Wednesday, November 7, 2012


Chart of the Day - Aflac (AFL)

The "Chart of the Day" is Aflac (AFL), which showed up on Monday's Barchart "52-Week High" list. Aflac on Monday posted a new 16-month high of $51.31 and closed +1.11%. TrendSpotter has been long since Oct 15 at $48.78. In recent news on the stock, Aflac on Oct 23 reported fiscal Q4 EPS of $1.77, well above the consensus of $1.66. Barron's on Sep 2 ran a story saying that Aflac stock price is cheap compared to its own history and its peers and that there is room for the stock price to grow 30%. Aflac, with a market cap of $23 billion, is a leading supplemental health and life insurance company.



By SRSrocco:
I have been spending a great deal of time going over the balance sheets of mining companies to get a better TRUE COST of SILVER PRODUCTION.   I have put out a request for anyone in the accounting profession to assist me in this matter.  After the initial interest, it seems as if these folks have backed off… for whatever reason.  I don’t plan on stopping before I can figure out a BETTER WAY to cost out gold and silver and not the pathetic industry standard of “CASH COSTS”.

Cash costs exclude depreciation, depletion and amortization, accretion, corporate general and administrative expenses, exploration, interest, and pre-feasibility costs.
  How can a mining company or the industry as a whole use CASH COST figures to show the investing public true costs of mining silver?  They do it to MISLEAD the public.
 I have had some SilverDoctors members reply to my previous post on Alexco Resources.  One member told me about another so-called extremely LOW COST SILVER PRODUCER named Dia Bras Exploration.
So, I took on the challenge and researched Dia Bras.  According to their Q2 2012 report, this is what they stated for their 1H 2012 SILVER CASH COST:

Isn’t that amazing… a NEGATIVE $21.70 per ounce silver cash cost.  For Pete sakes, Dia Bras should be rolling in the DOUGH… correct?  I mean, they aren’t mining silver at a ZERO CASH COST… they are mining it for $21 less than FREE…LOL.
If we look at their Consolidated Balance Sheet Q2 2012, we can see that on the bottom row, they had a NEGATIVE $6.7 million net income loss for the first half of 2012.  How in the living blazes can a company state a negative $21 cash cost and lose money?  (more)

Toyota Motor Corp. Back on Track

Toyota Motor Corp. (NYSE:TM) — For our Stocks to Sell in March, I said, “Production problems related to natural catastrophes continue. Analysts look for earnings to be limited by margin pressures, customer quality concerns and a stronger yen.”

Since then, Toyota stock fell from a high of $87.15 in April to a low of $72.56 in July. However, on Monday, Toyota reported an increase in profits of $3.28 billion ($1.04 per share) for its fiscal second quarter. The company raised its outlook for the fiscal year ending March 31, 2013, to $3.09 per share. Most analysts that follow TM raised their estimates as well, and changed their overall rating to a “buy.”

Technically, TM broke through its 50-day and 200-day moving averages on a high-volume price gap. Accumulation has been high since October, and this break confirms that the stock is back on track.
After a positive reaction to earnings, stocks will often succumb to profit-taking, and so long-term investors should plan to buy the stock under $80.
Trade of the Day – Toyota Motor Corp. (NYSE:TM)
Click to Enlarge

Comprehensive SILVER Interview with David Morgan (The Silver Guru)

Watsco Inc. (NYSE: WSO)

Watsco, Inc., together with its subsidiaries, engages in the distribution of air conditioning, heating, and refrigeration equipment in the United States. It distributes residential central air conditioners; gas, electric, and oil furnaces; commercial air conditioning and heating equipment and systems; and other specialized equipments. The company also distributes various parts, including replacement compressors, evaporator coils, motors, and other component parts; and supplies comprising thermostats, insulation material, refrigerants, ductwork, grills, registers, sheet metal, tools, copper tubing, concrete pads, tape, adhesives, and other ancillary supplies. It serves approximately 50,000 contractors and dealers that service the replacement and new construction markets. The company also exports its products to Latin America and the Caribbean. Watsco, Inc. was founded in 1945 and is headquartered in Miami, Florida.

Please take a look at the 1-year chart of WSO (Watsco, Inc.) below with my added notations:

1-year chart of WSO (Watsco, Inc.)

For the entire year shown above, WSO has always seemed to find support or resistance on or at the increments of $5. First, notice the $65 level (blue) that was most recently support. Next, you can see the common levels of $70 (navy) and $75 (red). At the very top end you can see the $80 resistance (purple). The nice thing about WSO is that it shows you how to trade it no matter what direction the market moves.

Caution: 6 Sectors Issuing Sell Signals

Stocks were volatile in the first two days of November, and that trend is likely to continue into this week. Monday may be a quiet day, but the volatility should increase on Tuesday as traders react to the inevitable leaks related to exit polls on the Presidential election. Wednesday should set the tone for the short-term trend.

Stock Market Breadth Turns Bearish

There are a number of ways to look at market breadth. All of them try to identify the underlying strength or weakness of the majority of stocks in the market. The weekly charts below show nine SPDR sector ETFs, and all of them appear to be forming topping patterns.

They are (from left to right):
1. Consumer Staples Select Sector SPDR (NYSE: XLP)
2. Health Care Select Sector SPDR (NYSE: XLV)
3. Technology Select Sector SPDR (NYSE: XLK)
4. Energy Select Sector SPDR (NYSE: XLE)
5. Utilities Select Sector SPDR (NYSE: XLU)
6. Consumer Discretionary Select Sector SPDR (NYSE: XLY)
7. Materials Select Sector SPDR (NYSE: XLB)
8. Industrial Select Sector SPDR (NYSE: XLI)
9. Financial Select Sector SPDR (NYSE: XLF)
Sector ETFs
The daily view reinforces the bearish outlook. Six of the nine are on sell signals based on their 50-day moving averages: XLP (1), XLK (3), XLE (4), XLU (5), XLY (6) and XLB (7). XLI (8) is near a sell.

The Chinese Credit Bubble – Full Frontal

from Zero Hedge
Whereas it is relatively easy to track the progression of the “developed world” deep into the twilight rabbit zone hole (in bizarro metaphore-land speak) of no total debt/GDP return as defined by Reinhart and Rogoff (where anything above 80% sovereign leverage is more or less the game over line for one country, let along the entire Western world) courtesy of day to day updates of total debt in the US (103% debt/GDP) and its comparably indebted peers, when it comes to world’s growth dynamo – China – it is next to impossible to get a sense of just how big the debt hole is for a country whose economic data has been and continues to be one massive goalseeked, G.I.G.O. blackbox. At least that is the case at the sovereign level where the government can and does show whatever data it feels like as the country is excluded from traditional counterparty flow checks which serve as an at least modest buffer for data fabrication for the other globalized countries engaging in international trade. That, and the Ministry of Truth of course, which some have likened recently to an amateur version of the US’ own BLS.
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