Red in this
chart is the 50 day simple moving average. Blue on this chart is a 20 day
simple moving average. I call this a
Double Crescent Formation. This is an
example of a “price” set up, with the two moving averages in upturning
crescents. On-Balance-Volume in this set
up is not optimal. Optimum for
OBV would be if it was turning up in the same measure as the Blue line, the 20
day simple moving average. A note here
is that JE often moves counter cyclically but with weak cycles, so at times it
may not react as in an optimum “set-up”, but I liked the Double Crescent
Formation to illustrate.
This is not
a recommendation, but an illustration, to help you recognize this kind of set
up when you run across it. We will
discuss other types of set-ups and where to look for them in future posts. Good Luck,
For most of us the reason for price
movements, can be pretty masked most of the time. This latest weakness in Gold, has a clear
reference to China, as shown in this LINK , based on China’s vacation week, its National Days
which ended today. The charts in the
linked article give graphic representation of this phenomena going back to 2013. I think the data exist further back but this
is quite graphic and worth a look in my opinion.
Got to be one
of the prettiest Bull Candles I’ve seen, rebounding as if they had read my
forecast for the end of Gold weakness.
CCI is an element I use here, helping Bird-dog or Point turning
the same vehicle, lets look at the 200 Day Moving Average, and refer to
Here the 200
Day Moving Average is the mean, constructed for the last 10 trading months, so
its stable. Notably, at the peak of this
leg, in early September GDX was 30% above the 200 Day Moving Average, almost
completely over-extended until the decline in October. Today the GDX is 10%
above its 200 Day Moving Average, in what I think is a completely sustainable
position. For most uses, the 200 Day
Moving Average provides a stable mean to compare daily prices with as to
determine trend. This is a Bull Trend
On-Balance-Volume (gray line behind price) provides a check on the validity of a price move, going in directional correlation to the price. Deviations and divergences from that correlation make me skeptical of the integrity of the price movement. MACD is in a low position, below zero, perhaps bottoming. Turning up in a bull move would signal good strength, the kind you want under a Good Buy.
previous Recco’s and recaps, all are in good standing, not surprising, the
strongest and weakest have swapped positions as this Precious Metals market get
itself together to resume its up trend.
Pretty much this index is either mis-used
Commonly when RSI is in the upper or
lower level it is called, either Over-Bought
which are both very inexact and can be terribly misleading.
Labelling a stock either Over-Bought or
Over-Sold, can position and investor to do the wrong thing.
The term I like
to use, is Over-Extended, either to the Up-side or the Down-side. In each case RSI is in a place where
reversals can begin to be effective.
Below RSI 30 or over RSI 70, is where
reversals often come about, but when they come about is not as clear cut
without another confirming measure or two.
Just being in those zones is no guarantee of reversal yet.
We all know we can count on stocks
fluctuating, the question
clearly is how to use that knowledge to
your advantage and profit.
The problem is that a stock’s RSI can
loiter in a given zone for some time without setting up a trade. Weakness or strength in the stocks advance
can signal it dropping out of whatever zone its in. Sometimes after leaving a zone, the RSI can
go right back into that zone.
Saying it is Over-Bought, may
give you the idea that a decline is imminent, same as Over-Sold as a
term may make you think that stock is ready to run to the upside, but no such
thing has to happen in either case until the timing indicators confirm or deny
it happening. Except for a crescendo in
the volume and then watching it diminish, there is no extra clue in those
charts to give you any hint of what is to come next, or when. So, do not be given a pre-set idea of what to
do when you hear those terms. It follows
that we will discuss confirming measures of using RSI.
For sake of discussion, RSI in its
simplest form, is the current price, divided by the stocks previous price any
number of days ago, specified in our calculation.
It is an
internal calculation of the stock’s internal strength, either stronger or
So now, neither chart gives you any
indication of a support or resistance, for either
of these stocks, so without further confirmation, this is a guessing game.
So, when we take up further using other
measures to confirm or deny the validity of an Over-Extended move, we will try
to find out which way this is going, and if we are luck, how far it might go.
Check back on our discussion of MACD
in Tech Talk!!
So XLE is comprised of about 30 stocks,
and the above curve measures the speed with which the number of stocks OVER
their 50-day moving average increase or decrease, based on the MACD formula
Below is based on the price of crude
oil, interpreted in Bull Candles.
