Saturday, November 3, 2012

BUY NUGT at $15.20

I purchased shares of Direxion's Gold Miner BULL 3X ETF (NUGT) at $15.20 in the pre-market Friday with the last few thousand bucks I had kicking around. 

My TSI Trading record has been updated.

Following my purchase I found it nearly comical that gold then opened Friday's session with a precipitous day-long fall following the 'jobs report'. I guess somebody actually took the report seriously.  

In reality, the event was a great exercise in hitting all the stops to take people out of their positions at cheap prices before the next big run up and I guess I should have seen it coming, but I didn't. That 'thinking like a thief' mentality does not come second nature to me, but I'll work on it. 

A week earlier I purchased some February 2013 call options on GDXJ as I surmised that gold had bottomed the previous day (Wednesday). And I was correct - until this incredible jobs report came out. Anyway, in the bigger picture I believe that my slight timing error really won't even matter.

I'm not sure how to account for options or futures trades on my trading record so I don't include them. 

FWIW, I sincerely believe this is the best time to buy miners for years to come.

I've been doing a lot of work on automated trading strategies for the past couple of months (or more). My skill set has been upgraded as I have become comfortable writing code for TradeStation, in addition to Think or Swim. TradeStation has a significantly more powerful programming language and an infinitely more powerful back testing / automation capability than Think or Swim. I have developed some good strategies and plan to begin making them and their documentation available to readers in the near future. 

Not much more to say for now, other than buy with both fists and be patient. We are about to begin a brand new intermediate cycle in gold that should take us up to $1900 rather quickly.


  1. I hope you are right, John. Good too see some actions from you!

  2. Good to see you back!
    Looking forward to your posts.

  3. John, good to see you are back. Your observation on "thinking like a thief" is spot on. I used to believe just out analyzing the average investor/speculator was enough. It's a rough game at times.

    Question - In earlier times you tended to focus on a "daily" chart which goes back months. In the case of both the daily and even 4hr, the TSI is negative and heading south for both NUGT and the HUI. Why the bullish outlook at least near term? Thanks.

  4. Good to see you posting again, John. I'm wondering why you see this November time period different from last year's when a decline started in the gold mining stocks that ran to the end of the year. I haven't concluded there will be a decline, but I look at least year's chart and wonder if this year will repeat or be different.

  5. Thank you each one for taking the time to write a comment expressing good wishes.

    In response to the questions, my reasons for being bullish are many:

    1. The daily cycle is on day 27 or so. Since 2001 that number has only rarely been stretched much further.
    Also, I cannot recall an intermediate cycle that did not conclude with a left translated daily cycle.
    The current daily cycle is the first (and I presume last) left translated daily cycle of this IC.

    2. The intermediate (weekly) cycle is now in the range of 5 months and only rarely has it stretched much further.

    3. The US Dollar has very weakly worked its way back up to its 200 dma. This morning I see that it is actually holding
    above that metric. This is the typical behavior where price just barely makes it to a point that fools a lot of people
    into thinking things have changed.....when it really has not.

    4. Gold has worked its way down to its 200 dma but is also holding just above it. These moving averages, for whatever reason,
    act like a magnet that not only draws price towards them but also repels price once the balance of ownership shifts.

    5. TSI (7,4) on both XGLD (gold futures) and GDX (miners) are screaming a positive divergence BUY signal.
    BTW, GDX has also worked its way down to the 200 dma and is presently holding just above it. To begin the
    second IC of the previous C wave (July 2009), GDX spent 3-4 below the 200. Our current situation is nothing

    6. Miners were on a tear last year from August to December, then corrected for 5-6 weeks taking GDX to spend
    a few days below the 200 dma. This year we are presently at the conclusion of a 5-6 week correction and also
    at the 200 dma.

    7. Finally, the market seems to have temporarily and entirely forgotten about Ben's promise to print, print, print.
    More than just rhetoric, the man is DOING IT. Markets swing from one emotional extreme to the other. Right now we
    are in this interesting 'denial' phase where Ben's actions appear entirely discounted. I don't believe for one second
    that the 6 week take down (profit taking) of gold and miners will last forever. In fact, just when everyone thinks the
    same (ie gold and miners are toast and the dollar is irrationally going to rally forever) is when one too many guys
    sit at the same end of the boat which then tips over from the weight and they all go into the water. We see this happen
    over and over and we will see it happen again very shortly with gold and miners.

  6. Hi John,

    I have been following your blog through RSS feeds but since "Thursday, August 23, 2012 - Buy DUST @ $35.80" there was no any new update then I saw your newer comments when I directly visit your blog.
    Do you aware of this RSS problem or I am the the first one who says it.

    Thanks for your efforts and wisdom.
    Have a nice day and profits (I hope).

  7. Hi Remzi - hummmm.... I was not aware of a RSS problem with my website.

    I was able to click on this at the very bottom of the homepage:

    Subscribe to: Posts (Atom)

    And saw my most recent post in the reader. I would think that means
    there is not a problem.

    I also notice just below this box another link:

    Subscribe to: Post Comments (Atom)

    I just subscribed to that link and imagine I will receive
    the comments as they are written, not sure.

    I'll keep an eye on it and please update me if you have a
    new revelation. Thanks! John

    1. Actually I use Chrome RSS Reader instead of Atom feeder and don't have any problem other blogs which I follow.
      Let's keep an eye and see what happens.

      By the way, John what can we expect after today's bounce on metals. Is it fake or real? :-)
      Gold (GC) rally time is coming or just before the hitting hammer time?

      Thank you so much.

  8. Remzi - gold: this is the real thing. Today was Day one of a new daily cycle.
    Today was Day one of a new intermediate (weekly) cycle, as well.. Gold is up
    $40 on Day one and there is around $200 left to go (UP!) by sometime around
    or slightly after New Year's. Time to buy if you have not already (IMHO).

    1. Thanks a lot.
      I already full loaded with gold (%20) and especially silver (%80).
      I hope you have good expectation for silver as well.

      I like to hope get deeper info while I prepare my finance thesis about gold. :-)
      (I hope you remember me about TSI indicator and phd etc.)

      I really appreciated.

  9. John,

    There is a True Strength Indicator on stock charts. Is this the same as your TSI indicator?

  10. Bull Rider - yes, it is the same.
    Also available at:

  11. John,

    Pretty weak action for an ICL so far in metals and miners don't you think?