The TSI Trader. How to trade the stock market using the True Strength Index

Thursday, April 25, 2013

Miners - True Strength Index (TSI) BUY Signals by the Dozens

We have all waited far too long for this day, but it finally got here. My goodness! I have never seen this many True Strength Index (TSI) indicator BUY signals in the mining sector in my life. Hallelujah!!!

I've ripped through my portfolio of 150 or so miners to show you what I am talking about with this post. What follows is a list of 92 miners that have a TSI BUY signal with the close of today's trade. Some have a single BUY signal, most have two BUY signals and yes, there are even a handful with three BUY signals. Holy cow!

I'll give you a quick refresher course on the TSI BUY signals using a chart to demonstrate each, then turn you loose on the huge list that follows.

The trend line break (TLB) BUY signal is given by a descending straight line that is connected by the TSI indicator's peaks and when it slams into a rising TSI the momentum has shifted from southward to northward.

The ZERO crossover (ZC) BUY signal occurs when the TSI indicator crosses up through the ZERO line, from negative readings to positive readings. When the TSI is rising above ZERO, price is always rising.

The positive divergence (PD) BUY signal is given when the TSI makes a higher low while the corresponding price lows make a lower low. This suggests that price has 'exaggerated' too far to the downside and is not in line with the actual momentum.

Click on the chart to ENLARGE

The trend line break (TLB) BUY signal is in white above, the ZERO crossover (ZC) is in gold and the positive divergence (PD) is green.

Enjoy this scenery - it's a welcomed change!

