Pre-opening Comments for Wednesday October 7th

U.S. equity index futures are mixed this morning. S&P 500 futures slipped two point in pre-opening trade. Futures were higher overnight following the release of better than expected quarterly earnings by Yum Brands and Costco and after the U.S. Dollar moved lower. However, gains faded as the opening approached and the U.S. Dollar recovered.
Yum Brands, operator of Pizza Hut, Taco Bell and Kentucky Fried Chicken added 1% after announcing higher than expected third quarter earnings. Consensus was $0.58 versus $0.58 per share last year. Actual was $0.69 per share. The company also offered positive earnings guidance for the fourth quarter.

Costco gained 2% after announcing higher than expected fiscal fourth quarter earnings. Consensus was $0.77 versus $0.90 per share last year. Actual was $0.85 per share. The company also offered positive guidance for the first quarter.
Monsanto added 1% after reporting fiscal fourth quarter adjusted earnings slightly higher than expected. Consensus was a profit of $0.01 versus a loss of $0.03 per share last year. Actual was a profit of $0.02.
Family Dollar Stores added 5% after releasing better than expected fiscal fourth quarter earnings. Consensus was $0.41 versus $0.38 per share last year. Actual was $0.43 per share.
TD Newcrest changed its opinion on several mining stocks this morning. Ivanhoe Mines was downgraded from a Speculative Buy to Hold. Teck Resources was upgraded from a Buy to an Action Buy. Gammon Gold was downgraded from Hold to Reduce. Thompson Creek Metals was upgraded from Reduce to Hold.
Cisco added 1% after William Blair raised its rating from Market Perform to Outperform.

Technical Action Yesterday

Technical action by S&P 500 stocks was quietly bullish yesterday. Three S&P 500 stocks broke resistance (JC Penny, Reynolds American and Safeway) and one stock broke support (St. Jude’s Medical). The Up/Down ratio increased from 7.04 to (382/53=) 7.21.
Technical action by TSX stocks also was quietly bullish. Three TSX stocks broke resistance (Birchcliff Energy, Emera and Gammon Lake Resources) and one stock broke support (Rogers Communications). The Up/Down ratio was unchanged at (116/22=) 5.27.
Interesting Charts

Gold was a focus yesterday on a break to an all time high above resistance at $1,033.90 (GLD: $100.44). Gold has formed a massive reverse head and shoulders pattern with a long term technical target of $1,300. On the other hand, gold and its ETFs on a short term basis are overbought.

Strength in gold is related to weakness in the U.S. Dollar. The U.S. Dollar has formed a tight three week trading range between 75.83 and 77.47. It found resistance at its 50 day moving average. Stochastics have rolled over. Will short term support hold? Probably!

Grain prices came alive yesterday. That’s good news for investors involved with the seasonal Ag play. A break above resistance by JJG above $37.15 would be convincing. Ag stocks responded strongly to strength in grain prices.

The U.S. Transportation sector finally has recorded a technical buy signal for its period of seasonal strength from September 24th to November 13th

Relative Strength for U.S. Sectors

….continue viewing charts and comments plus a column titled “Its a Wonderful Life – Not! HERE (scroll down)

Editor Note: Highly recommend that you take a monday morning visit to this Don Vailoux monday report where he analyses an astonishing 40 plus Stocks, Commodities and Indexes.

Don Vialoux has 37 years of experience in the Investment Industry. He is a past president of the Canadian Society of Technical Analysts (www.csta.org) and a former technical analyst at RBC Investments.  Now he is the author of a daily letter on equity markets available free on the internet. The reports can be accessed daily right here at www.dvtechtalk.com.

Impossible! That’s what institutional investors say about “Timing the Market”. Mr. Vialoux will explain that, indeed, it can be done with the appropriate analysis. He also will explain why timing the market will be important during the next decade. Buy and Hold strategies are not working anymore; Investors are looking for alternatives. Mr. Vialoux will demonstrate four techniques that can be used to time intermediate stock market swings lasting 5-15 months. The preferred investment vehicles for investing in intermediate stock market swings are Exchange Traded Funds.

