Current USERX price = 5.48, Up 6 cents (1.1%) 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 gold stock SKI Report, written on Sunday 3/22/15, was not predictive and contained multiple IF statements. But the situation clearly was not particularly bullish. USERX was in the process of rising over the 92-96 index.
Such a 92-96 index buy signal was going to be XXed Out (i.e., not buyable and possibly marking a high). The gold stocks rose during the 2 trading days after that Report and executed the 92-96 index “buy” signal on 3/24/15 at USERX 5.59. SINCE USERX HAD JUST RISEN FOR AN EXTENDED 5 CONSECUTIVE DAYS INTO THAT EXECUTION OF THE XXed OUT 92-96 INDEX “BUY” SIGNAL, JEFF HAD TO RECOMMEND THAT SKIERS CONSIDER INITIATING A SHORT POSITION ON 3/24/15 AT USERX 5.59. In other words, there was a reasonable probability that 5 days up into an XXed Out major index signal would mark a high.
The gold stocks then declined for 5 consecutive days down to USERX 5.28 on 3/31/15. Such 5 Up and 5 Down run patterns are historically meaningful. The top of the run higher marks a high and the bottom of the run pattern (which often has extended down to 9+ days) MAY mark a low.
The gold stocks have rebounded from that possible low on 3/31/15 at USERX 5.28. The rise has gone over the USERX prices from 16-20 trading days earlier and generated a resistance 16-20 index sell signal last Monday (4/06/15). And simultaneously with that 16-20 index buy signal, USERX failed to stay over the prices from 92-96 trading days earlier. Therefore, the USERX 92-96 index generated its sell signal last Monday.
The 3/24/15 XXed Out 92-96 index “buy” signal often marks a high and that has been the high-to-date at USERX 5.59. The subsequent 5-day run down often marks a low and it did on 3/31/15 at USERX 5.28. Last Monday’s (4/06/15) rise was enough to generate a 16-20 index resistance sell signal AND a simultaneous bearish 92-96 index sell signal. The HUI generated the same index signals with a one-day delay.
The SKI indices generated a simultaneous Double Sell index pattern last Monday (4/06/15) and SKIers were supposed to initiate short positions or at least sell/hedge any long positions the next day. Such Double Sell index patterns have often yielded significant declines (not “always”). The last such Double Sell occurred in January 2013 and was followed by one of the largest declines ever recorded over months. That does not “have to” occur here. The gold stocks did rise back up on this past Friday and USERX did return to the same price (5.48) that generated the Double Sell index pattern last Monday.
SKI is set up for too many possible index signals to describe herein, but the indices are bearish as of last Monday. Again, that situation can change, but the situation is highly dangerous for long positions. The prior run pattern high of USERX 5.59 and its low of USERX 5.28 are supposed to be technically/psychologically significant. Jeff does not enjoy reporting that a Double Sell index pattern has occurred. A simultaneous Double Sell index situation absolutely “should” mark a significant technical moment….
Best Wishes, Jeffski
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.