10 Best Ways to Find Holiday Deals Online

Sure, doing your holiday shopping on Black Friday -- the day after Thanksgiving -- is one way to score deep discounts. But if you don’t want to deal with the crowds in the stores, you can still save big by buying the items on your gift list online. In fact, if you use the strategies and sites listed below, shopping online may be the best way to get deals this holiday season.

Shop on the right days

You can save money by knowing the right days to shop online. Online shopping site Extrabux.com analyzed price data on 100,000 products over a two-year period and found that prices on some items fluctuate throughout the week.

--On Monday, you’ll find the cheapest prices on computers and electronics (on average, about $50 less than the rest of the week), says Extrabux.com co-founder Jeff Nobbs. You’ll also find the best prices on cameras (about $10 cheaper).
--Monday through Wednesday, TV and video game prices are at their lowest ($20 and $3 cheaper, respectively). Prices are at their highest points on Friday.
--On Wednesday, jewelry prices hit a low (just $2 lower on average, though).
--On Saturday, book prices are about $2 less than other days.
--On Sunday major appliances, such as washers, dryers and refrigerators, are about $12 cheaper, on average, than the rest of the week.
--Apparel prices don’t fluctuate much during the week.

Compare prices the easy way

If you’re trying to find the lowest price on a particular product, price-comparison sites make it easy. When you search for an item on these sites, they produce lists of the retailers offering the product, prices, shipping costs, and seller information and ratings. It's tough to beat Amazon.com for price comparisons. For most of the items we recently searched for, Amazon turned up the longest lists of results and the lowest prices. However, other price-comparison sites worth visiting include PriceGrabber.com and Google Product Search, which has a local shopping option to help you find products at stores near you.

You also can download the FreePriceAlerts.com tool, which will notify you instantly if a product you’re viewing online is cheaper at another site. The tool works on 115 sites, such as Walmart, Best Buy and Amazon (see the complete list), and more are being added every week, says founder Bob Wilkins. While you shop online as you normally would, the tool searches thousands of other retail sites and will display an alert in the top left-hand corner of the page you’re viewing that tells you whether you’ve found the lowest price or if another retailer is offering the same product for less (with a link to that retailer’s site). You don’t have to register at FreePriceAlerts.com to download the tool, but if you do register, you can set target prices for items you want and receive e-mail alerts when prices fall to the levels you want.

Use deal sites

Deal sites do the bargain hunting for you by scouring the Web for discounted items -- saving you both time and money. Our favorite is dealnews.com, which has a team of deal hunters who keep their eyes on a million products at more than 2,000 reputable online retailers and update the site with new deals at least 200 times a day. Plus, you can sign up for e-mail or RSS alerts for products or stores you're interested in and get gift ideas from the site.

GottaDeal.com is another great source for deals. You may find some here that you won't find at dealnews (we did recently). Slickdeals.net, a user-driven deal-sharing site, features a few deals a day on its home page, but its forums are where you'll hundreds of deals posted daily. And Offers.com features deals from more than 4,000 companies and stores, updated daily and organized into 190 categories (including clothing, electronics, toys and travel). It also points you to local deals in more than 75 cities.

Track daily deals

You can find lots of bargains at deal-of-the-day sites, such as Woot.com, that offer deep discounts on select items for just a 24-hour period. But it would take a lot of time to check each one of these sites, which list only one such deal a day. DODTracker.com does the hard work for you. It lists hundreds of items from deal-a-day sites and daily deal offers from retailers, such as Amazon.com. It shows how long the deal has been posted, the time the sale ends, the amount of discount (if available) and whether the item is still in stock. When you click on any of the tabs at the top of the home page (All, Computers & Electronics, etc.), you'll get a page that lets you sort by retailer, product, price and more.

Find coupon codes

Before you make any purchase online, search for coupon codes that can help you score a discount at the checkout (basically a sequence of numbers and letters you enter during the payment process). Some retailers advertise coupon codes on their sites when they're available. However, some coupon codes can be found only at coupon sites that work with retailers to create exclusive online coupons.

CouponCabin.com has more than 100,000 active coupons and deals. In addition to developing exclusive coupon codes with retailers, its staff searches merchant sites, forums, blogs, consumer e-mails and even the Sunday Paper for coupons, then updates the site’s listing three times a day. It shows when a coupon expires and when it was last tested so that you’ll know whether it still works. CouponCabin.com also offers a downloadable toolbar that displays coupons and deals if you visit one of its 3,700 participating merchants online.

Coupons.com has thousands of coupon codes that you can search for by store or category. You can sign up to receive weekly e-mails featuring coupon codes and online discounts. Retailmenot.com has coupon codes for 130,000 stores, a downloadable tool (browser add-on) that notifies you when coupons are available for a site you’re viewing, and a weekly e-mail newsletter that features the coupon codes that the site’s users consider to be the best.

