Friday, March 13, 2009

Phoenix Silver Summit Speech Report

Good afternoon and thank you for being here. It's an honor to get to speak with so many interested in silver, especially at such an interesting time in history. I'm going to ramble a bit, and try not to get too detailed and save some time for questions where you can get specific.
I'd like to acknowledge a few people who are not here that had an awful lot to do with me being here today. First, I'd like to thank Jim Cook, from Investment Rarities in Minneapolis, for his sponsorship of my work for more than eight years. It was this support that enabled me to devote all my time to studying and contemplating everything I could about silver. Thanks, Jim.
Second, I'd like to thank my friend of 25+ years, Israel Friedman. It was Izzy, who back in 1984, issued to me the challenge to prove him wrong in his analysis of silver. Although I had traded and invested in silver for years before his challenge, I admit to never having studied it in depth. Izzy's claim that the world was and had been consuming more silver than was being produced seemed so at odds with the price at that time, that I took up his challenge. I also admit that I thought it would be easy to prove him wrong, although I was well aware of his buying of silver in the $4 range and then selling it in the $40 range a few years later. When I discovered that he was correct, it set off a thought process that I couldn't satisfy. I couldn't reconcile how there could be greater demand for an item than there was current production with prices not moving higher. I'm sure that many had also been deeply perplexed with that puzzle.

Silver; Past, Present, Future - Phoenix Silver Summit Speech

Good afternoon and thank you for being here. It's an honor to get to speak with so many interested in silver, especially at such an interesting time in history. I'm going to ramble a bit, and try not to get too detailed and save some time for questions where you can get specific.

I'd like to acknowledge a few people who are not here that had an awful lot to do with me being here today. First, I'd like to thank Jim Cook, from Investment Rarities in Minneapolis, for his sponsorship of my work for more than eight years. It was this support that enabled me to devote all my time to studying and contemplating everything I could about silver. Thanks, Jim.

Second, I'd like to thank my friend of 25+ years, Israel Friedman. It was Izzy, who back in 1984, issued to me the challenge to prove him wrong in his analysis of silver. Although I had traded and invested in silver for years before his challenge, I admit to never having studied it in depth. Izzy's claim that the world was and had been consuming more silver than was being produced seemed so at odds with the price at that time, that I took up his challenge. I also admit that I thought it would be easy to prove him wrong, although I was well aware of his buying of silver in the $4 range and then selling it in the $40 range a few years later. When I discovered that he was correct, it set off a thought process that I couldn't satisfy. I couldn't reconcile how there could be greater demand for an item than there was current production with prices not moving higher. I'm sure that many had also been deeply perplexed with that puzzle.

For some reason, rather than to simply dismiss and put out of mind something I couldn't figure out, I thought long and hard about the silver supply/demand/pricing enigma. It was that thought process, plus my background as a commodity broker, that led me to the conclusion that the silver market was manipulated by excessive short selling on the COMEX. The actual Eureka Moment came one day as I reading the Wall Street Journal Commodity Tables. It wasn't an accidental discovery. I was looking for something wrong. I was looking for anything that was different about silver that could account for it's very different behavior compared to other commodities. After all, we were all taught that when consumption is greater than production, price must rise. Yet silver didn't. The light bulb went off in my head when I realized that COMEX open interest, when converted into real world supplies was completely out of line with every other commodity. This meant that the derivatives market in silver was larger than the underlying host market from which it was derived. A complete absurdity. The paper market tail was wagging the physical market dog. This is something that has remained constant in the subsequent 25 years of manipulation.

Much later, I would come to understand the role of leasing in the silver manipulation, which answered a lot of open questions in my mind. It was Izzy who caused me to be bitten by the silver bug, just as I may have, in turn, infected others, who in turn infected still more. The good news about this silver virus is that instead of giving you the flu or killing you, it could make you rich. For introducing me to silver, thanks Izzy

Finally, I'd like to thank my wife, Mila, who has been subjected to my preoccupation of silver for the entire duration. While I have both suffered along the way and enjoyed the journey, it was always my choice to continue or not. I know it was much harder for Mila as a partner, and a I marvel at her ability to persevere where I know I could not, were our roles reversed. Thanks Mila.

Between Hope and Fear

President Obama told the American people last night that the country is in trouble, but he vowed that the United States would recover and emerge stronger than before. In his first address to a joint session of Congress (don't call it a State of the Union), Obama gave a "sobering speech" but also "sought to spark optimism and confidence in his plan for recovery," notes USA Today. The Wall Street Journal declares that Obama "straddled the divide between fear and hope" throughout his speech, and the New York Times describes it as a mixture of acknowledging the seriousness of the economic problems "with a Reaganesque exhortation to American resilience." The Washington Post points out that Obama's optimistic tone had "been absent from his speeches in recent weeks," a fact that many, including former President Bill Clinton, had criticized. In what the Los Angeles Times calls "a significant departure from the George W. Bush years," Obama barely mentioned foreign policy and focused squarely on the economy and other domestic priorities.

In his 52-minute speech, Obama declared that the "day of reckoning has arrived" and called on Americans to "take responsibility for our future once more." He said it was time to bring an end to the era where people inside and outside Washington avoided making tough decisions in order to maximize short-term gains. He never implicated his predecessor by name, but the message was clear enough when he declared that his budget would reflect "the stark reality of what we've inherited." Obama pointedly noted that everyone in Washington, "and that includes me," will have to sacrifice some "worthy priorities" in order to deal with the burgeoning deficit. But he insisted that getting out of the current mess won't be possible unless the country starts to deal with some long-term issues, such as health care and energy policy.

