Current USERX price = 7.27, Down 7 cents (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 last SKI Report (written on February 10, 2019) described how the gold stocks had risen again to a major technical point on 1/31/19-2/01/19 marked by a HUI resistance 16-20 index sell signal, USERX 221 and 442 index buy signals at USERX 7.47, and a 10 Down and 5 Up USERX run pattern that historically had marked highs. Most importantly, the 221 index was close to another sell signal as USERX had declined from 7.47 down to 7.34.
The subsequent little decline on 2/11/19 WAS sufficient to generate a dangerous 221 index sell signal that executed the next day at USERX 7.30. Therefore, Jeff had to sell some (not “all” because the Regular SKI 35-39 index remained on its buy signal from 1/03/19 at USERX 7.07). Nonetheless, if USERX simply remained above 7.25 on just the next day, the 221 index would re-buy for potential bullishness again.
And so, when the gold stocks only dropped a little on 2/13/19 to USERX 7.28, the 221 index generated another re-buy. The 221 index buy signal executed the next day (on 2/14/19) at USERX 7.36. That quick little sell-to-buy cost me 6 USERX cents (1%).
The gold stocks then did another immediate surge higher. Therefore, that new 221 index buy signal was “correct” and yielded a solid 7% rise to USERX 7.87. However, USERX manifested a 3 Down and 4 Up run pattern into that 2/20/19 rise. When USERX declined, it would complete that run pattern which provided an historical 80% of marking at least a short-term high.
The gold stocks have declined strongly from that 2/20/19 run pattern high. Gosh, this market has been “jagged” with rather quick/brief sharp rises and declines. The decline generated yet another quick 221 index sell signal and that index does not appear to be close to re-buying this time. But the decline is about to generate short-term USERX and HUI 16-20 index supportive buy signals (the HUI’s 16-20 index last bought on 1/18/19 at an exact 150.77 low and then sold at an exact high on 1/31/19 at 170.38).
Overall, USERX declined from a July 2018 high of 7.91 down to the Fall 2018 low of 6.25. It then rose back to 7.87 on 2/20/19 to form a “cup” with a sideways-down “handle” likely to follow. The sharp decline last week is about to generate a short-term index supportive buy signal. Therefore, the gold stocks’ short-term trend should be about to bottom, the intermediate-term trend is likely down (bearish) from the 2/20/19 high, but the long-term corrective decline from the Summer 2016 high likely completed in the Fall of 2018.
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.