Current USERX price = 7.08, Down an extraordinary $2.35 (25%) 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, 3/08/20, remained long-term bullish on USERX (i.e., the gold stocks). But for the first time in a decade I wanted to be helpful by providing the most significant portion of the weekend SKI Update. That included the “NOW, the most important and simplest information is that the sell-stop for Mechanical SKI AND Jeff is a USERX 92-96 index sell signal”. It included the 92-96 index’s back prices. The reprinted portion of the Update also included the next most important section on an extremely bullish outcome: A rise to a new 35-39 index buy signal BEFORE a 16-20 index sell signal. Based upon SKI, something big was about to occur and Jeff was trying to be helpful.
The next day, on Monday (3/09/20) the gold stocks plunged, with USERX dropping from 9.43 to 8.60. The 92-96 index was being hit/touched, as per the numbers presented in the 321gold Report, moving towards a sell signal. And although most measures (e.g., HUI, GDX) rose a little the following day, USERX then dropped to 9.51. That moved the 92-96 index closer to a sell signal. And when the gold stocks began a further decline in the morning of 3/11/20, the 92-96 index’s sell signal was imminent/clear enough for Jeff to send the second morning Sell Update in 2 weeks, for the first time ever. Prices usually decline into a such a sell signal. The historic decline accelerated. Jeff, SKIers, and Mechanical SKI lost money but avoided the ensuing about 20% crash into 3/13/20 at USERX 6.06. All of this, as well as every index signal and Update is available to any subscriber starting from early 2006. The history prior to that, solely on 321gold, from 321gold’s inception to 2006, is unfortunately no longer in the 321gold archives.
The crash executed a 92-96 sell signal on 3/13/20 at USERX 6.06. That master index signal absolutely “can” mark an exact low. Unfortunately, Jeff is unable to say “buy” on such an index signal. NOTE HOW USERX FELL TO A NEW 4-YEAR LOW EXACTLY 218-222 TRADING DAYS FROM THE MAY 2019 LOW OF USERX 6.46. Just like the prior Report described how USERX had executed an 884 index sell at the exact top on 2/24/20 just as USERX went above the Summer 2016 top of 10.28, the cycles still occur (virus or no-virus).
The decline into 3/13/20 therefore moved the long-term 221 index towards a sell. Not only that, but it also simultaneously went below the prices from 442 and 663 trading days earlier. THEREFORE, WE HAD AN HISTORIC 3 SIMULTANOUS LONG-TERM INDEX SIGNALS EXECUTING two trading days later (on 3/17/20) at USERX 7.02. Plus, the 221 index then bought the next day (3/18/20 at USERX 6.14) and then sold again the next day (3/19/20 at 6.25). Three instant index signals are also historic and last occurred with the 16-20 index at the beginning of the largest portion of the 2008 crash AND at the exact low of the 2008 crash.
The historic index signals have caused Jeff to “call this” as the start of the next major “market phase”. The prior one was easily called bullish at the end of January 2016 because the indies all went to buy signals. Before that there was the bearish phase from 2011. There are plenty of analysts calling this the start of a Great Depression. Perhaps, but they usually don’t state if it is a deflationary or an inflationary depression. I’m awaiting further market behavior on this new market phase. The parabolic top in the Gold:Silver ratio and the apparent blow-off bottom in interest rates suggest that this new phase will inflationary (an inflationary depression is the worst possible outcome for society, in my opinion). Stock markets usually rise during inflationary depressions.
And then the gold stocks rocketed higher last Monday-Wednesday. That was sufficient to execute yet another 2 simultaneous index signals: A new 221 index bull market buy signal tied with a short-term resistance 663 index sell signal (the 663 index is the long-term equivalent of the 16-20 index). A new long-term bull also requires a 443 index buy signal. USERX’s rise to 7.50 last Wednesday (3/25/20) came within 1-penny of that index. Thursday morning’s rise went above index and had that held, a long-term bull pattern would have been evident. But the gold stocks reversed lower and turned Jeff short-term bearish because the tied 221 and 663 index signals are supposed to mark short-term resistance. The HUI avoided falling below its 221 index (the HUI held above its May 2019 low) and rose all the way up to hit/touch its master 92-96 index on Wednesday and was rejected.
Therefore, I leave you with some short-term bearishness. In a couple of days, if prices decline, the 663 index will quickly execute a supportive 663 index buy signal. That might simply be a 4% decline to fill the open GDX, GDXJ, and HUI daily open up-gaps from last Monday-Tuesday around HUI 185. A stronger decline could even go back below USERX’s 221 index at 6.50 again.
A new bull needs to be on a 221 index buy signal. In 13 trading days, that index will begin to include the June 2019 rise. The bullish case will need USERX to be rising and staying above the index’s rising back prices. I’d suggest using smaller investments to be cautious.
Best Wishes, Jeff
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