Obama acknowledged the anger that many people feel over the costly bailouts of banks and automakers but warned that the "cost of inaction will be far greater." He also warned that more money would probably be needed but said that the U.S. economy won't recover until the country's financial system has stabilized. "It's not about helping banks," he said, "it's about helping people." Obama once again repeated that he plans to cut the deficit in half by the end of his first term but made it clear that won't stop him from pursuing an ambitious agenda that was at the centerpiece of his campaign, and yesterday he spent lots of time talking about energy, education, and health care. But he mostly stuck to broad strokes and didn't reveal any significant details about his policy initiatives or how he plans to cut the deficit beyond repeating the tired mantra about how his administration is going "line by line" through the federal budget to find wasteful and ineffective programs.

The Great Red Hope For 2009 Top Stock

The Great Red Hope For 2009 Top Stock.

We'll get to the commies in a just a moment. First, a question: what happened to Tuesday's big rally?

Yesterday, top stocks held steady. The dollar lost ground. And gold rose back over $900.

So, are we at the beginning of a major rally...or did it end in a single day? We wait to find out.

In the meantime, let's look at China.

Yes, dear reader, the whole world turned its lonely eyes to the reds: "Touch us!" "Heal us!"

China, with its bumptious population...its boisterous growth...and its boney-handed politicians...is the world's hope for a fast recovery.

"China will the first out of the slump," says our old friend Jim Rogers. Jim has staked his fortune, his fame and his future on two things: commodities and China.

Of course, the two go together. If China can continue to grow, she will demand more and more commodities. Prices for wheat, iron, tin, coal - just about everything - will rise as China raises living standards. Or not.

China doesn't even need to grow wealthier in order to use more commodities. Like her saffron neighbor to the South, India, her population is so large, and growing by such huge numbers, she struggles just to keep up. One percent population growth is not a lot. But one percent of 1.3 billion is 13 million people - equal to America's entire jobless population. And that, of course, is an increase that happens every year.

The Middle Kingdom, as it is known, is thought to have an advantage in the fight against depression. It doesn't have to argue with Republican lawmakers, civil libertarians, or sensible people of any sort. If the reds want to do something - no matter how inspired or moronic it is - they can usually do it.

But here is a fork in the road. So we will take it. We don't follow events in China the way Jim does. Maybe he's right; maybe China will be the first one out. But we have a feeling that William Pesek might be right too. The idea that China will tug the whole world out of depression is "pure fantasy," says he.

"Chinese exports slump 25% as demand wilts," says a headline in the Financial Times this morning. Not hard to figure out why. Remember, this is a depression, not a recession. In a recession, consumers take a breather...orders slide...and exports decline. But it is only temporary...and not catastrophic.

But let us follow the export trail to see if we can figure out what is going wrong.

Let's see... there's the factory in Quangzhou. Hmmm...it has cut its production schedule. And there's the truck leaving the factory...only 3/4 full. Orders have fallen off... It arrives at the harbor in Hong Kong. And there it finds the shipping schedule has been cut (along with prices) drastically. After the container is placed onboard, the ship hoists anchor and is off. Two weeks later - for it is sailing more slowly than it used to, in order to cut expenses by preserving fuel - it arrives in Long Beach...where it is quickly unloaded and put on a truck that will take it to a warehouse, where the container will be opened and its contents off-loaded onto other trucks for distribution to retailers all over the United States. The whole process takes less time than it did a few months ago - simply because there's less traffic and less back-up at every step. When finally the merchandise gets onto the shelves, it finds fewer shoppers looking it over and fewer buying.

And here we find the source of China's troubles...and the reason it cannot quickly recover. It has set up its economy to provide end products for foreigners. Those foreigners can't and won't buy like they used to; they don't have the money. The credit bubble has popped. It's over.

Well, maybe the Chinese could lend U.S. consumers money? Ah...there lies a trap. U.S. consumers have more than twice the debt they usually carry. The last thing they want is more. They've seen how hard it can be to pay back debt - especially when you lose your job. Unemployment in the United States is already over 8%. It will probably be over 10% by the end of the year. In four states, it is over 10% already. Each percentage point represents about 1.5 million people who aren't buying many Chinese goods.

Well, maybe the Chinese could make stuff for their own people? Yes, they could...and they will. But that's what makes this a depression and not a recession. The whole structure of the economy must change. In the photo accompanying the FT article, for example, it shows a factory in Beijing that makes a third of the world's violins - almost all of them exported. Sure, the Chinese could decide to take up the violin en masse. But that's the sort of cultural change that takes time. Or, the factory could switch to making laundry cabinets. Again, it is possible...but it takes time. And the adjustment is painful. The violin makers need to be retrained. Many will be fired as the factory searches for a new product line. Without revenues, perhaps it will go broke...and then be repurchased at auction by a laundry cabinet manufacturer.

This is the process of creative destruction that Schumpeter described. One industry is destroyed so that another might be created. It is what depressions are good for. It is what we all face now - including China. Maybe especially China.

Won't the Chinese able to do it faster - since the commies are still in control?

Can Apple's Share Stock Price Weather the Downturn?

When it comes to all things digital, Steve Jobs is a man with an uncanny knack for being on the pulse of consumers everywhere. Without him it's hard to imagine exactly what the tech sector would look like.

That's how good he has been ― a rock star CEO if there ever was one.

That is a simple fact not lost on Apple investors these days or for that matter Microsoft's Bill Gates. Gates has known all about Steve's penchant for the blockbuster new product for some time now.

Speaking before the "All Things Digital" conference in 2007, PC Guy had this to say to about Mac:

"I would give a lot to have Steve's tastes. He has an intuitive taste for both people and products that is very hard for me to explain."

Jobs according to Gates somehow has "it"-something few people can ever explain or better yet achieve.

And the cold hard truth is it can't be bottled or entirely reproduced, proving once again that even in giant companies individuals matter.

So when Steve Jobs loses some weight or god forbid has another brush with cancer, the prospect of it all weighs heavily on the company he founded.

And fair or not, Apple investors have suddenly found themselves poorer partly because of it.

