ORIGINAL INSTITUTIONAL STUDIES UPON REQUEST NEM example - 2/5/2008
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Daily Commentary about SSRI - Silver Standards
2/25/2008
The technical analysis concepts here are all descrbed much more in our books, Help routines
and software instructions.
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Introductory Notes
Warning: The comments are made by the author, who has more than 25 years'
experience trading with these tools. But the tools and the author are not infallible.
(I wish!) So, anyone making trades based on this information must do so entirely
at their own risk and understand that the stock market is inherently risky and is often
very difficult to predict. Even insiders may lose money. I believe these comments
will help you understand better how to trade using TigerSoft tools. And I believe,
trading with them will make your investments safer and much more profitable.
The red Buy and Sell signals are based determined by the software automatically.
the computer screens the trading results from more than 60 different trading systems
and then posts the best for the last year. The best trading system often continues
for many months and even years because each stock has its own personality based
on the type of traders who buy and sell it most often. Very often professionals control
the stock's short-term swings based on the tools TigerSoft uses. To see how successfully
professionals rig these movements, use TigerSoft.
TigerSoft charts show the technical system which is most profitable for any stock
and how profitable that system is. To prevent others from copying our software, I
have taken off the charts shown here the basis of the Red Buys and Sells. The trading
results are provided. Unless otherwise stated, they include all the trades from long
and short positions, where we assume $10,000 is initially used and each trade costs
$40 in commissions and slippage. It is assumed that the trades are taken at the
close of.the day of a Red Buy or Sell signal. However, the trading results can also be
shown based on taking and closing out positions on the next day's opening after
a Red Buy or Sell. When this is true, I point this out explicitly.
2/25/2008 (c) William Schmidt, Ph.D. www.tigersoft.com
SSRI is on a new Red Buy. The declining blue 50-day ma now at 35.08 will act as resistance
on any rally. The down-trendline going through the 3 most recent bottoms crosses at 35.53. (Use
TigerSoft Diagonal Line feature. It tells you where the line now crosses.) The stock's closings have been
weak since the October peak at 48. If the convertible bonds the company is offering are quickly purchased,
I would think the stock will recover back to 43, barring any dramatic drop in Silver, which I do not foresee.
So, we will watch for announcements to that effect and hope that the stock starts to show more closing strength.
For the moment though, 35 is our trading objective. So, I would not buy too aggressively at the opening
tomorrow.
Buying on the next day's opening after a red Buy would have resulted in 15 trades since 5/4/2007.
11 were profitable, averaging +5% per trade. 4 were unprofitable, averaging 4% each. Taking each trade
and compounding the trades would have resulted in a 44.0% gain since last May. Note that this
assumed you start with $10,000 and each trade costs $40 in commissions and slippage. The stock
will be sold on opening the day after the next red Sell.
With Silver making new highs, one would think it only a matter of time before SSRI recovers nicely.
The black OBV Line is declining and is in a downtrend which is much weaker than its price action. Aggressive
buyers are missing. So a rally past 35 cannot be expected. The TigerSoft Accumulation index is in red bearish
territory. Something is causing holders of the stock to sell on intra-day rallies. The ITRS indicator shows the
stock has been slightly underperforming the weak DJI since the start of this year.
I am concerned that this silver stock cannot go up when silver is rising to new highs. What will it do
when Silver goes down in price? Earnings just came out for its competitor PAAS. They were very strong.
I believe SSRI has been held back because it has potentially diluted its shares by raising up to $120 million by
offering convertible notes: 43.33 will act as a resistance, as you can see below.
"The Convertible Notes are being offered and sold at a price of 100% of their face value and will
bear interest at a rate of 4.5% per year. Silver Standard expects to receive net proceeds of approximately
US$115.6 million (or approximately US$133.1 million if the over-allotment option is exercised in full) from
the offering of Convertible Notes, after payment of the commissions to the initial purchasers and expenses
of the offering..
"The Convertible Notes will be convertible into Silver Standard common shares at a fixed conversion rate...
Holders of the Convertible Notes will receive cash and, if applicable, common shares (or, at Silver Standard's
election, in lieu of such common shares, cash or any combination of cash and common shares)... Notes will be
convertible into Silver Standard common shares at an initial conversion rate of 23.0792 common shares per US$1,000
principal amount of Convertible Notes converted, representing an initial conversion price of approximately US$43.33
per common share, which is approximately 130% of the closing price of Silver Standard's common shares on the
Nasdaq Global Market on February 21, 2008. The offering of Convertible Notes is expected to close on
February 27, 2008, subject to receipt of any required regulatory approvals and the satisfaction of customary
closing conditions." (Source: http://biz.yahoo.com/iw/080222/0365505.html )
Day of the Week Trading Pattern.
When we look at the data for the last
year, and TigerSoft makes this very easy, we see that Mondays
and Tuesdays are much more likely to
bring weak openings and closings than Wednesday, Thursday
or Friday. Buying at the close on
Tuesday is often very profitable, as Wednesdays produce a higher
opening 56.3% of the time and an even
higher close 59.9% of the time. Thursdays are up 52.7%
of the time and Fridays show rallies
52.7% of the time.
