Current USERX price = 17.70 UP 25% since the last report 4 weeks ago. What a surge!
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 the most informative gold site, 321gold, since its inception approximately six years ago. 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 32 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 at http://www.skigoldstocks.com/about.php. 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.
I apologize for this Report being one week late. My wife experienced severe medical problems and emergency surgery eight days ago and I had thought that this Report was due today, but my personal problems would have prevented me from writing on time even if I had realized that a report was due a week ago. Thankfully, she has survived and is recovering well with titanium plates and screws in her "golden" neck. I also thank readers who cared enough about these SKI Reports to email me, asking why I had not written in the face of a powerful one-month surge in the precious metals.
The last SKI Report on 8/26/07, as per each of these free Updates, tried to provide solid hints on the SKI System's current view of the gold stocks and the precious metals market (as if SKI knows it all NOT). The emboldened, key statements from the last Special Report were:
And I concluded that Report with, "Be safe, best wishes, Jeffski", trying to imply that safety was important.
That 218-222 index signal marked a major low. The fifth and sixth trading days after that Report yielded a large rise in the gold stocks. I had covered my short position a day after the August 16th low, but Jeff was wrong (incorrect) even though it may have seemed that the Report had forecast this past month's surge: Although the 8/24/07 218-222 index signal reported in the last Report DID mark a short-term high to the day, the short position that was supposed to be established at that time was stopped out at a loss 1.5 weeks later as prices surged. I had expected that the week following that Report would begin the next downtrend into the final bottom, but on Friday 8/31/07, the gold stocks surged unexpectedly and avoided a very bearish SKI Index signal on the very last day (the indices are "accurate to a penny and a day"; just as the prior Report showed how a bullish signal had been avoided on the last day, leading to the last crash). I lost about 3% of all of my non-retirement monies and despite the surge of this past month, I "only" have about a 10% profit to show for this year (2007) and I did NOT participate in that beautiful rise. But I've been in cash for all but about 5 weeks of this year (low risk). SKI has been in cash for most of 2007 and made its money on its only "true buy signal" at the exact low of 6/26/07. It is called "conservative patience via a mechanical system that marks the critical lows and highs".
This isn't good advertising, but always has integrity and honesty. And this website, 321gold, is one of the few websites that even allow for the postings of my sometimes bearish reports. This isn't the standard "professional sounding" article, it is personal, conservative, and then is accurate when it provides true signals. SKI missed the low of June 2006, the low of October 2006, AND the low of August 2007. It has avoided doing much of anything, after making 84% in the 2005-2006 true bull market, but it did hit that exact June 2007 low with a true buy. I don't get rich in a week or a month, but make money each year (unless you do excessive leveraging and gambling at times when SKI is uncertain). It's never easy in this most volatile market sector, and the articles that purport that huge monies are to be made in short periods of time aren't likely to be accurate. The true SKI buy and sell signals of this century are provided in the "Free Preview" section of my website at http://www.skigoldstocks.com/free.php. SKI has done very well this decade, but certainly has not captured all of the rises and declines, and doesn't buy/sell every week or every month. And I am writing with some emotion.
The current situation: The gold stocks have now risen enough to approach their highs of the century (May 2006) as gold bullion has slightly exceeded its May 2006 high. I know of several analysts who are bearish, but every article on this website seems to state that now is the time to buy and that the great PM rise has finally been reinvigorated as the dollar (cutely described as "Universal Toilet Paper" by some of my Forum members) falls to near its lowest level in history and the U.S. Federal Reserve has cut rates and effectively abandoned/devalued the dollar. It appears to be a great time to buy the gold stocks and make some fast and big money.
The SKI indices show that it IS possible that a new bull market phase (where prices go higher and higher over a year and settle at a new higher level) began on 9/11/07, but the system also indicates that several technical factors just aren't right. SKI bull markets are marked by a 92-96 index buy signal that occurs in a specific manner so that it is "On the System Path". A detailed description of this pattern is included in the article "About SKI" at http://www.skigoldstocks.com/about.php. A true bull requires much more than prices simply moving over a certain price level. Basically, prices must fall to generate a 92-96 index sell signal that marks the LOW and then prices immediately rise enough to generate the true buy signal and the bull market period begins (ala the bull period beginning on 8/09/05 for SKI).
SKI IS on a 92-96 index buy signal since 9/12/07 and prices HAVE risen 11% since then, but if you can follow the last paragraph's description, prices need to FALL back and sell this initial 92-96 index buy signal and THEN generate the true buy signal at lower prices. That will require quite a nice decline from here to set up a true SKI bull market. I'm trying to prevent you from buying here and now and I don't care if my subscribers yell at me for "disclosing too much" because I just can't stand the barrage of purely bullish articles that are sent to my email and to websites that state something to the effect of "Buy gold now" after these stocks and metals have exploded over the past month. And I can't even tell you that a decline over the next few weeks (not necessarily the next few days) will yield a true SKI bull market. WE ARE WITHIN A FEW DAYS OF A POTENTIAL GENERAL STOCK MARKET DEATH RUN PATTERN. It is a rare pattern and I don't know if it will complete until it does so. The gold stocks have never held up during a STRONG general stock market decline (despite erudite articles to the contrary). Furthermore, the gold stocks experienced the SKI "death run" pattern in May 2006 and the next true bull market phase isn't supposed to begin (has never begun, since my data base started in 1974) until the SKI "life run" low (defined only for subscribers; sorry). I am getting rather vehement here and this may sound like a "diatribe", but I am willing to put my "golden neck on the surgical table" (as per my wife) and suggest that if you buy here, you are very likely to experience some significant pain over weeks if not longer. If the gold stocks simply skyrocket for weeks and months at this point, my golden neck deserves to be surgically removed, but I am stretching it out to offer my free advice to continue to be SAFE at this time. The SKI system and I must be "crazy".
I write these Special Reports in part as a "come-on" to attract new readers. But I truly write with honesty and sincerity, trying to provide as much information as possible while maintaining deference to paid subscribers. But when other analysts write that no one could have seen X coming, I disagree. There never is 100% certainty with any prediction system, but at times I profess that the index certainty approaches 99% (such as the true short to intermediate-term buy signal generated on 6/26/07 and executed on 6/27/07), and I am writing to subscribers that Jeff is going 100% long with leverage. In three weeks, when I write again, it should already have been more than evident what the direction of this next move has been (as usual).
If you are interested in following and learning more about the SKI indices, I'll write another Report for 321gold 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. 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.
I still say, "Be safe". Take that as a contrary indicator if you so desire, since everything looks so bullish and SKI must be crazy.
Best wishes, Jeff