But as good as Jobs is, there is an entire cutting edge company that stands behind him. And with the economy now buried in a deep recession, Apple's future goes well beyond the talents of just one man.

Meanwhile, the fundamental outlook for the computer industry in 2009 is decidedly negative. In fact, recent estimates have forecast that the global unit sales of PC's will increase only by 1% this year.

That would be a dramatic departure from 2008, when unit sales growth came in at 11% after fading fast over the last half of the year.

That has given the company yet another layer of doubt, leaving investor's to worry about how Apple will weather the downturn.

And in this free seven page report, The Wealth Advisory Research Team has broken down the tech giant answering the question on every investor's mind these days....

Beware The Bounce Short covering could drive a bear-market rall

"Echoing the forecast he made at this year's Barron's Roundtable ('Rocky Road,' Jan. 19), Felix (Zulauf), the founder of Zulauf Asset Management in Zug, Switzerland, still believes the S&P 500 will bottom in 2011 in the 400s, down from last week's 680 and a 2007 high of 1,565. But, first, he asserts, stocks are poised for a bear-market bounce from a low this month. It could last two to four months, and boost the S&P 25% to 40%, to roughly 900. (The corresponding level of the Dow industrials would be about 8,750.) Felix sees numerous signs of an impending rally: Sentiment is deeply pessimistic. The rate of change on (most) down days is declining, even as prices fall. And, there's lots of money around. But this rally will be for nimble traders only, affording 'those with too much in stocks to sleep well an opportunity to lighten up.' In anticipation of a move up, Felix has closed out his short positions -- for now ... After the rally, alas, the market could be cut in half, Zulauf says. 'Policymakers and investors still don't understand the process at work in the world economy'" ... Assuming a current book value of about $500, the S&P trades for 1.4 times book -- admittedly, down from 5 times at its peak. The market historically has bottomed at an average of 0.9 times book value. 'Secular bear markets usually last 10 to 15 years, and this one started in 2000,' he adds. 'The market has a chance to make an ultimate low within the next two years. If it does so at 90% of book, that low would be in the 400s.' Bottom line, the money manager says: 'People need to understand it is a different world today. We will not go back to the world as we knew it.'"
(Barron's � 3/9/09 issue)

Schaeffer's addendum: The italics in the above quote are mine, as they illustrate what may be a potentially disturbing sequence of events for the bulls � short covering by those who had correctly established bearish positions as they now anticipate either a market bottom or (as with Mr. Zulauf) a sharp bear-market rally. Mr. Zulauf joins Steven Leuthold, who on Wednesday of last week (according to Bloomberg) told investors to keep money out of his bearish Grizzly fund after it rose 74% in 2008, and Bill Fleckenstein, who shut a 13-year-old bearish fund in December. In addition, such prominent and respected (and erstwhile bearish) market analysts and money managers as Marc Faber, Doug Kass, and Bob Prechter in recent weeks announced they were covering their short positions.

The concern for the bulls does not relate to a knee-jerk contrarian reaction to the sudden conversion to the bullish case (at least for the short term) by such a large number of prominent bearish players, though the temptation is great. But one should proceed with caution on this front, not only because these gentlemen have proven to be very savvy navigators of this bear market, but because there are certainly a number of technical indicators that point to at least an oversold rally that could produce one of those "1,000 points in 1,000 minutes" bounces.

No, the biggest concern for the bulls is the fact that short covering is almost always a major factor driving bear-market rallies (including those that transition into bull markets), and if the short positions of such prominent players have already been covered, and this is also reflective of action being taken by others who had been short the market, then bullish short-covering firepower has already been seriously depleted. Worse yet, this covering has occurred in the context of a market that just can't stop making new lows, despite the urgent bid that automatically results when short positions are covered. Some redeployment of sideline money could certainly trigger a rally, but without sufficient fuel from short covering, the potential magnitude and duration of such a counter-trend move this deep into a bear market would have to be suspect.

Enough with Top Stocks Already

Dow got you down? Well it probably has a lot farther to go, even if there are rallies. 

It's getting harder and harder to make a buck with "buy and hold"…but who says that buying and holding stocks is the only way to make money or the best?

You could average gains of 104% ― without owning a single stock ― but to find out how, you're going to have to read on…

I'll never forget what my dad told me on that cool autumn walk in 1976.

I was young and hardly knew anything about money... but it didn't matter. The secret was just that simple.

In easy, gentle words, he told me the secret that eventually could have made as much as $1 million in just five years. And nearly $2 million in under 10 years...

You could do that, he told me, without "buy and hold"... without waiting for the stock market to "wake up."

Years later, I saw his private method make vast sums of lasting wealth without buying a single stock. 

That's why he called it the "Zero Stock Solution." And he taught it to me, all those years ago, on that brisk afternoon.

I had no idea how earth shattering his "Zero Stock" secret was until many, many years later.

But really, who would believe you could make multiple millions in the market without touching one share of the best stock?

Especially since he told me that you could fully harness the "Zero Stock Solution" to do it in ― get this ― about three minutes a day.

If this was a "job," it'd have hourly wage of about $10,400 an hour!

So you can see why I was skeptical... until I saw it work for myself.

The success I've found from dad's advice has shielded my family from great financial misfortune, and given us a life more comfortable than I'd ever dreamed of.

It can do the same for you, too. And I'll tell you how...

Dad Could Do It, But What About You and Me?

I always knew Dad could conquer the markets for outsized gains.

Ever since I was a kid, I saw him use the Zero Stock Solution to make fortunes for a small circle of private clients.

Take the Zero Stock Solution seminar he gave in the '50's; he charged $25 for three hours of information in a packed and stuffy hotel room.

A total of 22 people showed up.

Just 5 weeks later, some of the ones who followed his advice were as much as $50,000 richer!

