Your average gold bug has been calling for the US Dollar’s demise for as long as I can think of. Price is telling a different story. We are witnessing a strong new uptrend. As usual you do have a choice here. You can do one of the following:

  • Believe their narrative.
  • Base your trading decisions on price.

I cannot repeat this often enough: Think independently. This is the ONLY way to protect yourself. The downside is, you will need to assume full responsibility and won’t be able to blame anybody for your portfolio performance. Enough said.

Click on $USD monthly chart to enlarge:

Always up-to-date $USD US Dollar monthly chart on my public list.

The technical price target should be around 100. Therefore a more conservative target around 95 seems reasonable. That would coincide with a test of the dotted black down trend line.

Click on $USD daily chart to enlarge:

Always up-to-date $USD US Dollar daily chart on my public list.

The daily chart shows a bullish ascending triangle in the making. Right now the US Dollar is one of the strongest currency around. A bit more follow through and we will come closer to the completion of the triangle. This will trigger additional buy orders resulting in a resumption of the uptrend in typical ABC pattern fashion.

Keep in mind the following: Strong overbought conditions at the beginning of a new trend are a good sign. They are not in and of themselves a good enough reason to sell. They are merely a sign of how strong the trend is. Trading UUP or USDU are ways to profit from that trend.

Click on $USD RSI Relative Strength Index chart to enlarge:

Conventional wisdom usually leads to interpreting RSI incorrectly. As you can see in my RSI analysis there are two things to keep in mind that are counterintuitive:

  1. Overbought can stay overbought for a long time.
  2. When the RSI rises toward overbought after a long basing pattern, it signals the start of a new up trend

It goes without saying a rising US Dollar will most likely put additional pressure on commodities and precious metals. The SLV – Silver ETF chart certainly looks bearish, a move higher with the US Dollar, could trigger a further decline.

Normality is death. – Theodor W. Adorno

Twitter: https://twitter.com/Tischendorf
Stocktwits: http://stocktwits.com/Tischendorf

Charts:  http://stockcharts.com/public/1109839/tenpp

{ Comments on this entry are closed }

Many are still hoping for a trend reversal in silver. Rest assured, it will come one day. Technically speaking though it is most likely not going to happen anytime soon.

The reason is simple. We continue to witness falling tops. The most important characteristic of a downtrend, the most recent red bar I drew into the chart, indicating such a lower high, would have to be taken out in order to spring a bear trap. As a disciplined trader you do not bet on something that might happen or that you hope might happen. You patiently wait until it happens. You identify the trend, follow it and you simply trade price.

In the case of silver that means you either short silver or stand aside. Followers of my public list, regular readers and those who listened to my interviews avoided the carnage. I have been saying the same thing for over a year now. It is too early to commit to the long side. The technicals never said to buy and still don’t.

I published a post where I posited that the Worst Is Yet To Come For SLV. Silver hasn’t tanked since but the technical picture still hasn’t improved. Hence the path of least resistance still remains down. Going long before price confirms the series of lower lows has stopped is just wishful thinking.

Furthermore it is very unlikely we will get a sustainable bottom with Silver after such a long downtrend without capitulation type of volume. Volume is anemic at best. No signs of capitulation. Odds are high bad things will happen first before good things can happen.

Click on SLV chart to enlarge:

Always up-to-date SLV Silver ETF chart on my public list.

Looking at the following weekly chart for SLV, the 15$ and 12.5$ area are the most likely price targets once the recent lows are undercut. The areas highlighted in the chart will start to act as magnets attracting price.

Click on SLV weekly chart to enlarge:

Always up-to-date SLV Silver ETF weekly chart on my public list.

Hat tip to Charles Kirk for tonight’s quote.

Should you find yourself in a leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks. – Warren Buffett

Twitter: https://twitter.com/Tischendorf
Stocktwits: http://stocktwits.com/Tischendorf

Charts:  http://stockcharts.com/public/1109839/tenpp

{ Comments on this entry are closed }

This is meant to be a ‘post trade’ analysis. The real educational value here is the fact the ‘trade’ was not taken as the suggested method to enter the trade was a stop buy order. The stop buy order simply never triggered. The advantage of using such a method is pretty obvious. It protects you against yourself. You have heard me say quite often that I do have strong opinions but that I do not trade them. I base my buy and sell decisions on price action alone, not my opinion.

The KGC – Kinross Gold example is perfect in order to exemplify the benefits of such an approach. A stop buy order takes care of one of the emotional components traders struggle with. It only executes if the market cooperates and agrees with one’s assumptions. In KGC’s case, jumping the gun or simply doing the buy and hold thing, thinking that the supposedly great fundamentals would bail you out, eventually ended very badly. Those still holding are now simply hoping. Assuming the stock doesn’t go lower from here, I wouldn’t bet on it, I still have very bad news for you:

You need to almost increase your capital 4-fold in order to break even. This is not a career ending move but if you do not learn from such a mistake and repeat it one more time you are out of business. The only way to avoid this is a disciplined approach, proper risk control and a willingness to add Technical Analysis to your tool box.

Click on KGC chart to enlarge:

Here is the original post on KGC – Kinross Gold suggesting a stop buy order above 10.52. Don’t get me wrong, I’ve had my fair share of bad calls over the years. The key is to stay humble at all times and to correct mistakes as fast as possible. Love small losses, hate large losses.

Remember: Price is the ultimate truth and your ego is your worst enemy.

