Current USERX price = 8.83, Up $1.16 (15%) 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 Sunday 5/29/16, described how the SKI bull market from 1/24/16 was continuing and how the gold stocks had just declined into a second 16-20 index buy signal on Friday, 5/27/16, at USERX 7.67 as gold had also dropped for 8 consecutive days into a potential run pattern low. Jeff had bought back what was sold on 5/23/16 at USERX 8.25 just as the owner/founder of 321gold was touting Gann Global Financial being stopped out in expectation for a more severe decline.
The first 16-20 index buy signal had marked the exact low on 4/04/16 and this second one also marked an exact low: The gold stocks simply rose strongly since that last SKI Report.
The rise to new 2016 highs did, however, rise back over the prices from 16-20 trading days earlier to generate the 16-20 index’s sell signal on 6/08/16 at USERX 8.86. Remember, the 16-20 index is a contrarian index for the regular SKI indices (the 35-39 and 92-96 indices) and the 660-664 index is the contrarian index for the very long-term indices (the 218-222 and the 439-443 indices). When the gold stocks rise over those indices, it is usually marking resistance. The USERX 660-664 index sell signal had marked the exact high on 4/29/16 at 8.39, but now USERX has finally risen above that prior top.
But don’t celebrate further bullishness just yet! Remember, in the last SKI Report, I described how the HUI had still been unable to get over its long-term 663 index and I included the SKI chart for the HUI showing how each time the index had been hit/touched, the gold stocks had declined (actually just back to each of the 16-20 index buy signals at the next low). Now, when USERX and the HUI rose into the 6/08/16 sell signal, the HUI once again rose back to its resistance 663 index. And this time, the HUI just barely made it over the 663 index to generate its actual sell signal at the exact high-to-date on 6/09/16 at HUI 235.15 and USERX 9.08.
During this past week, each intra-day rise that hit/touched the HUI’s 663 index was rejected, despite gold rising to that new high at $1318+ on 6/16/16.
Since the last SKI Report coincided with another SKI index buy signal, I “gave” that one to you and I hope that you bought for the 15+% rise over the subsequent 2 weeks. But Jeff has sold to reduce his bullish exposure to the gold stocks because the HUI’s 663 index had marked the 6/09/16 high-to-date for this bull market with its sell signal and the USERX and HUI 16-20 indices executed their sell signals just one day earlier (missing the high-to-date by one day; normal).
Just as gold had fallen for 8 consecutive trading days into the 5/27/16 16-20 index buy signal, gold rose for 7 consecutive trading days during this past 1.5 weeks for a potential run pattern high while the gold stocks could not surpass the closing highs that occurred with the index sell signals. That’s not a bullish indication.
Most interestingly, the HUI’s resistance 663 index had the following back prices (from 660-664 trading days earlier) as of this past Friday (6/17/16): 249.21, 241.97, 245.49, 236.67, and 227.11. Where did the HUI close on Friday? 227.11. The resistance index was hit/touched EXACTLY again. Jeff does not believe that is a “coincidence”. This continuous string of SKI-perfection during 2016 won’t continue indefinitely….
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.