cheers,
john
SKI Update
6/25/05
Although the gold stocks were flat and looked quiet this past week, THIS PAST WEEK WAS CRITICAL AND THIS IS AN IMPORTANT UPDATE. Last weekend I wrote how the gold stocks (USERX, the gold mutual fund) needed to hold at 7.58 or higher if nature was going to generate the master
92-96 index signal. It was a long and complicated Update because I wrote that I didn’t know what was going to happen. THE SIGNAL WAS GENERATED ON FRIDAY.
On Monday, the gold stocks declined, but USERX held at exactly 7.58.
On Tuesday, USERX rose but held at the prior high of 7.62. Wednesday’s decline brought prices below 7.58, down to 7.56. If prices had fallen on Thursday, the 92-96 index signal would have been avoided, but despite the sell-off in many gold stock indices, USERX surprisingly surged up 10 cents to 7.66, a new high for the move. A Friday close above 7.57 would generate the signal and USERX only fell to 7.62, holding right at the prior high (holding Thursday’s little break-out to the upside).
Last week I wrote how I couldn’t see the SKI indices providing readers with a solid, high probability signal to buy. What a difference in one week! A true bull market occurs when I obtain a 92-96 index buy signal on the Path that is not XXed Out. Friday’s 92-96 buy signal is NOT on the Path and IS XXed Out. It is resistance level 3 and can mark a top that augers for a precipitious decline. Therefore, it is not yet time
to buy. BUT THE TRUE BULL MARKET SIGNAL MAY OCCUR THIS WEEK. All that
needs to happen is for the 92-96 index to quickly sell, ending the Path trade from the dangerous 35-39 index buy signal at 7.26 on 6/10/05.
Then a small but immediate price rise will generate a new 92-96 buy signal that is ON the Path and NOT XXed Out. THE MERE OPPORTUNITY FOR THIS TO OCCUR IS EXTREMELY RARE. That was the pattern for the start of the late 1970’s bull market and the 1993 bull market. The only other bull market, the one that started in July 1982, of-course also had a non-XXed Out 92-96 buy signal on the path, but that signal was not preceded by a quick 92-96 index buy and sell. The 1982 bull market didn’t “need” a quick 92-96 buy and sell because it was not XXed Out.
We are sitting on the potential edge of a long-term large rise or a disastrous fall. I am trying to avoid extreme statements, but this is extreme, and you can see my frequent use of capital letters. Note that the following statements continue to start with “If”s. Now, immediately, this coming week:
1. If prices do NOT rise over USERX 7.78 by Tuesday’s (6/28/05) close, the 92-96 index will sell, opening the Path and removing the XXing Out.
Thereafter, we could get a precipitious fall (pulled down by a falling stock market?; I won’t have any buy signals for gold stocks if they decline now) or the bull market signal. Note that prices can rise on Monday into the signal and even on Tuesday, but IF prices fail to rise over 7.78 by Tuesday’s close, the 92-96 will give a typical quick sell signal after the “buy” signal on Monday’s close. Note again that the “”
around “buy”, means that it is not an executable buy signal (It’s XXed Out and off the Path). A hard fall on Monday would look particularly bearish.
2. If the 92-96 sell signal is generated, it is a sell signal. Readers who missed the triple sell signal in 2004 or the double sell earlier this year have been asking when or if they should exit their long positions. A 92-96 sell signal IS the place to exit, even if you get whipsawed and then have to buy back 2 days later. Staying long after a
92-96 sell signal is extremely dangerous, but if the true bull signal follows, one has to buy.
3. If prices rise a little but still remain below 7.78 by Tuesday, a rise on Wednesday to 7.89 or higher would instantly generate the new, true bull market buy signal and a SKI ALERT. Although I’ve already lost some hair while missing the recent price rise, and I will be extremely nervous at buying on the way up, I MUST buy so as to protect my financial well-being. The SKI system would be projecting a continuing immediate rise and a long-term rise, erasing the triple sell from 2004.
That true bull market buy signal would have an instantaneous and rising stop as the 92-96 back prices continue to rise to 8.73!
4. If prices rise above 7.78 by Tuesday, I won’t have a bull market at this time, but SKI would have a pretty clear stop point for those readers who have long positions or are about to initiate long
positions: SELL on a 92-96 sell signal when it does occur. For example, when prices rise subsequent to a 35-39 buy signal (the recent
35-39 buy signal at 7.26 on 6/10/05), the rise usually lasts about 17-21 trading days and rises into a 92-96 “buy” signal that is off the Path.
We’ve now risen for 10 trading days into the 92-96 “buy” signal, so this can be the top (the 92-96 signal being executed 11 trading days after the 35-39 signal). But if the rise continues now and the 92-96 sell signal is temporarily avoided, as soon as the rise stops, a 92-96 sell signal will occur as that index’s back prices just keep rising.
The potential SKI bull market opportunity this week is a very rare opportunity. I wait for years for it’s occurrence and am usually disappointed. It hasn’t happened yet, but with the weekly MACD generating a buy signal and the many knowledgeable technicians that I read calling this the start of the great gold rise against all currencies, it’s no coincidence that the SKI system finally has a chance to say “Bull Market”. Again, use Brian’s applet at http://www.nls.net/m...ia/SKI/SKI.html to watch the 92-96 index this week. This could be the week that I refer back to for years to come. I am writing this Update early Saturday morning and sending this it via email to readers (who have requested to receive alerts) in order to check the list: If you are on the list and don’t receive it, email me at skigoldstocks@yahoo.com . Best wishes.
http://www.321gold.c...rn/current.html
