Current USERX price = 10.55, Down 72 cents (6.4%) since the last report 3 weeks ago.
Introduction (repeated from prior Reports):
I have been using my unique SKI indices to predict price changes in the precious metals' market for more than two decades. And my indices continue to mark the critical points. I have initiated a subscription website since 1/13/06 (yes, Friday the 13th) after having posted free updates for years at www.321gold.com. SKI is a timing service; although almost everyone seems to believe that market timing is impossible, that IS what the SKI indices have done for 36 years.
The SKI indices contain short-term (16-20 trading days), intermediate-term (35-39 trading days), and long-term (92-96 trading days) indices. A more comprehensive description of these mathematical indices and their history is found here. Basically, the indices compare today's price to prices from a specified prior time period. The name of the index specifies the time period (e.g., 92-96 index = compare today's price to prices from 96, 95, 94, 93, and 92 trading days earlier). Although I use the oldest gold mutual fund, USERX, for analyses, the predictions are applicable to the broad precious metals' market. I do not recommend or analyze specific stocks, but my subscribers from around the world regularly discuss individual issues on our Forum. In addition to the truly unique SKI indices, I also use "run patterns" to guesstimate turning points in the precious metals' market. A "run" refers to a pattern of daily up and down market closing prices. If the market has 3 consecutive days of higher closing prices, the run is "3 up". If prices then decline for 2 consecutive days, the run becomes "3 up and 2 down". If prices then close higher the next day, the run changes to "2 down and 1 up". Some people have referred to run patterns as "worms". A run pattern is only completed after the direction of closing prices has changed. I have compiled a listing of every run pattern that has ever occurred and generated probabilities that the end of the run marks a high or a low, moderated by the indices themselves.
The last SKI Report, written on 5/29/22, described how the gold stocks had plunged into 5/12/22 at USERX 10.25. The major issue was whether that plunge had formed a Life Run low for a final corrective bottom from the August 2020 high. The HUI HAD completed a Life Run via a 2 Up and 6 Down averaging more than 2% down per day. But USERX had NOT completed a Life Run pattern because it had a 1-penny rise (on 5/11/22) that had interrupted the run down. In any case, the ensuing rise was already hitting/touching the master 92-96 index’s resistance. The last Report concluded with the typical bold-faced print:
And so, that conclusion was correct, as usual (but, of-course, not “always”). The gold stocks continued to rise after that May 29th Report. USERX declined the next day to 11.11 and then surged higher for 2 trading days into 6/02/22 at 11.81. GDX rose to high of 33.52 and GDXJ rose to 42.19. USERX formed another rare run pattern of 3 consecutive 1 Down and 2 Up runs that reached the 16-20 and 92-96 indices’ resistance but didn’t quite generate those indices’ mathematical resistance signals. That run pattern has occurred only 3 times since 1974. It marked “nothing” at the start of 1982 SKI bull market, the exact high of that bull market, and the exact major intermediate high of 1/05/2021. Therefore, that was supposed to be a high because the SKI indices were poised to be marking resistance.
The ensuing decline held up just enough to actually generate the 16-20 index sell signal that executed on 6/07/22 at USERX 11.44 and the 92-96 index’s XXed Out (resistance) “buy” signal on 6/09/22. But the decline to USERX 11.01 on 6/09/22 instantly went back below the 92-96 index to generate a 92-96 index sell signal. That sell signal executed the next day (as always) on 6/10/22 at 11.31. The 6/10/22 sell signal opened the SKI Path of Trades. If a new 92-96 index buy signal occurred, it would be a potential bull market buy signal. Note how exact SKI math is: Had USERX risen to 11.39+ on 6/10/22, as the gold stocks gapped lower and then rocketed/reversed higher, an instant buy signal would have generated, but USERX failed by only rising to 11.31. Still, all that needed to occur was for USERX to remain above 11.03 last Monday (6/13/22) by avoiding a 2.5+% decline. Such a buy signal would also support the conclusion that the HUI’s Life Run low WAS valid.
But last Monday’s (6/13/22) plunge avoided generating that 92-96 index’s buy signal. This is an example of how difficult it is to write a projection that lasts for the 3 weeks between each of my public updates. Plus, I have to reserve some important content for subscribers.
Now, last week’s plunge occurred into a potential full moon (6/14/22) low and generated a supportive 16-20 index buy signal (falling below the USERX prices from 16-20 trading days earlier). Going forward, the new uncertainty occurs because that 16-20 index buy signal was XXed Out by historical rules (the buy occurred just AFTER a master 92-96 index sell signal on 6/10/22). Therefore, there is the 80% historical probability that the gold stocks will decline through last week’s low before rising enough to get back above the prices from 16-20 trading days earlier. It was/is a “dangerous” buy signal that has yielded some historic plunges. And last week’s HUI intra-day low went below the HUI’s Life Run low. That is NOT supposed to happen when there is a Life Run low and increases the likelihood of a further decline. The alternative, as of now, is that the gold stocks will rise back to index resistances in about 12 trading days. It’ll be difficult to obtain a new master 92-96 index bull market buy signal because the index’s back prices are RISING exactly from the January 2022 low of 10.55 (that just “happens to be” [sarcastic smile] the current USERX prices)….
Best Wishes on the new Juneteenth holiday, Jeff
If you are interested in following and learning more about the SKI indices, I'll write another Report in three weeks or you can shell out the big bucks for a SKI subscription. Weekly Updates are available by subscribing for a month (or longer if you're wise and cheap enough to want to save money) at my website www.skigoldstocks.com for the princely sum of $30 (for a one month subscription) or more ($240 for an annual subscription). I also provide more frequent intra-week daily messages/alerts at a slightly higher price along with access to our informative Forum.