Precious Metals Equity Index Form a Triple Top, What’s Next?

Gold, Silver and PM Stocks On Edge

I am going to step out on a limb in this report and cover what I think to be an intermediate top in the precious metals sector. Everyone I speak with and from the hundreds of emails I get I would say the vast majority are bullish on gold and silver. That being said, I feel we are 3-8 days away from a pop and drop in the price of gold.

Below are my explanation and charts of what I think is unfolding.

HUI – Gold Bugs Index

This chart tracks a basket of gold companies and can be used as a leading indicator for gold bullion at times. This index tends to lead the price of gold before rallies and also during declines. I have seen this lead by a few hours and even up to 7 days. I find it out perform when gold is about to rally, and under perform when gold is topping or about to start another move down.

It looks as though we are forming a triple top which also happens to be at a previous 2009 resistance level. Each time this level has been reached sellers take control and send the market sharply lower. There have been several long upper wicks formed in the past few sessions telling me that buyers are pushing the price up, but sellers hit the sell button pulling the market right back down. If this triple tops plays out, I would expect a multi month correction to take place. (more)

Dividends Beating Bond Yields by Most in 15 Years

More U.S. stocks are paying dividends that exceed bond yields than any time in at least 15 years as profits rise at the fastest pace in two decades.

Kraft Foods Inc. and DuPont Co. are among 68 companies in the Standard & Poor’s 500 Index with payouts that top the 3.80 percent average rate in credit markets, based on data since 1995 compiled by Bloomberg and Bank of America Corp. While Johnson & Johnson sold 10-year debt at a record low interest rate of 2.95 percent last month, shares of the world’s largest health products maker pay 3.68 percent.

The combination of record-low interest rates, potential profit growth of 36 percent this year and a slowing economy has forced investors into the relative value reversal. For John Carey of Pioneer Investment Management and Federated Investors Inc.’s Linda Duessel, whose firms oversee $566 billion, it means stocks are cheap after companies raised payouts by 6.8 percent in the second quarter, data compiled by Bloomberg show. (more)

Musante: Look for Undervalued, Oily E&P Plays

C. K. Cooper Senior Analyst Joel Musante likes oily exploration and production (E&P) names in name-brand plays, especially the Bakken. In this exclusive interview with The Energy Report, Joel discusses a few of his favorite names with underappreciated acreage or technology and talks about how he reaches his conclusions.

The Energy Report: Joel, you've covered E&P companies for more than a decade for various firms. Tell us how you started covering this sector and why you're still doing it 10 years later.

Joel Musante: I started covering the sector when I was with W. R. Huff Asset Management after getting my MBA. At Huff, I was a credit analyst, and I performed due diligence on private equity deals. I think this provided a sound foundation for doing any kind of financial analysis. The E&P sector is probably one of the more exciting sectors to cover. Although economic growth may have slowed in the U.S., the emergence of China and India and some of the other Asian economies has us asking how we're going to meet all this future energy demand. For oil and natural gas, the E&P companies have probably been the best at answering that question, as opposed to the majors.

TER: How so?

JM: If you look at some of the big shale plays that have emerged recently—the Haynesville and the Bakken—the leaders in those plays have been the E&Ps. Chesapeake Energy Corp. (NYSE:CHK) put the Haynesville play on the map a couple of years ago. And then EOG Resources (NYSE:EOG) and Brigham Exploration Co. (NASDAQ:BEXP) were on the forefront on the east and west frontiers of the Bakken Shale. Those were among the biggest new shale plays out there. (more)

10 Top-Ranked Stocks with Big Upside

TheStreet Investment Analyst

The S&P 500 Index has rallied 5 percent in September as improving economic data reassured investors. The long fixed-income, short-stocks trade appears to be unwinding.

Individual investors that need equity exposure should consider the following 10 stocks; they get the highest aggregate ratings from analysts and are expected to make big gains in the weeks ahead. They are ordered by sentiment, from bullish to most bullish.

