Daily Digger - Friday Feb. 11, '05

[wxman]

deleted

[wxman]

Here's an updated of SMSC (Steve Swink's) XAU projection

 

http://www.capitalstool.com/forums/index.p...ID=in&MSID=7810

[Ageka]

If SMSC is right in his targets for Sept.-Oct. time frame this year, I think I'll be selling and sitting on the sidelines for the anticipated decline into Jan. -Feb. 06.

The volatility is aging me quickly.

 

It can't be that easy though can it? Highs every Sept./Oct. lows every Jan./Feb.?

<{POST_SNAPBACK}>

 

 

Nope

Used to be a time when the high on SA stocks was most often in january

Not that I mind highs in septembre

[wxman]

SKI: I have to join the long list of anal cysts who turned bullish this week.

 

for Monday February 14, 2005

 

Bottoms, Buys and Blunders

 

Gold stocks bottomed this past week with the system executing its expected 16-20 index buy signal on Wednesday, 2/9/05 with USERX (the gold mutual fund) at 7.57. I have to join the long list of anal cysts who turned bullish this week.

 

The 16-20 index (and its minor variations) will generate its little sell signal on Monday for execution on Tuesday's close. Since its buy signal was obviously correct (an instantaneous surge up on Thursday and Friday; did you see that Thursday surge on "crossover day"?!), and since such signals usually mark important bottoms, the upcoming sell signal simply indicates initial resistance. Prices usually continue to rise into other index signals before making a meaningful high. In fact, in the last 3 years such buy signals have marked all of the major gold stock bottoms, with prices never falling below the buy-in price. This week was the completion of the Scenario #1 that I have been reporting on for more than a month. It augurs for a positive year and holds the likelihood that the gold stocks will surpass their November 2004 and December 2003 highs by a very significant margin. There is significant resistance overhead that should be overcome by more powerful buy signals coming at higher prices in the months (or even just one month) ahead.

 

The short-term run pattern is currently at 3 Down (the low), and 4 Up. Such runs off of major bottoms can continue, with most ending briefly at 5 or 6 days up, but the longest is 11 consecutive up days. USERX appears to have had a minor break-out on Friday by closing at 7.88, one penny above the 35-39 index sell signal marked price of 7.87 from 1/3/05. The next resistance is in the 8-8.10 area as marked by the back prices from the 35-39 index.

 

The next interesting information will come from the longer-term, important 92-96 index. I had been predicting since late September that the 92-96 index would sell out at a price below its buy-in of 7.23 in late September. I had been expecting it to do that this past week, 96 trading days from its buy-in day. However, since the 92-96 index began to break towards its sell signal last Tuesday (simultaneously with the 16-20 index buy signal), the price rise has avoided the sell signal, so far. This is the index to watch for a large buy signal in the weeks ahead and a true SKI bull market rise. But first it has to give its sell signal. I used to be very concerned that a price drop would follow any 92-96 sell signal, but in the past four years we've had 3 major bottoms marked by 16-20 buy signals coupled with a breaking 92-96 index that sold shortly thereafter on the way up. That is what is happening again! On those prior occasions, prices did not fall, but did not enter a true surging impulse move higher until the indices generated new important buy signals.

 

The only bearish possibility that I can find is a very unlikely one. Prices would need to top this week, probably at the end of this run up, and then begin to fall a little to generate the 92-96 sell. That sell signal would come immediately after the 16-20 sell signal that will occur for Tuesday. Therefore, it is a double sell (see the previously described Scenario #2). IF prices then declined to a new 16-20 buy signal, that signal would be XXed Out and we'd be off to the races on the downside. Essentially that would require that prices top this week and then fall to new lows for the year. Unlikely.

 

I, of-course, made a classic blunder this week when I didn't personally execute my own 16-20 index's buy signal. I'll be kicking myself for a long time and I'm sure that I'll reference/describe this specific stupidity in the years ahead as it's something I never forget. I know that many readers did buy and my colleague did too! My colleague plans to take his profits on Tuesday's 16-20 sell signal despite my perception that it's very unlikely that the sell signal will mark a high. He says that it's possible for the 16-20 index sell signal to mark a high and then for the 92-96 to sell at a lower price. Basically, he's just going to take the sure profit and wait for the next buy signal. But again, the current surge up is just a wave 1 up; even long-term bears would expect a second wave up after a pullback.

 

I've been bearish for months. The tide has turned. I am expecting some double buy, triple buy, or even better, a true 92-96 index buy signal on the Path, albeit at higher prices. We'll see if I "blow" that profit too, as I am currently feeling rather sick with myself for not having executed after having waited so long for that buy signal and after having sent out the alert last Tuesday night saying that the index was buying but that I was not buying. My only reprieve is that I had written "I am supposed to tell readers to buy." I'll recover and I am proud, once again, that the system objectively marked the spot.

 

Jeffrey M. Kern, Ph.D.

[Guest]

Hope she sticks; and more... 7pm in Calif Sunday nite..

 

Gold up $1.80, Silver up .07