	Thurs. 4/25/13
		TLB - Trend Line Break
		ZC - Zero Crossover
		PD - Positive Divergence
	Ticker				TSI
	Symbol		DAILY CHART - TSI (7,4)		BUY Signal(s)
		Last Price	Percent Change	Company Name
1	AAU	1.72	+7.62%	Almaden Minerals Ltd	TLB
2	ABX	19.48	+3.01%	Barrick Gold Corp	TLB
3	AEM	33.52	+0.81%	Agnico Eagle Mines Ltd	TLB
4	AG	12.96	+7.46%	First Majestic Silver Corp	TLB, PD
5	AKG	2.69	+3.06%	Asanko Gold Inc	TLB, ZC, PD
6	ANV	11.79	+2.34%	Allied Nevada Gold Corp	TLB
7	ARNGF	6.66	+7.85%	Argonaut Gold Ltd	TLB, ZC
8	AU	19.48	+0.67%	Anglogold Ashanti Ltd	TLB, PD
9	AUMN	1.79	+2.87%	Golden Minerals Co	TLB
11	AUQ	5.16	+3.61%	Aurico Gold Inc	TLB
12	AUY	12.55	+1.77%	Yamana Gold Inc	TLB, ZC
13	AXU	2.19	+5.29%	Alexco Resource Corp	TLB, PD
14	AZC	2.50	+3.31%	Augusta Resource Corp	TLB, ZC, PD
15	AZK	4.23	+1.20%	Auizon Mines Ltd	ZC
16	BAA	1.28	+0.79%	Banro Corporation	TLB, ZC
17	BCEKF	2.59	+2.78%	Bear Creek Mining Corp	TLB
18	BGLPF	2.56	+3.58%	B2 Gold Corp	TLB, ZC
19	BRD	0.66	+7.70%	Brigus Gold Corp	TLB, ZC
20	BVN	21.60	-0.60%	Compania De Minas Buena	TLB
21	CDE	15.60	+2.83%	Coeur D'alene Mines Corp	TLB, ZC
22	CDY	0.20	+5.26%	Cardero Resources	TLB, ZC
23	CELTF	0.69	+15.23%	Centamin Egypt Ltd	TLB, ZC, PD
24	CGR	0.31	+4.07%	Claude Resources Inc	TLB, PD
25	COLUF	2.45	+8.42%	Colossus Minerals	TLB, ZC
26	CROCF	0.23	+10.00%	Crocodile Gold Corp	TLB, ZC
27	DGP	39.17	+5.63%	DB Double Gold Long ETN	TLB, ZC
28	DPMLF	6.34	+1.81%	Dundee Precious Metals	TLB
29	DRD	6.86	+0.44%	DRD Gold Ltd ADR	TLB, ZC
30	EGI	0.30	+3.93%	Entrée Gold Inc	TLB, ZC
31	EGO	7.59	+0.53%	Eldorado Gold Corporation	TLB, ZC
32	EXK	5.10	+3.87%	Endeavour Silver Corp	TLB
33	GDX	30.61	+1.26%	Market Vectors Gold	TLB, ZC
34	GDXJ	12.83	+1.58%	Market Vect Junior Gold	TLB
35	GFI	7.63	+4.66%	Gold Fields Ltd ADR	TLB, ZC
36	GG	30.02	+2.01%	GoldCorp Inc	TLB, ZC
37	GLD	141.76	+2.45%	SPDR Gold Trust ETF	TLB, ZC
38	GLDX	4.27	+4.15%	Global X Gold Explorers	TLB
39	GOLD	81.43	+1.55%	Randgold Resources Ltd	TLB, ZC
40	GORO	10.20	+1.80%	Gold Resource Corp	TLB, ZC
42	GPL	1.13	+10.78%	Great Panther Silver	TLB, ZC, PD
43	GSS	1.03	+1.98%	Golden Star Resources	TLB
44	GUYFF	1.95	+4.54%	Guyana Goldfield New	TLB, ZC
45	HL	3.45	+0.58%	Hecla Mining Co	TLB, ZC, PD
46	HMY	4.91	-6.02%	Harmony Gold Mining Co	TLB
48	IAG	5.33	+0.19%	Iamgold Corp	TLB
49	ISVLF	0.70	+6.53%	Impact Silver Corp	TLB, PD
50	JAG	0.45	+8.72%	Jaguar Mining Inc	TLB, PD
51	KGC	5.67	+0.18%	Kinross Gold Corp	TLB
52	KGILF	3.47	+12.38%	Kirkland Lake Gold	TLB, ZC
53	KLNDF	1.22	+6.68%	Klondex Mines Ltd	ZC
54	MDW	0.99	+0.52%	Midway Gold Corp	TLB
55	MGH	0.30	+3.11%	Minco Gold Corp	TLB, ZC
56	MUX	2.12	+1.68%	McEwen Mining Corp	TLB, ZC, PD
57	MVG	7.79	+6.42%	Mag Silver Corp	TLB, ZC
58	NAK	2.71	+5.86%	Northern Dynasty Minerals	TLB, ZC
59	NCMGY	17.51	+0.86%	Newcrest Mining Ltd	TLB
60	NEM	34.40	+0.22%	Newmont Mining Corp	TLB
61	NG	2.48	+3.66%	NovaGold Resource Inc	TLB
62	NGD	7.89	+2.94%	New Gold Inc	TLB, ZC
63	NSU	3.72	+1.64%	Nevsun Resources Ltd	TLB, ZC
64	NUGT	13.27	+3.27%	Direxion Gold Miners 3X	TLB
65	OSKFF	4.13	+4.39%	Osisko Mining Corp	TLB
66	PGM	32.85	+3.40%	iPath Platinum ETN	TLB
67	PIRGF	2.26	+15.30%	Premier Gold Mines	TLB, ZC
68	PTQMF	0.39	-0.39%	Petaquilla Minerals Ltd	TLB, ZC
69	RBY	1.82	+12.41%	Rubicon Minerals Corp	TLB, ZC, PD
70	RGLD	56.12	+3.91%	Royal Gold Inc	TLB, ZC
71	RIC	2.09	+4.40%	Richmont Mines Inc	TLB
72	RTRAF	0.49	+14.46%	Romarco Minerals Inc New	TLB
73	RVM	1.39	0.00%	Revette Minerals Inc	TLB
74	SEMFF	1.86	+7.51%	Semafo Inc	TLB, ZC, PD
75	SGCNF	0.17	+11.28%	Sunridge Gold Corp	TLB, ZC
76	SGRCF	0.22	+7.37%	San Gold Corp	TLB, ZC
77	SGSVF	1.25	+2.95%	Sabina G & s	TLB
78	SIL	15.13	+3.35%	Global X Silver Miners ETF	TLB, ZC
79	SLW	24.33	+1.77%	Silver Wheaton Corp	TLB
80	SMNPF	0.49	+8.84%	Scorpio Mining Corp	TLB, PD
81	SSRI	7.37	+3.08%	Silver Standard Resource	TLB
82	SVLC	2.22	+9.36%	Silvercrest Mines Inc	TLB, ZC
83	SVM	3.07	+8.87%	Silvercorp Metals Inc	TLB, ZC
84	SWC	11.72	+1.56%	Stillwater Mining Corp	TLB, ZC
85	TC	2.90	+14.13%	Thompson Creek Metals	TLB, ZC, PD
86	TCK	26.42	+1.15%	Teck Resources Ltd	ZC
87	TGB	2.23	+6.19%	Taesko Mines Ltd	TLB
88	THM	1.01	+4.12%	International Tower Hills	TLB
89	TRQ	6.97	+2.05%	Turquoise Hill Resources	TLB, ZC
90	TRX	2.95	+2.08%	Tanzanian Royalty Expl	TLB, ZC
91	USGIF	0.97	+15.48%	US Silver and Gold Corp	TLB
92	VGZ	1.66	+0.61%	Vista Gold Corp	TLB, ZC

