Current USERX price = 8.927.99, Up another 93 cents (11.6%) 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, July 7, 2019) described how the gold stocks had maintained their new bull market but needed to hold up during the coming week to avoid an UNexpected 92-96 index sell signal. The bull market was first introduced to 321gold readers in the 6/16/19 Update that referenced a 6/12/19 interviewdetailing the bull market’s buy signal and the expected 100+% rise over 6-12+ months.
Although the gold stocks declined fractionally on 7/08/19, the subsequent rise clearly maintained the bull market by avoiding a decline to below the master 92-96 index (the prices from 92-96 trading days earlier). Since that 6/12/19 interview, USERX has risen 25.6% in just 6 weeks.
Is that “too much” of a rise in such a short period of time? NO. The gold stocks have risen an average of 0.8% per trading day during that time period. If that pace continued, it would take approximately 120 trading days to reach the predicted 100+% minimum profit in the unleveraged and broad-based USERX mutual fund. The HUI, GDX, GDXJ, etc., usually are more volatile than USERX and rise more during bull markets (but decline more during the bear markets). 120 trading days equals 6 months of time, so the pace of the rise is a little fast, but it’s still in line with the typical SKI bull market rise of 100+% over 6-12 months.
A corrective decline is possible at almost any time now. That is NOT a prediction for this coming week. The SKI indices work best at marking corrective lows (buy points) during bull markets in the same way that they are best at marking highs on rises during bear markets. Therefore, SKI isn’t very good at predicting the start of a 2-6 week corrective declines here. SUCH DECLINES WILL (100% historical probability) OCCUR during bull markets and, in fact, the larger the decline, the greater the subsequent rise during the bull market (empirically true since 1974).
Jeff is rarely “adamant”, but I have been and continue to be adamant on this bull market buy signal. The SKI index pattern is just so perfect and the bull market 92-96 index should not (“will” not) sell until at least 2020. Even the very long-term set of indices (the master 221 index, the 442 index, and the 663 index) generated perfectly/extremely bullish buy signals in June. There have only been 6 prior SKI bull markets since 1974: In 1979, 1982, 1993, 2001 (321gold posted), 2005 (321gold posted), 2016 (321gold posted), and now. It takes patience and discipline to make money in these highly volatile gold stocks. Ride this bull market.
And buy more on a corrective decline to a 16-20 index buy signal (as USERX, and probably the HUI, decline to below the prices from 16-20 trading days earlier). USERX (led higher by its 12% holdings in the Australian gold stocks) is not yet close to such a buy signal since it just made a new multi-year high on Wednesday (7/24/19) at 9.13. But a several-week decline would yield the 16-20 index’s buy signal. Sooner or later, that will happen (it always has, it “has to” happen), and the approach that most investors should follow is to buy more when the corrective decline occurs or just hold long. A longer corrective decline could even stretch out to yield a 35-39 index signal (on a decline to below the prices from 35-39 trading days earlier), but that is less likely historically. Personally, Jeff is a little “under-invested” at 85% long using about 40% of my net worth. Therefore, I am primarily looking to buy more when the decline occurs and will “suffer” with larger paper-profits if such a decline occurs from a higher price level.
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.