Comments in Tech Talk reports are the opinion of Mr. Vialoux. They are based on technical, fundamental and/or seasonal data that is believed to be accurate. The comments are free. Mr. Vialoux receives no remuneration from any source for these services. Comments should not be considered as advice to buy or to sell a security. Investors, who respond to comments in Tech Talk, are financially responsible for their own transactions.

Read full comment HERE

Read full comment HERE

Ed Note: Below is a small excerpt from Mark Leibovit’s Daily VR Trader. The VR Gold Letter is published WEEKLY

In tribute the spectacular breakout in the Gold market and to the current run in the stock market (both of which surprised the bears, but not this analyst), I encourage you to watch the following video of the ‘Running of the Bulls Pamplona, Spain’. Ole!

Gold staged a strong rally to record highs yesterday after rumors that Gulf Arab countries along with Russia and China were going to abandon the Dollar for oil transactions led to a decline in the Dollar and a rush towards the safety of gold. If you’re innocent enough to believe this is not true, then you need to wake up real fast! Unfortunately, only a military conflict will draw investors back to the Dollar – an event we cannot discount in poor economic times. Meanwhile, the Dollar will work lower and ultimately post new bear market lows under 70.00.

Gold closed at 1041.80, up 24.60, just above the old 1037 high. Gold hit a new all-time record high of 1044.80 just before noon yesterday. The other metals followed gold higher with silver up 0.72 to 17.34, platinum up 19 to 1313, palladium up 7 to 306, and copper settling up 0.0575 at 2.7845.

We knew it was only a matter of time before gold broke out to new records. Interestingly, gold set a new record high, yet the Dollar is still above its 70.698 low from March 18, 2008. So gold strength is not just because of the Dollar’s weakness.

Just on Monday, I wrote: “I believe we’re looking at another technical rally here possibly into mid-October, but I’m unsure of amplitude.” Gold has rallied 39.50 since I wrote that. Bulls-eye!

The weekly VR Gold Letter focuses on Gold and Gold shares. The letter is available to Platinum subscribers for only an additional $50 per month and to Silver subscribers for only $70 per month. Email me at mark.vrtrader@gmail.com.

Marks VRTrader Silver Newletter covers Stock, TSE Stocks, Bonds, Gold, Base Metals, Uranium, Oil and the US Dollar.

More kudos – Mark Leibovit was named the #1 Intermediate Market Timer for the 10 year period ending in 2007; the #1 Intermediate Market Timer for the 3 year period ending in 2007; the #1 Intermediate Market Timer for the 8 year period ending in 2007; and the #8 Intermediate Market Timer for the 5 year period ending in 2007. NO OTHER ANALYST SURVEYED APPEARED IN ALL FOUR CATEGORIES FOR INTERMEDIATE MARKET TIMING AS PUBLISHED IN TIMER DIGEST JANUARY 28, 2008!
For a trial Subscription of The VR Silver Newsletter covering Stocks, Bonds, Gold, US Dollar, Oil CLICK HERE

The VR Gold Letter is available to Platinum subscribers for only an additional $20 per month, while for Silver subscribers the price is only an additional $70.00 per month. Prices are going up very shortl, so act now! Separately, the VR Gold Letter retails for $1500 a year! The VR Gold Letter is published WEEKLY. It is 10 to 16 pages jam-packed with commentary and charts. Please call or email us right away. Tel: 928-282-1275. Email: mark.vrtrader@gmail.com .

Marks VRTrader Silver Newletter covers Stock, TSE Stocks, Bonds, Gold, Base Metals, Uranium, Oil and the US Dollar.

