Strategy Update Pre-Bell Report for Monday 2/11/08

Here are some stories from the overnight news wires to be aware of for Monday:

METALS ARE UP AGAIN IN OVERNIGHT TRADING: Gold gets all the attention, but Platinum and Palladium are outperforming those metals due to Plat & Pall production outages and now shortages. See list and analysis below, and check the 24 hour LIVE charts at strategyupdate.com
PAL IS UNSTOPPABLE! VGZ has been a tippy-top performer, lately, on days that gold is up. Check it out! (10AM UPDATE: PAL was up nearly 10%, grossly outperforming other metal stocks, and the rest of the stock market -- before metal prices started going down in the 10 AM hour. When metals rise again, expect it to be led by PAL, which may rise 10%-12% at that time.

KRY: They released some news at 9:19am, right after pre-market trading closed. Hmmm. Let's see how this (good) news drives this $1.80 a share gold mining stock.

(Be aware of automatic profit taking by major hedge funds when gold hits record levels. But if the trend is up, it will only be a temporary dip. You can take your chances that we will see that dip, but read the analysis below.)
2/11/08 GOLD ALERT:

Platinum price hits record high amid S.Africa power crisis

Angloplat earnings fall, power cuts to hit output

Newmont predicts all major gold miners will see production decline

Newmont forecasts higher costs

Oil climbs $92 on Venezuela threat
U.S. light crude for March delivery rose as high as $92.71 a barrel in early trade, matching its recent January 30 peak, the highest point since January 15.

Platinum hits record high on supply concerns
SINGAPORE (Reuters) - Platinum hit another record high on Monday on the back of lingering supply concerns in South Africa, which produces four-fifths of the world's metal. Spot platinum rose to $1,885/1,892 an ounce from $1,880/1,888 late in New York on Friday.


Venezuela threatens to stop US oil sales over Exxon
CARACAS (Reuters) - President Hugo Chavez on Sunday threatened to stop sending oil to the United States unless it halted an "economic war" that he said included an Exxon Mobil lawsuit freezing $12 billion in Venezuelan assets.

Goldman Sachs boosts wheat price forecast
SYDNEY (Reuters) - Investment bank Goldman Sachs (GS.N: Quote, Profile, Research) has raised its outlook for Chicago wheat futures by 47 percent to $13.50 a bushel after the U.S. Department of Agriculture cut projected 2007/08 U.S. wheat ending stocks.

The Goldman Sachs three-month and six-month price forecast compares with CBOT March soft red winter wheat WH8 futures closing price on Friday of $10.93 a bushel, after prices again rose by their 30-cent daily limit.

Record high wheat prices were sparked on Friday by new world agriculture supply and demand estimates by the USDA, which cut projected U.S. wheat stocks at the end of the 2007/08 marketing year on May 31 to 272 million bushels from its estimate of 292 million bushels in January.

This is the lowest levels of stocks since 1947/48, Goldman Sachs said in its Commodities Watch report, issued on Friday.

Acute world wheat shortages, after crop problems in both the northern and southern hemispheres and strong export demand, have sparked wheat price rises on U.S. futures exchanges by the daily 30-cent ceiling for most of the past three weeks, causing the exchanges to raise the limit from February 12.

Reuters reports that Australia's Central Bank Warns of More Rate Rises: Australia's central bank bluntly warned on Monday that it would likely need to raise interest rates again to restrain inflation, even as it trimmed its outlook for economic growth.

The unusually explicit warning from the Reserve Bank of Australia (RBA) lifted the local dollar above 90 U.S. cents while bills futures slid as the market priced in a greater risk of a further rate hike, perhaps as soon as March.

STOCK MARKET UPDATE: Experts are saying it's time to jump on the financial stocks, since they have been beat up so much. Batcomputer says, you will have a chance to buy the financial sector at lower prices than they are currently at. (And that's an understatement.) Batcomputer is very, very nervous that there will be a big bottom in the low 11,000's (or high 10,000's), before a big rally back to the 13,500 range. Look how the market has tanked in January, then again last week. But long term (2-3 years), you should be o.k. if you wanna take your chances on financials. Although the Batcomputer wouldn't. It's just not worth the risk since the dust hasn't settled yet. And we say there will be a lot more dust. Interested in gold in '08? See our update, including watchlist of picks. Wall Street updates throughout the day at strategyupdate.com.