Get cash back

Another way to save money when shopping online is to get cash back. Ebates.com has been around for more than a decade and offers members cash back from 1,200 stores. Rebates vary by store, but many offer at least 5% back on purchases.

Our favorite cash-back site is the relatively new Extrabux.com, which combines comparison shopping with online coupons and cash back from 2,000 top online retailers. We like Extrabux.com because you likely won’t end up spending more than necessary to get cash back. The site helps you find the best deal on a product by displaying prices and shipping charges from various retailers, plus cash-back offers and coupon codes. Basically, it puts all the available discounts on a product in front of you, says Extrabux.com founder Jeff Nobbs. Members receive cash back by check or PayPal, or they can opt to have the money donated to a charity.

Score more savings with discounted gift cards

Plastic Jungle and Gift Card Granny sell merchants' gift cards for less than face value. Buying a discounted gift card to use for your own shopping is a good way to score additional discounts. For example, buy a $100 Gap gift card for $90 (instant $10 savings), use it to shop online and use a coupon code for additional savings. Plastic Jungle offers free shipping standard. Most cards purchased through Gift Card Granny are shipped free, too, but some do have shipping fees (which are clearly displayed).

Take advantage of free shipping

If you’ve worked hard to find the best deal online, you don’t want to wipe out all your savings by paying a hefty shipping fee. FreeShipping.org offers free-shipping coupons for nearly 4,000 stores, including Amazon.com, Target and Best Buy. And all you last-minute holiday shoppers won't want to miss Free Shipping Day on December 16. More than 1,200 merchants have already signed up to participate in this annual event, which was created by Luke Knowles, founder of FreeShipping.org. Knowles says he hopes to have 2,000 retailers offering free shipping and guaranteed Christmas-Eve delivery for all items purchased on Free Shipping Day. Among the big-name retailers that have already signed on are Best Buy, Barnes & Noble, Kohl’s, Nordstrom, Sears and Zales.

Swap rather than buy new

You can save big by trading items you no longer want for things you do. An easy way to do this is to use a Web site such as Swap.com. And if you have an iPhone, you can download Swap.com's new free mobile app that makes it simple to trade your unwanted books, CDs, DVDs and video games for other items you crave. You can set up an account through the app or at Swap.com and create a list of haves and wants. The site will send you an e-mail alert when there is a swap opportunity, or you can simply click on the "what can I get?" link next to the items you have and search by media type to see what book, movie, CD or game you can get in exchange. See Why Buy New When You Can Swap? to learn more.

Pay with cash to avoid credit-card debt

Because debit cards don’t provide the same protections that credit cards do, we don’t recommend using them when making purchases online. But any of the savings you score using the techniques or sites listed above will be wiped out if you carry a balance on your credit card and pay high monthly interest charges.

EBillme and PayPal offer you a way to make secure cash payments when you shop online so that you won’t rack up credit-card debt. Both sites let you shop at hundreds of stores. At check-out, you select the eBillme or PayPal payment option.

The only personal information you have to provide to eBillme is your e-mail address, where you’ll receive your bill. Then log on to your bank account and use the online bill-payment option as you would to pay your utility bill or any other bill. You get the same protections as you would with a credit card. EBillme also has a cash-back program that allows you to earn points on every purchase and redeem them for coupons for future orders.

To create a PayPal account, you have to provide your mailing address and phone number in addition to your e-mail address. You also have to provide your bank-account information because PayPal handles the money transfer.

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Euro insider: European bank holiday could be coming soon

Dr. Pippa Malmgren has just posted on her web site her latest analysis of the eurozone crisis. I will point out, again, what I have pointed out in the past. They don't get more insider than Malmgren.

She served as financial market advisor in the White House and on the National Economic Council from 2001-2002, where she was responsible for financial market issues. She founded Malmgren and Company, in London, England in 2000 and was previously the Deputy Head of Global Strategy at UBS and the Chief Currency Strategist for Bankers Trust. She headed the Global Investment Management business for Bankers Trust in Asia. She has an M.Sc. and Ph.D. from the London School of Economics. She completed the Harvard Program on National Security. The World Economic Forum named Malmgren a Global Leader for Tomorrow, in 2000. She is also a member of the Council on Foreign Relations, Chatham House, the Economic Club of New York and the Institute for International Strategic Security. And she was the liaison between the Treasury and the President's Working Group on Financial Markets, aka, The Plunge Protection Team.

Her client list is completely amazing. She is advising every elitist corporation on the globe. Take a look.

