Special SKI Report #273
Gold Stock Update

Jeffrey M. Kern, Ph.D.
Email: jeff@skigoldstocks.com
USERX | historicals
Written Sunday Jul 10, 2022
Published Jul 11, 2022

Current USERX price = 9.21, Down another $1.34 (12.7%) 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 6/19/22, concluded (with the unusual bold-faced print for highlighting):

“Therefore, there is the 80% historical probability that the gold stocks will decline through last week’s low before rising enough to get back above the prices from 16-20 trading days earlier. It was/is a “dangerous” buy signal that has yielded some historic plunges. And last week’s HUI intra-day low went below the HUI’s Life Run low. That is NOT supposed to happen when there is a Life Run low and increases the likelihood of a further decline.”

And so, the gold stocks adhered to the 50-year historical probabilities via a continuing solid decline without more than 1-2 daily rises during the past 3 weeks. Multiple international measures have declined to 2-year or MORE lows. The Australian XGD index has declined to below its COVID crash low of March 2020 (when USERX plunged to 6.00). The Canadian Global Gold Index (symbol: $SPTGD), USERX, GDX, GDXJ, and the XAU have declined to new 2-year lows.

USERX has declined 13+% from that XXed Out 16-20 index buy signal on 6/16/22 at 10.62. The normal historical decline has averaged 1% per day. It’s been 14 trading days since that XXed index “buy” signal. Therefore, it’s been “normal” so far. Such declines usually extend beyond a mere 3 weeks.

This is a rather simple and brief Update. The gold stocks (and especially silver) are into oversold territory but SKI + Jeff don’t have anything predicting that a major low has occurred as of this past week at USERX 9.10. Yes, some short-term rise is completely feasible, but a further decline is historically-expected. Looking at a simple chart of the SKI indices, you can see that USERX is below all of the indices except for the very long-term 663 and 884 indices (the faded blue and turquoise index lines): see here. The next downside target is that faded blue index line that’s bottoming at down about 7-8% from Friday’s (7/08/22) close. The 884’s index line is down below USERX $7. The exact mathematical formula requires several days below an index line to generate an index’s signal.

These are long-term indices. The last time that they generated index signals was in 2020. They are contrarian indices that buy on declines and sell on rises. The last 884 index sell signal executed on the exact day (2/24/2020) of the pre-COVID top at USERX 10.61 (smile; the index signals are simple math and cannot be fabricated). The ensuing crash into the COVID-low on 3/13/2020 yielded multiple long-term index signals down into the USERX $6-7 range that provided the large profits for 2020. That’s still on that SKI chart on the very far left and all index signals plus communications are in the Archives section of the website beginning in 2006.

Obviously, the best time to buy is on such crashes into multiple index signals. Jeff usually does not “predict” any exact dates when index signals will occur until they are within a few days of generating. Hence, Mechanical SKI + Jeff remain in cash. Jeff always holds real physical gold as one core financial position while buying/selling the gold stocks. I repeatedly write that the best time to subscribe is during declines. Yes, that involves “wasting” some subscription money with patience that could last a few weeks or even months, but the website charge is supposed to be “small”. I dislike getting loads of new SKIers AFTER a 6-12 month major rise.  

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 $30 (for a one month subscription) or more ($240 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.

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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.

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