 Special SKI Report #27
SKI Gold Prediction is Still Crazy
Jeffrey M. Kern, Ph.D.
Email: jeff@skigoldstocks.com
USERX
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Written Oct 14, 2007
Published Oct 15, 2007
Current USERX price = 18.86,
UP another 6.6% since the last report 3 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.
New Material:
The last
SKI Report on 9/22/07 occurred after a 25%
upward explosion in the gold stocks from their lows on August
16th, 2007. As per each of these free Updates, I tried to provide
solid hints on the SKI System's current view of the gold stocks
and the precious metals market. The emboldened, key statements
from the last Special Report were:
1. Despite the powerful rise,
several technical factors just aren't right.
2. 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.
Despite that rather clear warning,
the gold stocks have continued to advance over the past three
weeks. USERX (the gold stock mutual fund) now sits at new highs
for the CENTURY, surpassing its May 2006 high by approximately
5%. Gold bullion has had, I believe, its highest monthly close
in history. And yet, I was looking back at April 19th, 2006,
the "good old days of the last true SKI bull". USERX
closed at 16.36. I sent a sell alert that morning as the run
pattern was 1 Down and 5 Up. Gold dropped about $15 the next
day. But note that gold was around $630. Now gold is about $118
higher. USERX is currently 15% higher than it was 1.5 years ago
while gold is almost 19% higher. Aren't the gold stocks supposed
to lead gold or at least out-perform gold on a percentage basis?
Fundamentalists will state that the poor stock performance is
due to high oil prices (a major cost for mining companies), but
oil prices were high in the late 1970s and the mining shares
soared. Is the stocks' 1.5 year relative underperformance an
aberration or is it predictive? I don't have an answer to that
question. I was just providing it for perspective and some food-for-thought.
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 continues to indicate 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 17% since then,
but if you can follow the last paragraph's description, prices
needed to decline and sell this initial 92-96 index buy signal
and THEN generate the true buy signal at lower prices. That did
not happen because prices have simply gone sideways and then
risen since the last report three weeks ago.
I had been expecting that prices
would be declining by this time. Prices have risen! The SKI technical
system is on a potential bull market 92-96 index signal and prices
have risen to new century highs. Fundamental factors appear to
be extremely bullish for the precious metals as the Federal Reserve
appears to have abandoned a U.S. dollar that sits near/at all-time
lows. And yet, the death run pattern from the high in May 2006
has not been adequately resolved, the SKI index pattern doesn't
fit with the past 34 years of index patterns, and the current
short-term run pattern is one day down and four days up into
this past Friday (10/12/07).
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.
Best wishes, Jeff
 SKI archives
email: jeff@skigoldstocks.com
Jeffrey M. Kern,Ph.D., is an academic psychologist with a specialty in the measurement and prediction of human behavior. The communications provided are for informational purposes only and are not intended to be investment advice or recommendations for specific investment decisions. Dr. Kern is not a registered investment advisor, but is registered as a commodity trading advisor (CTA). The information provided is considered accurate, but cannot be guaranteed. Investments/trading in narrow market segments or gold futures is for individuals willing to accept a higher level of risk for the opportunity of greater returns. Past performance is no guarantee of future performance. His website is www.skigoldstocks.com.
Communications should be sent to: jeff@skigoldstocks.com.
Copyright © 2002-2023 Jeffrey Kern. All Rights Reserved.
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