Current USERX price = 9.11, Up another 19 cents (2.1%) 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 gold stocks fulfilled the SKI definition of a bull market in mid-June, as reported on 321gold.com. Each SKI Report since then has involved a new higher price for the broad-based gold stock mutual, USERX, and new multi-year highs for the North American, Canadian, and (especially) Australian gold stock measures. The prior bull market for the SKI indices was in January 2016.
The 2019 bull market remains intact and should continue to be intact for “many” months. But, as almost analyst would write/advise, the last SKI Report (written on Sunday, July 28, 2019) was discussing “when” not “if” the first corrective decline would occur. I am quoting that Report’s conclusions because they remain valid and need to be reread:
After the last SKI Report, the gold stocks continued to rise for 2 trading days, but then plunged 4+% on the U.S. Federal Reserve’s announcement day (7/31/19; down to USERX 8.69). That proved to be an excellent place to buy some, but the 1-day decline didn’t come close to generating a 16-20 index buy signal. The gold stocks then rose into a USERX high of 9.62 on 8/08/19.
It’s only been 6 trading days since that USERX 9.62 high and only a few days since Cash Gold rose to reach its long-term horizontal resistance at $1525-$1550, but the 5% USERX (and HUI) decline IS now APPROACHING the supportive 16-20 index. A further multi-day decline would be needed to generate a 16-20 index buy signal for execution the following trading day. During the January-August 2016 bull market, the two 16-20 index buy signals executed at exact lows that were simply followed by renewed impulsive rises. Again, that does not always occur because corrections can extend out in time to allow the 35-39 index’s back prices to rise, yielding a decline to that index’s corrective low (likely weeks later). BUT, if one can handle sitting through some possible paper loss out/down to the 35-39 index, buying on 16-20 index buy signals during bull markets has always yielded a rise back to or above the index’s buy-in price. And then much larger gains over time…
Best Wishes, 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.