 Special
SKI Report #25
Gold Stock Crash Bingo!
Jeffrey M. Kern, Ph.D.
Email: jeff@skigoldstocks.com
USERX
| historicals
Aug 26, 2007
Current USERX price = 14.18
Down another 7% 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 the most informative gold site, 321gold,
since its inception approximately six years ago. 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 32 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 at http://www.skigoldstocks.com/about.php. 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 on 8/04/07 was entitled "True SKI Bull in
2 Days?". Note that the title had a question mark at the
end of it and included just three highlighted sentences that
captured the entire point of that public prediction piece (so
as to allow folks who are short on time to capture the essence
of the prediction). Those highlighted sentences were:
1. We are now within 2 trading
days of generating a true SKI bull market in the precious metals'
complex.
2. If we get the next signal
in a few days (probably 2 trading days), this signal pattern
has always yielded a price rise and a profit, but the index pattern
indicates that it might only produce a 3-week explosion OR it
could be a one-year plus true bull market.
3. I am also warning you that
if we don't get the SKI bull signal here, the gold stocks are
in CRASH mode.
At that time, I truly did not
know whether the gold stock bull market buy signal would be generated
or whether the market would avoid generating the signal and crash.
Hence, SKI was in cash (and that word, "cash", was
also highlighted).
The point of this new article
is to document for you, once again, that prediction is possible,
that the crash of 2 weeks ago did not "come out of the blue,"
and that the SKI indices, for some inexplicable reason, are sensitive
to a penny and a day.
The gold stocks came within one day and a few pennies (based
upon the prices of the oldest gold mutual fund, USERX) of generating
the true buy signal, but on the very day that they failed (by
RISING in price, but not enough), they generated a second sell
signal for a bearish double sell pattern. The day after that
second sell signal executed, the market went into crash mode.
As my preceding
321gold Special Reports have described, all of the great gold
stock bull market phases of the past 33 years have been marked
by a 92-96 index buy signal. The 92-96 index compares today's
price to prices from 96, 95, 94, 93, and 92 trading days earlier.
An index signal is generated when the current price rises above
or falls below those back prices for several days. Although you
will probably be appropriately skeptical that what I am going
to describe herein is ever possible, and I too am often still
amazed (even after 22 years of calculating the indices on a daily
basis), the calculation of the index is via a simple formula
that has been publicly available and therefore, is verifiable.
I am NOT making this up!
SKI bull markets are marked
by a 92-96 index buy signal that occurs in a specific manner
so that it is "On the System Path". A detailed description
of this pattern is included in the article "About
SKI." A true bull requires much more than prices simply
moving over a certain price level. Basically, prices must fall
to generate a 92-96 index sell signal that marks the LOW and
then prices immediately rise enough to generate the true buy
signal and the bull market period begins (ala the bull period
beginning on 8/09/05 for SKI).
When I wrote that Special Report
on 8/04/05 the 92-96 index was within one day of generating its
sell signal (the first step in setting up the bull market). On
Monday, 8/06/07, USERX fell enough (as expected) to fall below
all of the 5 back prices and did generate the signal (which is
a change in the sign of the final index score). Signals are then
executed the next day, thereby always providing one day of advance
notice. On Tuesday, 8/07/07, the gold stocks fell slightly into
what should have the exact low IF a bull market was about
to begin. And the next day, Wednesday, 8/08/07, the gold stocks
instantly soared (as they were supposed to) rising above all
5 of the index back prices. It was quite exciting as the bull
market signal was ALMOST generated. Here's a little
table of that price movement, the 92-96 index back prices, and
92-96 index itself:
When the sign of the final
index score changes, a signal is generated. If prices had stayed
up for two more trading days, the index would have generated
the bull market. But the next day, Thursday, 8/09/07, prices
once again fell below all of the back prices. Meanwhile, the
second major index, the 35-39 index, was moving towards its sell
signal. And yet a strong rise on Friday 8/10/07 would have generated
that 92-96 index buy signal and avoided the 35-39 index sell
signal. The rise was not enough (although in the morning the
rise WAS strong enough to then failed to hold), the 92-96 index
buy signal was avoided, and the 35-39 index generated its sell
signal to be executed on 8/13/07. Any SKIers who had failed to
heed my prior warnings to be in cash were supposed to sell on
8/13/07. And then the crash.
Interestingly, those crash
days brought the gold stocks down to a long-term index, the 218-222
index. That index generated its signal that often marks a low.
Hence the prediction that prices would rise this past week. USERX
is back up to 14.18! Another 218-222 index signal was then
generated this past Thursday and executed on Friday (8/24/07).
Some of my subscribers felt
that I "gave away" too much in that last Special Report,
while some readers of 321gold emailed me to say that it was a
travesty that I had made them believe that a great SKI bull was
about to begin. [Barb's
Note: And I didn't help... for a while the line item on the
321gold home page had a flipping exclamation mark, instead
of a question mark].
I did not intend to mislead anyone nor did I intend to "give
too much away". That last article provided the correct information,
in my view, but non-subscribers had no way to know that the bull
market signal had not been generated. I believe that the SKI
indices are once again indicating that a large move is about
to begin. It should be evident within the next 1-7 trading
days, but as usual, I am not allowed to say the direction or
the day.
I write these Special Reports
in part as a "come-on" to attract new readers. But
I truly write with honesty and sincerity, trying to provide as
much information as possible while maintaining deference to paid
subscribers. But when other analysts write that no one could
have seen X coming, I disagree. There never is 100% certainty
with any prediction system, but at times I profess that the index
certainty approaches 99% (such as the true short to intermediate-term
buy signal generated on 6/26/07 and executed on 6/27/07), and
I am writing to subscribers that Jeff is going 100% long with
leverage. In three weeks, when I write again, it should already
have been more than evident what the direction of this next move
has been.
If you are interested in following
and learning more about the SKI indices, I'll write another Report
for 321gold 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. 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.
Be safe, best wishes,
Jeffski
 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.
Copyright © 2002-2024 Jeffrey Kern. All Rights Reserved.
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