So what is she advising them. Here's part of her recent client letter (my emphasis):

All the options [surrounding the eurozone] are bad and costly. Market forces are increasingly determining what the options are and foreclosing on options policymakers thought they had. One option which is now under discussion involves permitting a country to temporarily leave the Euro, return to its native currency, devalue, commit to returning to the Euro at a better debt to GDP ratio, a better exchange rate and a better growth trajectory and yet not sacrifice its EU membership. I would like to say for the record that this is precisely the thought process that I expected to evolve,but when I proposed this possibility back in 2009, and again in September 2010, I had a 100% response from clients and others that this was “impossible” and many felt it was “ridiculous”. They may be right but this is the current state of the discussion. The Handelsblatt in Germany has reported this conversation, but wrongly assumes that the country that will exit is Germany. I think that Germany will have to exit if the Southern European states do not. Germany’s preference is to stay in the Euro and have the others drop out. The problem has been the Germans could not convince the others to walk away. But, now, market pressures are forcing someone to leave. Germany is pushing for that someone to be Italy. They hope that this would be a one off exception, not to be repeated by any other country. Obviously, though, if Italy leaves the Euro and reverts to Lira then the markets will immediately and forcefully attack Spain, Portugal and even whatever is left of the already savaged Greeks. These countries will not be able to compete against a devalued Greece or Italy when it come to tourism or even infrastructure. But, the principal target will be France. The three largest French banks have roughly 450 billion Euros of exposure to Italian debt. So, further sovereign defaults are certainly inevitable, but that is true under any scenario. Growth and austerity will not do the trick, as ZeroHedge rightly points out. Ultimately, I will not be at all surprised to see Europe’s banking system shut for days while the losses and payments issues are worked out. People forget that the term “bank holiday” was invented in the 1930’s when the banks were shut for exactly the same reason.

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4 Strong Stocks In The Strongest Sector: CEG, CNP, EQT, NI, XLU

During times of turmoil, the utilities sector usually holds up well, and this year has been no different. Year to date, the utilities sector as a whole is up 8.6%, while the S&P 500 index is down 4.42% as of the Friday close at 1,215.65. The SPDR Utilities Sector Select Index (NYSE:XLU) is up 10% to $34.64, from $31.49 year to date. Looking within the utilities sector, traders can find multiple stocks that are performing well, with many up more than 10% so far this year. There is even an handful that are up more than 20%; four of these stocks remain in strong uptrends, and while some are volatile, the stocks are likely to continue to outperform, even if the market move sideways or retreats further. Sector rotation strategies indicate that investors move into utility stocks in the early stages of recession, or when there is a threat of a recession. This is why utilities have been so strong recently and may continue to be, as long as there is fear about a decline or a flat-lining of the economy.

EQT Corporation (NYSE:EQT) is up 31.4% to $59.01 from $44.91 at the beginning of the year and remains in an uptrend. The 200-day moving average has provided the support and pullback may provide another opportunity for investors to get in. ETQ just crossed below the 50-day moving average so it may continue to slide down in the short-term, but if the trend can hold, buying the stock between $55 and $52.50 looks like a good entry point. A rise above $65.05 will break through short-term resistance and set in motion a likely retest of the high at $73.10.

Another stock that has been performing very well this year is Constellation Energy (NYSE:CEG). The stock is up 28.53% to $39.65 from $30.85 year to date. It is also trading well above the 200-day moving average and remains in a strong uptrend. CEG has pulled back very little and remains close to the 52-week high at $40.97. If the stock breaks above the 52-week high, there could be more room to run on the upside. The 50-day moving average has been providing some support, but if the price drops below it ($38.67) the trend line at $37 could be tested.

NiSource Inc (NYSE:NI) is also having a strong year to date, up 23.39% to $22 from $17.83. NI also remains very close to the 52-week high, and it has consolidated above the 50-day moving average. The consolidation pattern resembles a small triangle or pennant formation, and a rise above $22.40 would indicate an upside breakout of the pattern. If the breakout occurs, the 52-week at $23 will likely be tested and if momentum continues, look for the price to move towards $24 to $25.

CenterPoint Energy (NYSE:CNP) is up 22.53% to $19.36 from $15.80 year to date, and it remains in an uptrend. The stock recently moved below its 50-day average, but demand continues to be strong for the stock based on the continually rising on balance volume. Between $19.50 and $18.50 appears to be a good entry point if the uptrend continues. A drop below the 200-day moving average at $18.33 would signal that the stock is weakening. (For more, see Moving Averages: Introduction)

The Bottom Line
In times of fear, the utilities sector usually stacks up fairly well as investors move money to this more conservative and stable sector. Year to date, the sector as a whole has been outperforming the S&P 500, and is likely to continue to do so as long as fear about the economy is present. The stocks presented are all in strong uptrends and provide opportunity to potentially take part in the next advance as the uptrends continue. If a stock declines and breaks its respective 200-day moving average, it is a sign investors are moving out of the stock. Based on current performance, though, utilities remain the strongest sector and provide one of the best opportunities for relative risk protection and performance.

