SKI Gold Stock Prediction

presented by Jeffrey Kern, Ph.D.

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March 21st, 2005

Archived SKI Alert
More About This Trade

The gold stocks got hammered down 2.5% today (Monday) on the day that I was expecting them to rise 3%. What bothered me most about today was not the price decline, but the fact that I would have to write and face the readers who have now lost almost all of their profits. Todayís drop hit/broke the master 92-96 index whose back prices rose today to USERX 8.43. The drop landed DIRECTLY on top of the 16-20 index whose back prices rose today to 8.25 (with USERX closely at 8.26!). A continuing decline or even a failure to rise this week will cause the mechanical SKI system to sell via a 92-96 index sell. We would see if the 16-20 index buy signal ties the 92-96 sell signal or comes a day after it. A day after would generate a double sell (the 16-20 buy signal being XXed Out).

I wanted to sell today and in my 20 years of trading, I have almost always sold on days like today to avoid any loss. But I didnít sell and I didnít send out an email sell alert. I will sell this week if it appears to be extremely likely that the 92-96 index will sell by next Monday (i.e., if prices arenít going back above USERX 8.46 to avoid the 92-96 index sell signal). I want to sell ahead of the 92-96 index sell signal because prices invariably decline into such a sell signal. I didnít sell today because I simply cannot sell on a day when gold is down $9. Odds are that gold will go up tomorrow, but how will the gold stocks react tomorrow? Weíll see, but be prepared to close the long position this week if the gold stocks perform weakly.

The gold stocks were supposed to continue to rise here and this trade is not supposed to yield a loss. There is still a chance that prices will simply rise and I am waiting to see if that happens over the rest of this week. Itís been a year since the triple sell signal and I thought that the triple sell would be toast when we rose right here. Due to todayís drop, I still cannot be sure that the triple sell has been overcome.

I had thought that this would be time to relax and just enjoy a ski ride up, but such relaxation is now inappropriate. Be vigilant and be prepared to sell. My colleague may not sell if prices keep declining (heíll want to wait for a bounce), but there will not be another stop after the 92-96 index sell signal. Safety requires selling on the 92-96 index sell signal, should it occur. And I will not have any predictions if the system sells out via a 92-96 index sell signal. Iím glad that I ordered those vomit bags for the rocket ship last Friday. I feel like a lamb being set up for slaughter. Be disciplined to avoid any large loss. I am certainly not singing tonight, but I do know that I have, to date, bought and held on in a correct and disciplined manner. The goldies declined below critical points today, but I donít have a sell signal yet, so I am tenuously holding on. I am not denigrating myself because I have done everything according to the indices. Thatís all that I can do. Best wishes from dismayed Jeff. ( I am still fantasizing that the gold stocks will rise right now and that weíll be able to look back on this day as a bottom and most importantly, as the double buy signal having been correct).





How Did This Trade Work Out?

February '05 to March '05




SKI BUY SIGNAL SKI SELL SIGNAL Jeff Sold SKI Gain/Loss Jeff's Gain/Loss
Double Buy Signal

Feb 24 05
$8.17
Major Double Sell

Mar 28 05
$7.65


Mar 22 05
$8.13
$-0.52 $-0.04

While this trade was a loser, prices plunged immediately after the signal saving our readers a tremendous amount of pain. Here are the orginal SKI Updates for this trade:

  » Alert: Jeff Sells Early
     Mar 21 05

  » The Sell Signal
     Mar 25 05




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