Don’t pick tops. Don’t pick bottoms. – Edward Allen Toppel

Twitter: https://twitter.com/Tischendorf
Stocktwits: http://stocktwits.com/Tischendorf

Charts:  http://stockcharts.com/public/1109839/tenpp

{ Comments on this entry are closed }

Here’s an educational follow up post on NVGS – Navigator Holdings a bullish all time high set-up I highlighted a while back. The stock ended up trapping longs as the break to the upside ended up to be a false move. Hence the saying:

‘From false moves come fast moves.’

Click on NVGS chart to enlarge:

The chart is a great example why being disciplined is so important and why protecting one’s capital is key. The only way to successfully protect one’s capital is to heed warning signs and to act promptly as soon as the technical picture changes. NVGS was looking great. A bullish triangle breakout to the upside and new all time highs. What else could one wish for? Actually not much else. Even the volume pattern was looking extremely constructive at the time.

The lesson to be learned with NVGS is to keep an open mind at all times. Objective price analysis told traders to sell almost immediately after the entry. The red arrows I drew into the chart show the red flags NVGS raised:

  • Small gap down. With strong stocks you want tight bullish consolidations.
  • Long black candle falling back into the pattern. The pattern itself didn’t act as support.
  • No respect of major moving averages (20, 50, 200). No bounce whatsoever.

Waterfall decline charts like NVGS exemplify why I keep posting select quotes from veteran traders like:

Martin ‘Marty’ Zweig: It’s ok to be wrong: It’s unforgivable to stay wrong.

Linda Bradford Raschke: When the ship starts to sink, don’t pray – jump!

From false moves come fast moves.

Twitter: https://twitter.com/Tischendorf
Stocktwits: http://stocktwits.com/Tischendorf

Charts:  http://stockcharts.com/public/1109839/tenpp

{ Comments on this entry are closed }

Another follow up post on KNDI – Kandi Technologies with my updated chart thoughts on the ‘Air Pocket’ concept that is starting to become more evident. In simple terms, an air pocket is a price area where a stock didn’t spend much time to travel through. Most of the time stocks tend to display the same behaviour when they encounter identical price areas. In plain English: On the way up it took KNDI two days to move from 8$ to 12$. On the way down odds are it will take roughly the same amount of time. We most likely are witnessing a long-term topping pattern with KNDI. Recently KNDI hit resistance and the path of least resistance now looks to be down. The real risk for longs in KNDI is for the stock to hit that air pocket. If KNDI mimicks the behaviour on the way up it would mean a quick move to the downside is in the cards.

As I always remind my readers: In downtrends ‘surprise moves’ tend to be to the downside. With KNDI odds for bad things to happen are increasing by the day. For now I see no reason whatsoever to cover my short position. The stock is weak and I remain short.

Click on KNDI chart to enlarge:

The aggressive price target of the double top pattern would be around the 5.70$ area. This looks like an unrealistic target and it is way too early to tell. But if the stock puts in a quick down move around the air pocket area, the aggressive bearish downside target will become more likely. Let’s see how KNDI deals with the black trendline I drew into the chart. KNDI will most likely show its hand very soon as it is trading at a critical juncture.

Losers average losers. – Paul Tudor Jones

Twitter: https://twitter.com/tischendorf
Stocktwits: http://stocktwits.com/Tischendorf

Charts:  http://stockcharts.com/public/1109839/tenpp

{ Comments on this entry are closed }

SIMO Silicon Motion Technologies Bullish Chart Potential New Leading Stock

October 8, 2014

Over the past few weeks SIMO – Silicon Motion Technologies managed to repeatedly grab my attention. Here are a few reasons why: SIMO is trading close to its all time high Bullish ascending triangle chart pattern Impressive display of resilience during recent market weakness Bottoming tails and bottoming tails cluster the past two days It [...]

Read the full article →

KNDI Kandi Technologies ‘Chinese Tesla’ – Chart Update

October 8, 2014

Quick follow up post to my recent take on KNDI – Kandi Technologies sometimes referred to as the ‘Chinese Tesla’. http://www.tischendorf.com/2014/10/06/kndi-kandi-technologies-potential-long-term-topping-chart-pattern/ The long-term topping pattern remains in place. Price got rejected by triple resistance: Former gap area resistance Topping tails cluster MA 200 resistance As long as the stock stays below that resistance area there is [...]

Read the full article →

Martin Zweig’s Timeless Trading Quote – It’s okay to be wrong; it’s unforgivable to stay wrong

October 7, 2014

A quick post for all of you out there who do appreciate timeless wisdom from veteran traders. Here is one of Martin ‘Marty’ Zweig’s famous trading quotes: It’s okay to be wrong; it’s unforgivable to stay wrong. https://twitter.com/tischendorf/status/519581327792697345 To me, the “tape” is the final arbiter of any investment decision. I have a cardinal rule: [...]

Read the full article →

DDD 3D Systems – Former Market Darling Threatening To Accelerate Downtrend

October 7, 2014

A former market darling, 3D printing stock DDD – 3D Systems, has formed a bearish descending triangle that is threatening to break to the downside. So far the stock hasn’t experienced any kind of notable volume increase. That could be indicative of market participants being in denial during a strong downtrend. A long-term top is now [...]

Read the full article →

KNDI Kandi Technologies – Potential Long-Term Topping Chart Pattern

October 6, 2014

The chart of KNDI – Kandi Technologies the ‘Chinese TSLA – Tesla Motors’ is displaying several red flags indicating that the stock might have put in a long-term topping pattern. This looks like a clearly defined double top that is part of a bigger bearish head and shoulders pattern. The stock has broken the weekly [...]

Read the full article →