Current USERX price = 13.12, Down 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.
In the last gold stock SKI Report written on Sunday 5/24/09, titled “Strange Gold Stock Behavior”, I described how the gold stocks had been rising in a strange manner that was not SKI-correct and that I would have to rely upon long-term cycles/indices to call the next top because SKI can miss rises (ala the one from the XXed Out SKI buy signal on 4/17/09) but the gold stocks always come back down the regular SKI indices unless it’s a true SKI bull market. Such a decline was needed because SKI was not on a true bull market buy signal despite turning back to multi-year bullishness in the Fall of 2008.
The long-term indices marked the top by generating signals on the day of the closing high (6/02/09) and sold on 6/04/09. It was one of those “amazing” weeks because the market had to perform in a rather precise/exact manner in order for indices that are based upon prices from 2 and 3 years ago (occurring at the exact lows from 2 and 3 years ago!) to mark a current market top.
So I decided to reprint that Special Update sent to subscribers on 6/03/09 to sell and/or short on the close of 6/04/09, as follows (with a few XXXXs to preserve some information for subscribers):
“SKI Intra-Week SELL Update 6/03/09 4 PM PST USERX = 13.63, Down 78 cents (5.4%)
After being multi-year bearish on the gold stocks since the May 2006 “death run high”, the “life run low” in the Fall of 2008 predicted multi-year gold stock bullishness. Nonetheless, SKI has been strangely calling/marking highs on 2/20/09 and 3/23/09, a behavior that is not consistent with bullishness: During truly bullish periods SKI calls lows as opposed to highs. The 2/20/09 high marked by the 92-96 index has not been surpassed by gold bullion, but the gold stocks strangely rose to a higher high in June 2009 and SKI once again marked that high by selling/shorting on its long-term indices on 6/08/09. The decline from those long-term signals should be meaningful and should continue until the master 92-96 index generates its sell signal to open the SKI Path for a true bull market.
The gold stocks need at least another 12.5% decline from the current price (USERX= 13.12) to set the stage for a true bull market in the precious metals and the gold stocks (where prices rise and rise to establish higher levels). Such a set-up will be possible this summer IF/WHEN the current decline continues, as is expected rather immediately.
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 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.