach the data table.

A couple of readers have written me to inquire about the possible short sale of particular stocks that seem to meet the TSI negative divergence SELL signal criteria I imposed upon myself. I would like to share those with you now and try to clarify why these two stocks were not viable candidates of the negative divergence rules I applied to my selection. 

This first chart is a daily of Autodesk Inc (ADSK). This is an excellent example of the trend line break BUY signal trumping the otherwise obvious negative divergence SELL signal.

And the next chart is a daily of Inc (CRM) - also an excellent example of a trend line break messing up an otherwise legitimate negative divergence.


  1. I'm keeping all my CGR bought at 1.41, I believe it see's two dollars soon. Looked to me like most all miners were down today and will rebound this week.

  2. Anything is possible, including the scenario you have outlined.

    I decided to keep CGR in my retirement account for now because
    it is a long term value at this price. I sold it in my TSI trader
    account because, on a shorter term viewpoint, I am skeptical that
    the stock market and the price of gold will hold at yesterday's levels.
    I had a modest gain, it is now money in my pocket, so to speak, and
    I am not at risk if there is a further deterioration in price.

  3. John, new here, just catching up...your charts for ADSK and CRM have me a little confused. If you draw the TSI trendline consistent with the 20 stocks listed as potential shorts, the ADSK/CRM charts would seem to fit the 'short' profile. However, the trendline presented on both charts seems to end on Thursday, not Friday, so there is no trendline break BUY signal as depicted. What am I missing? BTW, I really like the TSI; use it on all my charts.

  4. John, whats your take on UUP/DXY? It looks like TSI along with MFI have bottomed on the daily charts.
    thank you

  5. Bottomed yes, but no trend line break, so it still leaves open the possibility
    of a divergent low in TSI over the next days. I hope it falls hard in the next
    few days. That will be the end of the SPX and gold rally (in the mean time I will
    unload all my miners).

  6. John, what is your take on CGR now? Would you be a buyer now? Seems like this is the time. What do you think?

  7. Anon - I have no interest in owning any miners for short term trades
    at this time as I expect the correction in the stock market is going
    to depress their prices. In a few weeks it should be a very ideal time
    to buy them!

  8. It may correct or it may not, nobody knows for sure. I guess we're just throwing the dice regarding miners then. I think I'm going to buy CGR today, it's just too tempting at this price.