Special SKI Report #238
Gold Stock Timing Update

Jeffrey M. Kern, Ph.D.
Email: jeff@skigoldstocks.com
USERX | historicals
Written Sunday Jun 21, 2020
Published Jun 22, 2020

Current USERX price = 10.34, Down 16 cents (1.5%) since the last report 3 weeks ago.

Introduction (repeated from prior Reports):

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.

New Material

The last SKI Report, written on Sunday, 5/31/20, emphasized that there was an 80+% probability bearish USERX run pattern (3 Down and 5 days Up) that formed at the 5/20/20 new multi-year high of 10.96. The bold-faced conclusions stated “That completed an 80+% probability "TOP of some type" on USERX's first down day. Therefore, traders were allowed to do disciplined-selling. It was also a worrisome 92-96 trading days from the early January 2020 high. Although further details were provided to SKIers, the basic information is that this run pattern has marked a high in 18 of the prior 22 occurrences since 1974 (including 6 declines that were intermediate-term declines lasting more than 1 month)”.

What happened? The gold stocks HAVE been in a downtrend since the bearish run pattern via the first down day on 5/21/20. But the downtrend for USERX and Gold has been historically mild. There have been some solid rising days that were instantly reversed by some solid down days.

The key point is that each decline has NOT gone below the master 92-96 index’s bull market buy signal nor the very long-term 221 index’s buy signal.

Now, the strong decline on 6/11/20 generated a 15-19 index buy signal for execution the next day. The 15-19 index is just a little quicker/faster than the primary 16-20 index. Both indices buy on declines to below the USERX prices from 15-19 or 16-20 trading days earlier. They occur together 98% of the time. The 15-19 index is monitored because any index can be off by 1-2 trading days for marking the exact technical spot. The 16-20 index has been the best since 1974 with a mean of zero trading days and a standard deviation of 1 trading day for marking “the spot”. And as the gold stocks declined on 6/12/20 to a new multi-week low at USERX 9.99, the 15-19 index executed its buy and the usual 16-20 index generated its buy signal for execution the next day (6/15/20).

Those short-term buy signals were the first “disciplined” SKI buys since the 5/20/20 run pattern top previously reported. The recommendation was to wait for the 16-20 index’s buy signal on Monday (6/15/20) because the ongoing sell-stop is a decline to below the master 92-96 index (the USERX prices from 92, 93, 94, 95, and 96 trading days earlier). The 92-96 index’s 5 back prices were at 9.55, 9.72, 9.77, 9.91, and 9.72 for Monday (6/15/20). Therefore, a decline to below 9.72 or 9.55 would smash the 92-96 index towards an “unwanted/unexpected” sell signal and buying would be deferred.

What happened? The gold stocks gapped lower on 6/15/20 as the 16-20 index bought. The brief 3-4% “plunge” went right down towards moving the 92-96 index towards its sell-stop sell signal. But then the gold stocks gradually climbed and continued to rise into a positive close after a Federal Reserve announcement that they would begin buying individual companies’ corporate bonds. Although the news attributed the 6/15/20 rise to that “news”, the rise began several hours prior to that news. So, for Jeff (based upon the SKI indices), the 6/15/20 reversal was either just “market nature-SKI” or there was insider-trading based upon early knowledge of the news.

In any case, the 15-19 index’s buy signal marked the exact closing USERX low and the 16-20 index’s buy signal marked the day of the intra-day low.

The conclusion was and is that the gold stocks should be in a rising period from the 6/12/20-6/15/20 index buy signals. If the rise occurs, it will generate a first resistance 16-20 index SELL signal within 1-3 weeks of the 6/15/20 buy signal. And on this past Friday (6/19/20), the solid rise to USERX 10.34 went exactly into that 16-20 index’s resistance because the prices from 16-20 trading days earlier were 10.71, 10.73, 10.35, 10.34, and 10.31.

USERX (and the HUI) remains on its potential long-term bull market 92-96 index buy signal and its potential longer-term bull market 218-222 index buy signal. The short-term trend has likely reversed to UP or SIDEWAYS-TO-UP from the 5/20/20 top. The gold stocks are supposed to rise into a 16-20 index resistance sell signal. Predictions are based upon the index signal(s), the current price, AND where the indices’ back prices will be tomorrow, in a week, a month, etc..

If USERX just keeps rising in this coming week, the 16-20 index’s sell signal will generate at over XXX in XXX trading days (XXX = reserved for subscribers). Such a quick rise is less likely to mark much of a top. The “best guess” is that the 16-20 index’s sell signal will execute right at the 3-day July 4th holiday weekend at above USERX XXX. All of the 16-20, 35-39, and 92-96 indices’ back prices will then be at almost the same prices level for a very significant technical point.

I’ll publish (as usual) an Update on 321gold.com in 3 weeks, one week after the holiday weekend. A decline during that week would likely yield major index signals for all 3 of the regular SKI indices. I am not “hiding something” from readers here. SKI strongly suggests the 7/02/20++ technical point due the intersection of Time-and-Price for multiple indices, but the price action into 7/01/20-7/02/20 (for the 16-20 index) and then the price action during several days after the holiday weekend are very likely to yield intermediate-term (1+ month) and longer-term predictions. The short-term low is likely to have occurred, but the intermediate-term and the currently long-term bullish index signals are set-up for some resolution. Look at the USERX prices from 16-20, 35-39, and 92-96 trading days earlier as of 7/02/20 and the week thereafter! You can do that, as I do for subscribers…

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.

###

SKI archives
email: jeff@skigoldstocks.com

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: jeff@skigoldstocks.com.

Copyright © 2002-2023 Jeffrey Kern. All Rights Reserved.

321gold Ltd