Special SKI Report #5:
I know my critical points...
USERX | historicals
written Sunday May 28, 2006
SKI Special Report #5
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
work. I have initiated a subscription website since 1/13/06 (yes,
Friday the 13th) after having posted free updates for years at
the most informative gold site, 321gold, since its inception
approximately five years ago. 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 32 years and that
is what they will continue to do!
Almost 3.5 months ago, on 2/11/06,
I posted an article entitled "Special
SKI Report: Bull Market Corrections." That article emphasized
that bull market corrections are "Hard and Fast". And
the first low of that corrective period ended the next day.
About 2.5 months ago, on 3/11/06, I wrote the
second SKI Special Report for 321gold, again emphasizing
that bull market corrections are "hard and fast", posing
the question, "Did yesterday mark the low?" That
article was written one day after the low.
About 1.5 months ago, on 4/11/06, in the third
Special SKI Report, I wrote "Was that a perfect and
important high that occurred on a classic run of 4 consecutive
days up in USERX into 4/06/06 (at USERX 15.18, a new century
high)? Or will this Third Special SKI Report somehow mark its
third consecutive low? ". That was timing bingo #3 on
these Special Reports as the metals' market bottomed that day
for another explosive month yielding large new highs for the
And finally, about 3 weeks ago, on 5/05/06, in the
Fourth SKI Special Report, I reprinted a perfectly-timed
sell message for 4/19/06 and portions of my weekend SKI Update
that contained such ebullient statements as "SKI is on
predictive fire!". The conclusion section of that fourth
report on 5/05/06 posed the question, "So is this Update
just happening to mark a high?" I cannot provide definitive
public predictions because I must maintain the privileges of
paid subscribers. Therefore, this current SKI Report continues
to provide additional post-hoc (after-the-fact) SKI data to non-subscribers
(and a little information about future possibilities).
The SKI indices contain short-term (16-20 trading days), intermediate-term
(35-39 trading days), and long-term (92-96 trading days) indices.
The long-term 92-96 index remains on its true and rare bull
market since 8/09/2005 at USERX (the gold stock mutual fund)
8.07. As I've written since that date, the precious metals
are expected to rise over many months and years until that index
sells. That primary index currently sits at a profit of
91%, down from the 113% reported in the prior 321gold SKI
Report due to the recent severe decline, with USERX (the
U.S. precious metals mutual fund) priced at 15.41. A more comprehensive
description of these mathematical indices and their history is
I use 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 guestimate 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 chart above shows a
run pattern of historic importance, the classic 2 days Up and 5-or-more days Down
run that averages a drop of 2 or more percent per day. It's a
killer of a run down that has occurred during all of the prior
precious metals' bull markets, but it is a rare phenomenon. This
recent run down lasted an unusually long 8 consecutive days,
with USERX dropping almost exactly 16%. Of-course gold dropped
about $100 during this decline.
Since the last SKI Report on 5/05/06, the gold stocks have experienced
a significant decline. Perhaps you're expecting me to now write
that I sold the exact high and had "another SKI bingo"
because I posed that "Is this a high?" question at
that time. Unfortunately, the other "bingos" that I've
reported for months were real, but this time it was a SKI
"strike-out". I did sell some on Friday, 5/05/06,
the day of the last Special SKI Report because gold was on a
run of 6 consecutive days up. But then when prices only dropped
about 1% on Monday (5/08/06) I re-bought to participate in another
2-day explosion into the century high of USERX 17.96 and gold
at $730 on 5/10/06. But possibly due to the remarkable timing
calls over the prior many months and the overconfidence exuded
in my prior 321gold SKI Report, I didn't sell at that top. I
did, however, refuse to maintain margin/leverage/futures long
since the call of the high on 4/19/06.
USERX is still 16% below its century high. Gold is still $80
below its century high. And most importantly, the gold stocks
have generated the historic run pattern of 2 Up and 8 Down. Such
runs mark all types of massive market turning points throughout
the past 32 years. The all-time lows in 1976, 1982, and 1998
were marked exactly by such run patterns. The massive highs in
1980, 1983, and 1996 were marked exactly by such runs. Such runs
have also marked very important intermediate (multi-month) turning
points. The "meaning" of this run pattern depends upon
several factors: (1) the position of the SKI indices (currently
still in a true and rare bull market), (2) the behavior immediately
after the run ends (in the current case, 1 Up day (5/23/06),
1 spike Down day to within one penny of the 35-39 index (5/24/06),
and now m2 days Up, and (3) the SKI index pattern that follows
shortly after these runs are completed. Again, I cannot disclose
all of this information in deference to my website readers. In
fact, although I am confident about my current short-term (weekly)
call on this market (short-term calls are usually harder than
longer-term predictions, but not currently), I am currently less
confident regarding the intermediate (monthly) and longer-term
(many months) predictions. I can tell you that we appear to
be approaching a very SKI-critical moment in approximately 2
weeks. I know my critical points, but I am not perfect!
The SKI indices should have the market "boxed in" in
about 2 weeks in order to make a very high probability call
regarding the very important monthly and multi-month trends.
You'll learn the answer in hindsight in the next SKI Report,
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
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. And if
you remember, I don't want a subscription cost to deter "the
small investor" or "the person with special circumstances"
from subscribing/profiting. Seriously, if the above applies,
write to me at email@example.com.
Note that I don't provide "free trials" or "prorated
refunds": (1) the website provides many many free samples
of SKI Reports, (2) I won't cater to folks who want free info
and then leave, but will give discounts to people who need them,
and (3) It takes time to learn and judge a timer whom you haven't
been reading for a long time (there are currently over 1000 Skiers,
most of whom have been reading me for years; see the SKI website
rankings rising at Alexa.
Best wishes, Jeff
Jeffrey M. Kern,Ph.D., is an academic psychologist with a specialty in the measurement and prediction of human behavior. The communications provided are for informational purposes only and are not intended to be investment advice or recommendations for specific investment decisions. Dr. Kern is not a registered investment advisor, but is registered as a commodity trading advisor (CTA). The information provided is considered accurate, but cannot be guaranteed. Investments/trading in narrow market segments or gold futures is for individuals willing to accept a higher level of risk for the opportunity of greater returns. Past performance is no guarantee of future performance. His website is www.skigoldstocks.com.
Communications should be sent to: firstname.lastname@example.org.
Copyright © 2002-2020 Jeffrey Kern. All Rights Reserved.