Tuesday, January 10, 2012

Rob McEwen: Gold to Hit $2000 & Accelerate, Silver $150 – $300

from King World News:

With the gold and silver markets still experiencing turbulence, today King World News interviewed legendary company builder, Rob McEwen, former CEO of Goldcorp and current Chairman & CEO of US Gold. When asked if he sees a coming gold explosion, McEwen responded, “Yes, that’s where every market goes (a mania). It just runs and buyer behavior models kick in where you reject the story outright, then you start to accept it and then you go, ‘I have to have it.’ We are looking at a lot of people (entering) this sector. It’s terribly under-owned, under-represented in most portfolios and when people start putting a little bit of gold in their portfolio, you are going to see big changes in the prices of gold stocks.”

Rob McEwen continues: Read More @ KingWorldNews.com

4 Low Risk Stocks On The S&P : CPB, ED, GIS, HSY

In conjunction with stock valuation ratios like the price-to-earnings ratio and the price-to-earnings-growth ratio, a stock's beta can help investors build a diversified portfolio. Beta is a measure of a stock's volatility, and adding low-beta stocks to a portfolio can a be a great way to provide diversification.

Benchmarking Beta
Using the S&P 500 as a benchmark for beta, investors can determine how a stock may perform in relation to a broad index. If a stock has a beta of 1, it is expected to move up and down in tandem with the benchmark. A stock with a beta of 1.10 is expected to rise or fall 10% more than the benchmark. Conversely, a stock with a beta of 0.80 would be expected to move up or down only 80% as much as the benchmark. In short, the higher the beta, the higher the stock's volatility.

And, by using beta to measure volatility, you can better choose securities that meet your criteria for risk. Investors who are very risk averse should put their money into investments with low betas such as blue chip stocks and Treasury bills. Those who are willing to take on more risk may want to invest in stocks with higher betas.

Here's a list of four low-beta stocks from the S&P 500 Index:



Market Cap (Billions)

General Mills(NYSE:GIS)



Consolidated Edison (NYSE:ED)



Cambell Soup(NYSE:CPB)



Hershey Co.(NYSE:HSY)




Final Thoughts
By adding low beta stocks from the S&P 500, investors gain exposure to a cross-section of industries including consumer goods, retail, auto part stores, drug manufacturing and industrial materials. The diversity is a great start, but investors should always remember to use beta as a guide to adding diversity and not as a guarantee of a stock's future price volatility.

4 Potential Top Performing Stocks for 2012: WMT, HD, ABOT' LSTG

I cannot remember the last time a 3% rise in the S&P 500 was met with such indifference. We all know the drill by now: stocks slump for weeks, then offer what amounts to a glimmer of hope to investors — only to slowly eat away at the gains in the days and weeks that follow…

However, if you dig through the rubble of the stock market this week, you’ll notice several names that are defying the sloppy, trendless action. Despite the seemingly never-ending eurozone crisis, big money is buying several blue-chip names that could become the new market leaders once the dust clears.

Here are a couple of my pre-season candidates that could be top performing during the first half of 2012:

Wal-Mart Stores Inc. (NYSE: WMT): The king of discount retailers is dominating the market this month. The stock is posting new highs again today, and could be ready to begin another impressive run like we saw from late September through mid-November. WMT’s climb makes sense during the current economic climate. In uncertain times, money will most likely flow to industry leaders. Add in the fact that Wal-Mart is a discount retailer, and you have the makings of one of the few sable plays that can outperform in any climate:

The Home Depot Inc. (NYSE: HD): By the looks of this chart, one would think the housing bubble never burst and we were in the midst of a powerful bull market. Home Depot has impressed me with powerful upside moves — notably yesterday and a couple off days before the beginning of December. Volume is incredibly bullish and orderly consolidation in the days following the large surges give buyers the opportunity to pick up shares without chasing the price:

Penny Promotions

[Editor’s note: In this section of Market Movers, we expose stocks that are currently the subject of promotional material. If you’re unfamiliar with promotions, pumps and dumps, or other penny stock scams, please take the time to read this column before continuing. Unless you are an experienced trader, we recommend that you avoid these stocks at any price.]

Abot Mining Co. (OTC:ABOT): ABOT has definitely been the spam stock of the week. Every newsletter on the planet is pumping this stock — and it has yet to make a significant move. That should tell you something right away. If a stock with that much money behind it fails to hold its initial move, it’s time to walk away. Right now, ABOT is trading for a little more than 4 cents per share. I wouldn’t be surprised if this stock gets cut in half before Jan. 1.

