Current USERX price = 7.57, Up another 37 cents (5%) 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 4/01/18), described how an anomalous 1-day 60% rise in one mid-sized Canadian mining stock (Klondex Mining) on 3/19/18 had caused USERX to surge 6% higher to form a special run pattern that had a 70% historical probability of having marked a major intermediate-term low. The bullish run pattern had caused Jeff to alter the distinctly/strongly bearish gold stock position that had been in place since mid-January 2018. The article focused on the philosophical difficulty in believing that such an anomalous USERX rise would be predictive for the entire precious metals’ complex. Jeff strongly advocated being purely empirical (“The Price IS the Price”) and disregarding the “reason” (the news) for USERX’s price change even though it “made no sense”. The article did not make a further prediction because USERX had subsequently formed a generally (80%) bearish little 1 Down and 2 Up run pattern on 3/26/18 at USERX 7.41.
Since that Report, the gold stocks went sideways-to-down for a week. That was consistent with the 3/26/18 resistance run pattern that stopped the supposed/empirical intermediate-term rise for two weeks. Then USERX rose back to 7.41 on 4/10/18 to hit/touch that prior resistance level before surging over that level the next day (rising to 7.58). The rise formed another bearish USERX run pattern (only in USERX again) at 2 Down and 5 days Up. And that was followed by another generally bearish run pattern: A 1 Down and 2 Up run pattern into 4/18/18 at USERX 7.68. Those run patterns are likely to yield at least some further short-term “consolidation” (sideways-to-down movement that uses up some time). Some of that consolidation has already occurred via this past Friday’s further decline back to USERX 7.57.
The last report concluded that the situation was likely to “resolve” into a more strongly bullish or bullish trend within 1-3 weeks. Had USERX declined 4-5% to below the 92-96 index during this past week, would it have set up a classic SKI bull market on a brief rise (over the 92-96 index) OR a another solid decline (on a failure to get over the prices from 92-96 trading days earlier).
Since the gold stocks held up well last week, the intermediate-term trend remains sideways-to-higher from that anomalous 3/19/18 USERX bullish run pattern (empiricism was correct this time!; not “always” correct, but the only method that I allow myself to use; without asking “why?” the price rose or declined). But this rise does NOT meet the definition of a SKI bull market because the SKI Path of Trades isn’t on a USERX 92-96 index buy signal. It is on a questionable intermediate-term 35-39 index “buy” signal from 4/03/18 at USERX 7.20. The next technical SKI-point is likely to take another 3-5 weeks as the 92-96 index’s prices rise up to the important January 2018 USERX top of 8.07. If USERX doesn’t rise above that price level at THAT time (Price X Time is what SKI-matters) OR if USERX falls back below the index at THAT time (AFTER a bullish gold break-out), the index will sell to set-up a distinct index pattern: Another chance at a true SKI bull market or the second meaningful decline 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.