That's over $300,000 in today's money. And as much as a 199,900% return on the attendee's $25 seminar fee just five weeks later.

Sure, I'd seen Dad achieve all of that.

But he was a genius. One of a kind.

That's why when Dad passed away ten years ago, some people thought no one could fill his shoes.

BUT... I plugged away at the Zero Stock Solution he entrusted to me. I had worked closely with him since 1995, and when he suddenly passed away, I knew I was prepared to step in and continue his service.

And you know what? The family secret worked, and then some. To the tune of $1,898,052 in just under 10 years.

I'll show you exactly how in a minute...But first let me make this clear:

"I tell you all this because Dad changed my life with the Zero Stock Solution.

He changed an awful lot of people's lives.

And as long as I can keep flesh and bone together, I'll keep that legacy of teaching people how to become millionaires going strong."

So (if you choose) I'm going to show you what's happened since I took over Dad's groundbreaking Zero Stock Solution.

Back on that walk in 1976 I never imagined this could happen.

But fast forward 33 years and here are the Zero Stock Solution gains I've found for readers. Unbelievable success for ordinary people, just like you...

Digital River (DRIV) Challenges Long-Term Resistance Following

Digital River (DRIV: sentiment, chart, options) has vaulted more than 10% higher today following an upgrade to "buy" from "hold" by Deutsche Bank analyst Jeetil Patel. Patel also lifted his price target on DRIV to $30 from $20 per share. In a research note, the analyst said, "business trends have been improving" in the first quarter, and that "future prospects look particularly healthy."

Patel believes that DRIV could diversify revenues shifting more toward direct Web distribution and facing growing costs in managing e-commerce internally. As a result of his improved view of the company, Patel upped his first-quarter earnings estimate to 51 cents from 49 cents per share, with full-year earnings seen at $2.05, up from $2 per share.

Checking in with the rest of the brokerage bunch, Deutsche Bank has gone out on a limb with today's "buy" rating. Currently, only 3 analysts rate DRIV a "buy," while 10 have doled out "holds" and another 2 have issued "sells," according to Zacks. Meanwhile, Thomson Reuters reports that the consensus 12-month price target for DRIV rests at $26 per share - a discount to the stock's current trading range just shy of $27. Any additional upgrades or price-target increases could provide additional buying pressure for the security.

Technically speaking, DRIV has rallied into long-term resistance at the 27 level following this morning's upgrade. Despite several attempts to best resistance in the region, the shares have not closed above $27 per share since Oct. 20, 2008. If DRIV can best this technical hurdle, the next region of resistance doesn't materialize until the 30 level - which is home to the stock's February 2008 lows and its declining 10-month moving average.

Top 10 Stocks For The Recovery Market

Top 10 Stocks for the Recovery from America's Leading Advisors marks the eleventh edition of NewsletterAdvisors.com's complimentary signature publica-tion. Each and every edition brings the best in investment ideas from the brightest minds in investing today to individual investors just like you.

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Enjoy this special report and the outstanding investment ideas from our hand selected investment experts. We also encourage you to consider some of the special offers from the contributors to this special report, including free trial memberships, subscription discounts, and additional bonus reports. Please see page 13 of this report for complete details, or click here to take advantage of these free offers today!

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Top 10 Stocks No.1 Atlas Pipeline Partners
by Addison Wiggin

I've been involved in investing and financial markets for the past 15 years. In that time, I've met every kind of investor... and heard about every kind of investing strategy and stock opportunity you can imagine. Here at Agora Financial, we scour the globe looking for hidden investment opportunities often over looked by Wall Street. Capital &Crisis editor Chris Mayer uncovers these opportunities and delivers them to you. Chris is called by some "the best financial journalist you've never heard of ..."

And on behalf of Chris Mayer... I'll gladly put every minute of my hard work and reputation building on theline. His Capital & Crisis subscribers have benefited greatly from his unique recommendations. His globetrotting letter knows no bounds and goes wherever profits can be found. Over to Chris… Finding the Great Investments He's BeenSearching for His Whole Career I'm going to show you how you can start collecting a 20%-plus yield -- on one overlooked energy stock --right away. Besides these plumpdividends, you'll get a good shot at tripling your money. And there's good reason to believe you could make nine times your money -- if Wall Street wakes up and smells hard assets, and pays exactly what they're worth.

The market isn't rewarding Exxon, Chevron or even Gazprom. And now is not the time to start taking risks on wildcat energy explorers. Right now, I'm looking at a stock that's trading under $6. And today, it's showing signs of a climb -- so I wouldn't wait on this opportunity. Just let me give you the bare bones of its business and a nod from a very smart billionaire investor who knows tough markets.

The company's secret is that it doesn't drill for a drop of oil and it doesn't frack a single foot of shale gas. What it does is keep companies who do at its mercy.
Atlas Pipeline Partners (APL:nyse) owns 1,600 miles of pipeline connected to nearly 6,000 wells and is adding over 800 new wells per year in Appalachia. It also operates a growing interstate pipeline system in the Fayetteville Shale. Plus, it has a great deal with one of the most active drillers in America: Atlas Energy. Every well that Atlas Energy drills has to be connected to Atlas Pipeline's system. These are low-risk assets. Now let's talk dividend. Since 2000, APL's average dividend increase clocked in at 7 cents a year. A plump year offered a 107% increase. While it's true that 2008 was a tough year for natural gas, NGLs (APL's primary product) are up 50% from their December lows. Aside from price recovery, there's another catalyst for dividend growth. Given the prime location of its pipelines in Appalachia, you have every reason to expect an increased dividend payout down the road.

War horse Leon Cooperman, shares my interest in APL. He is one of the great living investors. At a recent Manhattan value investors' conference, Cooperman confessed, "This is the most difficult environment I've lived through. And I've been doing this for 41 years."  But when he got to talking about getting 20%-plus on your money with APL, he had this to say: "At my age, it's better than sex, but that's just me."