Lone Star Gold Inc. (OTC:LSTG): Since gold has sprung back to life this week, it’s no surprise names like LSTG are getting pumped again. Junior miners are always a favorite target for pumpers because it’s so easy to manipulate the language in promotional material. The bottom line is anyone can put out a press release saying that they are looking for gold — but that doesn’t mean the company is sitting on anything of value. Adding to the obvious, LSTG is showing weaker bounces and lower lows with every promotion.

I suspect it will have much farther to fall from these levels:

Capital Account: Gonzalo Lira tells us how Americans are Escaping from the USA

5 Must-Have Skills for Job Seekers in 2012

In 2012, creativity and adaptability are among the key skills needed to land and keep a job, as staff levels remain lean and employers expect workers to respond to a wide variety of demands.

Economists say there won't be a lot of job growth. But there could be opportunities in areas such as health care, professional services, retail, and some manufacturing, said Harry Holzer, a public-policy professor at Georgetown University. Also, ongoing churn in the labor market means that even in areas with few new jobs, there will still be openings when workers move around. Read about jobless claims and modest improvement in job the market.

Technical knowledge and experience will be required for certain positions. “For professional services you usually need a professional degree. In health you usually need some training,” Holzer said. “Manufacturing needs some occupational training. Retail is different. It doesn’t require specific occupational training, but it does often require some interpersonal skills.”

In addition to the standard prerequisites, employers will be looking for workers who are able to quickly adapt to new responsibilities as companies respond to changing economic and industry trends. So workers should highlight their creative skills to differentiate themselves, said Lawrence Katz, an economist at Harvard University.

“Firms have so many job seekers per opening. They are going to want candidates with clear credentials, but also a little extra shine in interactive skills and creativity,” Katz said. “They are less willing in a weak labor market to take chances.”

In addition to adaptability and creativity, here are three skills experts recommend workers should pick up and enhance.

1. Technical literacy

It’s important for workers at a variety of levels to be familiar with some of the technical, if mundane, processes that keep organizations running smoothly, such as data input.

Take the health-care industry. Providers are bringing on more technology when it comes to record-keeping and billing.

“A knowledge of electronic data handling is just a really big plus. That goes for receptionists to the doctors who are becoming employees of larger hospital systems,” said Warren Bobrow, president of All About Performance, a Los Angeles-based skills-assessment consultancy.

Workers also need to be good users of social media. There’s a fine line between letting interested parties know about the latest news and bombarding them with too much information. Still, individuals shouldn’t be afraid to use networking sites such as LinkedIn to make employment connections.

2. Business acumen

As companies remain concerned about demand for their products and services, a wide variety of employees need to think about sales, experts say. Even those outside of marketing should care about revenue, and about making sure customers are happy.

Bobrow has clients in Colorado, an orthopedic practice with more than a dozen doctors, and those doctors don’t become partners until client-satisfaction surveys are reviewed and good results are found.

“They are in a competitive marketplace because so much of their work is based on referrals,” Bobrow said. “The doctors realize that their revenue depends on all of them bringing in more patients and having patients come back.”

Being savvy about pleasing customers isn’t about spin, said Ben Dattner, a New York-based organizational psychologist and author. Rather, workers need to illustrate the advantages of their products and services to please employers dealing with an ultra-competitive environment.

“Try to get to know your customer, the market and figure out how you can put things together in a package that adds value,” Dattner said. “Law firms are increasingly recruiting professionals who [bring clients with them]. The actual practice of law is becoming commoditized to some extent, but the ability to bring in customer relationships and be flexible is what companies are increasingly looking for.”

3. Flexible proficiency

Companies are looking for workers who are flexible and can take on functions in various jobs as market demands change, said Greg Barnett, director of product development at Hogan Assessment Systems, a Tulsa, Okla.-based personality-assessment and consulting firm.

That is, companies want workers who are “solid organizational citizens” — quick learners who are compliant, Barnett said.

“People are being asked to do more,” he said. “There are concerns when applicants are good workers but not people who are able to learn and change direction and change their performance.”

Dan Ryan, principal at a Nashville, Tenn.-based executive search firm, stressed the importance of project management and communication skills, which also happen to be transferrable.

“The ability of people at all levels to clearly communicate is not what it used to be,” he said. People “who can do that very well can differentiate themselves.”

3 Energy Stocks Gushing with Growth: PXP, ROSE, BRY

Are the exploration stocks about to bust out of the doghouse?

2011 was a tough year for many of the energy stocks, especially the smaller explorers.

They were beaten down in the summer sell-off with some declining 50% as investors feared that a global recession was soon to start. Any global slowdown would clearly mean lower energy prices.