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MF Global: The Beginning of the End of Paper Markets

by Andrew Hoffman, MilesFranklin.com:

It’s Monday morning, and I couldn’t be more ready to RANT. My job is to keep you aware of the dangers around you, which increase with each passing day. And some days on more than others, such as TODAY!

Don’t let the fact that a SUNDAY NIGHT SPECIAL wasn’t required the past few weekends, as they will be returning with a vengeance in the coming months, more likely before the end of 2011. This weekend alone saw waves of “horrible headlines” highlighting the collapse of the European Union, and now it looks like the U.S. economic implosion is about to retake center stage. Given the broad, intimidating list of such headlines, I am going to start today by going through them, before getting to my topic of the day – the long-term ramifications of the MF Global collapse.

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The Run On Europe Begins As Global Investors Head For The Hills...

Until recently, the concern about Europe has been mostly theoretical--a potential train-wreck that would occur if/when the world's lenders decided that the continent's problems extended beyond the basket case known as Greece and cut lending to Europe's "core."

Well, that concern is no longer theoretical.

It's happening.

The world's lenders are increasingly deciding that it's better to be safe than sorry, and they're pulling their money out of Europe.

As a result, the borrowing costs of many European countries are rising fast. And so are inter-bank lending rates, because the second huge problem with the Euro-train-wreck is that Europe's banks have Euro debts coming out of their ears.

(When bond yields rise, the market value of existing bonds drops, so any bank that owns the debt of any European country is suffering huge embedded losses. The banks don't mark these losses to market, so you can't see them on the balance sheet, but they're there.)

Last week, Italian borrowing costs soared over 7%, which has been viewed as a sort of Rubicon level. Spanish yields hit nearly 7%. And French "spreads" over German bonds expanded sharply.

Nelson Schwartz in this weekend's New York Times has some other details:

• The Royal Bank of Scotland and pension funds in the Netherlands have been heavy sellers of European sovereign debts in recent days.
• Kokusai Asset Management in Japan unloaded nearly $1 billion in Italian debt this month.
• Vanguard let a $300 million CD with Rabobank expire earlier this month and pulled the money out of Europe
• European banks like SocGen and BNP Paribas cut exposure to Italy by 26 billion euros in Q3
• American money-market funds have cut their exposure to European bank paper by 54% ($261 billion) since May

And so on.

The interbank-lending problems, by the way, are exactly what happened in the United States in 2007 and 2008.

If the run continues, for banks and countries and companies that live on borrowed money, the effect will be similar to the oxygen being sucked out of the room.

And because of the absurd opacity of bank balance sheets, there's no way to tell when or if some critical threshold will be breached and banks and insurance companies (think AIG) will suddenly have to start handing over tens of billions of dollars of "collateral" to counter-parties, blowing huge holes in their balance sheets.

Importantly, once runs like this get started, they can accelerate fast. Recall how quickly Bear Stearns and Lehman Brothers went from angry denials and "exploring options" to bust. Recall how quickly, a month ago, MF Global went from confident to flailing to broke.

Image: Bloomberg

TED Spread since summer.

Check out these two charts of the "TED Spread," which shows the difference between LIBOR (London Interbank Offered Rate) and US T-bills.

The first shows the sharp rise in the TED since the summer. The second, which extends back 5 years, shows how quickly the spread exploded in 2007 and 2008. As the latter chart illustrates, you can go from "concern" to "crisis" overnight.

Right now, Europe's leaders are still denying that there's a problem, and market pundits are still talking about possible solutions.

Image: Bloomberg

TED Spread since financial crisis. See how fast it spiked in 2007 and 2008.

But most of the possible solutions are still focused on the ultimate fate of the Euro--which, increasingly, is the least of the world's worries.

Whether the Euro survives, and how, is something that will likely take several years to work out.

The much more immediate crisis--and the way this week went, it may be a VERY immediate crisis--is whether the Eurozone can stave off a full-blown bank and sovereign debt panic.

The temporary solution that everyone is focused on is for the European Central Bank to step in and buy hundreds of billions of dollars of European sovereign debt to get rates down and keep them down.