2/11/08 Pre-Bell Update: Yahoo boardmembers to reject Microsoft's takeover bid feeling the offer is to low and wants $40 per share. (LOL!) Batcomputer says, "Watch CNET". (Let's watch and see what happens this week.)

Experts are saying it's time to jump on the financial stocks, since they have been beat up so much. Batcomputer says, you will have a chance to buy the financial sector at lower prices than they are currently at. (And that's an understatement.) Batcomputer is very, very nervous that there will be a big bottom in the low 11,000's (or high 10,000's), before a big rally back to the 13,500 range. Look how the market has tanked in January, then again last week. But long term (2-3 years), you should be o.k. if you wanna take your chances on financials. Although the Batcomputer wouldn't. It's just not worth the risk since the dust hasn't settled yet. And we say there will be a lot more dust. Interested in gold in '08? See our update, including watchlist of picks. Wall Street updates throughout the day at strategyupdate.com and do a Google alert for "strategyupdate.com" to receive blog reports.


IT GOLD ABOUT TO REALLY TAKE OFF?: Oil prices rising, inflation already rising (see commodity prices) and more Fed funds rate cuts expected...Gold miners are yet to catch up with gold's recent rise, proportionately. But of course gold itself is going to be safer than any one mining pick. It depends on what you are looking for in an investment. But although you always see gold and metals take some hard falls (especially at record high levels, that we are approaching again, as hedge funds take their automatic profits) -- if last week was any indication...gold is not only holding it's own in this volatile market...but could start to speed up it's gains, and reduce the sell offs this week.

Usually, I would be too nervous to buy metals after this big run-up this past week (because you can see some painful drops). But on Monday February 11, 2008...I think time will show today is about as good as you are going to do in the long run, when it comes to gold. (Unless you have the cajones to hang in there for one more "profit-taking dip" we usually see at these record levels. The last hedge fund sell off was at $836/oz. So you still have another $10 rise on gold before you have to worry about it.)

And the Batcomputer says that by that time, inflation fears, a weaker dollar, and higher oil prices may offset any major dips on it's way to $950-$1000. Gold is now the third currency and if the stock market runs into a "rough patch" over credit derivative/subprime/bond insurer crisis -- people will be pulling out of stocks -- and jumping into gold. (It would have been nicer to jump in at $800. But people always say, "Too late now" -- and then they look back and say, "Damn, I liked gold at $920!" (See Gold Update for list of miners and more on gold investing stategy.")

AND WE CALLED PAL ON FRIDAY: We predicted metals would be up led by Palladium. Sure enough, metals were up, led by Palladium. And our Palladium pick (PAL), closed at $5.60 -- up 12.45% for the day! PAL was at $3.59 on 1/23/08. (Better than gold!)

METAL STOCKS ARE STOCKS, NOT THE COMMODITY ITSELF: And since these are stocks, they sell off, too when the market takes a dive.. But long run, when/if the stock markets go REALLY south, due to economic problems, gold will rise without the DOW-based sell-offs. AND, as the DOW goes down...gold and gold miners stock will/do not go down as much as general stocks, so you still win. (That's the point!)

So in other words, on some of these down 200-300 point days, your gold miner may only drop 2%-3%, when everything else in the market is down 7%-9%. And this past week, dropping -123 point, followed by -370 points -- it closed Friday down another -63 points. While gold had it's best day all month. Read the writing on the wall, y'all!

PROFIT TAKING FEARS: With gold this high, assuming you will see profit taking drive the price down. What do you do when it looks as though it's only going up? I would buy it like crazy on Monday in pre-market hours if the Batcomputer is giving the "buy" sign at 7:00am EST on Monday 2/11/08. (However, there is a lot of volatility with the Euro and metals in overnight trading, so you may want to watch to see which way the wind blows before you buy right before a dip today.)