But when that didn't happen, the exploration companies were suddenly super cheap. They have since rallied off the summer lows but haven't yet regained the old highs. They are still out of favor with investors.

Will Iranian Tensions Be a Catalyst?

At the end of 2011, crude surged to close at just under $100 a barrel. In 2012, the upward momentum has continued as the price has risen 9 of the last 12 sessions and is still holding over $100.

Traders are blaming the saber-rattling out of Iran. Iran is threatening to shut down the Strait of Hormuz, a major shipping lane for crude, if the EU follows through with a proposed oil embargo. Twenty-eight EU Foreign Ministers are meeting on Jan 30 to debate an embargo but many believe it is probably a done deal.

The EU uses about 600,000 barrels of Iranian oil a day which could be replaced by the Saudis if they raise production (which they have already offered to do.) But the embargo would still make tight supplies even tighter.

Analysts are already guessing we'd have $125 a barrel oil if the oil embargo actually happens. It could go higher still if the Strait of Hormuz was shut and/or an actual military conflict occurs in the Persian Gulf.

The Magic Combination

What if you could buy a stock with a cheap valuation but which was also growing its earnings by the double or triple digits? Too good to be true? Not with some of the exploration companies.

Because the stocks are out of favor, valuations are very attractive. That means P/Es below 15, which is what I usually deem a "value" stock.

Earnings growth was explosive in 2011 and Zacks Consensus Estimates are also flashing bullish signals about 2012 as another year of double digit earnings growth appears to be on tap.

With the stocks so out of favor but the market now preparing for the possible perfect storm of growing demand but tight supply due to a Middle East oil shock, now may be a perfect time to add energy positions to your portfolio.

3 Energy Companies With Explosive Earnings Growth

Forget the small caps. The mid-cap explorers have great valuations and amazing growth projections.

1. Plains Exploration & Production Company (PXP)

Headquartered in Houston, Plains explores for oil and gas in California, the Gulf Coast region, including the Haynesville and Eagle Ford Shale, the Gulf of Mexico and the Rocky Mountains.

This Zacks #2 Rank (buy) has a $5.5 billion market cap.

2010 Earnings: $1.06
2011 Expected Earnings: $1.79 (growth of 69%)
2012 Expected Earnings: $3.30 (growth of 84%)

Forward P/E: 11.8

2. Rosetta Resources Inc. (ROSE)

You might not have heard of Rosetta but it isn't a small company as it has a market cap of $2.4 billion. Like Plains, is also based in Houston but has exploration operations mainly in South Texas, including the Eagle Ford shale and the Southern Alberta Basin in northwest Montana.

It is also a Zacks #2 Rank (buy).

2010 Earnings: 61 cents
2011 Expected Earnings: $1.97 (growth of 223%)
2012 Expected Earnings: $3.54 (growth of 81%)

Forward P/E: 12.7

3. Berry Petroleum Company (BRY)

Based out of Denver, this exploration company operates in California, the Uinta basin in Utah, East Texas and the Permian Basin and in Colorado.

This Zacks #2 Rank (buy) has a market cap of $2.4 billion.

2010 Earnings: $1.53
2011 Expected Earnings: $2.65 (growth of 73%)
2012 Expected Earnings: $3.92 (growth of 48%)

Forward P/E: 11.2

Bullish Sentiment Soars

Finally, bullish sentiment soared to an 11-month high, according to the AAII Sentiment Survey. And bearish sentiment fell to levels not seen since December 2010. Sentiment is usually considered a “contrarian indicator.” Since the survey is based on investors’ expectations for the next six months, it may merely be telling us that we shouldn’t expect a major breakout to new highs soon and, that until mid-year the indices will likely trade within the boundaries of 1,285 to 1,350.

Sluggish breakouts like last week’s are often followed by shallow pullbacks. Nevertheless, the breakout occurred, and so we should be buyers on any retreat as long as the pullback falls short of violating the respective 50-day moving averages of the major indices.

Triple Lutz Report–Imminent Economic Collapse–War with Iran-Russia-China?–Episode 146

Cyrus a devoted listener to the Financial Survival Network asked several questions. And this is one of the great things about doing a show, listener feedback. Have you wondered what the US will look like if there’s a complete economic meltdown? Or how much longer it will take? What about the government’s willingness to bring on a false flag attack to justify going to war once again? And if that war does come to pass, will it be a World War or just another case of military adventurism?

These are all important questions for which you will receive my opinions. We love listener feedback and urge you to call or write us. We’ll probably read your question live or play your voicemail message. So keep the questions coming.

Please send your question to kl@kerrylutz.com or call us at 347-460-LUTZ.

