Special SKI Report #177
Gold Stock Update: Bull Ended But A New SKI Buy May Be Close

Jeffrey M. Kern, Ph.D.
Email: jeff@skigoldstocks.com
USERX | historicals
Written Sunday Oct 30, 2016
Published Oct 31, 2016

Current USERX price = 8.62, Up 20 cents (2.4%) since the last report 3 weeks ago.

Introduction (repeated from prior Reports):

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.

New Material

The last SKI Report, written on Sunday 10/06/16, described how the plunge was “perfect”, that the HUI’s master 92-96 index had sold to end its bull market from January, and how a further decline was expected into a USERX 92-96 index sell signal that would likely mark a low.

The projection for an imminent further plunge was INCORRECT, but had it occurred, it would have very likely been the corrective low and the situation has not really changed. The gold stocks almost always decline into 92-96 index sell signals and the HUI had completed its signal on 10/07/16 at 199.26. It had lost the normal 50% of its bull market rise from January, but USERX still had NOT generated its 92-96 index sell signal. Therefore, the historically-based projection HAD to be that USERX would soon sell its 92-96 index to end its bull market from January.

But what followed was a gradual rise that just barely kept staying above the USERX 92-96 index by pennies each day. In hindsight, the HUI’s 92-96 index sell signal marked a low on 10/07/16, but the rise has been rather “meaningless”: The gold stocks often rise more in one day than the 2.4% USERX rise since that last public SKI Report.

The master USERX 92-96 index HAS now sold on 10/25/16 at USERX 8.90 for its 78+% gain from January (Jeff said sell much higher). The SKI run pattern appeared to mark a high on 10/19/16 at USERX 8.92, the long-term 884 index said “sell” one day before at USERX 8.70, the USERX 92-96 index marks “technical spots” (a little high this time instead of a low), and the gold stocks are APPROACHING yet more resistance via a USERX and HUI 16-20 index sell signal during this coming week (date reserved for subscribers).

IMPORTANT: Since the USERX/HUI 92-96 index has sold to end the bull market from January (although a longer-term rise is still projected due to the long-term SKI 221 index buy signal in February), the SKI System is finally OPEN to a new objective index BUY signal. The expectation (history) is that one further decline will trigger that buy signal. It would be a 16-20 index buy signal that marks a low on a decline as prices rise over the prices from 16-20 trading ago to generate a 16-20 index resistance sell signal and then plunge below the prices from 16-20 trading days earlier into the Mechanical SKI 16-20 index buy signal (buy). USERX needed to rise over 8.60 on this past Friday to continue moving towards the needed 16-20 index SELL signal. It did it! But in a few days, that sell signal is likely to generate and then a decline would generate the buy signal (probably to the level suggested in the last public SKI Report).

Conclusion

Read the public SKI Report from the start of the bull market. That was the last time that Jeff implored you to subscribe. I implore you again NOW to stop spending money on “experts” who make false money by heavy advertising, who use correlated markets to predict the gold stocks, or who predict extreme market movements. Unfortunately, the psychology of the markets meant that almost no one listened back in early 2016 and then, when folks subscribed in June/July 2016, all I could recommend was selling or staying in cash. NOW is THE TIME AGAIN to learn/follow mathematically objective SKI. I can only make predictions when the SKI indices provide signals, so I remain bearish and cannot “guarantee” that a 16-20 index sell will occur during this coming week and that the index buy will occur on one further plunge. The needed index signals may not occur, but they are expected, and if/when they occur, the 16-20 index has a mean of buying on the day of the exact low and a standard deviation of 1 trading day. It exactly marked each of the corrective lows during 2016 (4/04/16 and 5/27/16). This is the first POSSIBLE warning of bullishness in many months as we await imminent new index signals.

My 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 messages/alerts at a slightly higher price along with access to our informative Forum and a managed gold futures program. 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.

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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.

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