On or about September 3, a Bull Candle appears,
(unmarked), just poking its head above the trading range at 6.20, then falling
back to 6.10 support level.
What no one got is Chart Above + Chart
Below = Saudi Oil Plant attacked by BLACK SWAN!! – Now, was it a FALSE FLAG ATTACK?
With 19 precision
hits was it the Houthi Rebels, you think?
Was it the way to get
the oil price up where it is needed for producers?
So, when MACD Signals and Bull Candles
result, Big Things can happen!
Here we have a
downtrend, looking as if it is punctured by two big Bull candles already
penetrating the 50-day moving average to the upside. Unlike Rogers, this cannot be a Three (3)
White Soldiers formation as the 2nd bull candle did not open within
the body of the first bull candle. Later
it could become a two-candle continuation pattern, as long as the gap between
the first two candles is still open.
To me this
seems quite promising. Next Gen is a
uranium finder, developer and miner, so it has the risk profile unlike that of
petroleum companies. As well this
uptrend could flop, but when something is set in motion with this much energy
underneath it. If this continues, the 200-day
moving average is within reach let’s say in a week or two, of being breached to
the upside, again, a bullish development.
Now maybe in the next post or next week, we can see what the
On-Balance-Volume is doing to validate or deny the current moves.
Moving Averages, 20 day, Blue and 50 day, Red, as shown here:
Basically, as long as both the 20 and
the 50 are in Sync, the trend continues at least in the Intermediate term. If I showed a Long-Term Moving Average such
as a 200 day, then there would be what we’d estimate to be a base level of
support. Given the 20 and 50 rising, the
200 would not come into play if the close is far above them. In the case of CCW.V, the 200 dma is at .40,
so will become resistance when its approached.
In the case of GGD.TO, the 200 dma is at .34, and so is support far
below where it is now. We have One stock
far above support and one stock approaching resistance (the flip side of
In the case of
CCW.V, with enough energy under it, it will breach resistance and it will
become support once it does.
So, Moving Averages often show
direction, and possibly trend. Should
CCW.V breach its resistance at .40 and stay above it, you could easily say it
reversed trend and is now headed up. There
is one stock, GGD.TO that is in an uptrend, and one stock that may
turn itself into an uptrend. I use
Moving Averages as an advance indicator, to find stocks I want to watch. If we add back a supporting measure like
On-Balance-Volume, they we have more evidence of how the trend might go.
Maybe for the next time we will touch on the 200 Day Moving Average, and maybe later or as well, On-Balance-Volume.
After sorting thru all the Parallel Line
charts, Relative Strength, and some other criteria, a number of candidates
That being said, you can see if not feel that we are going thru a correction in the Precious Metals, and yet Silver is feeling frisky, so if your going to buy something, you will want something with energy underneath it and in the bottom half of its range. Two of those are presented here for your view. OLA.To, and LUG.To, both in Latin America. OLA is involved in 2 leaching projects in Panama and Mexico, while LUG is working the Fruta del Norte, with vast concessions in Ecuador, and has started mining its first entry there. Metal pours are anticipated this year. Here is what they look like. More charts next week, let say on TUESDAY, with explanations of Moving Averages.
As you can see, both of these have
touched their 20 Day Moving averages.
Generally the faster the advance, the more
intense the correction, all things equal, however they are not equal here, both
are touching their Lower Limit in the Parallel Bars charts, so it is equally
likely NOT to see an anymore correction in either of these. The Buy Limits, Sell Limits and Targets are
covered in the current Half Price (limited time) subscription as well as the
Silver Stocks, probably a half dozen stocks in all. As always Satisfaction Guaranteed, or your
Have a great weekend, be safe out there,
and Good Luck. Happy Labor Day and
see you on TUESDAY.
TRENDS are a “fitting” topic.
Remember the parallel bars in gym class?
Easy for some, difficult for others, always one arm
slipping before the other and down we go.
Trends are like that. Something
changes up or down and the Trend changes.
Cannot deny that this is a TREND, in the
defined as an INTACT TREND.
The fact that two different time frames
identify it the same, as an
so below is the same chart on a Weekly basis instead of the first one, which is
a daily chart.
