Although gold closed up for the third straight day, the run down in gold stocks continued today to 1 up and ELEVEN down, tying the longest such run ever ( for 1 up then down runs; the longest run down ever is 13 ) . However, this run down continues to be extremely weak ( averaging well less than 1% per day down ) and is very unlikely to mark a meaningful low. Resistance continues to be about 1-3% higher, at the 35-39 day back prices. A move over those 35-39 day back prices would be a buy. That window of opportunity closes a little every day, having about another week to do it before the 35-39 back prices start rising to a point where the 16-20 back prices will be lower than the 35-39 day prices. It doesn't look good at all for the bulls but we have to get an up day soon! Interesting how posters ( Ror ) had pointed out the earlier 10 or 11 day down run in Dec gold which now has been followed by a similarly long run down in gold stocks even after 3 up days in gold. I don't know what the meaning ( if any ) of that is. USERX remains at a new all-time low ( .258 today as compared to the all-time high of over 10.00, a drop of about 97.5% in a mutual fund and still going down ) . And "the books" preach a buy-and-hold stock strategy as being optimal. Just wait till the tech funds decline 97.5%!

I remember earlier this year, in March, when gold itself had gone down for 6 straight days in a fairly large way and I went long only to be stopped out the next day with a loss on an extraordinarily unlikely 7th day down that hit the index stop and turned me completely bearish. Yesterday everything suggested buying and then today the run down continued to 1 up and 7 down. Once in history it's gone to 8 down and once to 11 down. And now the end of this run won't necessarily be a meaningful bottom. It begs repeating the idea that trading against the long-term down trend in gold stocks is a dangerous enterprise and is why I did not buy yesterday and am hesitant to buy until I really get a signal or run that indicates a powerful move up, even if the long-term trend in gold stocks hasn't turned up yet. I know that I feel like gold bug hell. I know, I know, it's a chance to buy cheaper for a larger eventual gain. In terms of capitulation, the run down is long, but it's only averaging 1% a day and therefore does not qualify as a capitulation run in my book. And notice how cash gold went up today breaking that run down, opening it up to possible further downside.

The run will reach 1 up and 6 down today. The odds of gold stocks declining again tomorrow is only about 3% ( 97% prob of an up day tomorrow ) . USERX will hit a fibonacci # today and be sitting right on top of declining 35-39 day back prices, even if the stocks sell off more in the rest of the day. Falling below those back prices is the stop. The upside potential of this trade, however, is extremely limited over the next week since a rise of only 1-2% will cause prices to rise back above the 16-20 day index, generating a sell. After another week of just sitting here, however, the rise could be larger. Therefore, I am personally going to remain a chicken and wait at least until the end of this week to see if after 1 or 2 tiny projected up days coming up, we hold for the rest of the week. But you can buy at the close today with a potential loss in only the 2% area and a potential gain in the 6% area over the next 2-3 weeks. No major risk and no major reward on this technical analysis.

Yes, 97% of the time when 1 up 6 down occurs simultaneously with a 16-20 buy signal ( prices falling below the 16-20 back prices ) . A little scarey here because the prices are barely above the 35-39 day back prices.

1993 buy signal was a classic primary bull signal, but lacked a capitulation bottom ( so in retrospect I learned? that a bull buy without a classic capitulation is perhaps a fairly poor bull, only a double ) . Prices crossed above the 16-20 on 1/19/93, then above the 35-39 on 2/5/93, then above the 92-96 on 3/11/93, all of which was NOT a bull market buy. The bull requires a 92-96 index buy on "the path". "The path" is determined by which index gives the first/next buy. The above pattern had the 35-39 buy on the path ( not a bull ) . But then the 92-96 gave a sell on 3/9/93 after its buy, ending the 35-39 index buy signal and opening up the path to any index signal that gave the next buy. The 92-96 index gave the next buy executed on 3/15/93. A bull is indicated by a 92-96 on the path and not XXed out. The common pattern is a 35-39 buy followed by a 92-96 buy ( a high ) , followed by a 92-96 sell ( a low ) , followed immediately ( i.e., with no 35-39 signal ) by the 92-96 buy signal calling for a bull market. This pattern has been wrong once in history ( I called for bull and was stopped out ) . Generally, the rule is that the path is determined by whichever index gives the earliest buy signal with tied signals going to the longer index. The buy ends on the index sell signal that gave the buy on the path OR if a higher level index gives a sell. It is almost always true that a shorter term index ( 35-39 ) will give the first buy signal before the 92-96 ( visualize a rise after a decline ) . Right now we have crossed over the 16-20, crossed over the 35-39 and almost crossed over the 92-96 ( last week's 9/8 high ) . Had we crossed over the 92-96 last week then fallen and then risen, a primary bull would have been predicted. We're still on the 35-39 day index buy path and must cross above the 92-96, fall below the 92-96, then rise above it for a bull. Would need userx to hold next week, then rise above 2.80, then fall and quickly rise again, requiring at least a month in time. Very unlikely. Index gave the massive long-term bear signal in late 1998, predicting an 80% decline in gold shares from their highs ( 1998 and 1999 ) . We are currently down only 40% from those highs, halfway there. Please ask about the above, because I know it all and can't tell what other people won't understand as I try to explain it.

Hope you see this response tomorrow. I have analyzed the runs on both cash/spot COMEX and the active month ( which keeps changing ) since they started trading. I cannot say which is a truer indicator of the price of gold, so I do not disagree with you there. I can say that the run pattern of cash COMEX gold IS more predictive of future price behavior than the futures contract. In particular, lengthy down runs in futures gold are more common than in cash gold. This is largely due to the interest charges inherent in the futures prices and becomes more significant during periods of higher interest rates ( Hence, when gold is flat I want to be short, thereby capturing a nice interest charge profit ) . During up runs, the opposite is true: lengthy up runs are more common in cash gold than in the futures. This occurs primarily due to days when the futures are unchanged or down a t dime or two. Since the futures price contains an interest rate factor of about 5 cents a day ( used to be much more than that ) , futures down runs are more likely and up runs are less likely. Statistically, the futures runs are empirically less predictive. When cash gold goes down 5 or 6 days in row, that's an unusual run. However, the predictive ability of the number of days down must also be tempered by the size ( percentage wise ) of the total down move. The major, major bottoms are marked by many days down plus a high percentage loss per day. We are now down 5 or 6 days in a row in cash ( I think ) , but the percentage move down is very small, predicting that this is likely to a low ( or close to it ) but that the subsequent rise will also be very weak. Twelve days down in futures gold has happened many times in history. It has never happened in cash gold. The longest is 8 in cash gold and once at seven ( this year ) . Finally, be careful about cash gold as "they" often change the price a dime or two after the close to miraculously alter the run analysis at a critical juncture ( wait at least a half hour after the close to get the closing figure -- it's unbelievable at times how "they" change the number from down or unchanged to up thereby "destroying" the run ) . Cheers--You are investigating an important trading/predictive tool which works even better on USERX runs.

Just did today's numbers after I saw the big drop today. Prices fell today below the 16-20 index generating the signal, a trading buy for Monday. Unfortunately, the userx price also hit EXACTLY ( not surprisingly ) the high 35-39 day index price, starting the 35-39 index towards a sell ( a sell being very bad ) . Traders are supposed to buy on Monday with a stop at the 35-39 day index sell ( down about 3% from here ) . We have gotten the run analysis little buy coupled with the index buy. We are at support. No bull market, no great rise, but a 85% probability of a 4% rise up in userx with a possible 3-4% loss on the trade ( but with the probs strongly favoring the up move ) . If you're long ( and you should NOT be long ) , hold the longs here. "Interesting" how the index, the TA, fits the BOE auction again on Tuesday.

Hadn't seen the xau falling so much today. Should have looked before posting. The up gap has now been filled? Makes it much more likely that we'll get that 16-20 index signal by Wed next week. A little up on Monday, then down into the trading buy, but basically all is still bearish except for the nimble traders on that buy signal.

On Wed 9/6 I posted that userx had hit the 92-96 day index and that that was MAJOR resistance. A 92-96 XXed out buy signal ( crossing over the back prices ) was a definitive sell. Conclusion was "sideways to down" from there. That was correct, but not really profitable due to the low volatility.
On each day after that the 92-96 index broke closer and closer to the XXed out buy, even as prices slightly declined, with the index moving from -100 ( max ) on 9/5 to a -6 on 9/12. Remember a cross over zero into positive numbers would generate a signal. USERX's very slight drops since then have definitively avoided the signal.
On 9/13 the run pattern on userx went to 1 day up and 3 days down. You should know by now that that is definitively bearish, negating the bullish run pattern reported on 8/31. We are now 1 up and 5 down as of today's close. THE END OF THIS RUN DOWN WILL BE A BUY IF IF IT OCCURS TOGETHER WITH AN INDEX BUY SIGNAL. The buy signal would be a fall below the 16-20 back prices ( a 16-20 index trading buy ) . The 16-20 index is now breaking towards that buy and probably will give it in 2 or 3 more days. Even if the run down stops, the next 16-20 day index signal is likely to yield a very short-term trading bottom with a return to the top of the trading range. Rule: If the 35-39 is on a buy ( prices above the 35-39 back prices ) , the subsequent 16-20 day trading buy on falling prices is usually good if the 35-39 index is still on a buy. Note that the 35-39 day back prices are falling fast towards the 8/3 low, so as long as we stay above those back prices, a trading buy is likely. If that is correct, the subsequent rise would yield a definitive shorting signal.
This is all still very long-term bearish for dollar denominated gold stocks.
My reading on Kitco revealed questions re: an apparent long run down in gold itself, something like 10 days and an unchanged day on Dec COMEX gold ( unchanged days do continue runs ) . But remember, NEVER follow runs on futures contracts. ALL RUN ANALYSES ON GOLD ARE BASED ON SPOT COMEX GOLD ( Not BART's quotes ) . Why? Because the futures' prices are affected by interest rates, contago's, etc. The unchanged Dec COMEX day was an up day on spot, breaking the run, stopping it at 4 or 5, then resuming another 4 or 5 or 6 day run. I didn't check today, but if it was down again on spot gold today, expect a very small up on Monday to once again break the down runs which have only gone past 6 days twice in 26 years.
Will post daily as usual as we approach a possible small trading buy signal next week, possibly coinciding with filling the gap on the xau.

I had last posted that the run up last week should not be a high and that after 1 or 2 down days, a higher move should occur very short term. That has happened as of today after a small 1 day down yesterday.

Now is the time to be wary if you are long. The index is executing the 35-39 day signal tomorrow ( Thursday ) and the 92-96 day index broke today. This is all major resistance. Since the 35-39 day buy signal tomorrow is not XXed out, I cannot definitively say that short positions are in order tomorrow. The 92-96 day signal, if it occurs, IS XXed out. It will take another 3 days at a minimum for that signal to be executed. Alternatively, the market could explode up very soon with a major major top then definitively occurring about 21 trading days after tomorrow. The major resistance that we are in right now, coupled with the continuing low volatility in gold shares suggests that a sideways to down trend will commence within the next 1 to 2 days. If tommorrow is up and Friday is down in gold stocks, I strongly advise exiting longs since a 1 down 2 up pattern would then have been completed and would fit with a sideways to down gold stock trend. But that is getting ahead of the game for now. I continue to state emphatically that this is not yet a bull market in gold stocks. Looks like a small upward correction of the previous breakdown in prices. As always, wish I could be really bullish, but at least the run analysis has been a little bullish recently.

Since I left for the hospital last Tuesday the gold stocks have gotten more interesting and are approaching an important psychological point plus the three day weekend. You can read on for details and learning, but I WON'T end with some earthshaking conclusion/prediction.

Prices obviously did climb from that previous 5 down run, which on Tuesday night faked me out with a slightly lower price, but did mark a little low. The current run turned bullish on Thursday at 1 down 3 up, and continued up on Friday for a current 1 down 4 up. This run, whenever it ends, usually ( 75% ) does not mark a high beyond 1 or 2 days. The runs are actually somewhat bullish for the first time since late january.

The indices are breaking towards new signals. USERX current price is 2.83 tying the prior high on 8/16 after making a higher low. This is the first higher low this year! The 35-39 index was a +3 on Friday on userx, a -2 on Thursday, and -5 before then. A small rise on Monday will generate a signal for Tuesday ( the signal is called a buy signal because prices are rising over the prior 35-39 day prices, but this often marks bear market HIGHS . But look at the USERX 92-96 index back prices as of Friday: 2.90, 2.86, 2.87, 2.85, and 2.85. And they are dropping every day, tomorrow a 2.84 comes in, just one penny over Friday's close. A big Psychological point is here or here soon. Will we get a 35-39 day "buy" signal? Probably. Will we get a 92-96 day signal? We'll see. The 92-96 index here is major resistance. Rising above the 92-96, then falling below it, and then rising above it gives a true long-term bull market buy signal. If we rise over it this week, the subsequent fall below it will be easy since the back prices will quickly fly up to the 3.13 area ( the early May spike up ) . Very important psychological market action about to happen, which does not REQUIRE any kind of really big price moves. I'm still a watcher, waiting for the high probability situation that is ( always is ) getting closer. This should no longer be boring if you are a student of the gold market.

