Current USERX price = 7.21, Up 60 cents (9.1%) since the last report 4 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, May 19, 2019) didn’t have much to report. One scenario involved a rise in a few weeks over the prices from 16-20 trading days earlier and then a continuing rise to the 92-96 index (whose back prices would be declining at that time to the 6.60-6.67 range) mark a LIKELY HIGH. An alternative scenario was that such a rise over the 16-20 index would yield a quick decline to a true SKI 16-20 index buy signal.
After that 5/19/19 Report, the gold stocks drifted lower for 1.5 weeks into 5/29/19. USERX did begin to hit/touch the 16-20 index because it held 1-cent above its 5/02/19 low of 6.46 even as various indices (e.g., the HUI) made new 2019 lows. USERX was supported by a continuing rise in the Australian gold stocks (the XGD index). However, SKI did not provide any indication whether USERX would hold above 6.46 (as it closed at 6.47 on 5/28/19 and 5/29/19) or whether it too would break down below the 5/02/19 low of 6.46 for continuing bearishness.
The rise to 6.56 on 5/30/19 began to “smash” the 16-20 index towards its signal as USERX went above 4 of the 5 prices from 16-20 trading days earlier. USERX needed to rise to over 6.72 the next day to get over the 16-20 index (needing a large 2.6%). Surprisingly, it did so, and the gold stocks surged higher during the following week up to the 92-96 index (that was the first scenario described in the 5/16/19 Report).
The rise into the execution of the 92-96 index’s signal (as USERX rose over the prices from 92-96 trading days earlier) on 6/06/19 at 7.10 could have marked a high, as per the 5/19/19 Report on this website. In fact, SKIers were “allowed to” go short on 6/06/19 but Jeff recommended maintaining a long position because the rise had been so strong that it was likely to also rise up to the final Regular SKI index, the 35-39 index, AND SUCH A CONTINUING RISE WOULD YIELD A POTENTIAL SKI BULL MARKET. AS IMPORTANTLY, A CONTINUING LONG POSITION WOULD HAVE A RAPIDLY RISING SELL-STOP: The 92-96 index’s back prices were rocketing higher from the 1/24/19 low of USERX 6.60 up to USERX 7.47 and then up to the 2/20/19 annual high of 7.87. Therefore, if the gold stocks (USERX) didn’t keep rising, the 92-96 index would sell to stop-out the long position. Incidentally, the HUI, GD, GDXJ, and GLD (etc.) all had the same SKI index pattern.
After the 92-96 index’s buy signal (and potential high) on 6/06/19 at USERX 7.10, the gold stocks did immediately decline 2% into Monday, 6/10/19 at USERX 6.93. Gold had a large (worrisome) gap-down drop that day. The USERX 92-96 index was already within 2 days of generating a bearish sell signal and that tenuous situation continued on Tuesday (6/11/19) as USERX rose just 3 cents to 6.96.
I was then interviewed by Jordan Roy-Byrne in the morning of last Wednesday (6/12/19). Please see this linked interview describing the SKI-situation as of Wednesday morning regarding the current potential SKI Bull Market with a rising sell-stop. And look at the SKI Charts linked at that website as you listen. You may need to enlarge the charts on your screen (press Control+ on a keyboard) and you should move towards the right to where the black chart dots end. Focus on the blue, green, and red lines.
The Legend is:
The black dots are the daily USERX prices, Blue: 16-20 index, Red: 35-39 index, Green: 92-96 index, Faded purple: 221 index, Faded red: 442 index, Faded blue: 663 index, Turquoise: 884 index
In this past Wednesday’s (6/12/19; my 66th birthday; smile) 11 AM PST interview, Jeff repeatedly stated that USERX needed to close above 7.18 on this past Friday (6/14/19) or the 92-96 index would generate a sell signal to end this brief chance at a SKI bull market. USERX did rise to close at 7.21, but Friday was a “worrisome day” for the bullish case. USERX did drop down (based upon Jeff’s intra-day estimates) to 7.18 as the precious metals lost all of their large morning gains into intra-day losses, but then they recovered to stay above 7.18.
I also stated that USERX would need to be above “about 7.40 by the 6/19/19 U.S. Federal Reserve announcement in order to stay above the rising green line”. The exact number can change a little based upon the mathematics for the SKI indices. THE RISING SELL SIGNAL IS VERY CLOSE TO GENERATING. JEFF MAKES “NO PREDICTION” BEYOND IT’S A POTENTIAL BULL MARKET BUT THE SELL-STOP COULD BE ACTIVATED ANY DAY NOW. Jeff has been empirical and the discipline may not be easy to adhere to, but that’s SKI (that’s what I do since 1985 but I keep learning).
Yes, if the gold stocks don’t keep rising and the sell-stop is activated, USERX could still get over the green line again for a SKI Bull Market. Bulls occur when USERX rises above the green line 92-96 index BEFORE rising over the red line 35-39 index. That occurred in January 2016 for the 2016 bull market and has occurred just one other time since the Summer 2016 top. The historical information is that there was a potential SKI Bull Market 92-96 index buy signal on 6/18/19 at USERX 7.59. USERX then rose to the 35-39 index (like now) on 7/09/19 at 7.90. That was 1-cent and 1 day prior to the major high on 7/10/19 at 7.91! Therefore, the same thing could be occurring here and exercising discipline via the sell-stop for long positions is strongly recommended.
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.