So seriously folks, is there really a dime
worth (not silver) of difference between these two-time frames? In my world, I think not!!
thing you could discriminate upon examination of these charts, is where you
decided to pull the trigger, like on this one:
risk appetite, and itchy trigger finger, sometimes you get the jump on the
trend, say with PGM, buying it as it broke out of the trading range, which
topped out at C$0.60. More burnt
fingers, but bigger profits, is the rule of balancing risks against rewards
So now you have another tool, “Parallels”
TECH TALK TUESDAY
August 27, 2019
To review, here are the tools we had from
TOOL #1 in your Profit Kit is B.U.T.,“BUY UP TO”.
#2 in your P-Kit A.C.M.E.
“AFTER MARKET CLOSE EXIT”.
TOOL # 3, should
be P.E.T.: “Probable Estimated Target” – now you can decide if
you want to take a profit, or stay in, odds of getting stopped out increase as
you increase your A.C.M.E., with price moveups.
#4 will be M.A.C.D.,
“Moving Average Convergence / Divergence.” – You measure the acceleration in your
TOOL # 5, PARALLELS – your way of
watching the lesser trends inside the main trend and their direction. You can do it on Stock Charts on in DGS
Letter, or with a set of parallel rulers on a basic price chart.
here we have TOOL # 4 and #5
MACD & PARALLELLS. Tools 1-3 relate conditioning your buying and
selling to use advantageous means, and one more on the way later as well.
MACD and PARALLELLS give you the
guidance, hints and clues, as to when to act and what to do.
TOOL #1 in your Profit Kit is B.U.T.,
“BUY UP TO”.
#2 in your P-Kit A.C.M.E. “AFTER MARKET CLOSE EXIT”.
TOOL #3 will be M.A.C.D., “Moving
Average Convergence / Divergence.”
The BLUE BARS are the Histogram
that represent the numerical value of the MACD. That same value is the black
line. Same for the BLUE BARS. The interaction between the BLACK and RED (9
day Moving Average of the BLACK line), make MACD function like an Acceleration
Meter. The steepness of its upcurve or down
curve shows you how intense the G-Force is and whether its Increasing or
The MACD is figured on the
difference between the 12-day Exponential Moving Average and the 26-day
Exponential Moving Average.
Averages move faster than Simple moving average, so things can change in a
Watching the changes in
acceleration is often a first hint before price starts moving, for or
With three (3) specific values in
MACD, you can watch them for interaction to give you clues and hints about what
may come next. Now that you know what it
is, watch it for a while, and we will cover how to use it effectively as part
of your Profit-Kit.
Today reminds you of the Road Runner and Wile-e Coyote as he gets the 500 lb A.C.M.E weight dropped on him from above by the Road Runner.
So why and how does A.C.M.E. Work ?
AFTER MARKET CLOSE EXIT
is designed to keep stocks in your hands that work good. It is designed to keep the market makers from stealing your stock via INTRA-Day market fluctuations.
Once you know that market makers can take any stock anywhere they want during the session and bring it back to where they want it for the close, you see how they play their mischief.
So you like PVG under $11 and get a good trade, into it at 10.80, and wait a day or two before setting a stop. Then it surges to 11.50, and you set a stop at 10.80 just for safety sake. Feeling good, you don’t panic when it closes below 11.00, but watch as the market makers take it down the next day, under 10.80, down to 10.57, showing, that your lost now. Of course to further demoralize you, they run it back to close at 11.40, within 16 cents of its previous hi.
I don’t blame you for your bewilderment and perhaps anger ! I’ve seen this too many times to be surprised. Your 10.80 stop was in the right place but at the WRONG time. Specifying AFTER CLOSE and keeping it MENTAL, not entered, is the key. So designating your EXIT as AFTER CLOSE, keeps the sharks from biting your legs off, cutting you off at the knees, and stealing your stock, which by now has run up to almost 13.00 and you with NO stock, NO PVG !!
With A.C.M.E., in place, you must watch your stock, to execute A.C.M.E., the next day, if necessary. This is a necessary tactic, to stop theft by market makers. You end up with the good buys and appreciation from the good buy. Information contained herein is for educational and informational purposes only. Investors are responsible to execute their own due diligence investigations to protect their capital. Publisher or associates may have positions in these stocks as well.