Today's 1.2% drop in gold stocks keeps alive the possibility for a significant buy signal on Friday if the gold stocks will fall tomorrow and keep falling another 8-9% by Friday. The index needs at least another 1.2% drop TOMORROW to keep the buy signal scenario alive for Friday. I don't like it when the gold stocks fall more than gold, as happened today. The 5 down run that ended last Wed was apparently only a low that lasted for 2 days, not really any kind of low, but if you recall that run only had a 65% probability of marking a low anyway. I'm still out of this market and waiting...

Today's small up move ended the down run at that fairly common 5 up, 5 down sequence yielding the 65% probability that yesterday was a shortterm low. That's not a real high prob to me, 65%, but it's the most likely statment. The gold stocks still have a few more days where a 5% or more 4 day drop would give a very desirable buy signal. The only bearish scenerio is if we just stay flat and drift a little lower over the next 2 or more weeks. So nothing looks exciting to me except for the continuing hope of a quick drop in gold stock prices, but time is running out on that possibility.

This is a very interesting time to be following the runs and the 16-20 day index. Today the back 16-20 prices on userx were 2.73, 2.68, 2.69, 2.64, and 2.66. Closing price was 2.74. Note how the fifth day down in a row came within a penny of the back prices ( that is support, since a break below those prices within the next five days is a buy signal ) . Note how tomorrow the high price of 2.73 falls out and the new high price will be 2.70. The runs have not had the needed up day yet, but most of these runs stop by day 5 ( today ) . The trend is clearly down until the first up day. I don't know if it will drift down again tomorrow without hitting the 2.70 price, or if it will turn up to be a little bottom, or if it will plunge to give a clear buy. Only 5 more days for it to fall below the 16-20 prices for a clear buy. Remember, if it falls below those prices, it will still take 3 days to give an index buy signal. Can the down run continue for 3 or 4 more days? Usually, the rule is that the market takes everything to the max, meaning that tomorrow we'll get another little down day leaving the situation uncertain for as long as is psychologically possible, based on the index.

Sorry for the late post, got home a little while ago from taking my eldest son to college. A tearful event; he was conceived this day, it was my 24th wedding anniversary, and was the day he leaves us.

I note with interest APH being long the Swissie, short silver ( great call ) , and 50% long the gold stocks. Can't all be right, can it? Barrick bullish right near now ( I note them because of my respect for their expertise ) . A critical technical/psychological time so that I can see how a quick break down in gold/gold stocks within the next 5 days should generate the mechanical index buy, making many ( like I. Auger ) , stopped out or bearish. Will it happen? I really don't know, but we know what to do if the break down occurs.

Today was the expected day three down on the run from last week's 2 down 5 up Wednesday top. The three down in this formation confirms that prior run as a high. As posted last Friday, a day up tomorrow would be bearish because 5 up and 3 down runs herald a continuing down move at 94% prob. However, a down day tomorrow would move the run to 5 up and 4 down. At four down or more, that is a bottom 65% of the time. So if the run continues down tomorrow, the first day up after that can signal a low. One should cover shorts at that time to be safe. We could still get the continuing down move to a great index buy signal if we plunge or at least go to new lows within the next 7 trading days ... and counting. For example, the current run down could simply continue for many days, but usually does stop by day 5.

Since I'm home after surgery I can watch the market here and post during the day. P0sted under "SKI ( beware ) " this AM, warning of a likely key reversal down day in the gold stocks ( looking at the XAU ) and the stocks sold off on cue at the very end to form the anticipated key reversal down. As I've posted several times, although the textbooks say this is very bearish, it usually ( 80% ) is NOT bearish. But if it is bearish it truly leads to lots of selling. So we had the bearish run of 1 Down 2Up on 8/2 that so far has been wrong ( prices have risen since then ) . The only way for that run to be right is for lower prices now. We just finished a 2 down 5 up run that usually marks a top. The 16-20 index signal was executed today which is supposed to represent some resistance in the context of an overall bottoming or an uptrend. Finally, cash gold closed up a few dimes for day six up in a row. This run in cash gold should stop right here, going down tomorrow. Looks like everything is set up for a strong down move right now into a very big buy signal. Will it happen... I don't know, it's a rare event, but it's all set up right. Be very prepared to buy with everything you've got soon if gold stocks plunge over the next 4 to 9 trading days.

As prices cross above the 16-20 index, as is occurring now ( with ALL other indices on sells ) , it is neither a clear buy or sell, but the trend is 75% likely to be up. If we drop hard it is a buy signal as we drop back below the 16-20 trading index. If we were at overbought levels ( the other indices already on buys ) the current cross over above the back 16-20 prices would be a shorting signal. If we don't fall into a buy here and just go sideways to up ( note that the trend would still be up ) , I'll probably get no buy signal, miss whatever rise occurs, and the index will go short again as prices rise to the 92-96 day index ( a great short ) . The only way for prices to decline without getting a buy signal ( i.e., a continuing downtrend which is unlikely ) is for a VERY slow decline to occur now, taking prices very slowly below the 16-20 prices again ( a separation of more than one-half cycle {16-20;18/2=9 days ) from prices moving above the 16-20 to back below the 16-20. Therefore, the trend is likely to be up even though I don't yet have an entry signal and will not go ong until I get the signal to do so.
I never realized how complicated this must sound except when I try to put it into written rules. I still don't think I'm explaining it in an intelligible manner? The trend is likely to be up, but the mechanical system won't enter unless it's a good entry point ( want to enter when prices fall BELOW the 16-20 day trading index, when it's oversold ) . Hence, APH's position of 50% long is totally consistent with what I'm saying. The trend is likely to be up but we could get the big drop into a true mechanical system/index buy signal. Note that if I had just stayed short from the last mechanical index signal sell signal on 2/10/00 at userx 3.75 ( as posted on Kitco the previous day ) the index would have been staying short since then and would continue to stay short until a system buy. On that day, the signal came from prices rising over the 16-20 index AND the 35-39 day index exactly simultaneously the previous day ( as often happens ) .

Today's unchanged day in gold stocks was very good for my index. As previously reported, it was exactly what the doctor ordered. Unless we plunge tomorrow the 16-20 day index signal will be generated tomorrow for Thursday. Today got a +3, yielding +3, +1, -1, -5, and -5 for -7 X 4 = -28. A change from -60 yesterday to -28 today. We are now 2 down and 4 up. Although it would be psychologically nice to go up tomorrow again and then fall hard, that is not required. If we don't fall hard tomorrow the signal will be generated and a subsequent fall within the next 10 days will give a definitive buy signal ( but not yet a bull market signal ) .

I'm jumping the gun a little, but IF the subsequent fall occurs, there have been 7 such trades since 1974, all marking extended bear market lows within 2 days of the exact low. Note that these can only occur after long downtrends when all indices are on lengthy sells. Resulting rises in userx involving no leverage:

16% in 8 days
23% in 23 days
26% in 19 days
12% in 12 days
12% in 14 days
20% in 18 days
30% in 23 days

In all but one case the rise continued after prices had risen back over the 16-20 day prices, usually involving total rises of 40-100%. But not true bull markets. The last one occurred last summer for the 18 day 20% gain which, after a mild correction, yielded another 30% rise that the index and I did not catch. Hoping for the big drop ( usually 10-15% ) into the great intermediate bottom buy signal to start soon.

Gold stocks looked like they were going down today but came thru to close very slightly up ( as anticipated ) on my composite and on userx. That's very good news, breaking the 16-20 day index for the second day, yielding a +1 for today and a +1, -1, -5, -5, -5 , combined and multiplied by 4 to yield a move from -84 yesterday to -60 today. If we can stay around here for 2 more days the index will give a signal. Run is at 2 down, 3 up into a full moon. If we go up 2 more days in a row to 2 down, 5 up that usually marks a short term top. Hoping for hanging around here for a few more days ( a little up or down ) and then a 5 day plunge ( 10-15% ) into this year's real buy signal. But I've been waiting for this since April.

I closed out my short FSAGX on Friday AM, making less than 1%. Don't have any kind of buy signal and still am not bullish, but figured that: ( 1 ) enough good posters here think we're at some kind of a low that I'd go flat, ( 2 ) I kind of felt like singing in the car on 8/3 but wasn't in a car when I saw the closing prices, and ( 3 Importantly, any little rise on Friday would have and did break the 16-20 day index, which usually ( 80% ) leads to a 16-20 index signal in a few days. If that short position had been initiated/continued from many months ago I would sit thru any rise here, but it was executed at an already heavily sold time.

If prices don't fall much within 3 to 5 days the 16-20 index will give a contrary sell signal ( 1st level of overbought ) . An immediate ( 1-2 week ) drop to new lows will generate a significant buy signal! A continued flat to rise from the 16-20 index signal will give a 35-39 index buy ( still not a real buy signal; second level overbought ) and a continued flat to rise to the 92-96 index will be a definitive index short ( currently only about 9% higher ) . When I say "only 9% higher" that means the index will break at that point, but remember that it must rise above that level for at least 3 days to give a signal and I never know what could happen in those 3 days ( In 9/99 it rose about 25% in those 3 days, the most ever ) . Therefore, if prices can hang here or rise for a few days, the only truly bearish thing that could happen would be a very slow gradual decline to new lows. Perhaps prices will rise tomorrow into a standard 2 down 3 up run into the full moon, hang for a few days and then crash into or immediately after the Fed meeting for the nice buy.

Note that the prices below need to be multiplied by ten to compare to today's userx price of 2.68. Signals from July 1990 into 1993:

6/18/90 Buy executed 3.69
8/17/90 Sell and Short executed 4.70
11/16/90 Buy executed 3.36
11/30/90 Sell executed 3.40
1/15/91 Sell Short executed 3.57
3/27/91 Buy executed 2.94
7/8/91 Sell and Short 3.80
12/19/91 Buy executed 2.82
12/26/91 Sell executed 2.84
1/9/92 Sell short executed 2.97
1/21/92 Sell short 2.99
5/12/92 Sell short 2.38
3/15/93 Bull Market Buy executed 1.58

NO run analysis buy, no capitulation ( as you surmised ) to mark the 1993 bottom. In retrospect, userx made a perfect double bottom several months apart at 1.25 and I was looking for the buy signal in late 1992, early 1993 because it was 125 days ( by far the longest time ever ) from the XXed out 16-20 day buy signal on 6/10/92 to the first hint of a rise on 12/7/92 when prices finally went back above the 16-20 day index. In other words, we went from falling below the 16-20 day prices on 6/10/92 to rising above them on 12/7/92 with no other index signals between that. The average is 40 days between signals. Currently, we are only 27 days past the last fall thru the 16-20 day back prices on 7/3/00. We certainly can rise here or at any time and the index can't predict it, but this should not be a major bottom ( I am very confident ) . We just got a bearish 1 down, 2 up run, so any rise here should be short-lived ( less confident, moderately confident, since we could rise to the 92-96 day back prices at any time without the index predicting it, currently at 12% above today's prices, before falling again ) . I am willing to state that any rise here will simply forestall further declines, making me wait longer to get really bullish. Please G-d don't make it go up here, I'm tired of waiting for bullishness.

Did you see how the composition of userx that you noted for me ( with copper, etc. added ) presaged the addition of copper to the xau? Very strange, spooky. I just try to ignore it since I can't explain it.

Another little down day in gold stocks today continuing the slow downtrend. Would need a 9% or more drop in the next 3 consecutive days to start talking meaningful bottom here. That appears unlikely as the down run for the past 2 days has been so weak.