Why does he think Atlas is on sale? Thank collapsing hedge funds the most. These guys have been forced to sell even their best positions to cover losses in other areas. Cooperman thinks this stock is worth $46 easily. My original estimate was $48. That's nine times what it trades at today. So why not consider a stock trading at so steep a discount to book?

Don't forget the great yield -- that's poised to increase. Even if that dividend stays right where it was last quarter, you could still make back today's investment in under four years -- just through the dividend alone.
Recommendation: Buy Atlas Pipeline Partners (APL: NYSE).

Multiply Your Gains From Regular Stocks

"Each week, I tell my readers to make just 1 investment buy. And since November of 2006,  not one pick has lost value! It's no wonder our readers could have turned $5,000 into $1 million in just over 5 years! Now, we're quickly closing in on $2 million ― currently at $1,892,043.04!

Since Steve Sarnoff, options guru, relaunched his elite e-mail Alert Service, Options Hotline, on Oct. 24, 1999, with an initial recommendation to buy Barrick calls...the profit opportunities for his readers have just doubled and tripled and quadrupled...again and again and again.

If you had invested $5,000 in that first recommendation and in every recommendation that followed, you could have grown that small sum into to a quarter of a million by Dec. 3, 2000.

Then half a million dollars by Sept. 30, 2002.

And then to...$1 MILLION by Dec. 2, 2004!

His track record: 100% winners in all of 2008, 2007 and 2005!...92% winners in 2004! 90% in 2003! Steve's record just keeps getting better and better!

WOW! $1 MILLION in a little over five years with a startup investment of just $5,000 in each pick! I'm so sorry you missed the ride. But get ready. Because you're invited to:

Join Steve as he shows you the way to the next $1 MILLION...it's simple and straightforward and we'll show you how with Steve's one weekly option buy recommendation.

The stock market of the past few years has produced very few millionaires. You just can't make a million dollars with a $5,000 initial investment on a nine-year average annual return of 1.63%. To do so would take you more than 400 years. . You'll never live to see it, and neither will your grandchildren, great-grandchildren, even your great-great-grandchildren.

Hello, I'm Steve Sarnoff, recognized options expert and the editor of Options Hotline. I'm here to tell you that even if you've never traded options before, you can do it. In fact, it's quite possible you could grow over $1 million richer...just by buying one option a week...in as little as five years. My proven system is all you need.

In the time it takes you to read this letter, I'm going to show you step by step how you can trade options with a minimum of risk and a maximum chance of profits.

Just ask one of my subscribers, Mr. Eckert: "My very first trade using your service was the GE August $30 call. I couldn't be happier with the 116% profit in just three weeks!"

Or Donna, who says, "I am very pleased with your recommendations, especially with the Bank of America. It's unbelievable for it to be up more than 200% in just a few days."

Mr. Abbott, another one of my happy subscribers, confirms, "Joining Options Hotline was the best decision I've ever made...since I joined -- three months ago -- I have doubled my money."

Why are we getting such rave reviews? Simple. I have the track record to prove it: My wins have overpowered my losses, and my small group of readers has had the chance to reap $1 million in profits in just over five years.

And I'm not talking about a million-dollar portfolio that looks good on paper...I'm talking about the type of wealth you have only imagined. Seriously...$1 million on just one investment a week!

Enjoy Doubling Your Money! We have a track record with more than a 100% average gain on every pick since November 2006. Compare that to the pitiful average yields of the S&P and Nasdaq! Here are a few highlights from my decisively winning trading record:

Of the 8 options I recommended in the final 10 weeks of 1999, 7 were winners, ranging from a 17% gain on DJX puts to a 628% gain on Intel calls. You could have made $87,000 on those 8 picks...and lost only $5,000 on one trade.

In 2000, I recommended 32 options that triggered (meaning the option reached the price I recommended for buying). That year, readers had the chance to pocket $173,214.55 in total profits with only $5,000 into each play - MORE THAN DOUBLE what we saw in 1999

In 2001, the year of the terror attacks, I made 45 recommendations that triggered. We had some big winners. GM puts gained 1,202%, or $60,000! Pfizer puts, 431%! Biopure puts, 341%! Total profits that year could have been as high as $216,164

In 2002, we crossed the HALF-MILLION-DOLLAR MARK when the 3M puts recommended on Aug. 16 of that year gained 103%! Total that year - $205,101!

How can I claim such amazing track record gains year after year? Simple. I look at the highest price the option gets to after I recommend it and that's the gain I record in my portfolio. So, you can be sure that the gains I talk about here are the biggest and best possible. And the potential profits are the best you'll see.

Are you noticing a winning pattern here?

In 2003, only 4 of the 39 triggered picks I recommended lost. Readers could have racked up $189,463.32 by investing $5,000 in every pick.

In 2004, I cut my losers in half! Only 2 out of 36 lost! And we HIT THE $1 MILLION MARK on the iShares 20+ Year Treasury Bond Fund calls first recommended on July 16, 2004. You could have added $221,300.36 in total profits to your income that year and lost only $363.50! That certainly shows how your wins can overpower your losses.

In 2005, we simply stopped picking losers at all! Every pick was a winner! A 100% win rate. You could have added $217,523.58 by selling your options at the high mark.

In 2006, we picked 36 options that triggered. All but three were winners. The most profitable pick at its peak was a whopping 300%! You could have added $150,375.28 by selling at the right time.

In 2007, our winning streak continued! Every pick a winner. Nearly 40% of the picks were triple-digit winners too. You could have added another $202,635.16 to your bank account ― without losing a single penny!

That's right! Since hitting the first million-dollar mark on July 16, 2004, we've given readers the chance to make another $892,043.04 in profits since. We're closing in on our next million dollars, and I'd like to invite you to join us in this upcoming profit bonanza.