17 comments:

AnonymousApril 25, 2013 at 11:56 PM
Nice job John! Gold stocks are finally waking up! Gold back over $1500 tomorrow?
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AnonymousApril 26, 2013 at 7:28 AM
John, Good news. Hope the momentum lasts. Thanks, Bruce
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Liquid MotionApril 26, 2013 at 8:56 AM
When the stars are aligned like they are with TLB , ZC and PD you cant lose. Here come the 10 baggers.
Speaking of which....I notice that 10 of the stocks listed had a 10% or > change on the 25.4.13. May be indicative of how undervalued they were ( and still are). More of the same to be expected in the near future.
I have a feeling that things will move quite quickly over the course of the next week.
The physical shortage is now causing panic. This will in turn bring greater attention to the miners....the last bastion of redemption.
Your analysis and the fundamentals John....oh we know its a good thing.
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Heads UpApril 26, 2013 at 4:54 PM
Despite all the data, today the $HUI fell off 3.57%, and the $BPGDM rests at a devilish 6.66.

Miners generally lead gold out of cycle lows, yet they continue to wobble. I just don't get it.
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JDApril 26, 2013 at 7:30 PM
Looks like the TSI has turned down at the close creating a hidden divergence. For EW followers also looks like a well formed wave 4 at the low of wave 1. Projections using rsi and this hidden divergence point to a target for AKG of around 1.85 should the slide down continue. I hope I am wrong!
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AnonymousApril 27, 2013 at 12:02 AM
BBclub
Unfortunately, none of this takes into account the ongoing loss of capital the juniors are experiencing. The precious metals juniors general Capitulation is just getting started. Much more downward pressure is imminent. Patience is advised.Mike
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John TownsendApril 27, 2013 at 7:33 AM
Mike - I clearly recall what was touted as the problem for juniors in the 2008 melt down. It was what I recall continuously reading 'the freezing of credit'. That is, small companies had no access to get loans for working capital. The sky was falling and God Himself could not stop it - or so most thought.

In this 2013 market the explanation is generally that miners costs are rising, gold's price is falling, profit margins are somewhere between compressed and hopelessly non-existent, and kazillions of bankruptcies are just a matter of time.