Importantly, this solution it would not be easy or problem-free. It also wouldn't be permanent. It might not even be possible. The Germans, and the ECB, are adamant that this solution is not even a possibility. And even if the ECB could marshal the support to start buying, it would have to keep buying, day after day, month after month, and display total resolve in its public statements. It would have to keep buying until the Euro-zone's problems are sorted out, which could take years. It would have to figure out how to deal with the "moral hazard" of funding the deficits of most European countries and, therefore, removing any incentive for the countries to get their deficits under control. And, eventually, it would have to deal with the extreme inflation this "money printing" would likely produce.

In other words, if the situation continues to deteriorate--and barring some miracle, it will--the only way to stave off disaster looks less like an inevitable move and more like a Hail Mary pass.

The next few months, as the Chinese might say, are going to be interesting.

GM or Ford, which To Bet On? : GM, F

It’s been one year since General Motors (NYSE:GM), one of the most legendary of U.S. stocks, started trading again after the carmaker, one of the most legendary of U.S. businesses, came out of bankruptcy. Things started well enough, with the stock opening for trading at $35 on Nov. 18, 2010. It nudged higher in the following weeks and was up over $39 in early January, but it’s been downhill ever since.

Over the past 12 months, GM is down 39%. By comparison, Ford (NYSE:F), the second-largest U.S. automaker is down … 39%. That’s right, the stocks have been almost identical twins in the past year.

The first question investors should ask is whether both stocks are in trouble and should be avoided, or whether the long slide is now giving us a good buying opportunity. We all like to “buy low,” but only if we’ll be able to “sell high.”

My answer: opportunity. I view both GM and Ford as what I call “fallen angels” — companies that were once considered blue-chip or growth darlings that have fallen out of favor with Wall Street and investors but are on the verge of again flying higher. I say that for three main reasons:

Better quality = better image. Both automakers got serious after some very difficult times about doing what they should have been doing all along: producing quality cars that American consumers will pay for. Ford’s Fusion and GM’s Chevy Malibu each sold nearly 200,000 cars last year, making them the most popular American-made family sedans. They’re still outsold by Toyota Camrys and Honda Accords, but the gap is closing, and I expect it to narrow even more over time.

And don’t forget trucks. Ford’s F-150 and Chevy’s Silverado remain the most popular pickup trucks in the U.S. Nearly 400,000 F-150s were sold last year, as were almost 290,000 Silverados.

Competitive labor costs. GM and Ford also fell on hard times in part because of high labor costs, which ate into profits and put the companies at a big disadvantage to foreign carmakers with much cheaper labor. Both recently negotiated new contracts with the United Auto Workers union that are much more competitive, roughly 30% below what they were paying before the financial crisis. (Ford also agreed as part of its contract to repatriate jobs in Mexico back to the U.S.)

The stocks are cheap. Ford sells for just 6.6 times 2012 earnings estimates, and GM is even cheaper at 5 times 2012 estimates. That means both offer solid upside potential as well as lower downside risk, which is important given the crisis in Europe and slow global growth right now. Both companies could cut their earnings estimates if conditions weaken further and their stock prices would likely remain pretty firm.

And the Winner Is…

With both stocks now at attractive entry points, the next question is whether the two will rise together just as they fell, or do important differences favor one over the other? My answer: Go with Ford.

I really like Ford’s vision of the future and the ambitious program it has undertaken to get there. The company realizes how important energy savings will be, so it has focused efforts on becoming profitable in smaller cars. CEO Alan Mulally and his management team also understand the economy’s global nature, so it is focusing more on emerging markets than GM. These are long-term trends that may not show up quarter to quarter, but they should pay off nicely in the future.

Ford also doesn’t have the stigma of being bailed out by the federal government. I realize that was a while ago for GM, but perceptions are important in investing, and the fact that Ford was able to survive without a bailout brings it some respect in the market. The perception has fiscal reality as well because Ford has net automotive sector cash (which excludes the finance subsidiaries) of over $30 billion.

And while we’re digging into the finances, let me say I like Ford’s flexible cost structure. The problem with auto companies historically is that they bleed a good bit of cash when times go bad. Ford has tried to limit the impact of downturns by working hard to lower breakeven points across many of its businesses. Again, that’s important in the current environment, and I believe it will ultimately lead to a higher valuation.

So one year after GM’s IPO, let’s give kudos to both companies for their comebacks after the mistakes of previous years and the devastating financial crisis. I expect both stocks to move higher over time, and I look for F to outperform GM. I have a $20 target on F, just about a double from current prices. There’s also an excellent chance Ford will announce a dividend soon, which will make it even more attractive.

Investor Barton Biggs Says 60-70% Chance of Recession in First Half 2012, and is Cutting Back Exposure

Barton Biggs has not had a very good track record of late in terms of tactical trading calls, but certainly has a long held reputation on the Street. This morning he appeared on Bloomberg to give his thoughts on the market and the economy - neither of which is terribly bullish.

