Current USERX price = 6.00, Up 93 cents (18.3%) 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 gold stock SKI Report, written on Sunday 12/28/2014, was a potentially historic public update. It described the SKI index buy signal that occurred simultaneously with a special USERX (and GDXJ) 2 Up and 5 Down run pattern on 12/16/14. That rare and potentially powerful combination caused Jeff to title the last public Report as, “An exact low?”. And as a holiday present, I included the SKI index chart and multiple definitive conclusions. The most important conclusions were that IF the sell-stop (a decline to below the 35-39 index) was unexpectedly activated, new multi-year lows should occur, but if the sell-stop was not activated, a significant rise to the 92-96 index would be underway. SKI and Jeff were definitively long the gold stocks from the close of trading on 12/16/14.
Since that 12/28/14 Report, the gold stocks and gold have basically just risen. There have been several times when the gold stocks declined for two consecutive days. Those declines hit/touched the 35-39 index on 1/08/15 and just last week on 1/14/15, but the 35-39 index’s sell signal was avoided each time. Last Tuesday’s (1/13/15) “key reversal down” (a higher high than the previous day and then a decline to a lower low than the prior day), probably caused many analysts to expect a continuing decline, but the 35-39 index did not generate a sell signal.
I asked 321gold to add a “Must Read” to the last SKI Report for the first time in ten years. I hope that you saw the last Report and acted upon it. In a few years from now, the 12/16/14 low may be viewed as THE final multi-year low. I do not yet know if that is the case, but at least I have publicly documented buying on that low. Therefore, when some analyst reports that he/she was the “only person” to “call” or to buy that exact low, you’ll know differently. And SKI does so one day ahead of the buy (the index buy or sell signal generates one day prior to execution to allow for buying or selling on that next day).
The important thing continues to be the 35-39 index’s sell-stop. That index’s back prices have been rising, but will soon peak. If the sell-stop is unexpectedly activated this coming week, the prediction will be for a decline to new multi-year lows. But the 12/16/14 index buy signal and run pattern, as well as subsequent index signals, project a continuing rise into major index resistance (the 92-96 index and possibly even the 218-222 index) over the coming weeks. At that point, Jeff will sell and consider a short position. Since USERX has risen 24+% and the HUI has risen 33% from the 12/16/14 buy signal, it is tempting to take profits here, but the sell-stop is clear and the SKI indices predict a continuing intermediate-term rise.
If the rise continues, the subsequent multi-week decline must be just right to set up a potential SKI bull market. It’s only after the bull market index buy signal that we will know if 12/16/14 truly was the multi-year low.
Once again, this Report is brief because the situation with the gold stocks and the precious metals is rather “clear” and objective.
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 $25 (for a one month subscription) or more ($200 for an annual subscription). I also provide more frequent intra-week messages/alerts at a slightly higher price along with access to our informative Forum and a managed gold futures program. The precious metals are in a very long-term (decade+) up-trend but are the most precarious, volatile, and psychologically difficult market in the world (in my opinion). That's the way it's always been.