Barrick, I'm listening to all the posters and most certainly hearing you. Unless we get some real capitulation, it's unlikely that I can go long and it's also very unlikely that a rise, even of 20% would mark a major turning point. From last March 2nd when the index stopped me out of my one-day long position and indicated that the abyss lay ahead ( and Kaplan went long ) , userx ( admittedly a poor upside performer in declining markets ) is now down 20%. To me, that's a really big hit. When the real rise comes I believe we're talking 100s of % up. I may miss 20% rises, and OFTEN have, but I'm confident that the index won't miss the bullmarket when she comes... A true bull, according to my index ( a 92-96 day index buy signal ) , will take many months yet to unfold ( an up move, a down move to a higher low, and then some rise ) . The next 92-96 day index buy signal is XXed out, meaning we'd have to get that XXed out buy ( a great shorting point ) , prices would then have to fall back below the declining 92-96 day back prices, and then quickly move back above them for a bull market buy signal that would buy in about 20% off the bottom. However, usually the run analysis will call the multi-year low one day off ( after ) the day of the low. I am raising money from other investments ( trust deeds and real estate ) gradually in preparation for that day. I am also locking in some 1-year CDs at 7.75% at ETrade Bank ( they're giving a bonus of .5% to current account holders ) in my kids' names, such that the interest in essentially tax-free. In the Fall of 1998 I clearly told all I could that rates would be rising ( and I screamed the same in the Fall of 1993 when I refinanced my home at 6.25% 15 year rate, no points ) . Now rates should/will begin a decline soon ( this prediction is based on the falling gold price and the typical about 9 month delay between gold movements and interest rate movements, with gold leading ) .

Today's small up day gave us the same situation as we saw on 7/11 and 8/2, another freeking 1 up and 2 down run going into tomorrow. Same predictions as previously-- if we go down tomorrow it'll complete the 1 down 2 up run and be very very bearish for the third time in one month. If we go up tomorrow ( or unchanged ) we'll get the first 3 up since early Feb. That will not be a buy signal because it can be immediately be negated by 3 or more days down or a continuing run up to 4 or 5 or more. The weakness of this retracement suggests that we will not get the more bullish up day tomorrow, followed by 1 or 2 down days, followed by a move to higher highs ( above tomorrow's price ) . If we start down tomorrow, a consecutive 5 or more day plunge will mark a capitualtion bottom ( which would be a pleasant surprise ) . So a down day tomorrow would predict another decline to new lows on userx and a new all-time low in xau. And all I read are bullish analysts from every link I can get on this and other sites, despite the low "bullish consensus".

Eldorado: All gold stocks would have to go bankrupt and be delisted from exchanges for everything to go to zero. I cannot believe that that will happen in my lifetime. The only measure of sentiment that I allude to is price action. Therefore, if prices drop, I semantically refer to that as negative sentiment and vice versa. Hence, sentiment cannot get positive as prices drop. It's just a matter of me using words, no special meaning to "sentiment".

Barrick: I read all your posts and note the negative stock market predictions. I don't believe that our predictions are currently at odds. I certainly agree that gold stocks might only drop 10% or 20% from here before an intermediate term rally, but I don't want to sit thru that because I have nothing to tell me how far they'll rise off whatever the next low is. If your stock market predictions are accurate, the gold stocks may get hit with the other stocks. I don't have an xau downside target number and initiating a position after a run or index signal has been executed is something that I try to avoid. Execute on the signal or ASAP or skip the trade, that's the general rule. However, I can "guarantee" that the ski index stop on my shorts will get me out at a profit from the userx prices on 7/3/00 ( 2.91: the xxed out 16-20 day buy signal that forecast a 20-30% drop from that level; hence, 2.10 is a reasonable profit taking point ) , on 7/12 ( a run analysis sell at userx 2.82 ) , and now from 8/2 ( a run analysis sell at userx 2.70 ) . I don't have a number as a stop since the number changes everyday, but if you can look at userx and go back 16-20 days from today, today's stop would be spending several days above those back prices ( current price at 2.64; the 16-20 back prices are currently at 2.79, 2.82, 2.85, 2.82, and 2.80: dropping lower each day henceforth and I would always post as we approach the stop for several days ) . I am confident that a short initiated here will be profitable, but the position would have to be closed out earlier then my index stop because it was executed later. If one went short here, I'd exit on a time basis, in 19 business days or a drop in userx of another 15-20% from here. I am short FSAGX from 12.37 on 7/17 at 10AM. I plan to hold this position until I get a true buy signal and it is very unlikely that I will get stopped out on a price rise; the buy signal is highly likely to occur near a future low. Rises will generate further shorting signals. I don't recommend options due to time premium deterioration

Today's big drop in gold stocks confirms the 1 down, 2 up run completed yesterday and is very bearish. Userx drops to new all-time low of 2.61. New xau low coming. Barrick: there have have been no three or more ups in userx or my composite since early Febuary ( responding to your comment ) . This is all very bearish, as a double 1 down, 2 up pattern is rarely encountered. Don't be long. The possibility of THE crash into a decades low is possible right now ( see yesterday's post ) . Should be short with ski. Is anybody listening? Pray for 10 more consecutive crash days. I didn't see today ( medical tests ) , but, as you can tell I'm getting excited. It's been a perfect "short" day.

The run analysis is currently 1 down and 2 up again! A down day in gold stocks tomorrow would again be very bearish ( 64 out of 64 ) . An up day would be the first three days up since early February! If we go 3 up, that is not a run anaysis buy signal, but gives the first sign of a possible short-term uptrend ( the 3 up could be immediately reversed by a following 3 or more days down ) . The probability of an uptrend would be about 70%. If we plunge for the next 5 or more straight days we'd have a definitive capitulation buy signal. However, I don't find any cycle lows due soon so that seems to be unlikely to happen here. But I'm allowed to hope for the plunge and a buy. Anytime we go 2 up I'm looking for the plunge buy signal ala 1976, 1982, 1993, 1998 and others.

Another trading day and another down day in gold stocks. Userx drops 2% to all-time low of 2.64. Fsagx falls to 11.92. Now up about 4% on shorting trade. It's 20 days tomorrow from the XXed out 16-20 day index buy signal ( with userx down 9% and fsagx down 6% ) , so a break even stop on this trade is now assured. These declines average 40 days from the XXed out signal, so on average have another 20 trading days and a 20% decline ahead in gold stocks.
Read Ivan Auger site as usual. He's going commercial in a month and charging $260 a year. He's been bullish, as has been Kaplan, for months. If I'd followed their advise I'd be down about 20% in userx. Watch out as I become more confident in myself over the next month to exit the shorts. I'll notify you when I start singing in the car -- seriously.
Don't invest on the following, but I note that the 5 down day run in the stock market earlier this year has still held as the bottom in all indices except the tech stocks, which should go down. I've reported that that 5 down plunge run has always marked a multi-year low in the general stock market ( e.g., S&P 500 ) and that continues to be true despite the bearish prognostications of almost all the advisors that I can get my eyes on. Still looking for a 5 day surge UP to mark an all-time high as in 1987.

Signals from Aug 98 to Jan 2000:

9/1/98 BIG BUY userx 3.06 ( Probable Bull Market )
9/29/98 Safe Sell 4.09 ( I sell )
10/8/98 Clear Sell 4.47
11/11/98 Another Sell 4.00
11/30/98 *Unexpected Multi-Year Bear Sell Signal* 3.76
Projects 80% decline from high of 4.48. Still in effect. But since it's so long-term, this projection is based on only an N of 3 in the past 26 years.
1/12/99 Sell short ( Tried but couldn't ) 4.06
5/7/99 Sell short ( Tried but couldn't ) 3.99
7/13/99 Cover Shorts ( if you had been short ) and Buy Long 3.11
7/19/99 Buy Long 3.01
8/12/99 Sell Longs 3.60
Missed 9/21-10/4 rise.
10/1/99 Sell Short ( executed ) 4.40
12/2/99 Cover Shorts and Buy Long 3.60

Start of Kitco Posting
12/30/99 Sell 3.70
1/3/00 Sell 3.70

It's appropriate to feel a lot of uncertainty. If prices had been rising here and the gold stocks had closed at monthly highs yesterday, then I'd have NO uncertainty about this 1 down 2 up run. But we're near monthly lows so it's reasonable to be careful here about being bearish.

However, I have no concern about the effects of auctions, leasings,etc. I really have zero concern about that. The system's been operating thru the period you mention, 1997 to present just as well as before. The last 2 runs of 1 down 2up occurred on 2/18/00 ( followed instantly by 10% down ) and on 5/6/99 ( the BOE announcement occurred that weekend so that the drop on the Monday after the announcement ended the up run at 2 up, making the bearish pattern complete and yielding an immediate 20+% drop after that Monday big drop. However, each of those runs occurred right at highs after solid moves up. I could go on and on with examples. On 3/22/99 ( a secondary high ) got that run and dropped 10% over 12 trading days. 10/7/99 was a beauty-- look at a chart. But that was also a big high. The next one back was a fairly bad, inaccurate 1 down 2 up run on 7/7/98 where prices rose about 9% higher in 2 weeks, then fell 25% below the 2 up run price.

The gold stocks closed down today completing the bearish 1 down 2 up run. The run marks an exact high 75% of the time and almost exactly the high the other 25%. I'll be going short as soon as possible, needing an up day to short the stocks. The stop will be complex and unlikely requiring up and down movements. I'll be gone on Sat. for 2 weeks, but will leave a message or two with Norwester if the stop is hit ( almost impossible in that time frame ) . The small drop today made prices fall back very slightly below the resistance of the 35-39 day back prices that were hit yesterday. The most interesting possibility for the bulls is a complete and immediate collapse right now ( and I mean it has to be immediately and every day down ) every day for 5 or more days to provide a 2 up 5 or more big run down. Unlikely to happen, but if it does the run analysis would then buy at the bottom for a significant rally. A collapse of 8 or more days would mark a super bull market ( again, don't get excited, there's an extraordinary low probability of that happening ) . Kaplan notes that we've turned bearish as a site. The daily xau is oversold while the hourly is overbought. Perhaps a few more mish-mash days up and down before a major downwave unfolds. I have to be very bearish over the next month or more.

Today's up day makes the current run an important 1 down, 2 up. As stated many times, it therefore follows that if we go down tomorrow the 1 down, 2 up run would complete and this would be completely bearish, basically always ( about 63 out of 63 times now ) . However, an up day tomorrow of any magnitude would finally turn the run analysis bullish, the first time since late Jan/first day of Feb. My gold composite and userx have both risen into the back 35-39 day prices today. This marks some resistance, but if we can go up tomorrow and stay there for a day or two, we'll get the bypassed 35-39 day index buy. Thereafter, a slight fall and a hold at userx 2.80 will generate the long awaited intermediate term buy. If we go down tomorrow, the initiation of shorts ASAP is clearly signaled. There is, of-course, the BOE auction result tomorrow and the action tomorrow will give a run analysis signal either clearly bearish or bullish. The shorting position would be executed ASAP. The long position would wait for about 5 or 6 business days. My personal guess is .... bearish but actually worthless. See what happens tomorrow for the answer from the run analysis.

Yesterday I ( not the index ) started to "smell some bullish possibilities" coming and today demonstrated the uselessness of my feelings and the necessity of following the system. USERX dropped thru 2.80 ( closing at 2.79 ) to a new all-time low. Maybe gold stocks can still rise the needed 2% in the next few days and then fall to a buy signal, but my feelings of bullish possibilities are gone and traditional technical analysis of this leading indicator show it continuing to be a dog, predicting lower prices for the gold complex. Apparently the 75% odds of a major drop will hold this time and the gold stocks are heading down over the next 4-8 weeks by 20-30%.

Although the indices won't/can't turn intermediate term bullish until a little rise and little fall back to userx 2.80, the signs based on my experience are turning more bullish. For example, Paul Merriman's system e-mailed me today with a sell signal. Since they've been wrong now 16 out of about 17 times in the past 2 years, this will probably be the little low that my indices need. Marantette ( Gold stock letter ) is still on a sell. Kaplan selling some nicely last week. And did Mooney get stopped out yesterday or today? WileE, although excellent IMO, will probably be on the sidelines with me tomorrow. Barrick also an excellent poster IMO went perfectly 50% long yesterday. I'm starting to smell it. Lots of longs giving up and some smarts going TENTATIVELY long. Expecting that the stocks will now hold up better than gold. Let's hope we have another LITTLE up day tomorrow in gold stocks. We're approaching the apex of a descending triangle in userx at 2.80 again over the next 2 weeks.

This was a good day for the gold stocks. Gold fell but the stocks rose slightly and userx moved above the critical 2.80 level. Barrick's ( the poster ) buy signal from yesterday looks OK, although the only way for my indices to give a buy is for gold stocks to rise just 2% over the next four days ( to give a 35-39 index buy that is bypassed ) and then fall back to userx 2.80 ( to give a 35-39 index sell without rising over the back 16-20 index prices ) to give a buy around 7/20 on a one day rise over userx 2.80 ( to give an executable 35-39 index buy for an intermediate 15-20% rally into a major shorting signal ) . Although I will be on vacation in Alaska, Norwester has gratiously agreed to accept a call from me and post at that time IF this scenerio occurs.

