Current USERX price = 10.81, Down 45 cents (4%) 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 gold stock SKI Report, written on Sunday 6/10/12, described how the gold stocks had just risen into multiple index resistance signals on 6/06/12, but that the structure of market was likely changing back to bullishness since it became bearish in January 2011. The index-based expectation was for a brief decline, a brief rise, and then a decline into a higher low (above the May 2012 low) that would generate “multiple (and usually powerful) index buy signals in July”. That conclusion was a continuation of the expectation expressed in the SKI Report from 6 weeks ago: “If prices do rise for a few weeks, index resistances would be hit and major buy signals would be triggered on a several-week decline to a probable higher low”.
Long-time readers hopefully know that I follow-up and describe when the indices are wrong and when the indices are accurate. They were correct again. Subsequent to that 6/10/12 SKI Report, the gold stocks declined briefly and then rose meekly back to near the 6/06/12 high while repeatedly hitting/touching 35-39 index resistance. The expected next short-term high was for 6/18/12 or 6/19/12, and then a decline would likely trigger the regular SKI system to join the long-term SKI System on a buy signal that “should” change the structure of the market into bullishness. Simply stated, that IS what has happened to date.
USERX declined into 6/28/12 and generated its true 16-20 index buy signal. The HUI also declined into 6/28/12 and generated its 16-20 index oversold true buy signal. More interestingly, the HUI behaved perfectly last week: By remaining just over 422.01 on 6/27/12 and then just barely coming back to close over 409 on 6/28/12, the HUI also generated its simultaneous 35-39 index buy signal. And last week, the HUI also generated its long-term system buy signal on 6/26/12, but since the regular short-term system is usually more accurate than the multi-year system indices/cycles, buying was withheld until the regular system’s indices turned bullish.
SKI generated multiple index buy signals on 6/28/12, as expected from the Reports from 6 weeks and 3 weeks ago. The HUI generated what is usually a particularly bullish simultaneous index Double Buy pattern along with a long-term index buy signal. The surge on the next day (this past Friday, 6/29/12) brought USERX up into resistance again, but this time, based upon the HUI Double Buy, USERX is likely to generate another buy signal within the next 2-6 trading days. I’m refraining from specifying what USERX (i.e., the gold stocks) needs to do to confirm last week’s buy signal during this coming week and I’m also refraining from reporting the duration and strength of the expected rise. If you want to know the next rather quick buy point and/or the rather strongly expected target/resistance and stop-loss/gain index point, you’ll need to “shell out the small bucks” and subscribe (sorry, really, but I do need to reserve something for subscribers).
Best Wishes, Jeff
Please note: I am going on vacation so the next SKI Report will not be until week beginning Jul 29, 2012.
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.