Special SKI Report #196
Gold Stock Update: The Anatomy of a New Gold Stock Bull Market

Jeffrey M. Kern, Ph.D.
Email: jeff@skigoldstocks.com
USERX | historicals
Written Sunday Dec 17, 2017
Published Dec 18, 2017

Current USERX price = 7.27, Down 12 cents (1.6%) 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: Here’s the Anatomy of the Start of a SKI Bull Market

SKI is quickly approaching the execution of a new potential bull market for the gold stocks. I use the word “potential” because nothing is perfect when it comes to predicting market behavior. The current set-up has an approximate 90% probability of yielding at least some small profit if it gets stopped out, but such a set-up is almost REQUIRED if the gold stocks are going to have a chance of rising 100-500% over the next 6-12 months.

A potential bull market occurs when SKI’s master 92-96 index generates a buy signal that is On the Path of Trades. When USERX goes below its prices from 92-96 trading days earlier, the index sells and opens the Path to any new index buy signal. If the next index buy signal is a 92-96 index buy signal (when USERX is above its prices from 92-96 trading days earlier), the index buys for a potential bull market.

The Path is critically important: A bull market does not occur when the 92-96 index buys but is Off the Path of Trades. In fact, such Off Path “buy” signals are almost always major resistance. For examples, the strong rise in early 2017 yielded an Off Path 92-96 index “buy” signal on 2/23/17 that marked the exact start of a significant decline, and the strong rise into early September 2017 yielded the same index pattern. The above is documented in the 321gold archives. Click here for the September article that includes the link to the article from after the 2/23/17 resistance signal. I do (obviously) write these 321gold articles to encourage folks to subscribe, and only provide these free articles once every 3-4 weeks (so they are often “late” relative to subscribers), but they are also written to assist and to educate.

The approaching 92-96 index buy signal is On the Path of Trades because USERX has recently declined from its 9/01/17 Off Path (major resistance) “buy” signal to finally sell the index on 12/08/17 at USERX 7.04. That opened the Path of Trades and if a bull market buy signal was/is about to occur, the “sell” signal usually marks an almost exact low. When that occurs, the opportunity/possibility presents for a quick new 92-96 index potential bull market buy signal. Check the chart of USERX: Despite the HUI/GDX (etc.) and gold dropping for an additional couple of days beyond 12/08/17, USERX rose and 12/08/17 has been its multi-month low (at least so far).

We’ve had two 92-96 index buy signals that were On the Path of Trades in the past two years. The first executed on 1/26/2016 after the 92-96 index sell signal marked the exact low on 1/20/16 at USERX 4.64. The 92-96 index bought quickly because 92-96 trading days earlier (from early September 2015) USERX’s made a low in the 4.60-4.70 area. That buy signal marked the beginning of the 2016 100+% rise.

The most recent 92-96 index buy signal On the Path of Trades generated at the exact low on 5/04/17 and executed the next day (one day late). That buy signal occurred shortly after a 92-96 index sell signal opened the Path of Trades. And the buy signal occurred about 92-96 trading days from the December 2016 low. Although that 5/04/17 low at USERX 6.67 has never been broken to the downside, that potential bull market buy signal failed to yield a true bull market and sold on 5/23/17 at USERX 7.03.

Now, we are about to get our new bull market opportunity! It’s now been almost 92-96 trading days from the 8/08/17 low at USERX 6.97. This set-up was foreseen/described in the last SKI Report for 321gold that was titled "Don’t Fall Asleep".

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.

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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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