Current USERX price = 8.74, Up an extreme $1.68 (23.7%) 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, 3/29/20, was a description of the index signals into the crash low and subsequent rebound. The key conclusions were that a new historic bullish phase had commenced but had reached a short-term high. USERX had risen to a simultaneous new 221 index buy signal and a 663 index resistance sell signal on Friday (3/27/20) at USERX 7.08. The 221 index’s buy signal was a renewed long-term bull market buy signal but the tied 663 index sell signal (as prices rose over the prices from 660-664 trading days earlier) meant that prices should decline in the short-term. The expected short-term decline to a 663 index buy signal (as prices fell back below the prices from 660-664 trading days earlier) was a buying opportunity. Quoted, “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”.
And so, the gold stocks declined for the next 2 trading days to fill those open up-gaps. The decline generated the expected 663 index buy signal on 4/01/20. Index signals mark lows or highs within 2 trading days of the exact low/high with a 95%: The mean is at zero trading days (exact) with a standard deviation of 1 trading days. The 3/27/20 resistance 663 index sell signal was 2 trading days late for marking a high and the execution of the 663 index’s buy signal on 4/02/20 (one day after the signal generates) was 1-2 trading late in marking a short-term low. Therefore, Jeff recommended more buying on 4/02/20 at USERX 7.22 and on 4/03/20’s decline to USERX 7.10.
The ensuing powerful rise executed the 663 index’s next sell signal on 4/08/20 at USERX 7.58, but prices were historically supposed to continue to rise to the final index long-term index signal, a 443 index buy signal (the long-term indices are the 221, 442, and 663 indices). And so, prices kept surging higher. The rise was strong enough to finally activate the Regular SKI indices (the 16-20, 35-39, and 92-96 indices). The rise on 4/09/20 was sufficient to generate the 16-20 index’s sell signal for execution on the next trading day.
When prices rise to generate a 16-20 index sell signal, prices are supposed to rise into the execution of the sell signal on the next trading day. That “can” mark a high, but 90% of the historical times, the gold stocks keep rising into a 35-39 index or 92-96 index buy signal. And so, the gold stocks surged higher again on 4/13/20 at USERX 8.97. The 16-20 index executed its sell signal and had rocketed higher for 5 consecutive trading days.
Index resistance was being reached on 4/13/20, but again, prices usually rise to the 35-39 index and/or the 92-96 index.
The 92-96 index resistance “buy” signal generated on 4/15/20 and executed last Thursday (4/16/20) at USERX 9.00. The quotation marks around the word “buy” are used to indicate that it is resistance as USERX (and the HUI, GDX, XAU, etc.) rises over the prices from the master 92-96 trading days earlier. HISTORICALLY, THIS 4/15/20 92-96 INDEX SIGNAL YIELDS A DECLINE TO A 92-96 INDEX SELL SIGNAL, AND USUALLY OCCURS “QUICKLY”.
As importantly, and “worrisome” for any bullish scenario, is that the resistance 884 index SIMULTANEOUSLY executed its sell signal last Thursday (4/16/20) at USERX 9.00. The 884 index sells on rises and buys on declines (like the 663 and 16-20 indices). This was the index that executed its last sell index exactly at the USERX multi-year USERX high on 2/24/2020 at 10.61. Yes, since this a contrarian index that buys on declines, and it just executed its sell signal, A DECLINE MUST YIELD THE NEXT 884 INDEX BUY SIGNAL.
The prior 884 index buy signal (on a decline) executed on 3/02/20 at USERX 8.81. Of-course, that buy had to occur after the prior 2/24/20 exact-high sell signal. Jeff thought that could be a low, and prices did rise for 3 trading days, but when that buy signal was broken to the downside, the real crash immediately ensued. Therefore, for the intermediate-term and longer-term bullish case, if the gold stocks do decline as expected in the short-term (this week), the resulting 884 index buy signal “had better be” marking the next low. And the 92-96 index will quickly sell to mark a technical spot, with a re-buy needed on a renewed rise. Longer-term, SKI is supposed to be bullish from 3/27/20 at USERX 7.08 via a 221 index buy signal. That index had bought back in June 2019 at 8.08, rode USERX up to the 10.61 high, and then sold on the crash at 7.02 and simply re-bought at 7.08. It’s as if the index never sold! The HUI’s 221 index never sold. But SKI bullishness needs this expected short-term decline to be … short-term.
Hoping that you and your family are well,
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.