I feel like saying, "What did I tell ya?", but I'll be wrong too often in the future. Userx hit exactly 2.80 today. It's hard to fathom, but a penny can make all the difference. It held support today! The xxed index signal was for Monday, so it's possible that it missed a crappy low by one day too early. Or the gold stocks will break thru to the downside. If USERX ever closes below 2.80, we're going down as per the xxing out on Monday's buy signal, down 20-30% in the gold stocks. Strong hearts who have another system that makes them bullish have an entry point right here and now with an instant stop on any lower close. Since the probabilities are 75% that we will break to the downside, I stand aside until the index and/or run analysis require this faint heart to risk capital. The current run is 1 up and 2 down .... if we go down tomorrow the run will again be very bearish at 1 up and 3 down plus we will have broken all support. I guess we'll go up tomorrow? ( otherwise it's all too clear and easy that we're going down and markets don't make it clear and easy ) . A fairly big important move on the day after a long weekend, with such moves usually being attributable ( for the gullible fundamentalists! smile ) to some kind of fundamental announcement ( e.g., central bank sales, oil output increases, or some other event that the gov'ts always seem to save for a long weekend when the technicals call for it ) .

Re: 1995-1996 buy, sell, short signals ( no trouble at all ) :

3/3/95 Buy userx 2.16
3/10/95 Sell userx 2.30
8/3/95 Buy userx 2.37
9/5/95 Sell userx at loss 2.24
12/5/95 Buy userx 1.99
12/13/95 Sell userx 1.99 ( no gain )
12/15/95 Buy userx 1.96
2/5/96 Sell userx 2.58 ( Note the sell was a 443 day index XXed out buy signal coupled with the deadly 1 down 2 up run on the day of a full moon ) . This was one day after the 1993-1996 high in most gold stock indices ( e.g., xau ) , but userx was way below its 1993-96 high recorded on 10/20/94 at 3.26!!! This 1 down, 2 up, 6 down pattern was supposed to and did mark a multi-year high in most indices.
2/5/96 Short userx at 2.58 ( but can't short that fund, have to short a group of indiv stocks, and had to wait for a ten percent drop before getting one up day to go short! ) .
9/19/96 Add to or initiate more shorts at userx 1.77.
Maintain shorts until buy signal on 1/12/98 at userx .51
1/12/98 Buy userx at .51
1/30/98 Sell userx at .57
4/24/98 Short userx at .58
6/18/98 Cover shorts and go long at userx .37
7/8/98 Sell userx at .40 ( actually 4.00 after 10 for 1 reverse split )
9/1/98 BUY USERX AT 3.06 ( .306 )

7/5/00 PRICE .28 ( 2.80 ) Ties all-time low. Not a bull market.

Gold stocks ( as per my composite and userx ) went down slightly today. Therefore, the run analysis avoided the important 1 down 2 up and is
at a meaningless 1 up and 1 down. The xxed out 16-20 index buy signal executed today at userx 2.91, not near userx 2.80 ( the prior 2 lows ) . I don't like it from a bulls standpoint. We'll see on Wed, but I still clearly do not want to be long. I repeat that this is not a bull market in gold stocks and it'll take take quite some up and down movement to change that statement. Continue to preserve your capital.

An xxed out buy of this type has never yielded more than a 4-5% rise until it sells out ( goes back over the prior 16-20 day prices ) . Currently those back prices are only 2% above current prices, so that occurrence seems likely again if we are going up at all. Note that it takes at least 3 days to generate a signal and a day to execute it, so a dynamite one would rise 2-5% or more a day for those few days to yield a profit of 10-25%. Had one dynamite one that took 16 days to start to rise ( but never fell below the buy in price ) , then rose 30% in the last four days ( 20% in the last 2 days ) . Here we could rise a little, get a sell, then rise a little and get a true 35-39 day buy for a nice rise. But need to go home and check if we had an up or down day today for the run analyses.

Gold stocks rose today ( contrary to my expectations ) , but failed to rise enough to avoid the next index signal, the 16-20 index buy signal to be executed on Monday. Remember, this often dynamite buy signal is not executable because it is once again XXed out, portending a 25% prob of a small rise and a 75% prob of a major fall soon. I was and still am hoping that userx will fall into support at 2.80 on Monday, but since it rose today to 2.92, it seems unlikely that it will drop 4% on Monday, a fairly dead day. This is scarey. If the stocks are unchanged or up a little on Monday, the run will be at down one and up two heading into Wed.. If they then go up on Wed, we'll have the first bullish run pattern since the end of January! But, if they go down on Wed, I'm giving early warning now that that would be an executable shorting pattern ( more on that if we go up on Monday ) . So perhaps we'll just go down a little on Monday to keep the run analyses uncertain ( but really still bearish since I've not gotten one bullish run since late Jan ) . In any case, the one thing that is for certain is that the 16-20 index did give it's signal today for Monday, forecasting nothing particularly great in the very short-term for the bulls. The day after long weekends ( Wed now ) have the single highest probability of setting important market directions in the gold stocks. Happy holiday weekend!

Gold stocks got hit hard today following the 35-39 day index sell executed yesterday. The indices haven't been wrong in a long time. Gold stocks will continue to fall, as previously expected, into Monday as the 16-20 day index will give its signal tomorrow to be executed Monday. This is an instant replay of the past two months, with the 16-20 day index giving an XXed out signal at the end of each month followed by a crappy rise and a return to userx all-time low of 2.80. Expecting userx to hit 2.80 again on Monday.

One could, once again, go long on Monday. However, it'll be the same 25% probability of a small rise and a 75% chance of a continuing large fall. If one goes long on Monday, however, one has an immediate stop if userx falls below 2.80 on a closing basis at any time. So it's a low risk, low reward situation and I'll continue to wait. If the pattern continues, after Monday we'll get an even smaller rise in gold stocks than the one in early May and then early June, followed a very slow decline back to userx 2.80 at the end of July. The pattern in the indices would again be a 35-39 day buy signal after Monday's 16-20 day signal is executed, which would be non-executable ( off the trading path ) followed by a 16-20 day sell as prices rose a little over the back prices, followed by a slow decline. How boring can this get and how patient do we have to be? Wish I had an index that could predict 2 or 3 day moves so that I could do SOMETHING!

I posted last night. 35-39 index was selling today. If gold stock prices rise today and rise a few more days I'll enter long on the next 35-39 day index buy ( the breakout ) , but no buy here. Today would be day 3 up on a 2 down 3 up run. I would not enter longs here, consider selling. I'm off to class. Couldn't get on Kitco for an hour--server busy, so I knew gold was moving.

As projected ( no great projection ) the 35-39 day index gave its sell signal today to be executed tomorrow. Some chance of it marking a low, but the gold stocks would need to drop about 3% tomorrow for there to be any chance of a low tomorrow. Now that the 35-39 index has sold ( not a shorting signal or a buying signal ) the index is open to execute a 35-39 day buy signal immediately IF that is the next signal. Unfortunately, the 16-20 day index broke yesterday and more today. If prices don't rise before Friday, that index will give an XXed buy signal. That means it's giving another crappy buy signal to be executed next Monday with the buy signal once again having a 25% prob of a small ( 4% or less ) rise and a 75% prob of a large drop ( falling more than 20% ) . Since most here are looking for bullish signals, the ski indices could turn bullish as follows:

1. After this 35-39 index sell ( and a 3% drop tomorrow ) the gold stocks immediately rise to above the back 35-39 day prices, thereby avoiding the 16-20 index signal.

2. After the 35-39 index sell tomorrow, prices continue to drift down to userx 2.80 on Friday or Monday generating the 16-20 index xxed out buy signal, we get a small rise to generate a 16-20 index sell signal ( as prices rise over the back 16-20 day prices ) thereby ending that trade at a small profit. Then gold stock prices continue to rise a little to generate a new 35-39 day index buy which would be executable. An intermediate term rise. This scenario seems more likely than #1.

The bearish scenario is that prices drift down to userx 2.80, generating the 16-20 index signal that is xxed out, prices then rise for 2 days or three crappy days before dropping thru userx 2.80 and declining for two months about 30% ( in gold stocks ) . A break of support at userx 2.80 will look very very very very bearish. Watch out for it.

A number of index signals and runs are likely this week. My system has remained bearish since early March, but some interesting patterns will develop this week. It's extremely likely, just about certain, that we'll get a 35-39 day signal executed this Wed. I note that this coincides with others' predictions for a low on Wed. Just because it's a 35-39 sell signal does not mean to short. This signal here will mark a critical point and I don't know if it is a real buy or sell signal. More importantly, the 16-20 index will break on Monday and will probably give a contrary buy ( remember that as prices fall below the 16-20 day back prices that is a sell on the index, but the index is contrary: it's a buy ) . However, that buy signal is xxed out, meaning a 25% prob of a small quick gain again and a 75% prob of a major decline. The most bullish pattern is therefore a drop into Wed ( userx 2.80 again ) then a rise to avoid the 16-20 day signal, followed very shortly by a beautiful 35-39 index buy the following week ( a real buy! ) . Alternatively, if prices fall into Wed and stay flat till Friday, the 16-20 will give its signal. If that is the low ( as many others predict a low on June 30th, Friday ) , the ensuing rise will yield an fast 16-20 day contrary sell for the 25% probability of a small profit and THEN ( hopefully ) the 35-39 index real buy. Hey-- does this finally sound possibly bullish after this week for the first time since the end of Febuary? The bearish ski indices may be bullish soon. Note that we are 1 up and 2 down, expecting a down day on Monday for the bearish 1 up 3 down run again, but we might continue to decline slightly on Tuesday and/or Wed yielding a potential weak bottom 1 up and 5 down run by Wed. When userx hits 2.80 ( exactly ) this week, buyers should come in for a few days even if we subsequently plunge. Fly or die time hits by the week after this week - latest. The timing of the above statements is "certain", the direction after them is still not certain. None of this bullishness will change the long-term downtrend in gold stocks. The middle to end of this week would be the time to buy the calls to complete the straddle position initiated with the puts from two weeks ago. The trading range will resolve itself the week after this week. Try not to jump the gun on a pure long or short position, a fake out move usually occurs in these situations ( e.g., a 2 day move up off this week's bottom followed by a downside breakout, or, a dip at the end of the week or the first two days of the following week to below support - userx 2.80 - followed by the intermediate rise with a valid 35-39 day index buy signal ) .

Looks like another little down day in the gold stocks today. 35-39 day index gave +3 on Wed, +1 on Thurs, and will give a -1 today. Will almost certainly give the 35-39 day sell signal on Tuesday, executed on Wed. This is as I have expected and posted. Note how the 35-39 day buy that was NOT on the path will end up selling at a loss or no profit. That's why it was not on the path! Userx still likely to return to it's all-time low at exactly 2.80 next week, yesterday closing at 2.89. Then the ski indices will be open for business on the next up or down move.

If any technically knowledgable Kitcoite knows how to interpret a descending triangle, let's hear from you. Userx went from 2.80 to 3.13 ( in one day ) , returned to 2.80 ( taking 19 days ) , went up to 3.02 ( in 8 days, around the 61.8% Fib # ) , and is now returning to 2.80 ( in about 9 days ) to complete the base of the triangle next week.

Have been examining the relative merits of different gold mutual funds, primarily the dog userx vs. fsagx ( Fidelity ) . As I had previously posted, my beliefs in thi comparison were born out. Userx goes down more than fsagx in bear markets ( most of the past 13 years that fsagx has existed ) . During the 1993 bull, userx made an initial rise of 142%, fsagx 86%. userx then fell 37%, with fsagz falling only 21%. userx then flew 77%, with fsagx gaining 49% ( all numbers close, but approximate ) . Userx is more volatile and when we get to a bull, it's preferable. Alternatively, when userx outperforms, it's likely that the golds are in a bull.

The triangle is definitely below any and all moving averages since it's occurring at all-time lows. I was hoping it would be bullish. My own idea is that if the price then rises over the down trend line connecting the 2 previous triangle highs ( 3.13 and 3.02 ) that it's a potential breakout and will yield a 35-39 day buy on the path that is executable. Alternatively, if it ends up falling below 2.80 after an attempt to break out to the upside, it would be bearish and correspond to the index giving its XXed 16-20 day buy signal ( a buy signal that should be bad ) as prices fall below the back 16-20 day prices.

Actually, the original concern was that the system was developed using too much BULL market data. We developed it in 1984 using 1972 to 1984 data. If I remember correctly, 72-74 was bear, 74-80 was bull, 80-82 was bear, 82-84 was bullish. System works better in a bull market because it's geared to go long primarily, harder to get the right shorting points, which rely on XXed out buy signals ( buy signals that are predicted to be bad ) , as opposed to index sell signals. For example, the upcoming 35-39 day sell signal is not necessarily a good shorting point.

