Current USERX price = 7.96, Down just 13 cents (1.6%) 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 9/03/17, described how the gold stocks had risen into two index resistance signals: An 884 index resistance sell signal on 8/31/17 and a more important 92-96 index resistance “buy” signal on 9/01/17 at USERX 8.09. Such index signals were resistance into overbought territory and the historical recommendation was to sell 50-100%. Such index signals often mark exact tops, so we were wondering how the gold stocks would perform on the next day after the 3-day holiday weekend (9/05/17).
The gold stocks continued to rise for a few days after those index resistance signals. The fact that the signals did not mark an exact high (+ or – a day) suggested that the intermediate-term uptrend would be intact but that a correction was nonetheless historically likely: One is always supposed to sell (due to the historical probabilities) on such index signals.
Gold and various gold stocks indices have now declined, but USERX has only dropped 2-4%. It normally takes about 16-20 trading days from the 9/01/17 resistance signal before a SKI index (the 16-20 index) will be set up for a supportive buy signal (as the gold stocks decline to below the index’s back prices; the index is “contrarian” and buys on declines).
That time is approaching and therefore, such a buy signal is approaching. More interestingly, the master 221 index IS set-up for a simultaneous buy signal (as USERX remains above the declining prices from 218-222 trading days earlier). That master 221 index has a strong track record of marking important technical points.
It’s not unusual for SKI index signals from different time frames (cycles) to occur almost simultaneously. And when they do bunch together, that increases the likelihood that the signals are marking a critical technical point. In this case, if the two buy signals occur, it should be marking significant bullish support.
The bearish case would be maintained if there is a large decline during this coming week to avoid the 221 index’s buy signal. The bullish case needs USERX to remain above the 221 index’s back prices soon AND thereafter. The 221 index’s back prices for this coming week are USERX:
SKI generated almost simultaneous 35-39 and 884 index buy signals back on 8/16/17-8/17/17. That group of index signals yielded the decent rise into the two index resistance signals on 8/31/17-9/01/17. But there is now the set-up for two new buy signals. There’s no prediction stated here, until/unless those two SKI index buy signals generate, but the set-up (nice possibility) IS approaching.
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.