Special SKI Report #239
Gold Stock Timing Update

Jeffrey M. Kern, Ph.D.
Email: jeff@skigoldstocks.com
USERX | historicals
Written Sunday Jul 12, 2020
Published Jul 13, 2020

Current USERX price = 12.22, Up $1.88 cents (18.2%) 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, 6/21/20, described how the gold stocks (USERX) had declined into 15-19 and 16-20 index supportive buy signals on 6/12/20-6/15/20. Those buy signals were the first SKI-disciplined buy points since the 5/20/20 run pattern high. The boldfaced print emphasized that “The conclusion was and is that the gold stocks should be in a rising period from the 6/12/20-6/15/20 index buy signals…The short-term trend has likely reversed to UP or SIDEWAYS-TO-UP from the 5/20/20 top.” The gold stocks were absolutely expected to shortly rise into the first resistance 16-20 index sell signal (as USERX rose above the prices from 16-20 trading days earlier). The next technical point was expected to occur into the 3-day holiday (and full moon) weekend after 7/02/20. If the gold stocks reversed lower after that weekend, the 16-20 index would have already sold on the rise and the major SKI index (the master 92-96 index) was set up to generate a bearish sell signal that would likely end the ongoing bull market. That was not a prediction, it was an IF statement.

What happened? Simple. The gold stocks just kept rising (smile) from the 6/12/20-6/15/20 buy signals. The rise quickly generated the first resistance 16-20 index sell signal on 6/23/20. As was stated in the prior Report, “Such a quick rise is less likely to mark much of a top”. Therefore, Jeff did not recommend selling because during a bull market, the bullish intermediate-term and longer-term trends are supposed to bullishly break-through such short-term resistance. And so, the gold stocks simply paused for a couple of days and then kept surging higher into the July 4th holiday weekend (smile).

The strong rise into 7/02/20 made it almost impossible for the bears to get their needed 92-96 index sell signal. Bears needed a 13+% USERX plunge after the holiday weekend to have a chance to sell the master bull market index. Hence, Jeff continued to buy a little into that weekend’s potential technical point.

And after the holiday weekend, the gold stocks just continued to surge another 7% higher. Therefore, unless USERX now UNexpectedly plunges about 13+% in the next few days, any potential SKI-bearish scenarios will have SKI-virus (sarcasm) “died”. USERX keeps making new many-year highs and the HUI, the Australian gold stocks (XGD index), etc. have finally followed higher during the past week.

There aren’t any SKI index resistance signals at higher prices. The gold stocks are above ALL of the indices. That must happen during a bull market. The next SKI-disciplined buy-point will occur on an eventual decline back down to the 16-20 and 35-39 indices. Nonetheless, I (Jeff) just bought a little more during the week before the July 4th holiday. I’m now a little above the maximum 30% of my net worth that I allocate to gold stocks. Most of those purchases were done between 3/25/20-4/03/20 based upon the long-term 221 index’s buy signal. So that’s a 60-70% paper profit. Then another 10% was bought at the index-marked technical spot (a low) on 4/21/20-4/22/20. And the remainder was bought on the 16-20 index’s buy signal that marked the low on 6/15/20.

I always want to emphasize that it’s extremely important to “Know Thyself”. Personally, I explicitly decided not to sell any gold stocks on the 5/21/20 bearish USERX run pattern and to just hold long to buy more on the expected decline. Subscribers were explicitly “allowed” to sell if that fit their discipline. Did they all buy back at the 6/12/20-6/15/20 low? There isn’t one “correct” answer for everyone. Be aware of what you’ve done (your “discipline”) during prior bull markets. 

Mechanical SKI and Jeff’s bullish intermediate-term and longer-term perspective does NOT require a continuing rise during the coming week. But the short-term has been UP for 13 of the 18 trading days since the 6/15/20 execution of the 16-20 index’s buy signal. I sincerely hope that you’ve been profiting through the fastest gold stock crash and rocket launch that I’ve experienced since 1985.

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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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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