Current USERX price = 14.43, Up another 70 cents (5.1%) 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 SKI Report, written on 5/09/21, remained short and objectively simple since the late March 2020 low: The master 92-96 index’s back prices will be rising to the early January 2021 high during the next 2 weeks. I don’t need to “predict” whether the gold stocks will rise above that intermediate-term high because the objective sell-stop will handle the situation.
In the week after that Report, the gold stocks declined into 5/13/21 and hit/touched the 92-96 index towards a sell signal at USERX 13.27. In just 2 trading days, the index’s back prices (from 92-96 trading days earlier) would surge higher to the early January 2021 highs at USERX 14.19-14.36. The gold stocks then rose solidly on Friday 5/14/21. The visual depiction of the SKI indices, with the rising green 92-96 index line and the USERX price in black dots, looked like this (click on the image to enlarge it). They needed to rocket higher to avoid generating the index’s sell-stop sell signal.
And then, right on cue, they did rocket 5.5% higher on Monday (5/17/21) to USERX 14.32 and HUI 323.55. The indices for the HUI actually executed an index signal that could mark high on that day. But USERX (with its diverse Australian, Canadian, South African, and U.S. holdings largely priced in those countries’ currencies) held up to stay above the green line 92-96 index. By the next weekend (5/22/21), the visual depiction of the SKI indices looked like this.
Note how USERX (and the HUI) went right up to challenge or exceed the early January 2021 high. The master green index line is now doing the subsequent plunge from that January high. The supportive blue line 16-20 index is rising and the red line 35-39 index is also rising.
Since the gold stocks are above all the indices, SKI does not provide any short-term or intermediate-term predictive ability. The HUI’s 5/17/21 index signal has continued to mark the HUI’s closing high, but USERX and the Australian XGD has edged yet higher. I wouldn’t recommend chasing further rises here. Eventually (i.e., sooner or later), there has always been a decline to at least the blue line 16-20 index buy signal and even possibly to the red line 35-39 index. A quick plunge to below all 3 of the regular indices would actually set up the most bullish historical index pattern, but that is UNlikely.
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.