Current USERX price = 7.79, Down 25 cents (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 1/07/18, continued to be purely bullish since the December 18, 2017 potential bull market 92-96 index buy signal. Bull markets REQUIRE that the master 92-96 index buy (On the SKI Path of Trades; as described in the SKI Technical description. This is not like going over some moving average(s). It is the unique comparison of today’s price to prices from specific prior 5-day periods in the past. The 92-96 index compares today’s price to prices from 96, 95, 94, 93, and 92 trading days earlier.
It’s usually the case that when the 92-96 index buys and then the 35-39 index buys (as occurred on 1/26/2016 and next on 12/18/2017), a bull market has commenced that yields a 100-500% rise in a broad basket of gold stocks over 6-12+ months. But such potential bull markets can fail.
The primary sign of a failure occurs when the 92-96 index sells after such a buy. “It just so happens” (that’s sarcasm because there aren’t “coincidences”) that if you go back 92-96 trading days, that is now just past the September 2017 peak in the gold sector. When I last wrote 3 weeks ago, USERX was at 8.04 and that peak was at 8.09-8.27, so it appeared quite likely that the gold stocks would surpass that peak and maintain the bull market. But USERX and almost any other dependent measure failed to do so and the 92-96 index has sold. It’s mathematically possible (and rather easy) for the 92-96 index to re-buy if the gold stocks continue to rise just a few percent because the index’s back prices are beginning to decline, but that’s never happened in the past 44 years.
Prices have not yet begun to decline. That appears to be due to longer-term cycles. Jeff primarily uses the regular SKI indices (the 16-20, 35-39, and 92-96 indices) for investing and trading, but the longer-term (218-222, 439-443, and 660-664) indices are converging for an ominous index pattern. If you go back exactly 218-222 and 439-443 trading days, you’ll see that those indices will be at the following prices during this coming week:
In other words, if the gold stocks do not rise enough soon (exact date and mathematics reserved for subscribers), it “just so happens” that THE 221 AND 442 INDICES WILL GENERATE EXACTLY SIMULTANEOUS SELL SIGNALS. Such an index pattern would be “ominously bearish” and Jeff is preparing to short the sector if the sell signals occur. Of-course, nothing is perfect and even if such sell signals generate, a brief further rise after the sell signals could generate a new 221 index buy signal. But again, that too, has never occurred during the past 44 SKI-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 $25 (for a one month subscription) or more ($200 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.