Current USERX price = 11.49, Down 36 cents (3.0%) 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.
This Report was delayed one week due to a family medical emergency. Sorry, but family comes first. The last SKI Report, written on 9/12/21, described how the bearish SKI index pattern had continued. USERX had remained below the prices from 16-20 trading days earlier by declining on 9/07/21 (the exact “last day”) to below 12.44. The boldfaced conclusion stated “If the bearish behavioral pattern is going to continue, USERX is likely to decline to below 11.66-11.65 during the early part of this coming week. For the bullish case to have a chance here (breaking the bearish pattern), USERX would need a rise back to above USERX 12.22 by the end of this coming week.”
The simple basic situation was that SKI would remain bearish until (at least) the gold stocks could rise above the first resistance 16-20 index (the prices from 16-20 trading days earlier). Since June 2021, USERX had risen to the 16-20 and/or 35-39 indices THREE times (on 7/14/21, 8/03/21, and 8/13/21). Each of those instances marked a high. Each time, USERX would rise so very close to getting over the index and then fail, sometimes on the last possible day (i.e., the gold stocks were rejected by that resistance). The indices reflect nature (the market) rather exactly!
After that Report, the gold stocks rose for 3 trading days into 9/15/21 at USERX 12.05. The rise hit/touched the 16-20 index’s resistance AGAIN. Although it took 4 trading days (not the “early part of the week”), the gold stocks’ plunge on 11/16/21 took USERX to another new 2021 low (below 11.66-11.65) and avoided going above the 16-20 index’s resistance again. The bearish pattern persisted for the 4th time.
The continuing decline into 9/29/21 at new 2021 lows for worldwide measures took USERX down to 10.71. After the Australian gold stocks (the XGD.ax) reversed higher on 9/29/21, the North Americans and USERX began to rise. Last weekend’s SKI subscriber update concluded that a short-term rise back to the 16-20 index’s and even the 35-39 index’s resistances were absolutely possible. But conservative Jeff and Mechanical SKI remained in cash.
Now, USERX has risen a typical/decent 1% per day over 7 trading days. It’s risen for 5 consecutive trading days. Such runs higher usually end at 5-6 days. Please take 2 minutes to look at the current SKI Index Chart. You should quickly see that USERX (the black dots) has risen to once again just barely reach the blue line 16-20 index first resistance that’s at 11.49 (the current price) on Monday (10/11/21). And the second resistance 35-39 index (the red line) is just a little higher. The 35-39 index “just happens to be” at the prior 8/19/21-8/20/21 low USERX 0f 11.65-11.66-11.96. When the market rises into prior lows marked by an index, that is likely to mark a second resistance.
In conclusion, the decent rise during the past 1.5 weeks is reaching index resistance(s). During the past 4 months, each rise into the overhead indices has been rejected down to a lower low. During this coming week, we’re going to see whether this bearish behavioral pattern will change. If USERX can rise above 11.59 on Thursday (10/14/21) or be above 11.49 (the current price) on Friday (10/15/21), the 16-20 index would generate its first signal in the past 4 months. It still would represent first resistance, but the bearish behavioral pattern would be changed and Mechanical SKI would get “activated” for new action. Until that happens, the gold stocks remain in an intermediate-term downtrend. The problem for the bullish case is that there’s also the 35-39 index resistance at USERX 11.65 this week.
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.