Still nothing defintive to report from ski's perspective. The very small up day in gold stocks today at least avoided another bearish run ( avoided the 1 up 3 down run ) . Now at 2 down 1 up. The 35-39 day index started breaking towards a sell at +3. I believe that the xau closed its open up gap today. It would be great if we finally moved solidly up within the next 2 or 3 days, but with the Fed meeting coinciding with the day that the 35-39 index will yield a sell, and me having no indicators that are bullish, I'm guessing that we'll still drift back down a little to userx 2.80 for the third time and get a 35-39 day sell ( which will still not be a definitive signal, but which should end the narrowing trading range one way or another next week ) . Wish I could state a definitive prediction and finally put my money to work/at risk, but still waiting and getting impatient. I state and know that markets go nowhere at least a third of the time, but it's still always hard to live through. Cheers to all, but I'm getting weary of being patient.

Reify: I've stated this before, but I think it's important enough to repeat this view. That 1998 buy spike was a buy spike! However, it was only 7 straight days down ( after 2 UP ) . Not enough historically for a true bull. At that time, although the run analysis and I bought, I was bullish but concerned/confused that the buy spike didn't meet historical standards for a long-term rise. That concern ( uncertainty ) was confirmed by a long-term triple index sell about a month later. The third such triple sell in history. The other two led to the massive waves down in gold from 1980 and from 1996. Such triple sell down waves may take a year or two to really begin and may take 3-5 years to complete. 1998 + 3= 2001 or +5= 2003. In my work, that buy spike was negated by reported/alleged Central Bank/Cabal intervention on 10/8/98. Market opened way up, closed slightly down at the exact time to negate a ski index bull market pattern and turn it into a long-term bearish scenario ( that should be the last bearish scenario we see ) . Boy, was I disappointed/upset for months in late 1998.

Not a good day in the gold stock arena today as stocks fell while spot gold closed up ... a measly 10 cents. One would hope the stocks would close up tomorrow to avoid another bearish run of 1 up and 3 down ( currently at 1 up 2 down ) . If we go down tomorrow, what'll that be?, it seems like 25 straight bearish runs in the last 4 months without too much price decline. 35-39 day index on userx will start to break towards a sell tomorrow if prices don't rise about 7%. That size rise seems unlikely to happen. Kaplan sounding short term bearish tonight. To repeat, the short sell, if it occurs over the next six days, opens the index to an intermediate short buy that is executable if prices then rise over the 35-39 day back prices before they fall below the 16-20 back prices ( which are at their lows for the next about 2 weeks ) . So IF userx falls back to 2.80 to yield the 35-39 day sell and then rises again, there's a chance for a true buy signal. If prices fall below the 16-20 back prices after a 35-39 sell, that buy signal will be on the path but will NOT be executable ( it'll be XXed out, setting the opportunity for the next Extended Ski tutorial on XXing out rules on a weekend ) . You can tell that thruout these weeks, although the index has been indeterminate, the runs and SKI have been bored to bearish. APH and others caught that 3 day nice rise in physical gold, but the stocks, which I focus on, have failed to respond.

Tyrant asked for an update, but there's nothing new to report. Index is not long or short. Run analysis has not been bullish for months. Userx in now 4.5% above it's all-time low. More and more restricted trading range continues in the gold stocks, preparing for the next fly or die. Time passing, such that by this Wed ( in 2 days ) the 35-39 back prices will start to rise and the 35-39 index will sell in 7 days unless we rise to/above the early May prices. Tyrant, it's going to be hard to make any money here because we're drying up, market to decide soon on a major direction. If the 35-39 sells, the index is open, a 35-39 index buy will be executed, but a fall to new lows will generate an NON executable 16-20 day buy signal and the same probs from the last one will apply ( 75% prob of major decline, 25% prob of minor rise ) . Generally, buy dips and sell quickly, short rises and cover quickly ( 1 or 2 days ) . Or straddle, buying puts on strength and calls on weakness. Will userx return to the all-time low of 2.80 in the next few days??? 2.80 to 3.13 ( May ) , 2.80 to 3.02 ( June ) , 2.80 to ?? ( July ) . Note that the most basic technical rule that rising markets should spend more days rising than falling still has not occurred. This very simple analysis continues to show that the market rises quickly, then spends many days gradually declining. This is bearish!

Gold share prices holding "due" to 16-20 sell signal up to one-half cycle, 9 days. Must fly within 7 days and counting down, or die. If doesn't fly, will yield a 35-39 day sell ( as those prices will spike up ) . Note the coincidence of the index time periods with the next Fed meeting ( this is typical ) . Still unpredictable to me, but the run analysis remains negative. A reasonable and highly likely profitable strategy is to straddle by buying slightly out of the money calls on dips ( like today ) and slightly out of the money puts on rises ( in gold or the stocks ) with the prediction that a major move 15-20% up or down will occur within the next 20 trading days. If we break to the upside the top is predicted in 17 trading days and counting down. Please note how I am not a trader, but a position player waiting for the very high probability situation. The best will be the nice rise scenario over the next 17 days into a major shorting opportunity. I'll consider myself very fortunate if this rise occurs now. Remember how 3 months ago I was able to make multiple accurate predictions but stated that that was unusual. Since then the gold shares have gone nowhere with a slight downside bias. I've stood aside, but that should end within the next 7 to 17 trading days. Hoping for the rise very soon, but don't know, evidence still tends to point down.

So, the index ended up being correct when it predicted that the 16-20 day trade from 5/31 to today would be a loser or be a crappy winner. It had predicted a 4% gainer if it was good or a 20% loser. It was good at 4.5% ( userx 2.80, the low, to 2.94 today ) . Moreover, the sell signal from yesterday executed today looks like it hit the day of the high ( intraday at least ) . I'm pleased that it worked out the way it was supposed to, the way it was predicted, close to being "science". The next signals could be a 92-96 buy ( if it takes off 20% to the upside ) , a short sell, or a short-short sell ( a buy ) . If the short sell comes next, that's death. That would happen if prices fall very slowly over the next 9 days. If they fall fast it'll give a true 16-20 index buy on the path that occurs within 11 days of the 16-20 day sell ( executed today ) . Unfortunately, given the current index patterns, that kind of buy signal here would be very very rare ( but possible ) . If they rise over the next 17 days to the 92-96 index signal that'll be a definitive short. Still being patient and was also a "patient" again as the stupid physicians finally drew the liquid out of my chest while the gold stocks were starting to fall. Hope your doing okay as the market pops up and down.

16-20 Index sell is executed at the close today, ending the supposedly "crappy" 16-20 index buy from 5/31's close. Renotong this from yesterday evening because earlier yesterday I had mistakenly stated that sell would be executed tomorrow. Nope, today. 5/31's "crappy" buy signal has not turned out to be too "crappy", will make about 7% in 9 days. I state the odds henceforth as 50-50, but within 9 trading days the gold stocks have to "fly or die". Just as traders had a good risk/reward going long on the 35-39 day buy signal several days ago, now one has a fairly good risk/reward going short using a mental stop of a second day close over today's closing gold stock prices.

You asked for it and there's not much definitiveness to report. Nice strong up day in the stocks. 16-20 index went to a +5, 35-39 index went to a +5. If they stay up tomorrow we'll get a signal ( prices over the 16-20 day index ) which is executed on Wed. That'll end the 16-20 index trading buy from last Wed that I couldn't execute ( at a profit ) . If/When that signal happens the market will clearly have to fly or die because if it then falls below the 35-39 day prices we'll get a "dreaded" double sell ( 35-39 day back prices are falling to the lows ) . Or it will fly up 20% to the 92-96 day prices. I'm not supposed to be long but that doesn't mean that it won't fly! If it goes up I will make a clear prediction that the top will be in 17-22 trading days from the 35-39 day buy execution ( 17-22 business days from 6/8 ) as prices go over the 92-96 day back prices.

Bearish run analysis ( 3 up, 3 down ) and neutral to bearish ski index path makes me predict a slow continuing decline in gold stocks this week. The current run usually ends at 3 up 4 or 5 down, so looking for 1 or 2 down days followed by some very weak up days. Looks like the same scenario that we had after the May 2 run up of a few days followed by three weeks of gradual down. Now had the early June 3 day run up to be followed by several weeks of weak downside action. Userx appears to be forming a descending triangle ( 2.80 up to 3.13 in MAy, down to 2.80 and up to 3.01 [Fib 61.8%] in June to now slowly retrace to 2.80 again in June ) . Boring, corrections, no real movement for months. Pleased to have remained in money market funds.

The ski index ( not me ) predicts .50-1.00 on userx (now at 2.89; all-time high of 104.40) within 1-2 years then a gigantic rally that will probably never recover 104.4 from 1980.

The index path system determines which of the 3 indices' buy and sell signals is followed for trading/investing. The terminology used here will be employed henceforth: 16-20 index= short-short ( SS ) , 35-39 index=short ( S ) , 92-96 index=long ( L ) . Remember that the SS is contrary ( when prices fall below the back 16-20 day prices ( a sell ) it is executed as a BUY signal and vice versa. This insures that one buys at oversold levels and sells at overbought levels. The S and L buy when prices go above the corresponding back prices and sells when the index turns from + to -. ( Search earlier this year extended posts if you don't understand what I'm talking about and want to learn ) .
The index which controls is the index that buys first. On tied signals the higher-order ( longer term ) index controls the path. Control does not switch until the index in control sells out or loses control.
Examples:
1. S and L are on sells, SS gives a sell ( a rise over 16-20 day prices ) and falls to a buy. A great buy. Prices rise to an S buy and THEN an SS sell. Control stays with the SS until it has sold.
2. Same as #1. Prices rise to a S buy then fall to an S sell before an SS sell. SELL. The longer term index sell takes precedence always.
We are currently on an SS buy ( not executed for other reasons not yet explained ) , rose to an S buy, have not yet reached an S sell or fallen to an S sell. SS buy was supposed to lose or not gain much. Current prices sitting right at S sell area ( if we fall ) and right at SS sell area ( if we rise ) . Do the numbers day to day, it's always amazing to watch the market follow the back price lines.
3. Same as #1 but now the SS sell day ties ( exactly ) with the S buy day. Extremely common. Control transfers to the S buy, an "intermediate" term buy. S sells when one gets an S sell or or L sell ( if prices rise to the L buy and then it sells ) .
4. Same as #1 but the SS sells before the S buys. Technically, supposed to exit on SS sell and re-enter, but usually the S buy will occur within a day or two of the SS sell and should the S buy not occur, the only thing that can happen if prices fall back is another SS buy.
5. Prices rise without an SS buy on the path first. That would mean that you had a previous SS buy that was not on the path followed by a S or L sell, and then prices rose to a S buy or an L buy. If get an S buy the trade continues until an S sell or an L sell ( if prices rose to an L buy after the S buy ) . Alternatively if prices had risen to an L buy tied with the S buy or an L buy before the S buy, control would be on the L index ( the definition of a BULL Market! ) . The most common way of getting a bull market ( e.g., 1993 ) is to get an S buy on the path followed by a L buy ( not on the path therefore ) , followed by an L sell ( without an S sell; therefore the L sell ends the S buy trade and the index is open for any buy signal to be on the path ) , followed quickly by a new L buy.
The same path rules will apply to the longer term set of 3 indices ( but note that these interestingly turn out to be inverted from the shorter set of 3 indices ) : the 660-664 index is the equivalent to the 16-20 index ( the 664 here is the trading index! ) , the 439-443 index which is the equal to the S index, and the 218-222 index which is the equal to the bull market L index. These are obviously less validated and don't come into play for years at a time.
If you're really understanding and are astute, you could realize that one could get a SS buy, then a S buy, followed by an S sell, followed by another SS buy as prices fall. That second SS buy is NOT executed, it's XXed out in our terms. This XXing out procedure is very important because markets just don't stay in trading ranges ( 16-20 buy and sell signals ) but break thru to the downside, thru the SS buy signals. The XXing rules will be described on another weekend when we get to the next XXing out instance in real life. Note that S buys and L buys can also be XXed out. For example, on 2/10/00 the index gave the common tied SS sell and S buy signals tied ( transferring control to the S index ) . Why did we sell at userx 3.75 and then recommend going short? The S index buy was XXed out, making it a sell signal. Starting to sound like it'll be too complicated? Nah, not after further rules and some practice. If you're wanting to follow and learn this, I'd suggest printing out this page and the prior extended instructional posts.
The path is, of-course not always correct. Around 80% correct, but the rules avoid losses. The most common error is an SS buy on the path, followed by an S buy, followed by an SS sell, and the market continues to rise to a L buy while the index is on the sidelines after the SS sell. That's a possible happening right now and why I state that I'm not buying, but the stop - the S sell - is just a few % away on the downside and the L buy is up 25% ( a good risk/reward, but the odds favor getting the S sell next based on the path and the fact that the 5/31 SS buy signal was XXed out and was not executable yielding the prediction that the SS Buy to SS sell trade, if the SS sell occurs, will yield little profit ) .
Always happy to answer questions, explain in other words, or hear criticism of the index/rules/procedures. Many of the path patterns DO conform to traditional TA, such as double bottoms yielding a tied SS buy and S buy. As an exercise in understanding, try to picture or draw that scenario ) , but the advantage is that it's objective! ( a signal is a signal, period ) . Let's hope the indices give a high probability on the path signal soon, it's been 3 months!