Trading Lesson 7: Stochastics

Like the Relative Strength Index (RSI), stochastics is another popular oscillator to gauge price momentum and judge the age of a price move. Stochastics is not a new oscillator. The idea was originated by a Czechoslavakian and perfected by Dr. George Lane, editor and publisher of Investment Educators in Skokie, Illinois.

But unlike the RSI, which measures momentum based on the changes in daily settlement prices, stochastics has two lines and the calculations are based on the rate of change in the daily high, low, and close. The concept for stochastics is based on the tendency that as prices move higher, the daily closes will be closer to the high of the daily range. The reverse is true in downtrends. As prices decrease, the daily closes tend to accumulate closer to the lows of the daily trading range. This concept also holds true on daily, weekly and monthly charts.

Stochastics can be calculated for any time period. Choosing the right time period for the stochastics is similar to choosing the right number of days for a moving average. In effect, stochastics is a trend-following method since its lines will cross after tops and bottoms have been made. Choosing too short a time period will make the stochastics so sensitive that it becomes virtually worthless. If the time period is too long, it is too slow to turn and too insensitive to be useful.

Stochastics signals

Both bearish and bullish divergence are shown on the accompanying S&P chart. There's bearish divergence in late February when S&P prices make a new high but the %D line stays far below its winter high. This divergence accurately warned that a top was forming. An equally good signal of a bottom was the bullish divergence during the spring. The S&P was making new lows into early May, but the %D line held above the lows made during March.

Overbought/oversold zones

Markets seldom go straight in one direction without a pause or correction. When prices move up and appear to be ready to correct, the market is called overbought. When prices have been moving down and appear to be ready to rebound, the market is oversold. As a mathematical representation of a market's overbought or oversold condition, stochastics tells you when prices have gone too far in one direction.

Values above 75 (in the shaded area) indicate the overbought zone. Values below 25 (also shaded) indicate the oversold zone. (Some traders prefer using 80 and 20 as the parameters for overbought and oversold markets.) In sustained moves, stochastics values may remain in these shaded areas for extended lengths of time.

Buy/Sell signals

There are at least two popular ways traders use stochastics for buy and sell signals. A conservative approach is to wait for both the %K and %D to come out of the shaded area to issue the signal. For sell signals, a conservative trader waits for both lines to rise into the overbought zone and then fall below 75 again. An opposite pattern is followed for a buy signal. After both lines drop below 25, the buy signal is given when the stochastics lines climb above 25 again. This is a more conservative approach because you will be slower in taking a position, but it may eliminate some false signals.

For more aggressive traders, the buy and sell signals on the stochastics charts are generated when the two lines cross. For most traders the buy and sell signals are flashed when %K crosses %D, as long as both lines have first gone into the overbought or oversold zones. This is similar to the buy and sell signals of two moving averages.

Waiting for the stochastics lines to come out of the shaded area will sometimes prevent false - signals. For example, If you, were watching for a buy signal on the stochastics chart for the NYSE composite index during the August-September period, %K crossed the %D line in early August and at least five more buy signals were given before the trend finally turned up in early October. An aggressive trader who went with the first crossing of the lines would have been stopped out at least a couple times before finally getting on board for a good move up. But the more conservative trader would have been waiting for both lines to climb out of the oversold area before buying, thus avoiding the whipsaw signals in August and September.

Oscillators are notoriously unreliable in signaling trades against the trend. For good stochastics signals, you'll need to trade with the longer-term trend (Giant Footprints) . Follow only the buy signals in uptrends and only the sell signals in bear markets. However, in a trading range market, stochastics will give good buy and sell signals.

Buy and sell signals are shown on S&P 500 chart. With stock indexes in an overall uptrending pattern, the stochastics buy signal would have helped traders establish long positions on the buy signals in November, December and March. The sell signals in February, June and July could have been used to take profits on long positions.

Some traders prefer to see the %K line cross the %D line on the right side. This is called a right-hand crossing. In other words, %K is crossing %D after %D has bottomed or topped. When the %K crosses the %D line before the %D has bottomed or topped, it is referred to as left-hand crossing. Of course, this can only be seen in hindsight because, at the time the two lines intersect, you don't know if the %D has reached its ultimate top or bottom.

Left-hand crossings are not as common as right-hand crossings. You can see a left-hand crossing on the S&P chart in early February. The %K dipped below the %D before the %D had reached its ultimate peak.

Stochastics is a very useful technical indicator which helps you with your timing, especially when it is used in conjunction with the other trading tools.

