Current USERX price = 8.07, Up 9 cents (1.1%) 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 9/24/17, described how the gold stocks had risen into two index resistance signals at the start of September, but were apparently in the process of declining into two simultaneous index signals: A 16-20 index short-term buy signal AND a long-term 221 index buy signal. That Report was titled, “Approaching The Next Gold Stock Buy?”. There wasn’t a bullish prediction until/unless those two index buy signals generated, but that time was approaching and was likely to occur. Two simultaneous cycle/index buy signals (from different time frames) are always more predictive than one signal (and three signals, as per January 2016, are the most powerful/predictive)
The two index buy signals DID generate on 9/29/17 for execution on the following market day, 10/02/17. The system was developed (in 1985) to allow for a one-day “notice” to buy or sell because my colleague and I were professors who couldn’t spend time watching the market. Therefore, the two buy signals executed at USERX 7.85 on 10/02/17. To date, the gold stocks made an intra-day low on that day before closing slightly higher.
The short-term 16-20 index predicted a rather immediate rise into a 16-20 index sell signal. This index is “contrarian” because it buys on declines and sells on rises (like a stochastic indicator). That rise has occurred as USERX rose for 6 out of the following 7 trading days.
The rise generated the expected 16-20 index resistance sell signal on 10/10/17. The sell signal therefore executed on last Wednesday (10/11/17) at USERX 8.21 for the short-term 4.5% gain and Jeff sold some. USERX has declined for the past two trading days since the sell signal but the long-term 221 index remains on its buy signal. It would take a significant 7+% decline to sell that index.
In conclusion, the expected buy signals occurred and the gold stocks rose into short-term resistance this past week. The intermediate-term remains bullish from a 35-39 index buy signal on 8/17/17 at USERX 7.36. And the long-term has yielded bullish 221 index signals simultaneously for USERX and the HUI on 10/02/17. The short-term has therefore become uncertain because prices could decline into another 16-20 index short-term buy signal OR rise through last week’s resistance due to the longer-term cyclical buy signals (that only occur every year or two). That issue should be decided over the next two weeks. If the gold stocks decline over these next two weeks, the intermediate-term buy signal SKI could get stopped out AND then quickly generate a new bullish intermediate-term buy signal quickly (on a 2-day rise). That would be an excellent new entry/buy point with an instant sell-stop.
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.