5 Additional Deadliest Mistakes When Applying For College Funding

In this installment we're going to cover 5 additional deadliest mistakes almost every parent makes when trying to get money for their child's college education.

If you make any one of these mistakes, it could end up costing you thousands or even tens of thousands of dollars in lost funding that you might have been eligible for.

We don't want to see you making these mistakes if you don't have to. That's why we've decided to devote this installment to teaching you how to avoid these common mistakes and make sure you get the maximum amount of money from every school your child applies to.

So, without further ado, let's discuss...

"5 Additional Deadliest Mistakes Most Parents Make
When Applying For College Funding..."

Mistake #1: Not understanding the difference between "included assets" and "unincluded assets" for purposes of filling out financial aid forms 

Reality: Certain assets are counted much more heavily in the financial aid formulas than others. For example, savings accounts, CD's, stocks and bonds are all included and asked about on the Federal Financial Aid form. However, it does not ask about the value of annuities or cash-value life insurance anywhere on that same form.

Mistake #2: It doesn't matter where I keep my money; it's all counted in the same way

Reality: Nothing could be further from the truth. Where you keep your money could mean the difference between you getting $10,000 in financial aid or getting nothing! For example, money in the child's name is weighted much more heavily than money in the parent's name. If you don't know how to legally and ethically position your money properly for purposes of financial aid, you could end up losing thousands in financial aid! Even the people reading this who have enough money saved to fully pay for your child to go to college, wouldn't you rather "save" some of the money you've "saved" if the school is willing to pick up part of the tab?!?

Mistake #3: "My CPA or tax preparer is qualified to fill out my financial aid forms - I'll let him/her do it"

Reality: Unfortunately, CPAs and tax preparers are experts at tax planning and preparation - not financial aid planning. For example, a CPA or tax preparer might suggest that you put some or all of your assets in your child's name to save money on taxes. While this advice is well meaning, it will usually kill most if not all of your chances of getting financial aid. Also, CPAs and tax preparers are not trained in filling out financial aid forms. In many cases, they will unknowingly fill out these forms improperly (i.e., using pen instead of pencil, using white-out to cover mistakes, omitting social security numbers, etc.), and these "minor" mistakes will bump your financial aid forms. If this happens, you will have to re-submit these forms all over again, and you will probably end up losing thousands in financial aid since it is awarded on a first come, first served basis.

Mistake #4: Waiting until January or even worse after January of your child's senior year of high school to start working on your college financial aid planning

Reality: Since financial aid is based on your previous year's income and assets, it is imperative to start your planning as soon as possible before January of your child's senior year. If you want to legally set up your income and assets so you can maximize your eligibility for financial aid, you must start working on this, at least, one year in advance - preferably in the beginning of your child's JUNIOR year of high school. The longer you wait and the closer it gets to your child's senior year, the tougher it gets to set up your financial picture without creating a "red flag" for the colleges and universities. It is also important for you to know what your "Expected Family Contribution" is so you can start saving for it. And, you should also know which schools can give you the best packages before you start visiting and applying to them. My advice is if you haven't started planning, DO IT NOW!

Mistake #5: Going Through The Financial Aid Process By Yourself Because It's "Cheaper"

Reality: If this describes you, the colleges and Federal Government are going to love you! This allows them to keep control over the process instead of you, the parent, understanding how the process works and taking back control from them. It always amazes me that people will readily use a doctor when they get sick, a lawyer when they get sued, but suddenly when they are going to send their child to college and spend between $14,000 - $34,000 per year, parents want to save themselves a couple of dollars and do it themselves. Unless you spent the last 5 - 10 years of your life studying and understanding the financial aid process, there is no way you are going to know how to get the maximum amount of money from each school. And, if you do try it yourself, you'll probably spend countless hours trying to figure it out. The moral to this story is "Don't Be Penny Wise And Dollar Foolish!" Use an expert who can help you through this process and make sure you get everything you're entitled to. (If you still insist that it makes sense to handle this yourself, we have a list of 10 books that we recommend you read word for word before even attempting to navigate your way through the financial aid jungle). On top of that, we would recommend reading the HERA (Higher Education Re-authorization Act), which is 400 pages of the smallest legal type you have ever seen and will only take you a couple hundred hours to read!

Be on the lookout in your email next week for the next Online College Funding Course installment where we will be discussing 7 strategies to help you get the maximum amount of money for your child's college education!

Scott Weingold has been ranked one of the top ten college funding advisors in the country, according to The National Association of College Funding Advisors. He has co-authored the book, "The Real Secret To Paying For College. The Insider's Guide To Sending Your Child To College - Without Spendng Your Life's Savings."  and has published two student success handbooks: "The College Admission Application Boot Camp Handbook" and "The No Nonsense Insiders Guide To A Successful Freshman Year And Thereafter."  Scott also publishes a popular free online newsletter, "College Funding Made Simple" which reveals insider's tips, methods, and strategies for beating the high cost of college. Scott is the co-founder and a principal of Ohio-based College Planning Network, LLC, one of the nation's largest and most reputable college and financial aid servicing centers. CPN is a member of the National Association of College Admission Counseling and the Better Business Bureau.

Scott, along with his college funding advisory team, helps thousands of families throughout the country with their college planning needs and offers a series of free educational teleseminars and workshops on "How To Pay For College Without Going Broke In The Process!"

Parthenogenetic Stem Cells Poised to Break Through

As you know, SC stock prices have gone up even in this period of deep market pessimism. Weekly, new and seemingly miraculous stem cell-related cures are coming to light. The message is getting across even in important nonscientific publications like The Economist.

A recent article was subtitled, "American attitudes to stem-cell therapies are changing fast." Inside the article is this critical paragraph:

"Barack Obama has promised to reverse the ban. When that happens, American academics will no longer have to watch enviously from the sidelines as their colleagues in Australia, Britain, China, the Czech Republic, Israel, Singapore and South Korea push ahead. But though the legislative wheels have yet to start turning, the mood has already shifted."