All of my posts relate to gold stocks, not to the stock market. My sytem is NOT supposed to buy because the 35-39 day signal is not "on the path of trades" ( to be explained at a later time ) . The path is still on the 16-20 day index buy signal from last Wed that had/has only a low probability of being very good. I am not buying today. I was saying however, that those who have been waiting and believe in something other than my system ( which can miss these kinds of rises; and there appear to be lots of good systems posted on Kitco that say to be long gold stocks ) have a fairly decent entry point here. It's a reasonable thing to go long here, but my rules do not have me going long. Remember, my system rules strive to avoid losses even if it means missing some potential gains. I do know that all of this is not the start of some great bull market. If the market rises, it's a trade, and the better trade will come in shorting the gold stocks after the rise ( should one occur ) .

The 35-39 day index buy signal was given today, executed at the close tomorrow. Probabilities are about 70% that we'll go up about 20-25% over the next month, 30% that we'll go right down to below the back 35-39 day prices for about a 5% loss. Those odds aren't bad. The remaining problem, however, is somewhat complicated to explain, but involves a concept I have not mentioned: the path and index control. There are 3 indices 16-20, 35-39, and 92-96. Which signal is executed/in control when? The index currently in control is the 16-20. This remains in control until that trade ends ( prices rise back over the 16-20 back prices ) . That has not happened yet. Therefore, we are still on the questionnable buy signal from last Wed's close ( which has to date, retrospectively, hit the xau low and userx low on the nose ) . Until that trade ends, the path remains with the 16-20 index in control and this 35-39 day buy signal is simply bypassed. This procedure, of-course, has sometimes been wrong, but it is safe ( avoids losses ) . Based on reading all the posters here, I believe that they'll be right and prices will rise, but I'm personally continuing to avoid buying or selling until I get the "close to perfect" set-up. If by some improbability this path is right and prices decline right back to the previous lows, the index may give such a true clear buy signal.

Current run at down 2, up 3 indicating a bottom achieved and/or a top in place if down tomorrow. Many wondering why the shares have underperformed -- should not be a surprise. That signal ( falling under the 16-20 day prices ) from last Wed had a 25% prob of yielding around a 4% profit from Wed until prices rose over the 16-20 day prices. That rise over 16-20 day prices is highly likely to be executed on Friday, therefore, expecting prices to linger and fall until that signal on close on Friday, down 2-3% from current prices to fulfill the predictionof a possible 4% gain. MOREOVER, IF shares rise tomorrow or fall less than 3.5% tomorrow ( userx close over 3.91 ) the 35-39 day intermediate index will give its buy signal to be executed the next day, on the close on Thursday, followed by the 16-20 overbought signal executed on Friday. Probably an intermediate buy signal finally achieved causing a rise over the next 20 trading days to the shorting trade of the year as prices reach the 92-96 index. Gold's been amazing compared to the shares-- I predict the shares. Continued CHEERS! It's nice to have some action and we've had some stupendous posters lately ( I read and appreciate all of you ) .

While I sat for an hour today drinking barium prior to a CAT scan, I watched an interview on a business/market channel with the head of the Edcational Foundation on Money. The interviewer started out asking, "You're not a goldbug are you?", and the expert responded "Worse than that. All fiat money systems have historically ended in the fiat being equal to the cost of production -- zero. As this happens the rich lose wealth, the professionals make less, and the workers who rely on pensions, etc., lose everything. It's unfair and it will happen."
( My comments ) Whether it's inflation, deflation, or most probably inflationary depression, gold is the only true money and it will always be that way. Period. Fortunately that time is not yet here. Unfortunately that time is not yet here. My system's estimate is within one to two years. Begin gathering cash to be able to buy gold in that time period. Tomorrow marks important 222 and 443 cycle dates from the 1998 low AND the July 1999 low in gold stocks. These prices currently represent resistance as we are in a down trend. If we go up nicely tomorrow this resistance is about 4% higher than current gold stock prices. It's highly unlikely that we'd go much above that. So if we go up tomorrow I would expect us to hit that resistance. If we go down tommorrow, it's another breakthru to the downside -- with a run pattern currently at 1 up and 2 down, a down day tomorrow will give us another very bearish 1 up 3 down pattern and a probable breakthru of Sharefin's beautiful gold sentiment chart to the downside. Note that I care not about fundamentals such as this supposedly important report that comes out tomorrow. I don't believe that the report matters but people will respond in the psychologically correct direction no matter what the report says ( there'll be somebody stating the market's interpretation that justifies the movement whichever direction the gold market goes -- it's verbal diarrhea to me ) . Cheers!

FundaMETALists' 5/27 2:30 post summarized the recent/current run and index situation perfectly, but neglected to note that on Wed 5/24 userx did close down, forming the bearish 1 down 2 up run that I warned about before I left on Tuesday. Had we gone up that Wed it would have be a bullish 1 down 3 up, but by going down, YOU SHOULD HAVE KNOWN that gold/gold stocks were going down thereafter. Folks, that 1 down, 2 up pattern continues to perform at basic perfection for all these years.

The current 2 up, 3 down pattern is unlikely to meet the criteria for what we've come to call the great capitulation run down. After three days we're only down 2-3%, a standard weak 1% a day down run, not the 2% a day required. Yes, we could accelerate to the downside and make the run into a buy signal, but such true capitulations have never started weakly like this. So I'm not excited about the prospects of getting a run analysis buy here at a major bottom. Plus if we get the prices falling below the back 16-20 prices, it would make not sense to get an index bearish signal coupled with a run analysis buy signal.

FundaMETAList also correctly summarized the index situation. The past five days of signs are +5 ( 5/22 ) , +5 ( 5/23 ) , +1 ( 5/24 ) , -3 ( 5/25 ) , and -3 ( 5/26 ) . Added together X 4 = +20 on Friday. Thursday 5 day total was also +20, 20 - 20 = 0, so there was no velocity component to add to the +20 index number on Friday. Tomorrow gold stock prices will have to rise about ten percent to avoid the index sign turning from positive to negative.

I certainly would not want to be long, the odds are bad from my system's perspective. However, they are only odds, probabilities, so we could rise 10% tomorrow or the signal that comes on Tuesday could end up yielding a very small rise, but most of the time right at the day of the signal the gold stocks will fall hard breaking perceived technical support levels and that will not be a bottom. Therefore, in line with the run analyses, we might get a little up day tomorrow and a big downer on Wed as the signal is executed. If the signal comes, it once again suggests that another 20-40 trading days need to pass before a meaningful rally.

the bullish case REQUIRES that the stocks rise to/above the highs of 5/2-5/5. If you remember, the 16-20 day index executed a signal on 5/5, which was supposed to and did stop the market for 9-10 trading days, which expired Friday. They are now free to rise. If prices had fallen below the 16-20 day back prices during this 10 day period, it would have been a marvelous buy signal. Came close, but close is not good enough. Note the demoralizing activity on Thursday and Friday to me was also seen by Yvan Auger using a different methodology.
IF we now get a 16-20 day signal by prices falling below the 16-20 day back prices that would be bearish ( see probs below ) . On userx, that would require a drop below 2.80 this week. However, by the Tuesday after Memorial Day ( 6 days from now ) the back prices will all be at the 5/2-5/5 highs, so that to avoid the bearish signal prices must be at or above those back prices by Friday/Next Tuesday. Note that the day after three day weekends are often very important and you should be nervous then.
IF we fall below the 16-20 day prices here are the odds. 75% of the time prices will continue to drop. 67% of these drops are major, in the 20-30% area. 33% of these drops are "minor" in the 3-10% area. Note that this was signal that stopped out my 1 day long position back in March and led to my bearish stance since then. Although many excellent traders here made some money on the long side in particular stocks and short-term trades, mutual funds and broad gold composites fell about 4% from 3/2 to 5/5, a "minor" drop from 3/2 to the following HIGH. ( that's how these drops are measured ) . The 25% of gainers were all samll, in the 0-3% range. N=about 25 total over 26 years. If this signal occurs, the risk/reward clearly says don't be long and consider going short despite the current low prices.
Note that IF we do rise this week that the 35-39, 218-222, and 439-443 indices will all give signals on the Wed after Memorial Day! That will represent an all-important point, to be discussed then.
Note that the index is not predicting one way or the other, but the run analyses are still bearish and the bulls definitively need a rise this week. You can tell that my personal opinion ( worthless ) leans towards the bearish side and my Fidelity account to short Fsagx is now open for business. Waiting...
Best of luck to all, this is a wonderful site and we should support Kitco. When the time is right I fully plan to buy my physical from Bart!
Lastly, SHAREFIN's marvelous gold sentiment chart shows the recent bounce in sentiment off the important support line and is now turning down to retest. IF the 16-20 index signal occurs the prediction is that sentiment would break thru to the downside.

Crystal Ball: Glad to see that you're following the userx predictor dog. Try recording the prices each day and computing the 16-20 day index. Current prices are almost about to fall under the back 16-20, but now that won't be a buy because the fall must be within a half cycle, within at least 10 days from the time of the last signal. If/when they fall thru, userx will be portending a continuing decline.

And today, someone sold all those mining shares off at the close such that an apparent up day turned into a down day - another bummer. As per USERX being down. So we don't have a 1 down 2 up run into Monday, just a meaningless 1 up 1 down run. Just a little more down and she's thru to the downside not to return to these levels for a long time. Looks like that's what's about to happen. Yesterday and today have been perfect to negate the opportunity for the index to become bullish, just can't do it any better. When I need a down day it goes up and when I need an up day it closes down. Very very important, even though the moves are tiny. I've been bearish for a long time now, became uncertain again, and it's just about bearish confirmation time again, clearly in agreement with APH and EB. Close to being back to the "into the abyss", "down to new all-time lows scenario", also thereby implying a continuing dollar rise. If one's long here, clearly need to use the lows from 5/1 as a stop. Sorry to be bearish, but if anyone can take it, I will post at some time the index's long-term ( year to two out ) prediction for the final bottom and the subsequent once in a generation price explosion.

Okay, who bought that 100 shares of Mongolian mining company KILLSKI and made userx and my composite go UP today. If you've been following this analysis the last two weeks, this tiny up close prevents the index from falling below the 16-20 day prices within the required time period ( tomorrow ) . This leaves my system out in the cold, meaning that we can now go back up to xau 63 without a signal from my system. If you're long, gold stocks MUST rally before Tuesday in a week from now ( 5/30; that Monday being Memorial Day ) because that will be 16-20 days from the 5/2 runup. In other words, prices falling below the 16-20 day index now would NOT be a buy signal and would portend continuing decline. Similarly, a drop below the prior lows ( from 5/1 ) in the next few days would give this now bearish index signal. So, the run analysis has yet to turn bullish, but I won't be at all surprised if we've had our retracement from the move up on 5/2 and we'll either go up and retest/exceed those highs or we'll just drift, drift, drift lower ( as APH stated on about 5/3, stating that the move up was bad allowing for a continuing drifting down ) . Wish I was surer, and so I have to wait again. I am bummed out. I will not be surprised by a move up within the next few days but the odds remain at only 67% for going up. The system can't always predict.

Gold stocks will be a buy within the next three days. Stocks fell the predicted 3+% today giving a -1. The earliest the index will give a buy for is to be executed on Monday, but this is the last possible day. So any spike down over 6% in a day on Thursday or Friday will be a buy. The index and the day of the low form a fairly normal distribution with a mean on the day of the index signal, with a standard deviation of 1.5 days. You can be simple and certain by just buying on the close of the day that the signal is executed or we can try to beat the index by looking for the capitulation day ( more than 6% down in a day ) . Any help will be appreciated. I will post long explanations today, tomorrow, or Friday, detailing probabilities and stops. Be financially and psychologically prepared. This will not be a true bull market, but an excellent buy signal.

