SKI Gold Stock Prediction

presented by Jeffrey Kern, Ph.D.

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August 10th, 2005

Archived SKI Update
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Gold stock SKI MASTER Buy signal! Do you believe it, watching the gold stocks (USERX) fall for the expected (needed) 4th day (by one little penny) into a master 92-96 index BUY signal executed on Tuesday 8/9/05 at USERX 8.07? I have never seen the 92-96 index buy at an exact low, but that is what this looks like after today’s one-day rise. And emotionally, I actually am robotic; I have no emotion as my money is at risk and everything has transpired correctly to the exact day. My colleague (the guy who always bets 100% and sometimes loses a large amount), went 100% long at yesterday’s buy signal (8.07) and was sleeping, in hibernation, when I called him today to tell him that the gold stocks were UP. Even these exclamation points are printed without emotion (seriously). I’ve received more bearish emails than ever and I am telling you:

The 92-96 master index executed its buy signal yesterday at USERX (the gold mutual fund) 8.07 and SKI (me) bought a little yesterday and bought a lot today. I AM 90% LONG IN THE BIGGEST BET OF MY LIFE AND WILL ADD TO 100% BY THE END OF THIS WEEK. I’ve (we’ve) waited so long, and the multi-year buy signal occurred on what should prove to be THE day of the short-term low. This event should be followed by an amazingly impulsive multi-month (or longer) wave UP.

You were supposed to buy by today. I (chickenski) BOUGHT. If you hesitated in buying, so be it, it is NORMAL. But take each upcoming day as a buying opportunity whether the gold stocks are up or down (caveat: unless they fall 8% tomorrow; that is not going to happen). A move to new highs (over USERX 8.29) is the last, final confirmation of this buy signal. If you waited the extra day (as I had suggested) you must be a robot and EXECUTE. Make the phone call, press the mouse button. The emails and calls that I’ve received in the last few days have indicated extreme hesitation in purchasing gold stocks. My Lord, I wait for X years, I post for 5 years, I get the signal, and few appear to be able to act. When have you seen any mathematically-generated signal do what you have just seen?

My net worth (outside of my home and my retirement funds) is long gold stocks. This is the time to buy and hold. I know that some prices appear to be too high to buy. I know that I’ve remained bearish for the 2.5 months even as the gold stocks have risen. As one emailer states: “You are going to buy near the top. you system is bogus and laughable. anybody with common sense can see it is a joke and i feel sorry for anyone who takes you seriousy/You are dangerous.” (That is a direct quote; grammar has not been altered). Yet another reader writes a comment for my personal archives, “This guy is giving a sex education lecture. He always warms up the crowd by asking how often people have sex. A few people say every day. A lot of people say every day or every week. One guy in the back says every year. The lecturer is surprised, no one has ever admitted to once a year before. The lecturer asks the guy, "If you only have sex once a year, do you mind my asking why you look so happy?" The guy starts jumping up and down and waving and replies, "Tonight's the night! Tonight's the night! So, based on your alerts, I'm starting to buy gold stocks.” Even here, note that he “started” buying. Such reactions are, in my experience, have an unusually bearish tone at a time when I’m writing that I’ve got one of the great buy signals of my life. I truly appreciate all comments, I’ve learned new things from them and value them. Thank you all for your communications, I value them.

This will be the time to buy and hold. I haven’t written that since the triple buy in December 2002. At that time, I was honored to apparently be denigrated by Robert Prechter, as another new analyst who was saying “buy” at the gold top. This Update certainly qualifies as my second “buy and go away” signal this decade. You will see a change in SKI: I’ve usually been saying to sell, and sell, and sell on rises and on special declines. Now you’ll see me saying “buy” on declines. A true bull requires that I avoid using the “S” (sell) word. When prices fall 10% or more into signals, I’ll be saying “Buy and Leverage Up” until we get a master 92-96 index sell or a definitive run pattern top. Email me if I use the word “Sell” to remind me to just hold long and be prepared to leverage on declines (Brokerage accounts allow me to buy extra USERX on margin after I’ve held the mutual fund for at least 30 calendar days). My long-term strategy has been to avoid leverage, EXCEPT during a true 92-96 index buy signal, leveraging on renewed 16-20 or 35-39 index buy signals.

The long-term 439-443 index is in play. I’d mentioned how prices had touched that index on 7/28/05 (at USERX 7.64) and how prices instantly rose off of that “touch”, suggesting that it was support. That index’s back prices are at 8.08 tomorrow and in another 6 trading days, those back prices rise to 8.62. Those back prices are rising to the multi-year high of 9.37 over the next month. The expectation is that current prices will stay above those back prices, rising to 8.62 within 7 trading days and to new decade highs in a month. I cannot predict tomorrow or Friday, but prices are allowed to go back down to USERX 8.08.

I am robotically and unemotionally bullish. Email me at when you begin to check the heightened value of your account(s). Seriously, please. I did that check when I was bullish, at the exact high on 3/9/05 at USERX 8.73. Despite this request, I know that you (and I) won’t be able to resist that temptation at some point in the future. And that will be a warning sign. I write again, for my sake as well as yours, “Avoid findings small reasons to sell”. This is supposed to be the rare “buy and hold” period. I recant the bearish triple sell from 17 months ago; it’s time has apparently expired and SKI is a gold stock bull. But of-course I must remain flexible if proven wrong. I am at a loss for this year, but haven’t incurred an annual loss in a decade: I expect to go to an annual gold stock profit in short order. And I slept 11 hours last night. I didn’t even look at the gold stocks until the markets were open for 3 hours. I am practicing going into suspended animation. I will accept being wrong and will sell if I get a 92-96 index sell signal (currently at below about 7.62, but that stop will be FALLING and appears to be out of reach). Do you believe in the indices? (No profanity please!). And Best wishes.

How Did This Trade Work Out?

August '05

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

Aug 09 05

Sell Signal

When ?????

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This chart shows the most recent SKI Signal, the True Bull Market Signal of '05! SKI has not said sell.... YET!

  » SKI True Bull Market Signal
     Aug 09 05

  » The Buy Signal
     Aug 10 05

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