This article is particularly applicable, as it cites two important SC players ― both in my Breakthrough Technology Alert portfolio.

Despite the great performance of the SC sector recently, I'm not encouraging you to buy these top stocks for short-term gains. Even if prices do go up significantly in the near future, these are long-term plays. Don't be distracted by fluctuations. This is the wrong time to even think about taking profits. With prices so low, this is the time to pick up ridiculously underpriced top stocks and hold onto them until they produce truly transformational profits.

Inevitably, the wider community of investors will get the stem cell message. Then, we'll see truly dramatic increases in SC top stocks. In fact, I'm predicting another irrational bubble and correction before prices head up permanently. I suspect the bubble will be sparked by high-profile news stories. My guess is that a group of celebrities will admit they've rejuvenated their hearts and skin using offshore SC treatments. That may be the time to cash in some, though not all, of your holdings.

Just as you shouldn't jump at short-run upturns, don't overreact to downturns. There has never been a medical technology as powerful as stem cells. They will entirely remake the face of medicine. As Sanjay Gupta, Obama's surgeon general pick, has said, "A new kind of medicine is being created that will definitely break out of the realm of science fiction and become reality. There are places around the world where people are already doing this, such as Moscow…and, certainly, Korea."

Don't let yourself be panicked by high-profile analysts who give short sell orders and then talk down the companies they've shorted. This happens in every sector, and regenerative medicine is no exception. Prices may dip in response to highly publicized attacks, but this is simply self-fulfilling prophesy. It says nothing about the long-run fundamentals of the targeted companies.

Similarly, don't get distracted by stories such as the one that broke last week about the Israeli boy. He had developed benign tumors after getting some sort of SC therapy. The therapy included injections delivered directly into the brain from an illegal source in Russia in 2002. That was long before the real breakthroughs in the science. One horrified stem cell company insider told me, "We have no idea what they injected into the kid." Despite the fact that reports indicate that the therapy did save the child's life, news seemed to send stem cell stock prices down temporarily.

For perspective, let's sample some other recent stem cell news.

Miracle Stem Cell Cures Keep on Coming

Egyptian scientists have announced that adult stem cells can prevent diabetes-associated heart dysfunction. I've already written about the successful treatment of multiple sclerosis by rebooting the immune system with stem cells. Within a week of that news, a similar procedure was shown to successfully treat AIDS.

The stem cells used in the AIDS therapy came from a donor with a rare genetic resistance to the disease. It worked so well, in fact, that the patient no longer takes AIDS drugs. The donor stem cell transplant also cured his leukemia. This is reality, not science fiction.

The success of the AIDS SC therapy has huge implications. The most important is that it demonstrates the potential of genetically engineered stem cells to give individuals new immunities and biological capabilities.

This is critical because humans are born with a broad range of genetic strengths and vulnerabilities. Now, we're seeing that those strengths can be transferred via stem cells. These donor cells will give your body the ability to knock out diseases you would not otherwise have the ability to fight. Eventually, designer stem cells will be used not only to cure, but to enhance our physical states. Immunities to cancers, Alzheimer's and other diseases will be routinely delivered via GE stem cells as a new form of inoculation.

The company I'm recommending this month, in fact, is on the cutting edge of the convergence between genetic engineering and stem cell technologies. Fortunately for early investors, it has been largely ignored by the financial media. The Economist article I referred to above, however, indicates that this is about to change.

This company controls an entire branch of stem cell science and patents. Moreover, it is far closer to market than many of the "big" SC companies that are getting so much old media attention.

The SC Company to Look for in the Short-Run

An odd thing about stem cell science is that we have a pretty good idea about many of the long-run applications. For example, we know that personalized induced pluripotent stem (iPS) therapies will be used for general regenerative therapies. You will provide a blood or tissue sample to a SC company. Those cells will be robotically converted into iPS cells. Then, those cells will be programmed to repair specific organs or tissues. They will rejuvenate everything from retinal nerves to hearts, cartilage and kidneys. Because the cells will be your own, they will cause none of the immune problems associated with donor cells.

This technology, however, is a few years away even for wealthy first-world patients. For billions of others, it could well be more than a decade. This means that most early profits will come from donor stem cell therapies. And as is the case with transplants, this raises the issue of immune reactions.

Fortunately, a great deal is known about immunosuppression. This is due to a long history of organ, graft and marrow transplants. A number of companies are developing stem cell therapies now that rely on immunosuppression technologies.

There's Always a Silver Lining

Here at Casey Research, we are trying not to be overly pessimistic, but there's no denying the mass of bad news coming to us from all fronts: the forces of collectivism are using the cover of the crisis they largely created, aided and abetted by capitalism's quislings, to roll over the individual.

Even so, contained within the dire reportage is also some very good news for you personally.

The Bad News

As fully anticipated, with its first budget plan, the Obama administration has fired a salvo into the side of the productive classes. (For those of you who are not U.S. citizens, feel free to use Team Obama as a proxy for what is likely to occur where you reside.)

Yes, we expected the $1.75 trillion budget deficit, which will, by the time all is said and done, come in a lot closer to the $2.5 trillion number anticipated some months ago by our Chief Economist Bud Conrad.

Yes, we expected the government to begin raising taxes, which they are proposing to do with vigor ― starting with an increase of $1.4 trillion on the people who earn in excess of $250,000 a year. "Right on!" shouts the mob, on the way out the door to burn Porsches (which, Bloomberg reports, is now becoming something of a trend in Germany's capital, Berlin).

For no other purpose than to keep the record straight, it's worth noting that thanks to the government's steady dose of inflation, $250,000 today will only buy you 77% of what it would have in 1998…and 56% of what it would have in 1988.