Smart Money - December 2011

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On the Verge of Huge Stock Market Crash, Implications For Gold and Silver

We might be on the verge of another huge market crash, one similar to 2008.
Check out the following chart below, and you will see why…
- The RSI hasn’t been overbought anymore in a long time, indicating weakness in stock markets… The same was true in 2008.
- The SP500 found heavy resistance in the 1260-1280 zone (just as we warned our subscribers), which was the low of June 2011. A similar thing happened back in May 2008, where price ran into resistance of the November 2007 low.

- Look at the exponential moving averages (20, 50, 100 and 200 EMA’s). They have now been converging as price rallied, but right now, price is falling below these EMA’s, just like in late May 2008.
- The MACD is now flirting to break the green support line, just like in May 2008, right before financial armageddon occured, and price is right at the green support line now, just like in 2008.

Chart courtesy stockcharts.com
If we are about to see the exact move as in 2008, this is what it would look like…

However, Charles Schwab and Sentimentrader noted: “On Friday 11th of November, the market experienced the 17th time in the past three months that the S&P 500 SPY (exchange-traded fund trading the S&P 500) gapped by more than 1% at the open and then didn’t close that gap during the day. This means that the S&P didn’t reverse enough to “kiss” the previous day’s close. As you can see in the chart below, this level of “unclosed gap” behavior has been seen only four other times since the early-1990s. All occurred while the market was forming a major bottom.”

So on the one hand, we might see a crash. On the other hand, there is just so much negativity out there, that one should ask him/herself if it’s not time to buy???

Just ASSUME we are going to see another crash like in 2008… What would likely happen to the different asset classes in such a scenario?
1) the USD seems to have broken out to the upside. This is usually bad news for stock markets.
2) Gold is still “safe”, as it is still above the 150EMA, a level that has proven to be strong support during this entire bull market, with a minor exception in 2008.
3) GDX, a gold mining ETF, is still “safe”, as price is still holding above the 400EMA, a level that has proven to be strong support during this entire bull market, with one exception in 2008.
4) Silver has fallen below the 250EMA, a level that has proven to be strong support during this entire bull market, with one exception in 2008.
5) the SP500 is now in a dangerous situation, as price is now below the 250EMA, just like in 2008…

Chart: stockcharts.com
If the stock market would be headed for a remake of 2008, one would expect similar implications for Gold, Silver and the Mining stocks…
They would all crash, as investors look for “safety” (the USD and US Government Bonds).
This is the most likely scenario.
However, it's not necessarily the case this time. Back in 2008, the yields on 10 year bonds was as high as 4%. Right now, 10 year bonds only yield 2%. That’s a big difference between bonds in 2008 and 2011… Another big difference between then and now, is the amount of debt that exists. After the financial crisis of 2008, the debt level of the USA has become “unsustainable” and “unmanageable”. Would you trust your money to the US during 10 years, for only 2% interest? No thanks.
If (when) the credit rating of the US is lowered, I think that would be the time when the “flight to gold” would occur. Gold would then be seen as the only “safe haven” out there.
Another difference between 2008 and now regarding commodities, is the fact that sentiment is now completely different from 2007-2008.
Back in 2008, commodities were at all-time highs, but so was sentiment, as we can see in the following chart:

Chart: sentimentrader.com
Right now, sentiment for the CRB index is not bullish nor bearish.
The same is true for sentiment for Gold:

Chart: sentimentrader.com
Look at the green and red circles in the chart above. When you buy in times when sentiment is bearish (green circles) and sell in times when sentiment is bullish (red circles), you get incredibly good entry and exit points for gold.
Sentiment for silver is now pretty bearish:

Chart: sentimentrader.com
At the end of April, when silver was boiling hot, we warned our readers for the coming collapse in silver prices.. (click HERE to read the article)
In fact, we posted this chart below, which shows us the Gold-to-Silver ratio. It divides the price of one ounce of gold by the price of one ounce of silver. A rising ratio means gold outperforms silver, while a falling ratio means silver is outperforming gold.
Do you get why we left silver for what it was, and why we preferred Gold over Silver when we posted this chart?

Chart: stockcharts.com
Now here is an updated version of this chart. We can clearly see that price (“the Ratio”) has found resistance at the 53 level, which is exactly the 38.2% Fibonacci Level. Whether this level will be broken remains to be seen, but more often than not, price tends to revert to the 50% level, which, in this case would be a Gold-to-Silver ratio of 60. If we are about to see 2008 again, it could even retrace all the way to the 100% level.

