if this guy is right (and his record is very good) then we now are experiencing a once in a lifetime explosive move in gold and gold shares that still is in an early phase.
.
SKI Gold Stock Prediction
Jeffrey M. Kern, Ph.D.
Written on Friday for Monday January 6, 2003
Gold stocks have simply continued higher since the last Update on 12/24/02. USERX has moved up another 9% in this 7 trading period, from 5.07 to 5.51. I have not Updated since then because I do not have anything new to report. We are on a massive, historical triple buy index pattern generated between 12/02/02 to 12/09/02. I have no index resistances above the market. Therefore, the only call that I can continue to make (until there is at least a 2-4 week decline into a 16-20 index buy signal) is that we are going higher. And if/when we get that decline the call will still be that we are going higher. The move up from the triple buy has generated profits in the area of 25-35% in this mutual fund in one month. USERX is averaging 1.7% up per day during this time period, the highest rate of gain ever generated, kicking off what should be a secular bull market that lasts for years. I can only add to your investing by saying again, "Avoid finding reasons to sell. Historical overbought indicators are to be ignored in this once in every generation situation."
Today's price rise took us through the Fibonacci point of 5.41 that I had previously mentioned. That point can now be discarded from consideration. The only remaining traditional technical point would be the 2002 USERX high at 6.54 that should be surpassed in 2003. Despite some writers' concerns regarding the apparent underperformance of the gold shares relative to gold, I see no cause for concern: a 37% rise in USERX in one month is an extraordinarily strong rise.
If you do not calculate the indices themselves, you can go to Sharefin's site to view a graphical representation of the 16-20, 35-39, and 92-96 index prices. The goal is to look forward to possible index signals. Since the triple buy signal, current prices are above ALL possible future prices. If you look forward, you can see how the 16-20 and 92-96 indices intersect in 15 trading days. The only way to obtain any signals for the next few months is for a decline to under USERX 4.96 in 15 trading days, with the low occurring several days later on January 31st. Prices would be falling below the 16-20 index and below the 92-96 index (the price peak on 9/12-9/16/02 at 4.96-5.03). If we held there or rose for a few days, the 92-96 index would generate a bull market buy signal, on the path and not XXed Out. This is what I am hoping for, but what I hope for is of little importance to the market. So I remain completely long, but hoping for that decline to make the market technically perfect. The alternative is that we simply go up and up and up.
If you look at a chart of USERX over the past 3 years you will see that the primary times that gold stock prices have surged upwards have been following SKI system buy signals. Although the absolute year 2000 bottom was clearly missed, the 35-39 index generated a clear buy signal on 4/26/01 until a sell at the high on 5/21/01 (a 21% gain in 17 trading days). The 92-96 index generated its buy signal on 12/06/01, but as the introductory piece on 321gold reads, that buy signal was unfortunately XXed Out, leaving me "Betwixt and Between," trading short-term during the massive rise that ensued into early June 2002. During that period, the 16-20 index gave a buy signal at the only interim bottom on 3/11/02 and generated a fast sell signal on 3/20/02 at 3.90. That sell signal obviously missed the ensuing manic rise, but at the time I noted how if prices rose through the signal "it would be like a rubber band that would eventually snap back." The gold stock crash in June/July partially vindicated the XXing Out on the 92-96 buy signal and the 16-20 index sell signal as prices returned to the 4.00 price area until the current triple buy. We also had the 35-39 buy signal near the low this Summer on 10/15/02 that was stopped out in one day, selling on 10/17/02.
Do you remember how terribly upset I was at that point, not at the loss, but at the idea that the beautiful buy signal was wrong and was instantly negated? Yes, the market then rose for a few weeks, but it had to decline again (based upon the index buy signal having been stopped out). Then we obtained the strongest of all buy signals, the triple buy, generated at/near the bottom in early December 2002. The system is supposed to generate very high probability buy signals while keeping me out of the market during sideways-to-declining movements. It does. Now it says to be long and stay long, leveraging the investment (one canmargin mutual funds, as well as stocks, at many brokers at 3 to 1 after having been long for 30 calendar days) on declines into subsequent buy signals. This could be the once in a generation opportunity to continually pyramid the investment upwards on each subsequent buy signal (after a decline) to build a fortune. Since I have been trading/investing in golds since 1985, I have only had the opportunity to do this on the short side. The triple buy signal (which has not occurred since pricing began in the early 1970s) may be heralding a titanic shift in money flows into the precious metals arena.
“The things that will destroy us are: politics without principle; pleasure without conscience; wealth without work; knowledge without character; business without morality; science without humanity; and worship without sacrifice.” Mahatma Gandhi
