Current USERX price = 8.09, Up 80 cents (11%) 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 9/03/17, described how the 9/04/17 XXed Out 16-20 index buy signal has marked a low and that a rise should occur into a 16-10 index sell signal AND a 35-39 index buy signal. That Report concluded that “The two index signals, coming together (as often occurs) should mark the next critical point, usually to within a day. We know that those index signals aren’t marking a low. They should mark resistance (with some subsequent decline or at least sideways movement) and we should soon see if they will also occur on a “break-out”.
The gold stocks (USERX) DID then rise into a 16-20 index signal on 8/15/17 and then the 35-39 index buy signal on 8/17/17. But SKI also generated a third index signal, an 881-885 buy signal on 8/15/17. The 884 index is a contrarian index: it buys near lows and then sells on rises near highs. It compares the current price to prices from 881-884 trading days earlier. The combination of the 16-20 and 35-39 index signals suggested some sideways movement for a week or two, but the addition of that 884 index buy signal suggested that the gold stocks would rise over several weeks into an 884 index sell signal at around USERX 8.00. In any case, mechanical SKI bought the 35-39 index buy signal on 8/17/17 at USERX 7.36.
The gold stocks then went sideways-to-higher for a week, but of-course then surged higher along with gold during this past week. USERX has risen a little past 8.00, up to 8.09 on this past Friday.
The rise yielded the 884 index sell (resistance) signal that executed on this past Thursday (8/31/17) AND a second index signal, a 92-96 index “buy” signal that executed on this past Friday (9/01/17). The quotation marks around the word “buy” indicate that the index signal marks resistance and is not a new true buy signal. It’s common for SKI index signals to occur in bunches of 2-3 index signals that increase the likelihood that the index signals are marking a critical technical point. So SKI generated 3 index signals 2.5 weeks ago and has now generated 2 index signals marking this past Friday as the next critical technical point.
The 884 index sell signal clearly marks potential resistance. The regular indices’ pattern (a 16-20 index sell signal, followed by a 35-39 index buy signal, followed by the final 92-96 index’s “buy” signal) has an approximate 80+% historical probability of marking a high. That’s based upon the 25 occurrences since 1974. In the other 20% of occurrences, the gold stocks have continued to rise about another 10% before experiencing a meaningful decline. The last time this occurred was on the 2/23/17 execution of the 92-96 index’s “buy” signal. You can check the 321gold archives for my descriptions of that occurrence before and after it occurred (http://www.321gold.com/editorials/kern/kern021317.html and http://www.321gold.com/editorials/kern/kern030617.html). Jeff and SKIers were supposed to sell 100% on that 2/23/17 92-96 index “buy” signal at USERX 8.78 prior to an instantaneous decline to USERX 7.51 and then months of further consolidation. The next trading day (on 9/05/17) should be important. A rise on 9/05/17 obviously will show that the 92-96 index’s signal did not mark an exact high…. Of-course there is more information for subscribers, but the above is the most important information.
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 daily messages/alerts at a slightly higher price along with access to our informative Forum.