UPDATES THROUGHOUT THE DAY AT STRATEGYUPDATE.COM. (Plus 24 hour LIVE gold, metals and euro charts.)

Gold and Wall Street Update for Wednesday 2/6/08

Here's an update of the past two days worth of updates from the Strategy Update website. StrategyUpdate.com: Updates, newswires and 24 hour metals charts.

Start with a new closing bell update for 2/6/08: After dropping -370 points yesterday, the market rallied as much as up +125 (based on good news at Disney perhaps), before ending on a days low of down -65 points.

That's a give back of -190 points off the days high. And it's never good for the next day when you end on the days low, with a give back like that. Overall, not a lot of confidence, especially with bond insurers and credit derivatives crisis looming. Even many bulls are saying we will be hitting recent lows, again (we dropped to 11,900 range this year, so far.) However, unless some goverment "mircale anvil" falls out of the sky to save the financial industry, SU predicts lows in '08 will be in the 10,700 between now and August.) But even if it's just a drop into the high 11,900 range...don't expect to see the DOW back in the 13,500 range anytime in the first half of '08 (or longer).

NOW, some GOLD TALK, since gold was up in overnight and early morning hours. It came down, slightly, as oil prices dropped on news on increased reserves. But gold has really held it's own (closing at $903.90). And you won't believe it, but I bought ONE gold miner stock in pre-market hours, from my watchlist of 50 miners. IT CLOSED UP 8.93% FOR THE DAY!!! Most other good mining stocks were flat to up +0.00%-+2.00% (GFI, GG, ABX, GLD, SLV, AUY were all in this range.) So for Vista (VGZ) to close up +8.93 is off the hook. But ZD trusted in his Batcomputer when they picked this name off the list this morning. (We posted it this morning...see below.)

2/7/08 UPDATE: Bad news on popular gold miner Newmont Gold (NEM), which is the #2 gold producer in the world, and popular with investors due to their non-hedged gold reserves. However, bad news on the earnings call means stay away from KGC until it shakes out.

HERE'S THE UPDATES FROM THE WEBSITE OVER THE PAST 48 VOLATILE HOURS:

2/6/08: Gold and gold mining stocks are up and outperforming the stock market today. But oil inventories come out in a half hour, and there is expected to be a surplus, so that could drive down the price of oil, and gold along with it. And although there will still be many ups and downs, gold will probably be outperforming the stock market in '08.

Be careful buying gold today, because you can expect the price to drop, based on a rise in oil inventories that most likely will reduce the cost of oil, per barell. However, with recent Fed cuts, and more expected, investors may be hanging on to gold positions, so it may not give back as much as usually expected.

1:30 PM GOLD UPDATE: Batcomputer says 1:30pm will be the peak for gold today. Be prepared for short-term downward price movement based on declining oil prices. (See more below)

Gold miners: But, if you decide you want to buy gold miners today, or in the future, SU likes AUY and VGZ (a nice little engine that could) the most. Also on the list; GCGC, KGC, EGO, UXG, NG, HMY, HL and GOLD. And two safer ones; ABX and NEM. (See news on NEM posted above. GOLD, Rangold Mining, had some news we don't like last week, but it hasn't seemed to hurt the stock, otherwise it would have been our #1 pick.)

Consider the miners above to be the "StrategyUpdate Gold ETF Basket", if we had one. (Once you buy one, stay on top of news releases that may have an effect on the stock.)

PLG and GRZ are two new ones we like, but haven't watched long enough. PLG is tied to Platinum and is kickin' butt today, but see alert below. GRZ is gold reserves. (Research 'em first!)

OTHER GOLD MINERS: These are popular ones, too, that go up and down, proportionately with the others mentioned above. Most of these I just turned cautious on over power outages in S. Africa that slowed production, and may suffer more power reductions in the future: GFI, GG, AU, IAG.