All of this amounts to a very logical and reasonable analysis. And I most definitely agree patience is advised.

This analysis also speaks to the risks of trying to short term trade this group of stocks, in my opinion. I think one either believes in gold's secular bull market, buys solid value as best they can discern and sit tight, or one trades with an itchy finger on the trigger and says a few prayers.

In 2008 I did both strategies and to some extent I got lucky. I bought a miner trading at 10% of book value and held on for dear life. One morning a few short weeks later I woke up to find it trading 300% higher (another company bought my company)and I immediately sold. (Too bad because a couple of years later my gain would have been 2500%, not 300%).

Another miner I had bought months and months earlier I held, though when it bottomed it was nearly a 100% loss....I continued to hold and months after it bottomed I sold - taking a 50% loss. If I had held a full year longer after my exit I could have realized a 100% gain. And if, by chance, I had had the guts to buy more of this miner at the bottom - when I was looking at a nearly 100% wipeout - my gain in a couple of years could have exceeded 4000%.

Both of these experiences of trading miners in 2008 are my real life experiences and have given me my resolve, at present, to just be patient.

I sincerely hope readers who believe in the gold secular bull will take my thoughts into consideration when tempted to hit the sell button to end the pain. The rationalizations I offered in the first two paragraphs above are reasonable. I know that. But I also know that markets go from one incredible extreme to another. What seems like a big deal today will not even be on the radar screen a year or two later. The time to have guts is when absolutely everything 'short term reasonable' is agreed by literally everyone. Then, do the opposite and twiddle your thumbs. Odds are in your favor, if you are patient.

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John TownsendApril 27, 2013 at 8:46 AM
Liquid Motion - if you are interested in doing a little reading, here are a few interesting links for today:

1. http://blogs.marketwatch.com/thetell/2013/04/26/j-p-morgan-has-sold-2-mln-ounces-of-comex-gold-since-feb-says-blogger-mark-mchugh/

2. http://www.tfmetalsreport.com/blog/4673/if

3. http://www.gotgoldreport.com/2013/04/gold-legacy-cot-stunner-.html

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Liquid MotionApril 28, 2013 at 12:38 AM
John,
Thanks for the links. Nice reads which support the thesis of the gold price take down and the obvious short covering (absolutely stunning).
Of particular interest is the action from JPM..now that is breathtaking and one simply has to ask why ?
Although, what concerns me is the accuracy of the COT data. When you consider who prepares this information and the purpose that it is fit for, it makes one wonder about the legitamacy/integrity.

If we believe in the fact that the price of the metals are absurdly low (given they are a product of the futures paper market), then at what price do we reasonably expect it to be at when we consider it to be fully priced ?
The question is rhetorical because Gold and Silver have no measuring stick..no metric (other than fiat currency)to put a suitable price on it. It becomes limitless. Perhaps the adoption of gold in forming a basket of currencies in the new paradigm of world currencies would avert a buble formation and avoid an inevitable bust scenario.

So getting back to the case in point...we are now set up for the comms to take a further beating as the central banks and their buddies at the bullion banks, fill up their vaults and reverse what they did on the downside, and apply the same principles now on the upswing. Price suppression will turn the market into an accumulation phase. It will again be as (if not more) breathtaking to watch. Watch for the panic to take hold.

I firmly concur with your analysis about the underlying and inherent value in miners. It has been a difficult 18 months to bear but as you so correctly remind us ...patience will win (provided you remain committed to the bull). I am and continue to be heavily overweight the sector and physical. This period of dramatic price suppression in both the price of metals and of miners has been an absolute gift, one which I could not resist by adding to my existing portfolio. Should it eventuate again, I will repeat the process. Its the hardest decision I've made in a long time to buy (stocks)when all are running to the exits. The physical (buying)really is a no brainer.
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John TownsendApril 28, 2013 at 10:21 AM
Liquid Motion - thanks for writing a number of very interesting thoughts. I would enjoy sharing in your dialog with the following thoughts:

I don't see that the commercials are taking, or subject to the specter of 'further taking' a beating from the forces shorting the gold market. For starters, gold has already retraced 50% of 'the beating' in very short order and may well retrace it entirely in the near future.

