Current USERX price = 5.95, Up 22 cents (3.8%) 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 gold stock SKI Report, written on Sunday 12/08/13, described how the gold stocks (USERX) had initiated another Armageddon-decline period as of the master 92-96 index’s sell signal on 11/14/13 at USERX 6.62. The decline had reached USERX 5.73 and a continuing decline was expected over weeks.
Since that time, the gold stocks have been flat to lower for two weeks into a new multi-year low of USERX 5.70 one week ago (on 12/20/13). Gold declined $35 into 12/20/13, but has held above its June 2013 low of $1179.40. And during the past week, the gold stocks and gold have rebounded a few percent.
The rebound during the past week has taken the gold stocks up into the first resistance index, the 16-20 index (comparing the current price to the prices from 16-20 trading days earlier). The gold stocks have also risen above the chart downtrend line that connects the highs from the 10/28/13 high at USERX 6.62.
For SKI, the first sign of an end to this Armageddon period requires a rise to generate a 16-20 index sell signal. Such a signal would be first resistance, but if the index signal generates, that’s the first index sign that a low “MAY” be forming. If the 16-20 index sell signal generates, prices will either: (1) Decline to a new 16-20 index buy signal for the potential low, or (2) Continue to rise to the next resistance, a 35-39 index signal (above the prices from 35-39 trading days earlier). In other words, if the index signal generates, there should be support below the market on a decline to a 16-20 index buy signal. Or prices would just rise over several weeks into the next resistance. Yes, that is not predictive, but the index signal would provide the first sign/possibility that this multi-year decline has ended. It is within 1-2 trading days of executing.
Best Wishes for a Happy New Year, 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.