Special SKI Report #210
Gold Stock Update

Jeffrey M. Kern, Ph.D.
Email: jeff@skigoldstocks.com
USERX | historicals
Written Sunday Oct 14, 2018
Published Oct 15, 2018

Current USERX price = 6.91, Up only another 14 cents (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 coincided with a technical point marked by a 16-20 index resistance sell signal. The report concluded that a decline on the next day to below USERX 6.74 would turn the immediate trend down.

USERX did decline to below 6.74 on 9/24/18, down to 6.65. Therefore, a short position was appropriate. BUT THEN THERE WERE MULTIPLE SHORT-TERM TREND CHANGES that I could not (and cannot in the future) project ahead of time. Yes, that isn’t Jeff “holding back” information, it just changes and requires a subscription for more timely information.

The gold stocks (USERX) did continue to decline as expected. The decline into 9/27/18 at USERX 6.44 formed a bullish run pattern at 4 days Up and 5 days Down. Plus, that decline generated short-term index buy signals. Therefore, Jeff had to turn short-term bullish on the 9/28/18 rise to 6.55.

Prices rose for just 2 days into 10/02/18 at USERX 6.71. The SKI short-term indices (and the 442 index) executed sell signals on that day, but Jeff had to expect/predict a rise to the 35-39 index because another decline would simply generate more short-term index buy signals. History emphatically predicted a rise to the 35-39 index.

Here’s a reprint of the synopsis sent to SKIers one week ago (on 10/06/18). All daily SKI Messages and Weekend (Saturday) Updates since 2006 are on the website:

“Bottom Line: The gold stocks have performed almost exactly in-line with historical probabilities by rising early last week into the 15-19, Composite, 16-20, and 442 index sell signals on 10/02/18-10/03/18 for first resistance. A further sideways-to-higher move has to be expected into this coming Wednesday-Thursday’s (10/10/18-10/11/18) 35-39 index “buy” signal. The quotation marks around the word “buy” mean that such an index signal is likely to mark a high due to the index pattern and the XXing Out of that buy signal. The gold stocks might even rise enough to appear (on charts) to be bullishly breaking-out of a completed Head & Shoulders bottom pattern, but that can be a “fake-out” and SKI/Jeff cannot buy. Folks who are short-term long from last weekend should sell on this coming Wednesday-Thursday’s 35-39 index buy signal. New short positions can then be considered, especially if/when the 35-39 index quickly sells during the following week. Such short positions would be able to use a new (unexpected) 35-39 index buy signal as a stop-loss.”

The above synopsis may still be too complicated for folks who haven’t read SKI for years, but a rise was predicted (rather definitively) into this past Wednesday-Thursday that would look like a bullish break-out of a Head and Shoulders bottoming pattern, but it easily could be a fake-out rise and profit-taking was recommended on such a rise. The USERX 35-39 index’s “buy signal executed on this past Friday at 6.91. The HUI’s 35-39 index buy signal executed a day earlier, on Thursday at 154.20.

Conclusion

The SKI indices and USERX run patterns have been remarkably precise during the past 3 weeks. That often occurs but such multiple short-term predictions do NOT occur every month! The rise into this past Thursday-Friday has marked the next technical spot, without question. The index signals usually and regularly mark almost the exact technical points. That does not provide me with some perfect predictions every week or month, but Jeff/SKI does know the high probability technical spots. Better than anything else that I’ve ever read/found elsewhere for the gold stocks. Otherwise, I could stop doing this and rely upon some other analyst.

Look, that was an obvious (and expected) “bullish break-out” on the charts. But that anticipated “break-out” occurred into the second resistance 35-39 index signal (exactly).

So here come the “if” statements. The historical probabilities favor an immediate decline to either test the break-out OR go back below the prices from 35-39 trading days ago. Look back 35-39 trading days: USERX was at a prior high of 6.86-6.73. If USERX can avoid a quick 35-39 index sell signal (probably by holding above 6.73 over the next 1.5 weeks, but the exact index math can vary day-by-day; precisely), the break-out should be bullish with a rise up to the next and massive resistance level of the 92-96 index (the prices from 92-96 trading days earlier) during the next 1-2 months. If the 35-39 index sells, SKI will turn Jeff back to the bearish side. Re-read (carefully) the Bottom Line quotation section above. I don’t charge a lot, haven’t raised prices since the 2006 inception of the SKI website, and have been SKIing gold stocks since 1985… I adamantly continue to INSIST that one should follow the price behavior of USERX due to its holdings across countries (mainly Canada, Australia, and the U.S., coupled most importantly with the effects of movements in the Canadian Dollar, Australian Dollar, and South African Rand all rolled into one daily price; nothing else does that!).

I had to be adamant in the Summer of 2016 that folks who did not sell would be “sorry” (see the 321gold archives) and I remain adamant that the decline since then was/is “corrective”. The special 2 Up and 10 Down USERX run pattern into 9/10/18 at USERX 6.34 was too weak for me to historically “call” that as THE corrective low (see the prior SKI Report), but that IS possible given the limitations in predicting human/market behavior.

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 $25 (for a one month subscription) or more ($200 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.

###

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 © 2002-2023 Jeffrey Kern. All Rights Reserved.

321gold Ltd