Current USERX price = 9.85, Down 23 cents (2.3%) 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 SKI Report, written on Sunday, 1/05/20, described how the bull market was continuing but that gold (after 8 consecutive daily rises) and the gold stocks (which had negatively diverged with gold on 1/03/20) were over-bought and due for a short-term decline. If such a short-term decline occurred, the 884 index’s back prices were rising towards the Summer 2016 top at USERX 10.28. Therefore, this contrarian index/cycle would generate a buy signal on a decline to below the USERX prices from 881-885 trading days earlier.
After that Report, gold continued to rise for another 2 consecutive days to reach a rather extraordinary 10 consecutive daily rises and USERX rose to 10.24. That threatened/tested the Summer 2016 high at 10.28 and was even more short-term overbought. And then the expected short-term decline occurred.
After just 3 trading days, with a decline to USERX 9.82 on 1/10/20, the gold stocks had declined to below the prices from 881-885 trading days earlier. Therefore, the USERX 884 index generated its buy signal on 1/10/20 for execution on the next trading day. Since the index is contrarian and buys on declines, the gold stocks were expected to decline on Monday (1/13/20). A decline to below USERX 9.56 on 1/13/20 would smash the master 92-96 index towards a sell signal. USERX did its common exact 1-cent behavior and dropped 2.5% on 1/13/20 to close at 9.57 as the 884 index’s buy signal executed while avoiding a 92-96 index sell signal. I’d put an exclamation point at the end of that last sentence, but such exact USERX behavior occurs rather regularly.
The 1/13/20 884 index’s buy signal did NOT herald some long-term rise. The long-term SKI indices were already on a major buy signal from June 2019. The master 221 index had bought on 6/24/19 at USERX 8.08 and the 442 index had bought just 2 days later for an EXTREMELY LONG-TERM (years) Double Buy index pattern. The 884 index is short-term. Yes, it should seem “strange” that an index from almost 4 years ago would be a short-term index that is contrarian, but that’s what was discovered in 1985 and it’s been corroborated since then. The 884 index is similar to the regular SKI system’s shortest index, the 16-20 index! (that deserves an exclamation point).
Now, we know that the 884 index’s buy signal marked an exact low AND the master 92-96 index cannot sell for a profit for months (as that index’s back prices are declining from the 9/04/19 high). The bull should be intact over months and even years, but the 884 index IS (99.9% probability) going to generate its short-term sell signal (as prices rise back over the prices from 881-885 trading days ago) within a few days. It’s appropriate for me to reserve the exact date for SKIers. The good news for the bulls is that after that 884 index sell signal, any short-term decline would just generate a second 884 index buy signal because the 884 index’s back prices are continuing to rise. Sooner or later, an 884 index sell signal should be “broken through” to the upside and the index should not come-into-play again for years…
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.