Current USERX price = 11.46, Down $1.40 (10.9%) 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 11/21/21, described how the gold stocks had risen to the major 3rd and final resistance 92-96 index and the 221 index’s long-term resistance at USERX 13.18 on 11/13/21-11/15/21. The expected decline would reach first support into a 16-20 index buy signal at below USERX 12.69. A potential bull market set-up was described IF USERX could rise back to above the 92-96 index in December, then drop back below it, and then rise again.
The gold stocks then went rather straight down. The first support 16-20 index’s buy signal generated as USERX dropped below the cited 12.69 level. The supportive index signal generated on 11/26/21 at USERX 12.02. Jeff bought a small position on that buy signal because it had an objective sell-stop: A further decline to below the 35-39 index (the prices from 35-39 trading days ago).
It only took 1.5 trading days for that sell-stop to activate. The gold stocks and gold immediately rose after the 16-20 index’s buy signal, but each morning rise was met by motivated sellers and a renewed decline. Hence that potentially short-term bullish index signal was sold at a 1% loss on 12/01/21. The immediate continuing decline went down to the expected 35-39 index sell signal. The 12/03/21 low of USERX 11.46 yielded a brief rise, but was quickly followed by a decline to test that 11.46 low on this past Friday (12/10/21).
This behavior is represented by the SKI index signals for the HUI, see here. I usually present the data for USERX, but the HUI’s index signals have been in synchrony with USERX. The black dots are the HUI price. The green line is the master 92-96 index, the red line is the 35-39 index, and the blue line is the 16-20 index. See how the HUI rose above the green line to mark major/final resistance at the mid-November high of 278.31 and has now gone straight down to below all of the index lines (the green line, then the blue support line, and then the red line).
The SKI indices are primarily back into the set-up to mark resistances on rises to the index lines.
Conclusions: The multiple index signals during the past 1.5 weeks absolutely can mark a low here for a multi-week rise back to the 16-20 and 92-96 indices. But such a rise would “just” trigger renewed index resistance signals in a few weeks. And since the gold stocks are below all of the primary SKI indices, there isn’t an objective sell-stop and Jeff canNOT hold long positions.
I continue to SKI-perceive that this 1.3 year sideways-decline is corrective and will yield another bull market 100+% gain (as always, but “when”?). It would take a rise back above the green line 92-96 index (resistance), a decline back below that index, and then a quick rise back above to provide a SKI bull market. That would currently take a month or two to set-up and generate. It is mathematically possible but does not occur until it “does”. A decline to a new 2021 low at below USERX 10.71 would extend the time needed for the next bull market.
Best Wishes, Jeff
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