We're still on track for the buy on a collapse, but it has not nearly dropped enough yet. Remember that the drop below the 16-20 day prices must happen by Friday. Today, prices will fall to somewhere right on the 16-20 back prices right where they're "supposed" to be ( based on the 16-20 day index ) . Note, again, how the market will push the stated time and price requirements almost exactly to the limit. Remember the probably exagerated story about Gann predicting a price at a certain time and in last 5 minutes it does it? I've never seen that myself, but usually see the market wait until the last possible day ( s ) to do what it's going to do.
Yesterday's little up day completed that bearish 1 up 3 down run such that we are now on a 1 up 1 down run as of the close today. If the index gives it's signal on Friday to be executed on Monday ( the last acceptable time frame ) , maybe we'll be on a 1 up 4 down run at the close on Monday ( an acceptable run for a bottom when combined with a signal ) . Gold is on a three down run today. Maybe it'll continue to day five on Friday or even better, day 6 on Monday. If day 6 happens, remember that only twice in history have we gone down that 7th day.
Again, most interestingly for others ( i've often seen this ) watch how the daily prices play with the 16-20 back prices, let's say on userx. Today the back prices are 2.86, 2.87, 2.85, 2.85, and 2.84. The 2.86 drops out tomorrow and is replaced with a 2.81 ( the all-time low is 2.80 that comes into play on ... Monday ) . Yesterday's close was 2.95, so it can drop about 3% and not generate a -5 ( thereby forestalling the buy signal another day ) .
I clearly do not recommend long positions yet. The runs are bearish and one can continue to hold or initiate very short-term ( a day or two or three ) shorts. I'll be happy enough if we continue the fall to finally have the wait end. The real question for me is "How many of us will have the guts to catch the falling knife on Friday or Monday?" It's required to be extremely difficult, for me too.

also forgot to put in another beaarish factor for this week, very short-term, but I think it's useful knowledge for traders. Gold rarely has lengthy runs up or down for several days. Mostly it's 1, 2 or 3 days in the direction on a closing basis. Therefore, if you're bullish, you don't want SPOT gold to close up 10 cents and if you're bearish you don't want gold to close down a little. This is a generally accurate statement. We closed up a dime on Friday - slightly bearish especially with the gold stocks down.

I've been waiting for ten weeks now for some kind of capitulation low in the gold stocks and the time is running out: it either happens by the end of this week or it's not going to happen ( and it now cannot be a capitulation that yields a bull market, but can yield quite a big rise ) . As posted last Sunday, the 16-20 day index signal executed 5/5 usually stops the market from going up for one-half cycle or 9-10 days, ending this week. A fall below the 16-20 day prices ( they're still falling too ) will be a buy only if it happens within that time period.

Bullish factors:
1. My gold composite closed Friday exactly on the 61.8% Fibonacci retracement from the 5/1 low to the subsequent high. Stocks going up now?
2. As posted on 5/1, the cycles were due to bottom on 5/1 and may be seen as having bottomed, so we should go at least sideways to up. That 5/1 post stated that I was expecting a 2-5 day weak rally. The 2-5 day rally part was right and the "weak" was dead wrong.
3. The 5/5 signal is followed by sideways to up prices 67% of the time and marks a high only 33% of the time. So these odds are 2:1 that we're not going down much this week.
4. Hourly and weekly stochastics are oversold.

Bearish factors:
1. The run analysis remains bearish from before 5/1 and again on the 1 up 3 down formation last week. We are now 1 up and 2 down so that a down day of any size on Monday will give us another bearish run pattern. If the run continues down to down 5 days or more with prices falling below the 16-20 day index, it'll be a classic buy pattern.
2. The xau daily stochastics are still overbought.
3. As stated on 5/2, that 5/1 "low" was very very strange. The gold stocks just doesn't jump 11% the first day off a low ( the second day and thereafter, yes ) . Fake out?
4. Although sentiment numbers show low bullish consensus ( meaning the numbers are bullish ) , once again I find almost unanimous of letter writers and "experts" that I read are bullish and already long ( auger though expects lower prices this week down to xau of 56. They have stops at xau 57 down to 54.24. Breaking 58.20 on the downside would also be likely to hit sell stops.
5. The BOE auction is in 7 trading days. How could this fit with a capitulation low that must come before that? It fits the back 16-20 day prices perfectly. IF a sell-off happens, the index will take at least 2 days of -5s to yield a signal executed the third day. If the index were at all +5s now, it would take 3 days plus a day to execute. But the index has broken and as of Friday is not at +100. If you look at the math, if the index has a +5,+5,+3,+5,+5=+92, two consecutive -5s will generate a signal: First day, +5,+3,+5,+5,-5= ( 13x4 ) =+52 and the next day, +3,+5,+5,-5,-5= ( 3x4 ) =+12. Adding in velocity, [+12- ( +52 ) ]/2=-20, and +12+ ( -20 ) =-8 and the sign has changed. It will therefore take at least three days to execute a buy. Monday is likely to yield a small move in anticipation of the Fed on Tuesday, so a -5 is unlikely. If we fall to -5 on Tuesday, the index will execute a buy on Thursday, on the Full Moon ( a confirmation ) . When prices rise back above the 16-20 prices, that usually ends the trade. The back prices continue to stay low thru the following Tuesday, meaning that even if we get the buy signal, prices are not supposed to rise much until after Tuesday otherwise the index would give an almost immediate sell signal within three days from the buy signal ( that just doesn't happen ) .

So the TA for me is divided and still not clear. If we tank by the end of the week, the TA will be clear. If we just drift lower and fall below the 16-20 day prices AFTER this week, the index signal cannot be executed ( it's not a buy, it's past the half cycle buy time ) and strongly predicts a very bearish, slowly falling scenario for months.

Gold stocks dropping for day 2 down, run will be 1 up and 2 down now. IF IF we're going to get the moderate capitulation ( it won't be a bull market buy signal bottom because we'd have to be 2 up, then drop 25% in 10 days ) , index buy late next week the stocks should drop every day averaging at least 2% a day, probably taking out all stops all the downside ( so the run into the low would be 1 up and 6 or 7 down--excellent ) . Most likely day would be a buy next Thursday or Friday ( the full moon is correlated with highs and lows but the index doesn't know that, it'll just give the buy after the stocks have fallen below the 16-20 day prices ) . Today's index number will probably be a +3, with the total moving lower from yesterday's +90 to +72.

The high 16-20 day back price on userx today was 2.96. That was supposed to be support, allowing for a 2% down move today. Not unexpectedly, and per posts from two days, userx closed today at ... exactly 2.96 ( down 2% ) . That would give the 16-20 index a +4 for today ( a tie with one price and staying above the other 4 back prices ) . It'll be interesting to see if current prices continue to follow the back prices down staying above them, fall thru them to give a fast buy signal next week, or just start rising in a few days.

85% prob short-term gold stock shorting trade will be given if gold stocks close down today based on the 1 up, 3 down run. If they close down today , the 3 down run will not have been followed by a 3 up run to negate it. Have to be sure, however, that they are closing down today ( can always reverse intraday ) . 16-20 back prices ( support ) today at down 2%.

As previously posted, if gold stocks fall by next Friday to under the 16-20 prices ( the 16-20 day index turns from + to - ) , that will be a buy signal, no matter how far they fall. Am not predicting this will happen, but if it does, I'll be a buyer for the first time in months.

Let's use USERX for our data, publicly available unlike my proprietary gold composite, good correlate. Look back 16-20 days as of today, 5/5/00. Five back prices are 3.05, 2.99, 3.01, 2.94, and 2.91. Markets, as a powerful rule, will draw out their real directional move as LONG AS POSSIBLE, driving all participants crazy ( and those that know the index even crazier! ) . I don't know the next direction so the market will keep it unclear. I could and did verbally predict to my co-developer that today's closing price would be 3.06, right ( exactly ) above the back prices, yielding a +5. For those checking, learning computations, the sum of the five days X4 is -5, +5, -3, +5, and today +5, yielding +28 with ( [+28]-[-12] ) /2= a total score of +40. Note how despite today's decline, the index became more positive. Bingo, staying right above the back prices, but this doesn't tell me anything predictive ( that's why it was expected and usual ) .
Look ahead. Monday's set of back prices is 2.99, 3.01, 2.94, 2.91, and 2.89. They are dropping and will continue to drop. Even if we fell below all 5 of these prices and got a -5 for Monday, that -5 would only replace a -5 in Monday's five day computation and the total would be unchanged from today. If in fact we get a major fall here, the index delays changing from positive to negative due to declining back prices and replacing -5 counts with other -5 counts! I am not predicting this, but if we start to plunge you'll see the index delay a change from + to - until we start to fall thru the old lows.
I imagine that this is difficult to understand, but it will be easier as the days progress and the computations become easy to understand. Historically, I've seen plenty of fake-out lows where we spike up immediately only to fall to a lower low that causes extraordinary bearish ness. This is possible here. I'm not saying it's going to happen but the odds are 33% for a 10-20% fast drop here. That will cause a buy signal. ( If you check past posts when people asked what would turn the index bullish, one response was a rise above 16-20 prices followed by an immediate fall below them, ala summer 1999 ) . If a fall occurs that is slow ( ala APH ) there will be no valid buy signal. The next signal if we fall thru the 16-20 day prices must occur within 10 days from today ( Friday ) for it to be valid.
Again, I am not predicting this, as the odds favor a sideways to upwards movement here. But a down day on Monday will simply cause a -5 to be replaced and will certainly not give a buy. If we do start down it will take at least another 4 or 5 days to generate a great buy. The index only makes a prediction here after the next price move ( up a lot will short, down a lot will buy ) . You can check back Userx 35-39 days for the next upside target if we break thru this resistance, up about 7% from today. I wait impatiently.

The 16-20 day signal occurs for tomorrow. The computation for today was [-5] ( from 4/28 ) + [-5] ( from 5/1 ) + [+5] ( from 5/2 ) + [-3] ( from 5/3 ) + [+5] ( from today ) = -3 X 4 = -12. ( Still negative, but then add in velocity ) Change from yesterday to today [ ( -12 ) - ( -52 ) ]/2= +20, such that -12+20=+8. The sign has changed from - to + as of today, such that at tomorrow's close I circle the composite's closing price and record "16-20 day contrary sell". This again, is the trading index, such that most of the time one can sell on the contrary sell ( as prices cross above the 16-20 day back prices, like tomorrow ) and buy on the contrary buy ( as prices fall below the 16-20 day back prices. The last siganl was a contrary buy on 3/2, which was normally a buy but the procedure XXed it out ( more on that another time ) saying that the contrary buy should not be a good buy, with 67% of the time prices falling thru it and 33% of the time prices staying flat. In hindsight what happened was that prices stayed flat for about 3 weeks and then fell for about 6 weeks, but now have shot up in the last 3 days. The closing price tomorrow for most broad gold stock composites ( e.g., mutual funds ) will probably be at or a little below that price on 3/2, as the index was forecasting. But the whole correct forecast for 2 months failed to yield any profit since prices ended up essentially flat. Individual variations in stocks occurred, as usual, with North Americans being higher now and South Africans and Australians being lower, so I use my composite, but most mutual funds are approximates.

So, what does the signal portend? By itself, the index signal gives the probability that 67% of the time we will eventually go higher and 33% of the time lower ( tomorrow would be a high ) , because we are still in oversold territory ( prices are lower than the 35-39 and 92-96 day indices ) . If prices were giving this signal and we were above the other two indices, tomorrow would be a definitive selling day. If prices plunge after tomorrow, falling below the 16-20 day prices ( note that they would have to rapidly fall to new lows, which is the way the index works ) that would be a super buy, but most of the time ( 67% ) prices get stopped by the signal for a while ( usually a week or two ) and then continue up to the next level, the 35-39 day back prices which are currently about 6% higher. Or by the close tomorrow we could be 6% higher and the 35-39 day index would start to break ( often you'll see the 16-20 and 35-39 dau signals come exactly together or close together. The sell signal executed on 2/10 ( perfect ) was a 16-20 contrary sell AND a 35-39 buy that was XXed out. We'll see, but the bottom line is that the odds are the trend is now up, which isn't any big deal of a forecast! All the cycles appear to have bottomed on 5/1/00, which I also mark down and then will look ahead about 18-20, 35-36, and 95-96 days from 5/1 for important cycle points.

My gold stock composite had a bad day, down about 4%, yielding a -3 today ( meaning the current price was below 4 of the 5 16-20 back prices and above only 1 ) . Therefore, I've got [-5]+[-5]+[-5]+[+5]+[-3]=-13x4= -52. Yesterday's sum was -80, the difference from today to yesterday [-52- ( -80 ) ] was +28, divided by 2 = +14 for a final composite of -38.

This shows that the index is still breaking towards the signal ( a change from - to + ) that the bullish case definitively needs, but the resistance encountered today was strong ( a strong Cabal? ) to move it from +5 back to -3. The jury is still out and the bullish camp needs a move up tomorrow to generate the signal tomorrow for Friday. I took a 1.5% loss on my half position this mid morning and I don't know whether I did the right thing or the wrong thing, but the index has not yet given the signal to end the existing downtrend. Needs to go up about 2% tomorrow to generate the signal for Friday. There is still a bull/bear struggle right here.