Chart: stockcharts.com
Anyway, while we preferred Gold over Silver back in April 2011, we now start to like silver again (with a focus on start to)… We still like gold, BUT when the final phase of this precious metals Bull market takes place, I think the best place to be is silver.
Silver and gold are highly correlated. When gold goes up, silver goes up, and when gold goes down, silver tends to go down. However, the price movements in Silver are much more volatile than those in gold… If gold would go as high as $5,000 (or even as high as $6,600 as I think it might go), one can imagine what will happen with the price of Silver in that case…
According to this chart from mcoscillator.com, we can see that Gold should outperform the equity markets for another 1-3 years.
This chart shows how many ounces of gold it takes to buy “1 share” of the Dow Jones Index. In the early 30′s, it took 2.1 ounces of gold, and in 1980, it took only 1.3 ounces of gold. Are we headed for a similar level over the next 1-3 years? Time will tell, but if you would like to have a helping hand, feel free to subscribe to our services, and get access to similar analyses, nightly updates and trading updates (we invest real capital in stocks we analyze)...

Willem Weytjens

Precious Metals Charts Point to Higher Prices – Part II

Over the recent couple months the precious metals charts have made some sizable moves. Most investors and traders were caught off guard by the sharp avalanche type selloff and lost a lot of hard earned capital in just a few trading sessions. Gold dropped over 20% and silver a whopping 40%.

The crazy thing about all this is that these types of moves in precious metals can be avoided and even taken advantage of in certain situations. There is no reason for anyone to continue holding on to those positions after they pullback 6% of more because of the type of price and volume action both gold and silver had been displaying in the past few sessions.

I warned investors on Aug 31^st that precious metals were about to top any day and that protective stops should be tightened or taking profits was also a smart move. It was only 2 trading sessions later that precious metals topped and went into a free fall. You can get my detailed analysis if you read my report “Dollar’s On the Verge of a Relief Rally Look Out!”.

A couple weeks later once precious metals has found support and the uneducated investor’s were licking their wounds wondering what the heck just happened to their trading accounts… I put out another report but this time with a bullish outlook. Silver was currently trading at $29.96 and I had a $35-$36 price target over the next two months. Gold was trading down at $1611 and I saw it heading back up to $1750-$1775 area before finding resistance and pulling back. Both these forecasts were reached over the next two months. You can quickly review the report called “Precious Metals Charts Point to higher Prices” for more info.

With all that said, what exactly are the charts saying right now?

Current Precious Metals Charts Summary:

The past 6 weeks we have been watching both gold and silver struggle to hold up but they have managed to grind their way to my price targets. After reaching those targets a couple weeks ago sellers have stepped back into the precious metals market and put pressure these metals.

Last week gold and silver started to pullback in a big way with rising volume. This could just be the start of something much larger which I will cover in just a moment.

The wild card for precious metals and for every stock and commodity for that matter is Europe. Every other day there seems to be headline news moving the market and most of takes place in overnight trading for those of us living in North America. It’s this wild card which is keeping me from getting aggressive in the market right now.

Let’s take a look at the charts…

Silver Precious Metals Chart:

Silver is currently in a down trend and may be starting another leg down this week. Long term I am bullish but for the next couple months I am remain neutral to bearish for silver until it forms a base to start a new uptrend from.

Precious Metals Charts

Gold Precious Metals Chart:

Currently I am neutral/bearish on gold. If it can trade sideways for a few weeks then I will become bullish.

Precious-Metals-Charts

Precious Metals Charts Conclusion:

In short, I feel there is a good chance the US dollar will continue higher and if that happens we should see strong selling in North American equities, commodities and likely on the precious metals charts.

Financial markets around the world are at a tipping point meaning something really big is about to take place. The question is which way will investment move. The only thing we can do is trade with the current trends, price patterns and volume.

At this time I still see a higher dollar and that means lower stocks and commodities. This could change at the drop of a hat depending on the news that comes out of Europe so the key to trading right now is to remain cash rich and taking only small positions in the market.

Technically Precious With Merv

For week ending 18 November 2011

Take away Thursday’s drop and we have a week that did nothing for gold. However, we cannot take Thursday away so it was a negative week. It looks like more to come, from a technical point of view.

GOLD

LONG TERM

It looks like gold may be heading back to test that long term moving average line but in the mean time there seems to be little change in the long term position as of the Friday close.

Trend: Gold remains above its positive sloping long term moving average line. Whether you draw a simple or semi-log scale long term chart for gold you see some well defined long term trend lines. Gold remains well above both long term up trend support lines. It is reacting downward after just touching its resistance long term trend lines on both charts. So, from this, one can assume that the down side is the direction for a while but that the price can still drop a reasonable amount without affecting the long term up trend.