10. G-III Apparel [GIII 29.97 0.07 (+0.23%) ] designs outerwear and sportswear apparel. G-III swung to a fiscal second-quarter profit of $3 million, or 16 cents a share, as revenue grew 39%. The operating margin turned positive. G-III's stock trades at a trailing earnings multiple of 12, a forward earnings multiple of 10 and a book value multiple of 2.4 — 36%, 39% and 32% discounts to peer averages. Its PEG ratio, a measure of value relative to predicted long-run growth, is 0.3, signaling a 70% discount to fair value. Piper Jaffray expects the stock to gain 34%, to $40. (more)

Dennis Gartman: Gold to Hit New Highs?

Gold will likely hit new highs, said commodities trader Dennis Gartman while speaking on Tuesday's "Fast Money Halftime Report."

Gartman said there are concerns raised that the monetary authorities could be too aggressive in adding reserves and monetizing debt. The euro experienced pressure because of disregard for the bank stress tests throughout Europe. It bounced, but is heading down. Gold, therefore, has become the third largest reservable asset in the world behind the US dollar and euro.

*It's worth noting that during Fast at 5p Gartman returned to talk more about the gold trade and said expressly, "I'm not waxing terribly enthusiastic. I wouldn't throw caution to the wind and buy gold here."

In other words, he believes gold will go higher but also thinks there are better places to put money to work. (more)

Webbot Clif High on One Radio Network, 9/8/2010

one on one conversation regarding November event, dollar, economy,2012.Clif High shared a recap of some his 'web bot' hits, as well as presented some dire predictions for the future. He foresees a strong earthquake possibly hitting the West Coast in the next few days. He predicted economic collapse over the summer orchestrated by "the powers that be," and increased censorship of the Internet. During this same time frame, "sun disease," or solar flare-ups will impact life on Earth, he said. High also issued a warning over the dates November 8th through the 11th, 2010 in which he said an Israeli attack on Iran/nuclear war could occur that will have 9/11-like consequences.



Webbot predictions predictions about the economy, and U.S. and world events for the summer of 2010 and beyond . Here are some of the highlights of what they see coming:

* No warfare between Israel and Iran, at least not until November.
* Six very large earthquakes are yet to come during the rest of 2010.
* A major tipping point will occur between November 8th – 11th, 2010, followed by a 2-3 month release period. This tipping point appears to be US-centric, and could be a dramatic world-changing event like 9-11 that will have rippling after-effects. The collapse of the dollar might occur in November.
* From July 8th, 2010 onward, civil unrest will take place, possibly driven by food prices skyrocketing, and the devaluation of the dollar.
* A second depression, triggered by mass layoffs, bankruptcies, and the popping of the "derivatives bubble," will see people moving out of cities.
* After March 2011, the revolution wave will settle down into a period of reformation.
* A "data gap" has been found between early 2012 running through May 2013. One explanation is that "our civilization gets knocked back to a pre-electronic state," such as brought about by devastating solar activity.
* A new benign form of capitalism will emerge during 2017-2020.

U.S. stocks end off highs as European bank worries return

(MarketWatch) -- U.S. stocks on Thursday posted a second day of gains, with the Dow industrials just a few points away from posting gains for 2010, as investors cheered a drop in weekly jobless claims and an improvement in the trade deficit.

The market pared its gains, however, after a report Deutsche Bank might sell stock to raise billions in cash.

"They will likely not be the only bank that will have to raise more money," Peter Boockvar, equity strategist at Miller Tabak, said after Bloomberg reported Deutsche Bank AG /quotes/comstock/13*!db/quotes/nls/db (DB 59.97, -0.02, -0.03%) was considering a stock sale to raise as much as $11.4 billion.

While the report concerning Germany's largest bank triggered a softening in equities and the euro, Boockvar said the paring of gains "came in context of a market that keeps running up above 1,100 [on the S&P 500] and then stalling out." (more)