Beyond that, the commercials may well have generally decided that this is their strategic opportunity to screw the shorts kinda *once and for all*. The shorts now provide more rally fuel than ever seen before historically and on the subject of short squeezes, this is about as good as it gets. The shorts do not have the bullion to back up their positions and are, as always, bluffing. They are such a nuisance to the free market that it would not surprise me if the commercials see their opportunity to strike their match and watch their paper burn. Seriously.

I found your thought about the possible use of gold supporting a basket of currencies as a means to avert a bubble formation in gold interesting. And I will easily concede my following thoughts in response are just my musings, as I don't know too much about this subject. But here goes:

Depressions occur when debt is no longer serviceable. An individual goes bankrupt when his income no longer can sustain his house payments and credit card minimum payments, for example. Entire nations can also go bankrupt, though the process is slowed by their ability to 'create money' out of thin air to continue servicing their debt.

The resolution of bankruptcy is the complete forgiveness of incurred debt. This leaves an individual with quite literally just the shirt on their back, no assets and no debts. Just the opportunity to start over from square one....with nothing.

In the case of currencies, the squaring of all accumulated debt by the issuer (thereby resolving the bankruptcy issue) would require that the currency be backed by something of at least equal value to the accumulated debts. Obviously, as the accumulated debts are horrendous, the value of this object that backs the currency would have to be horrendous, as well.

Backing currency with gold has the known advantage that there is a finite amount of gold in existence. Further, it cannot be mined or found in such abundance that the finite gold in existence is easily or quickly diluted. And of course, gold cannot be electronically printed.

So where is all this going?

Well, my thought is that in order to straighten out the impossible debt service issue that inevitably leads to bankruptcy and depression, possibly on a world-wide scale, if gold is used to back the 'currency of the future' then it will instantaneously be valued appropriately to solve these issues. Which is also to suggest that gold would be valued at $1500 one day and the next day valued at $20,000, or some such number.

Those sovereign nations working towards this outcome are acquiring bullion just as fast as it is available. I presume if they are able to corner the market they will be able to name their terms. Those sovereigns pretending to have gold in their vaults (US) will be screwed and those that really have gold in their vaults will be in the driver's seat.

In summery, I wonder if gold will have a blow-off top. History shows that all parabolas end the same way - badly. But I am not sure there is an example in history like the one I have described. Hummmm.....

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DBApril 28, 2013 at 1:52 PM
"If gold is used to back the 'currency of the future' then..."

Imo, gold and silver will just be two of many currency components in the "basket" forming a new world reserve currency, a transition from the USD beginning sometime in 2016-2017.

Gold has been in a correction since August 2011, a correction that will end within 3-4 weeks at $1280.
Gold stocks are washed out and this is the accumulation period for the best managed companies with the brightest prospects.

This bottom picking opportunity for gold and silver stocks ranks among the top three since November 2000.

I hope all will take advantage of this incredible opportunity to buy over the next several weeks. Everybody should be positioned preferably by the 3rd week in May and before the next FOMC in June.

All aboard!
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GregApril 28, 2013 at 2:48 PM
Hi John

I see you're using daily data to read the TLB, ZC, PD signals. Normally I'd guess that means these are short term trades. However, with the volume of mining shares that are being triggered, would you consider these to be at a long-term multi-year low?

Many thanks for these excellent reports!
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FazshaMay 14, 2013 at 12:25 AM
Semafo is a screaming buy now. Cash flow is .14 for Q1, and the stock is $2. How much lower can it go?
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