Tuesday, September 25, 2012

BUY CGR @ $0.85

I set a limit order in this morning's pre-market to buy shares of Claude Resources Inc (CGR) at 82 cents but there were no takers. So I upped my offer to 85 cents just before the regular session opened and my order was filled within the first 30 minutes or so. 

My TSI Trading record has been updated.

A number of considerations went into adding to this position. First and foremost is the concept that the solid gold miners with the highest cost to produce an ounce of gold are the hardest hit when gold falls and the highest percentage gainers when gold is rising. This is a conclusion I arrived at in my June 25th post Miner Cost per Ounce Study

With this concept in mind, and after double checking the current status of various miner's recent earnings and expected future earnings, CGR continued to fit the metrics I was looking for.

Second, I clearly recall the summer of 2009 as that was the summer I began this blog. Gold lifted off from around the $910 area in early July and finished just above $1225 in early December. It was a stunning 35% gain in just 5 months. And I recall that the daily cycle corrections were very shallow. Like if one was expecting a dramatic correction one just got left in the dust.

My sense is that, with QE3 in the bag, we could well be in a very very similar environment - an environment in which gold just continues higher and higher...and miners move quickly. 

Anyway, being long at this point will prevail - sooner or later - and being short is, as far as I am concerned,  like playing with a big pack of matches.


  1. The 20 sma provided support for a lot of the miners today. Even GDX. Bruce

  2. I concur 100%. It's better to buy now and sit tight, then wait for the corrections to come (which may or may not) and regret at the end of the year.

  3. The dollar (/DX) TSI (7,4) has made a series of 4 peaks beginning with Sept. 18.
    With one exception, each peak has been lower than the previous. Meanwhile, the rising
    trend line connecting the TSI lows is now positioned to meet the TSI that has been
    falling for the past 24 hours....just above the ZERO crossover. This could well be the
    day that the dollar bear flag loses the wind and falls - sending gold into the next
    leg higher.

  4. oopppsss



  5. John, DUST 23.82 looks like a buy on daily TSI 4 7, what do you think?

  6. That's a tricky call looking at the setup, but I don't like it.

    The 4 hour TSI 7,4 is giving a buy signal so we have conflicting
    messages there. For shorter term trading I prefer what the 4 hour
    says over the daily, fwiw.

    I guess I would generally look at this with the question, 'what are
    the odds DUST goes up from here and what are the odds it goes down'?

    If I don't feel strongly one way or the other (as in this case), I just
    pass. It's tough to make money in the stock market. Doing trades that
    feel like a coin flip is a good way to get the short end of the stick
    - at least that is usually what happens to me.

    I hope my thoughts help you make a good decision.

    1. John,

      Looking at DUST chart it seems to have a good shot at reaching 32 even 40. But that has to correspond to a sizable drop in gold which seems unlikely under unlimited QE4. What can make it happen? A sudden stock market crash maybe. Going to buy some DUST when daily TSI 7 4 cross zero line this time(would also break down trend line too), currently at -0.10.

  7. Busy with school john? Looks like a TSI buy signal on the GDX, GLD, and SLV charts!

  8. John, its time to buy gold! (1678) TSI positive divergence on daily chart.