Our discussion and Schippi's graph from 2 nights ago solved a MAJOR theoretical problem of my system's. Whenever I get that special run ( 2 up, long run down ) to mark the exact day of a multi-year low, prices are supposed to rise until I get the same run to mark the exact top of the multi-year. The 1998 low had never been reversed, BUT Schippi's graph showed that we got a 2 up 5 big down ( up on 10/6 and 10/7/98, then down big for five days ) , marking the multi-year high! I had had 10/6 as a .001% down day. One price of one gold composite stock was incorrectly reported to the world. When corrected it changed 10/6 to an up day! Note that the central banks reportedly intervened to drive gold down on 10/8, when the gold stocks opened strongly up and then barely closed down on the stated intervention ( I didn't record what the intervention was, it might have been to support the dollar ) . If this is called manipulation, it's legal and perfect and destroyed the gold stocks/gold market psychologically for years. This solves my technical problem for the gold market and makes my system clearly super bearish until my next capitulation run down. If you'd like to see my special pattern mark another all-time high check out USERX on ..... 2/2/96 ( as a way of thanking you for helping me find the above error ) .

I haven't closed out the shorts yet and may be sorry for not doing so, but this drop this morning is the only way for the market to keep me. The stop is supposed to be a "rise over the 16-20 day back prices". I've described the computations before in theory, this is the first example since then of the index approaching a signal. If this becomes bothersome please let me know and I will stop the description over the next few days.
On Monday the current price was below the price from 20, 19, 18, 17 and 16 days ago, yielding a -5. The same was true for the prior Friday, Thursday, Wed, and Tues. The sum of those five days was -25, which is multiplied by 4 to yield the ski index value of -100 on Monday. Yesterday, Tuesday, the current composite price incredibly closed above all of the prices of 16-20 days ago ( by about 2%, but the amount means nothing ) , so the index got a +5 for yesterday. So I had -5 ( from last Wed ) , -5 ( from Thurs ) , -5 ( from Fri ) , -5 ( from Mon ) , and +5 from yesterday. This equaled -15 X 4 = -60. The velocity of the change from Monday to Tuesday was [-60 - ( -100 ) ]/2 = +20, which is added to the -60 to yield a 16-20 index value to -40. When the index value changes from negative to positive here, a signal is generated for the close of the next trading day. Hence my statements that it takes "several days to generate a signal". Note that it actually takes a minimum of three days plus the execution day ( 4 days total ) , meaning that the earliest that a 16-20 signal can be executed currently is this Friday.
Usually when the index breaks, it will end up generating a signal. But the times that the signal is avoided are amazing to behold. Today, the back prices ( which are now falling ) are between 3-4 % below yesterday's closing price. A fall today of more than 4% will produce a -5, but most likely today's price will fall to something yielding a +3 or a -1, essentially keeping the entire process in suspense and maybe even extending the signal generation day to next week or avoiding the signal entirely. Note the potential convergence of these critical values with WileE's statments about the need to stay above a certain level thru Friday. The question for me is, do I have the guts to stay short for a few more days waiting to see if the signal is generated now that I am back to a small profit today. Can and should I follow the system exactly or just say "get out while you have the chance and if the prices collapse, so what, you've just missed a profit opportunity?" I knew that I did the right thing by not capitulating yesterday at the close and I didn't because my procedure clearly required me to at least compute yesterday's closing prices to see if they surpassed the back 16-20 day prices. I posted, emotionally, "Stopped Out" last night because it would be safest for shorters to just get the heck out by the close of trading today. Think I'll follow my "chicken strategy" and go from 95% short to 50% short right away and that way I'll be happy whichever way the market goes over the next few days. I'm experienced at the "chicken strategy", it always makes me control my emotions by taking money off the table when things are uncertain for me.

Just read your posts/chart now. Your fund had the perfect 2 up, 7 down into the 8/31 low also for a major buy and then at your arrow had a 2 down, 5 up. What exact date is that possible 2 down, 5 up. It looks right ( strong enough ) and may cause me to now have to track your fund as well as my own composite and USERX. A 2 down, 5 up or more there would have given me a major shorting signal because the prices were above the 16-20, 35-39, and 92-96 day prices! Would have shorted on the first down day after the five up. My index gave a sell near there and then gave the terrible triple sell that I've mentioned in the past portending several years down and a drop of about 80% from that exact high.

No, that was my Arrow on my mouse! Too tired. But see the 2 UP and 5 DOWN at the EXACT HIGH, which would have been a multi-year sell signal for me ( perfect ) and a short-term buy signal that doesn't look just right because it went a little lower before rising for a sell at a profit. If possible, post the exact date of the 2 up or the five down and I'll check it out tomorrow.

Just checked back in. You are interpreting the "runs analysis" exactly correctly. There are plenty of intermediate term bottoms that are NOT marked by the special run that I have found. I cannot know when it will occur, but when it does it has been highly predictive. Are you familiar with Mark Leibowitz's work on volume reversal and stocks. He looked for a pattern that marked highs and lows and says he's found it, but never really disclosed it to anyone. I am disclosing it, but it only shows on a very broad composite of stocks. It'll usually show on USERX. I made the same statement about 5 big down in the stock market having marked lows in the past. So the absence of the pattern does not mean a meaningful low can't occur, the presence means it should occur. The bull markets of the 74 ( or was it 76 ) , 82, and 93 all started with that run. 98 low also but only 7 down. The major highs in history were marked by 2 up and 5 or more down ( 1980, 1985, 1996 ) . The pattern has been incredible to the exact day in the past. It has held up since it was discovered by us in 1985. The only strange thing so far was that the Fall 1999 exact high was marked by only 2 up and 4 down ( although the index went short, not the run analysis ) . I had been expecting a 2 up 5 or more run down off this cycle's high, which lead me to believe that we would still be in a trading range thru this year until the run off the top, marking the multiyear top occurred. It didn't and now the world wide gold stocks are at all-time lows. Perhaps we're about to get the run down again to a major bottom. I'm not so much worried about missing a rise, I'm worried that when I buy that it'll go up or when I short that it'll go down. They'll be plenty of times that I'll be out, unsure. Bobbo, again, you appear to understand perfectly.

I'm sorry if I haven't explained properly. I'm just so used to it that I think I'm explaining clearly. Sure, it's over time. Just days. Today we went up. That's day one up. If we go up tomorrow, that's day 2 up. If next day is down, we're 2 up and 1 down. If the down run continues to 5 or more AND averages 2% per day on the down run, the special pattern has occurred. Less than 2% down per day and the downtrend always has continued. Interestingly, the reverse, 2 down and 5 or morre big days up is another very predictive run marking other highs and lows, which I would describe when it occurs in the future. But the best that I've got is the one I've been describing. Is this clearer?

I guess that I'm ashamed to say that I still record each day's price on my big notepad and on my 1985 486 computer that I can copy files onto an old type floppy disc. But as an example go to 8/18/98 closing price on USERX ( 3.48; day 6096 in my database ) . Next day, 8/19, is up to 3.54 ( Day one up ) . Next day, 8/20, is up to 3.57 ( Day 2 up ) . The next seven days are down to 2.94. The first day up, 9/1, I bought. The 2 up, run down sequence had been completed for a meaningful ( big, tradeworthy bottom ) . I gave the day number in my database, because for many many years I did not record the calendar day, just my day number, starting from the first day that data was available ( each day representing a day that U.S. stock markets were open ) . Day 546, in late Sept 76 was the bottom at 2 up and 9 down. You can check out the 1982 bottom too, 2 up and 10 down.

The run ends when the first day that the price changes direction. We just completed a 1 up, 4 down run in my gold stocks because today was up. So now we've started a 4 down, up run that's currently at 4 down, 1 up. If we go up tomorrow, it'll be 4 down, 2 up. If the next day we go down, we'll have completed a 4 down, 2 up run and have started a 2 up, N down run. I know the past probabilities of every type of run MODERATED by my 16-20, 35-39, 92-96 day index signals. For example, a 2 up, 7 down run while all indeices are on buys is a definitive ( 100% ) high probability, whereas when they're all on sell signals, it's a definitive low. I developed the probs in 1985 and, contrary to my expectations, they have almost perfectly maintained those probabilities over these past 15 years. So I really believe. Look back in my posts to 2/22/00. Note the posted run of 1 down and 2 up made me say--go short. It's almost perfect under the index signals I had then. ( note I was too chicken and said, short on next up day, which never happened as they just fell day after day--I'm just supposed to short immediately on that pattern ) . There are many many patterns, which I report the probs on as each run occurs. The completed 1 up and 4 down run we just had has actually never marked a bottom under all index sell signals ( where we are now ) . So I stay short and it is highly, highly likely that we will go to at least some lower low than yesterday's closing price.

Yup, they are total capitulation sequences, apparently. The larger the drop, the bigger and longer the rise. Take em to the bank trades. Average about one per year, this year's failed for the first time ever when I got stopped out. Spelled bad news, more down prices, IMO.

DO you mean after a 2 UP, 5 DOWN run? One rule is 5 or more straight days up after the five down is a sell. Search back to the period of 3/29 to 4/5/2000. You'll see me talking about a 2 up, 6 down run that failed to meet the 2% criteria and that a great short should be when/if 4, 5, or 6 straight up days followed. When the fifth day up followed, I went short. But I have many rules. For example, sometimes we get 2 up and 5 down followed by 1 up and a spike down day! THat's an intermediate term bottom and the longs are held until I get ski index ( not run analysis ) signals that, for example, prices have risen past the 92-96 day back prices. So it's not simple, human behavior is complex, and the markets are highly complex. One could just take the 10% profit each time and be happy. 2 up and a longer run down predicts, in the past, higher rises. I don't think that this post is being too helpful to you because there is no one simple rule beyond the times that an immediate run up follows.

Today will be day four down, two up four down. You remember how nice a buy a two up and 5 or more run down usually is? Need one more day down, tomorrow BUT BUT THIS WILL ONLY BE A BUY SIGNAL IF GOLD STOCKS FALL 10% from the start of the run down. As of Friday, only down 3%. We need a drop of 7% combined today and tomorrow. Not looking like it's dropping enough yet. If it goes down slowly, it'll just keep going down. I've seen runs of 2 up and 12 down that were meaningless because they averaged only 1% a day.

Compare the current day closing price to each of the past days ( e.g., the one 39 days ago, 38 days ago etc. ) . If today is higher than 39 days ago, give a +1, higher than 38 days ago give another +1, lower than 37 days ago give a -1, tied with 36 days ago give a 0, higher than 35 days ago give a plus 1. Add them together and multiply by 4. Do this for today and each of the past four days ( comparing yesterday's closing price to the 35-39 todays' from YESTERDAY, two days ago to 35-39 days from 2 days ago, etc ) . Add together all five days of numbers yielding a maximum of +100 or minimum of -100. Do this every day. Next add the velocity component. Compare ( subtract ) the above number from yesterday ( ranging from +100 to -100 ) to today's above number. Divide by 2. Add it ( it may be + or -, don't use the absolute value ) to the original # which ranged from 100 to -100 ) . When this final conclusion changes from + to - OR from - to + it yields a signal for the next day. Zero does NOT yield a signal. So this number is not a moving average and changes daily. We tried using combos of 2 to 2000 days and found 5 to work ( note it's a trading week! ) . This is not enough to know, because then we have to get into theories of patterns of signals from the 16-20, 35-39, 92-96, and the longer-term set of 218-222, 439-443, and 660-662. The 16-20 is a contrary index most of the time. When it goes from + to - it's a buy and will correspond to oversold, - to + is a sell. Same with the 660-664 ( the long-term 3 indices turned out to be inversions of the shorter ones, in that 92-96 is a bull and 218-22 is a bull! ) . My system is proprietary, I will teach it to my kids and eventually write a book ( I'm an academic clinical psychologist like Bernstein was and Prechter was ) . What I've given you here is the basics, does not include all the great run analyses ( though I have given you down 1 and up 2 to sell, and up 2 down 5 or more to buy ) and is not enough for you to use it. But I'm happy to gradually give it away as we progress over the next few years if someone or all of my gold bug friends will begin to calculate the above on a daily basis. And follow along. You'll be amazed at how close you get to signals and then just miss them or just get them. It'll make all the difference in the world. Right now we're on all sell signals and I got stopped out 3 weeks ago by a 16-20 index changing from = to - ( which is usually a buy and might still be this time but a crappy one ) because we then discovered how to avoid the bad 16-20 contrary buys by what we call XXing them out. The xxing out is right 67% of the time but must be used to avoid all large losses. It gets a little more complicated.