PLATINUM AND PALLADIUM WATCH: Gold is more of a currency, where Platinum and Palladium are industrial metals that have been hotter than gold, this year.)However, an expected drop in car manufacturing is expected to hurt these two metals. Which is why we took PAL (Palladium) off our list, but you can still trade it, as a cowboy. Platinum and Palladium still look to still be squeezing out big gains, today, as metal prices rise, due to shortages in these two metals caused by production outages in Australia and S. Africa. So that may be offsetting the downs you should expect to see in Plat and Pal, as industrial demand drops.

GLD is a popular ETF. (IAU is a similar, lesser talked about gold ETF, too.) It's price is linked to gold bullion prices. It's less risky, than individual mining stocks, but you won't see the big gains, either. I say, forget GLD. GDX is the gold miners ETF, which is tied to gold miners, as opposed to gold, itself. Same thing though...too safe. GRZ is a gold reserve ETF we like better. (Disclosure: VGZ, UXG)

2/5/05 GOLD & DOW ALERT: No gonna be a fun day for gold. Read Friday's prediction on what is going on with gold, today. And you are crazy if you think the DOW isn't about to hit a "rough patch" (as Bush calls it) on the opening bell, over bond insurer crisis and a much worse than expected ISM number (economic number). (All we've done since November-December is warn you about February. But you still aren't ready to believe what is about to happen. Because you never heard the phrase, "historic proportions", so you think you know what you can expect.)

Gonna be a GA-REAT day for SKF...(see alert below).

2/05/08 9:45 AM UPDATE: We told yo azz!!! In the first 15 minutes of trading, SKF is UP 5.73% and the DOW is DOW-N 223 points. (See also: REW, UP 5.74%.)

10:50 AM UPDATE: Batcomputer (SU Indicators) says Dow is ready to drop a little more, below it's current down -180-200 point range And don't look for one of these, "Down 200, then up 300" rally days like we have seen recently, though. If news of the bond insurers continues to scare investors, this could be a slow boil of consecutive DOW-N days. (SKF is a good indicator...when it is up 5%, DOW will be down about 220...and if SKF hits 6%...well, you know what comes next.)

11:35 ALERT!!!: SKF HITS UP +6%...let's see where the DOW goes from here.

12:10 NOON: To those who feel gold is taking only a short term dip, now is the time to start "layering in" your buy. Some folks feel gold is taking more of a long term, downward trend to 850, or below. But Batcomputer on Friday said, Tuesday or Wednesday would be the low point on gold and metals, before they take the big rise, based on all these rate cuts.

12:24 PM -- SKF vs DOW UPDATE As SKF moved to +6%, the DOW moved to -250 points. When SKF was up +5%, DOW was down 220 points. SKF up 4.50%=DOW down -185. It's very predictable. Hope SKF doesn't hit 7% today! Now, SFK is up 6.5% and DOW down 270 points (at 12:42pm). See the pattern!

MORE PATTERNS: 1:12 PM SKF UP 7%, DOW down -285. SFK UP 7.19% = DOW down 300 points (at 1:49PM). SKF UP 7.67% = DOW down 320 points (3:04 pm) SKF UP 8.27=DOW down 360!!! SKF 8.45%, DOW DOW-N 370 points (at closing bell) See the pattern?

SRS: Here comes SRS (Short Real Estate)...

2/4/08 ALERT: When SKF (Short Dow Financials) goes UP, the DOW goes DOW-N! (Click Daily Blog Link for more)

strategyupdate.com

We Told You So Tuesday: DOW will be DOW-N Over Bond Insurer Crisis & Extra Weak Economic Number

10:50 AM UPDATE: YIKES...after opening down -200 points at the bell, and leveling off to down -180, or so...The Batcomputer started going nuts...and raised the alert level, indicating a drop further to the DOW-N -220 to -250 (or -- clears throat -- more level). Watch SFK as an indictor. When it is UP above +5%, or more...start worrying about the DOW being down 220 at that point. So if SKF rises to +6%, or more...you know what is coming next!!! With the scare the bond insurance crisis, and derivatives market has given Wall Street (rightfully so) -- could be a slow boil of many DOW-N -200 points (or more) days this month.

2/5/05 GOLD & DOW ALERT: No gonna be a fun day for gold. Read Friday's prediction on what is going on with gold, today. (See thread on this blog below.)