More kudos – Mark Leibovit was named the #1 Intermediate Market Timer for the 10 year period ending in 2007; the #1 Intermediate Market Timer for the 3 year period ending in 2007; the #1 Intermediate Market Timer for the 8 year period ending in 2007; and the #8 Intermediate Market Timer for the 5 year period ending in 2007. NO OTHER ANALYST SURVEYED APPEARED IN ALL FOUR CATEGORIES FOR INTERMEDIATE MARKET TIMING AS PUBLISHED IN TIMER DIGEST JANUARY 28, 2008!
For a trial Subscription of The VR Silver Newsletter covering Stocks, Bonds, Gold, US Dollar, Oil CLICK HERE

U.S. gold hits record high of $1,043.20 an ounce

U.S. gold futures rose to an all-time high of $1,043.20 an ounce on Tuesday as a weakened U.S. currency prompted investors to buy gold as a hedge against dollar-denominated portfolios.

Pre-Market:

The recent rise in gold prices above the $1000 mark has sparked interest in the yellow metal once again, but this is in fact the third time in less that two years that gold prices have reached four figures, with the previous two occasions preceding large drops in the gold price.

So is it a case of third time lucky this time for gold?

We certainly think so, particularly as we watch gold tick up in Hong Kong to flirt with $1020. However $1033 is the critical level that we are watching intently, as we believe a break above this level will confirm that gold is indeed in a major rally and not just another failed attempt at maintaining a four figure price.

Emphasis must be placed on the importance of gold breaking the $1000 level, and maintaining it, this time around. If it fails again this will jeopardize future attempts, firstly as bulls will become nervous as soon as it ever comes close again, and secondly traders will jump on gold as a textbook short. This could put gold’s bull run back a year or two.

Thankfully however, we do not see this happening. We see gold breaking $1033 very soon, and then running to $1200 over the coming months.

Hold tight, its going to be wild ride on the way though.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.

A brief excerpt of the lengthy daily internet comment by Richard Russell of Dow theory Letters. One of the best values anywhere in the financial world at only a $300 subscription to get his report daily for a year. HERE to subscribe.

I believe that it’s now widely taken for granted that we’re in a primary bull market. I’ve been in this business for a long, long time. And any time I feel that something in the economy or the stock market is a “lock” and is taken for granted, I say to myself, “Maybe but I want proof — proof in the market’s action.”

I’m in a difficult spot here. I know that almost everyone believes we’re in a bull market, but I’m not convinced. I still suspect that we’re in a counter-trend rally in a continuing bear market. I know this is now an extreme minority opinion, but minority opinions against the crowd, have always intrigued me.

The Dow hit a high on September 22, a high unconfirmed by the Transports. The Averages turned down from there. As of last Friday, the Dow had been down seven out of the last eight sessions. This took the Dow down to just above its 50-day moving average (which stands at 9458).

The Transports have been down eight of the last 10 trading sessions. As of Friday, the Transports had sunk below their 50-day moving average, which now stands at 3749. Unfortunately, there’s no way of telling at this time whether we are seeing a mild correction of the advance — or whether the rise from the March low is now in the process of topping out. The outcome to this puzzle is absolutely critical.

If both Averages can rally above their recent highs (for closings see below), the bull case will remain alive. If the decline continues and volume increases on the decline, the bear case will be enhanced. We’re living a great drama now.

Wall Street wisdom — “It’s easier to stay out than to get out.”
“Get out when you can, not when you have to.”

The 84 yr. old writes a market comment daily since the internet age began.  In recent years, he began strongly advocated buying gold coins in the late 1990’s below $300. His position before the recent crash was cash and gold.

There is little in markets he has not seen.  Mr. Russell gained wide recognition via a series of over 30 Dow Theory and technical articles that he wrote for Barron’s during the late-’50s through the ’90s. Russell was the first (in 1960) to recommend gold stocks. He called the top of the 1949-’66 bull market. And almost to the day he called the bottom of the great 1972-’74 bear market, and the beginning of the great bull market which started in December 1974. He loaded up on bonds in the early 80’s when US Treasuries where yielding 18%.