Special SKI Report #257
Gold Stock Update: Corrective Low Completed?

Jeffrey M. Kern, Ph.D.
Email: jeff@skigoldstocks.com
USERX | historicals
Written Sunday Aug 1, 2021
Published Aug 2, 2021

Current USERX price = 13.16, Down just 12 cents (0.9 %) 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

Congratulations to www.321gold.com on its 20th anniversary. SKI has been there from almost Day 1. Prior to that, the SKI Reports were posted at Kitco starting on the first day of the new century in anticipation of the bull. Since then, gold has risen about 600%, oil’s up about 650%, and the DJIA is up about 400%. But don’t worry, there hasn’t been any meaningful inflation during the past 20 years that destroys the savings of people who don’t take risks (that’s sarcasm; I’d prefer NOT having to take risks).

The last SKI Report, written on 7/11/21, didn’t provide any great prediction. And USERX is almost unchanged from the SKI Report 6 weeks ago. Jeff had bought shortly after the late March 2021 low and SKI generated its potential bull market 92-96 index buy signal on 4/12/21 at 12.61 that was quickly followed by a Double Buy 35-39 index buy signal on 4/14/21 (as USERX rose above the prices from 92-96 and 35-39 trading days earlier). And then Jeff finished selling on 5/18/21 (the high for the HUI, but USERX and Gold held up into June) because bull markets always (yes, always) correct back down to a 16-20 index buy signal (as prices fall below the prices from 16-20 trading days earlier).

That 6/18/21 16-20 index buy signal was supposed to mark the beginning of the “corrective low” at USERX 13.18. The market (USERX) can also go down to a 35-39 index sell signal. I tried to go into educational detail in the last Report, but I likely got too detailed and complicated for folks who don’t subscribe on a regular basis. I did provide you with the information (true since 1974 that when COMEX NY Cash Gold (not the futures market that is distorted by interest rates) rises to settle just above a round number, it is short-term bearish. And when Cash Gold declines to settle just below the round number (e.g., $1800), it is short-term bullish. More importantly, the conclusions were that “it can take up to 35-39 trading days for the bottoming process to complete” and that “the major sell-stop is just too low”.

Did you see Cash Gold rise to settle just above $1900 for 3 consecutive days on 5/28/21-6/02/21 and then do the expected plunge down to the 16-20 index buy signal? And did you see Cash Gold drop to settle just below $1800 last week (7/26/21-7/28/21) before rising?

The major SKI sell-stop is a 92-96 index sell signal. It’s the green line on the following SKI chart, see here. The black dots are the USERX price. Look back to when the black dots were at the 2021 low (in March) and follow them relative to the green line. Can you see how USERX went above the green line in March and then kept hitting/touching the RISING green index line but wouldn’t go below it? USERX even surged on the last possible day (5/18/21) to stay above the line AS THE INDEX LINE TOPPED AND Jeff sold. And can you see how USERX then eventually fell to hit/touch the DECLINING green index line several times without going below IT? Last week, USERX declined and came within 1 day of stopping Jeff out of my conservative partial long position but then rose to avoid it. USERX closed at 12.52 last Tuesday (7/27/21) and a decline to below 12.51 would have done the bearish trick on the 7/28/21 U.S. Federal Reserve’s announcement of “inflation, but don’t worry”. So far, THE corrective low of USERX 12.42 occurred on 7/19/21. That WAS exactly 92-96 trading days from the March 2021 low as the green index line bottomed.

Is all of this random? Of-course not, since 1974. And major financial institutions don’t educate themselves enough about SKI to manipulate USERX’s 100+ international gold/silver stocks (plus foreign currencies) to cause such behavior.

You should be able to see that USERX has now risen to hit/touch the first resistance blue 16-20 index line exactly as the green index line reached its mid-March 2021 temporary high. The sell-stop 92-96 index is now temporarily dropping. An ongoing bullish trend needs USERX to stay above the green index line. The historical time period for a corrective decline has not been used up, but “soon” (time reserved) USERX needs to get above the DECLINING blue (16-20), red (35-39), AND faded purple (very long-term 218-222 trading day) index lines.

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.

Copyright © 2002-2024 Jeffrey Kern. All Rights Reserved.

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