And you are crazy if you think the DOW isn't about to hit a "rough patch" (as Bush calls it) on the opening bell, over bond insurer crisis and weaker than expected economic numbers. (All we've done since November-December is warn you about February. But you still aren't ready to believe what is about to happen. Because you never heard the phrase, "historic proportions", so you think you know what you can expect.)

2/4/08 ALERT: When SKF (Short Dow Financials) goes UP, the DOW goes DOW-N! (See yesterday's thread below.)

Gonna be a GA-REAT day for SKF! (Price is Right "Loser" Sounder): Whomp, whomp, whomp, whomp...(deflated), Whooooooooooompppppppp.

STAY AWAY FROM GFI & IAG: IAMGOLD (IAG) used to be a good mining stock. It was hit with bad news last week that we brought to your attention, and more bad news today, as it's target is lowered -- today -- most likely based on the news we brought you last week. Gold Fields (GFI) was one of the most recommended at the end of '07. Not anymore based on this kind of news:

This conversation was conducted on February 4th 2008 from . Bellwether Report

Q: What's your professional opinion of Gold Fields Ltd.?

A: We are taking a negative stance on share of Gold Fields Ltd. as we believe the company will experience tough operationally challenges for fiscal 2008.

Q: Why do you take a negative' stance on this stock?

A: One of the biggest issues will be increases to deep level mining risks. As it stands, the company has already announced a 7% decline for its second quarter South African gold production due to health and safety stoppages over the quarter. Adding to this is the rise in the cost of capital expenditures, which will put further pressures on margins. Lastly, the recent power supply shortages that the company has been experiencing as a result of the nations rapidly increasing demand for electric power will surely put a damper on production and profitability for the near future.

Q: What more can you tell us about the Company's current position amid power issues?

A: Currently, Gold Field's power usage has been limited to approximately 90% of its normal power requirement. However, the larger threat is that there is no guarantee that this power level will be sustained. In addition, at current power levels, six of the company's 21 operating shafts will be at risk of closure, seriously putting profitability at risk.

Q: Based on this, what would you tell investors looking to position themselves in this equity?

A: Consequently, we do not advice investing in shares of GFI until we see evidence of improving operationally conditions.


(Strategy Update recommended to pull out of this stock a week ago, or more, based on S. Africa electric problems that affected GFI's production):

When it it time to buy gold, don't buy GFI & IAG.
StrategyUpdate.com for updates, news wires and 24 hours live gold charts.

Strategy Update January Recap, February Predictions

1/31/08 End of Month Update = WORST JANUARY IN HISTORY:

When you see the Dow trade in a 400 point range on the same day (the day after another Fed rate cut) -- something is going on...and you better be careful, out there. Those who have been following this site and blog, know that since the end of '07, we have been screaming to pull out of the market by January 2, 2008 to avoid a HUGE down month of historic proportions.

And with historic rate cuts, bail out talk, stimulus packages, and today's 200 point rally -- it is still the worst January in history. Long term investors will say, "So what, it always goes back up." And there is always plenty of money to be made in down markets.

However, for those non-professional investors -- people who cannot afford to take that kind of hit (want to avoid stepping in the biggest puddle in history, if possible) -- then I hope we gained some credibility with you for the future. If you are someone who feels safe because you stick to mutual funds -- or buy a "safe" stock and hold it for life because you know things always go up...this year's market isn't for you. READ MORE

1/31/08 Update (2pm):

* The Dow is up 120 points, after being down 190 on the opening bell. You would HOPE the market would be up after another Fed rate cut! But if people feel the market is at a bottom, Batcomputer says the DOW will be trading in the 10,700 range (the real bottom) between now and August, if not sooner. So please keep that in mind as you make your investment plans this year. It's all about the bond and derivatives market and it's coming down fast and hard. (Feel free to bet against the Batcomputer, but read the Daily Blog for previous predictions first, please.)