Strength: Looking at the long term momentum indicator on a daily chart we see that the momentum turned to the up side in Nov of 2008, crossed into its positive zone in early Jan of 2009 and has remained in its positive zone ever since. Although still in its positive zone the long term momentum indicator has not been showing any great strength behind the recent rally and has once more dropped below its now negative sloping trigger line.

Volume: The volume indicator did not really pick up steam until the middle of 2009. Since then its trigger line has remained in a positive slope until very recently. Although the indicator had dropped slightly below its trigger line a few times along the way the trigger remained positive until very recently. The indicator is now below its long term trigger line and the trigger line is now also in a negative slope.

As of the Friday close the long term rating remains BULLISH although the direction of the various indicators would suggest that we might be in for some downgrade shortly.

INTERMEDIATE TERM

The intermediate term is a little bit on the mixed side as far as the indicators are concerned. Something’s gotta give.

Trend: Gold is toying with its intermediate term moving average line and although much of the Friday trading was below the line it did end the day just a hair above the line. Unfortunately, the line itself is in a very slight negative slope.

Strength: The intermediate term momentum indicator is heading towards its neutral line but did finish the week slightly above the line. It is already below its trigger line and the trigger is sloping downward.

Volume: Although in a still lateral trend the volume indicator is showing signs of heading lower. It is below its trigger line and the trigger has turned to the down side.

All in all the intermediate term rating at the Friday close is not quite a full bull but is at a + NEUTRAL level, one level below the full bull. The short term moving average line has turned downward but remains above the intermediate term line for confirmation of a positive rating although not necessarily a full bull.

SHORT TERM

From a short term perspective things are getting worse and worse. Weakness has been entering the picture over the past few weeks but this week it was most evident.

Trend: The short term up trend has been busted and the down trend is in vogue. Gold has dropped below its short term moving average line and the line is heading downward.

Strength: The short term momentum indicator has entered its negative zone and remains below its negative trigger line.

Volume: The daily volume action remains low, as can be expected if the trend is towards lower levels. The fact that the daily volume has not increased significantly during the down moves suggests, at this point in time, that the down trend my not last very long. Should the daily volume increase as the trend moves lower, that would not be a good sign.

The short term rating at the Friday close is BEARISH. This is confirmed by the very short term moving average line having now crossed below the short term line.

As for the immediate direction of least resistance, I would be inclined to go with the down side at least for another day or two. That would put the Stochastic Oscillator into the oversold zone creating the potential for a rebound.

SILVER

LONG TERM

The long term P&F chart for silver has been pretty good for us. The recent rally stopped right at its down trend line and the price is now reacting. The initial projection on the break was to the $28 level, which it reached quite quickly. Now, the next projection is all the way back to the $12 level. We’ll just have to see if THAT ONE comes true. I wouldn’t place any money on it but I would not ignore it either.

Trend: Silver continues to trade below its long term moving average line and the line slope remains to the down side.

Strength: The long term momentum indicator continues to hug its neutral line and basically move in a lateral direction. At the Friday close it ended below the line and below its negative sloping trigger line.

Volume: The volume indicator is not doing much but did end the week just slightly above its positive trigger line.

For the long term the rating, at the Friday close, is BEARISH.

INTERMEDIATE TERM

Trend: For the past few weeks silver has been moving above and below its intermediate term moving average line although the line had consistently remained in a negative slope. On the Friday close silver ended below its moving average line and the line remained sloping downward.

Strength: The intermediate term momentum indicator continues to show weakness in the price move. It remains below its neutral line and below its negative sloping trigger line. The only minor encouragement in the momentum indicator is its up trend line. From its mid-Sept low we can draw an up trend line in the momentum indicator. At the Friday close the indicator remains just above this line (although in the negative zone). The price has already crossed below its similar up trend line but this may be a false break as the momentum is usually the more accurate line to follow (when we have one).

Volume: The volume indicator moved below its trigger line during the week and bounce upwards on Friday to just about crossing above the line. Not quite but almost. The trigger remains in a very slight upward slope.

On the intermediate term, at the Friday close, the rating is BEARISH. This bear is confirmed by the short term moving average line having just crossed below the intermediate term line.

SHORT TERM

Trend: The Thursday action was significant and put silver decidedly below its negative sloping moving average line, where it remains after the Friday close.

Strength: Although weak the short term momentum had remained in its positive zone until the Thursday action. It is now in its negative zone and below its negative trigger line.

Volume: The daily volume action remains low and not a significant factor technically.

At the Friday close the short term rating is BEARISH. This bear is confirmed by the very short term moving average line having moved below the short term line.

As for the immediate direction of least resistance, I’ll go with the down side here along with gold. Despite Friday’s up day all the indicators suggest weakness and the Stochastic Oscillator is not yet in its oversold zone. Another day or two should do it.

Merv Burak, CMT