WHAT DOES A “SET-UP” LOOK LIKE?

 TECH TALK TUESDAY

OCT 8, 2019

        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,  DG

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TECH TALK TUESDAY

      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 junctions.

4

      Now, keeping the same vehicle, lets look at the 200 Day Moving Average, and refer to On-Balance-Volume.

      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 now.

      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.

      Relative to 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.

TECH TALK TUESDAY

TECH TALK TUESDAY

September 24, 2019

How to use some measures 

RELATIVE STRENGTH INDEX

     Pretty much this index is either mis-used or over-used.

        Commonly when RSI is in the upper or lower level it is called, either Over-Bought

or Over-Sold, 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 weaker.

        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.

DG

TECH TALK TUESDAY

BULL CANDLES and MACD

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 (Above).

        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.

TECH TALK TUESDAY

Let’s look at Moving Averages

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 support).

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. 

Meanwhile Good Luck.  DG

FRIDAY FINAL Aug 30, 2019

WHATS UP WITH THE USUAL SUSPECTS WE FOLLOW ?

        After sorting thru all the Parallel Line charts, Relative Strength, and some other criteria, a number of candidates presented themselves.

        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 Money Back.

        Have a great weekend, be safe out there, and Good Luck.  Happy Labor Day and see  you on TUESDAY.

DG

TECH TALK TUESDAY

August 27, 2019

      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. 

Here goes:

        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

INTACT TREND, 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!!

        The only thing you could discriminate upon examination of these charts, is where you decided to pull the trigger, like on this one:

Depending your 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 before today:

        TOOL #1 in your Profit Kit is B.U.T.,BUY UP TO”.

          TOOL #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.

          TOOL #4 will be M.A.C.D., “Moving Average Convergence / Divergence.” –  You measure the acceleration in your movements.

        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.

So 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.            

TECH TALK TUESDAY, AUG 20, 2019

MACD=Moving Average Convergence / Divergence.

        TOOL #1 in your Profit Kit is B.U.T., “BUY UP TO”.

                TOOL #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 Decreasing.

                The MACD is figured on the difference between the 12-day Exponential Moving Average and the 26-day Exponential Moving Average.

Exponential Averages move faster than Simple moving average, so things can change in a hurry.

                Watching the changes in acceleration is often a first hint before price starts moving, for or against you.

                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. 

TECH TALK TUESDAY

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.                                                

pic curtesy of Pintrest

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