* GOOGLE EARNINGS ANNOUNCED AFTER THE BELL: I don't care what the earning results are...in this market Wall Street will find something they don't like and the stock will go down in after hours trading. (But this isn't based on the Batcomputer, just my opinion.)

1/31/08 Pre-Bell Alert:

* You gotta admit -- all SU has done is warn about the bond insurance crisis as we turn the calendar to February '08. Sorry I was off by a day. See 1/30 Closing Bell Investor Alert below. DOW will open up DOW-N! (Hope you can handle the G-Force)

* 1/31/08Opening Bell Update (9:33am): Dow drops 180 points in the first three minutes of trading.

* BOND INSURER BAILOUT: We are looking at nothing less than a massive government bail-out of the bond insurers. Hope they can pull it together in time, before the series of down 300 days hit the market. And SU still feels that the government/Fed will not be able to keep propping up the global economy, long term. A bail-out will help in the short term, but it'll get way too ugly, first because you can never expect for them to pull it together in time -- but I hope they do.

* SEE 1/30 CLOSING BELL INVESTOR ALERT BELOW.

* Gold dropped in overnight trading, but rebounded as the dollar becomes weaker and is trending back up -- but is going down in the 9:00 am hour. Overall, though, don't you think gold will be going up in '08? Should see some up $50 dollar days as the Fed collapses the dollar and inflation kicks in. Gold is the third currency, now. It's not about industrial use, or jewelery. It should be traded as a currency like the dollar and euro. We will see things happen to the euro this year, that we have never seen in history. Things are happening!

* I don't care what people say about supply and demand -- when the dollar goes down -- oil sheiks raise the price of oil to make up the difference. (Added inflation.) So in this case, do not look for an increase in production output to try and bring the price down.

* Weekly jobless claims and consumer spending numbers were released in the 8 AM hour. Reuters says, "Consumers spent less in December than at any time in the past 15 months while applications for unemployment benefits soared last week, two more signs the economy is weakening." This should add a little weight to the anvil, this morning.

1/30/08 Post-Bell Update:

* WE TRIED TO WARN YOU!!! DON'T WAIT TOO LONG IF YOU NEED TO ADJUST YOUR PORTFOLIO! Welp, looks like the bond insurance news Strategy Update has been crying about since late last year -- and early this year -- and even more so this month, warning of problems starting as soon as we turn the calendar to February -- has started to affect the market today, as news is starting to leak out. (See DAILY BLOG and read every thread for the past two weeks.) Evidence? The market was up 125 points (plus), but went south at 3:15pm on this bond insurers news (downgrades starting, and word is getting out that it is much worse) for a DOW close of down 37 points. (And a further slide was "saved by the bell!")

* Reuters Story on bond insurers killing Wall Streets' Rally: Wow, did my Batcomputer and Los Angeles street sources call this one!!! I have NO idea how they know these things, when they know these things (see daily blog)...but at least I listen and have this website to post the news.

* 1/30/08 3 PM HOUR UPDATE: Short term gold traders -- now is the time to sell/take profits for the day. This hour only, otherwise you may want to wait for another bump up, cause at $840/record highs, you will see some profit taking.

back to strategyupdate.com

Not Gonna Be A Good Day For The Dollar or The Stock Market

First of all, since many of you reading this have never hear of "Zuma Dogg", you may be wondering, "Who cares what this guy has to say?" That's up to you. But if you follow me for a while, maybe I will build up credibility in your mind. (I win 'em over the hard way.)

First of all, here's a recent blog post that may at least raise some eyebrows if you are a new ZD reader: ZD predicts subprime/housing bubble burst 3 months in advance

NOW, FOR TODAY'S POST...LET'S SEE IF I CAN GAIN SOME "CRED", RIGHT OFF THE BAT:

NOT gonna be a good day for the dollar or the stock market on Monday November 19, 2007. YIKES! INVESTOR ALERT! THE BOTTOM IS REALLY GONNA START TO BOTTOM OUT TODAY! NOT GONNA BE A VERY CHEERY HOLIDAY SEASON AFTER MONDAY'S CLOSING BELL!

zumatimes.com
Zuma Dogg on YouTube
zumadogg@gmail.com