Let's try putting it into practice. Using the slow stochastics indicator pictured at the bottom of this chart, try to determine the two overbought and oversold areas:

2012: What You Need to Look For Before Your Next Buy…

This year should offer plenty of opportunities for traders and investors alike. We’ll take a look at this year’s potential in just a few seconds. After all, the new year is a time to better ourselves — usually resulting in ridiculously long waits for treadmills at your local gym. But as any fitness buff will tell you, the new faces become fewer and fewer as winter progresses. By March, many of the newcomers have already given up, returning once again to their normal routines, pledging to try again the next year.

The world of finance isn’t much different. Late December and early January is the only time of year when the financial media makes a serious attempt to look beyond the daily ups and downs of the market, instead offering serious-sounding predictions related to the fate of stocks, bonds and commodities. The predictions will be short lived. Rarely will we see a follow-up — and the regular programming of relentless play-by-plays and reports of daily market action will continue.

But right now, we can learn a lot by dissecting the 2012 forecasts. Of course, by this I do not mean following the consensus recommendations. Instead, we can use the analysis to give us a better feel of how sentiment might shape the market this year.

Bloomberg keeps track of forecasts from 12 top strategists, and notes that on average, these analysts are expecting the S&P 500 to rise to 1,348 by the end of this year. According to Bloomberg’s records, it’s the smallest predicted return in 7 years. A Morgan Stanley analyst with the most accurate 2011 prediction sees the market losing more than 7% in 2012, thanks to the continuing European debt crisis and high volatility.

Even professionals who possess a more bullish outlook — citing strong profits and positive economic data — say they are not encouraging clients to buy just yet. In fact, according to an Investment News survey, only a little more than 43% of financial advisers plan on increasing their clients’ exposure to U.S. stocks this year, compared to more than 63% who were looking to U.S. stocks for gains at the beginning of 2011.

By now, you should see how it’s all shaping up. The bears are obviously out of equities or short, while those making any sort of bullish argument are on the sidelines. Despite their bullishness, the optimists still feel that lower prices — and consequently, better entry points — are on the horizon. These attitudes certainly make sense right now. The market has battered bulls and bears alike since the August meltdown. At some level, everyone has been burned by this market, and no one is anxious to jump back in for fear of getting burned for a fourth or fifth time.

So what does it all mean? For now, we might see more of the same, choppy action we’ve come to expect. In fact, Tuesday’s action in the S&P looks a lot like other recent rallies: a strong push at the open, followed by a slow fade. Selling on strength could continue to dominate in the near future. But down the line, I see the possibility for a monster fear rally. What I mean by this is the possibility of one small spark igniting a buying frenzy…

The ingredients are already in place: Big money is underexposed to the long side and corporate profits have been strong. If the S&P can manage a convincing move higher, we could see panic buying form those worried that they could be missing out on a big move. That’s the kind of action that can jump start a significant push higher.

Of course, this scenario is not set in stone. Furthermore, it is not wise to take a contrarian position just because it exists (in our example, the potential for going long in anticipation of a panic-buying rally). There has to be a tipping point of sorts — when the consensus opinion becomes so overwhelmingly bearish that there is no one left to extend the downward trend. A small rally creates short covering, then short-squeezes, which lead to bigger rallies, snowballing into a significant upside move. Look back no further than the early October 2011 bottom for a perfect example:

Discovering this inflection point is a nuanced game at best. And for the record, I don’t think we’re near this point just yet. Look at the recent upside breakout in the S&P. While stocks aren’t totally in the clear just yet, we are seeing a few moves in the right direction. Yes, deficit politics and the eurozone will still play a large role in the market’s direction and volatility for the time being.

But I will be looking for signs of a potential rally in the near future.

In these market conditions, we cannot risk anticipating big moves like the scenario I’ve explained above. We simply have to be ready to react once the market gives us the signal — and the S&P breaking above its October highs would be a satisfactory start.

Chart of the Day - Roper Industries (ROP)

The "Chart of the Day" is Roper Industries (ROP), which showed up on Friday's Barchart "All Time High" list. Roper on Friday posted a new all-time high of $90.29 and closed up 0.41%. TrendSpotter has been Long since Nov 30 at $85.19. In recent news on the stock, Roper on Dec 7 raised its quarterly dividend by 25% to 13.75 cents per share. Roper on Oct 24 reported Q3 EPS of $1.12 versus the consensus of $1.08. Roper Industries, with a market cap of $8.6 billion, sells specialty industrial controls, fluid handling and analytical instrumentation products worldwide, serving markets such as oil & gas, scientific research, medical diagnostics, semiconductor, microscopy, chemical and petrochemical processing, large diesel engine and turbine/compressor control applications, bulk-liquid trucking, power generation, and agricultural irrigation industries.