A decade from now, given the inflation rate we expect, the dollar's purchasing power will erode by another 50%, and probably a lot more than that. In fact, at the current rate of money creation, by the time the dust settles, $250,000 might be the annual wage commanded by burger flippers.

But, hey, look at the bright side, at that point everyone will be rich!

The further details of Obama's budget plan are a hodgepodge of this and that, some of which we even agree with (like cutting business subsidies). On the whole, however, the overarching mandate appears to be to thrust the hand of government, like some motion picture kung fu villain, deep into the heart of American enterprise.

And government's expansion is far from over. The news continues to pour in…

Citigroup to get another $25 billion bailout from the U.S. Treasury.

Treasury officials work on bailout plan for auto parts manufacturers.

President Obama exploring automatic workplace pensions and an expansion of unemployment insurance. 

AIG, now a government lap puppy, takes another big loss, and is again looking to its master for another handout.

Speaking of lap puppies, Fannie Mae, has lost another $25 billion and is looking for $15 billion more from the Treasury. The value of this zombie institution's net assets is now a negative $105 billion, and eroding. Great investment of your tax dollars, eh?

Then there's the new administration's cap-and-trade green tax…a stunning new initiative that will bring many U.S. businesses to their knees.

There is more, so much more, including a $638 billion reserve fund for healthcare reform in the president's budget that loudly broadcasts that, "Yes, we're going there." There being nationalized health care.

However, there's also some good news to be found in the way things will be.

The Good News

My fellow citizens of planet Earth, it is now abundantly clear that the trend toward socialism in all its many disguises is about to, once again, shift into high gear.

We've been here before, encouraged by the words of Karl Marx, a distinctly unsuccessful individual (to read his life story is to read of almost unending misery, poverty, and discontent) but a decidedly successful phrase-coiner, knocking the world off its axis with his "From each according to his ability, to each according to his need."

While no one with any real sense of history, not to mention economics, can take any overt joy at the prospect of the dark clouds of collectivism looming high in the sky above us, there is, if you pay close attention, a very big opportunity in all of this.

Namely, we are now presented with a relatively rare chance to see with some clarity into the future.

Imagine if eight years from now you could step into a time machine and zip right back to this very moment. How much money do you think you could make?

Well, just because the chattering masses have the blinders on as they march forward to their collective penury doesn't mean we need to join them. And, if we are even a little bit careful, we won't.

So, what is it about the future we can now see? Some broad strokes…

Currency depreciation.

More taxes.

Rising interest rates.

A price capitulation in real estate, with a collapse in commercial.

Exchange controls (now that Team Obama is raising your taxes, you don't really think they're going to let you pick up your wealth and leave, do you? The window for global diversification will soon be closing.)

The return of mega-labor unions.

Trade wars, shooting wars, and other forms of heightened geopolitical tension.

(This is a topic we are discussing at greater length, backed up with specific recommendations, in the March edition of The Casey Report, released on March 3. Among its many highlights, Doug Casey has contributed an article titled "Street Fighting Man" about the prospects for social unrest.)

Provided you keep your personal wealth profile low (there was a reason Sam Walton, founder of Walmart, drove a beat-up pickup truck), your financial powder dry, and, maybe most important of all, retain your sense of humor, the opportunities in the unfolding crisis will be abundant.

Whatever you do, don't be complacent about what's coming.

We are long past the point where doing nothing is an option. Review your personal finances, cut out unnecessary expenses, talk to your accountant about tax planning, and, if you're a U.S. citizen, consider moving at least some of your wealth out of the country while you still can (but please, don't try to hide it…that's a fool's errand). If you own gold, only you and your spouse, if you have one, should be aware of it.

Ask yourself, "If I just dropped in from eight years in the future, what measures would I take?"

Now, take them.

One day we'll all look back on this and la-a-augh…

A Shooter writes: "Come on guys!  If the socialist leader you're referring to is Obama, you're behind the curve. He took great pains to deny to a journalist that he was a socialist. I have to agree he's not a socialist; he's been trained by communists."

Duly noted. 

"Gary,

"Not all Canadians dream of 'evolving into full human potential.'  Although I am a proud Canuck, I can tell you that socialism is a tax on creativity and innovation.  The justification for socialism is what makes it so appealing ― 'educate the children!'  'Healthcare for all!'  These sound noble and wonderful, and they can be, providing that people use them responsibly.  I got a great education in Canada.  Having said that, I went to school with people who were making a career out of being students.  Hey, it's cheap, so why start working?  One of the guys I went to university with worked salmon fishing in British Columbia in the summer, and then went on unemployment while he went to university (salmon season's over ― he was unemployed).

"So personally, I think that socialism is great if you have people that appreciate it and use it to better themselves, but unfortunately those people are few and far between ― you get way more people that feel that they are entitled to those benefits.  Although having to endure American arrogance could be very painful (a lot of them came up to Calgary for the Stampede every year), I do agree that having the liberty to keep your own money, make your own choices, and succeed or fail on your own merits is vastly preferable to having someone else decide those things for you.  If I wanted a parent, I'd move back in with mine."

Socialism does indeed work great for angels. Not so good for humans. The humans that would benefit are the same ones who'd refuse it. Oh the irony…

"Gary,

"Your response to the Canadian writer today on her impression looking south onto the devastation was off the mark.  I'm an American living in Germany ― another one of the misguided 'socialist' countries.  I don't understand what you and your fellow rednecks are afraid of.  I'm stress-free knowing my family will have full healthcare no matter what. Your disciples will reply with the obligatory whining about poor quality of healthcare and unbearable waiting for treatment and in your vacuum of knowledge and experience, you will be wrong.  I say wallow in your ignorance while the world looks on and marks your shameful embrace of a failed governmental system with a victimized populace.  Don't fear good intentions ― I know you don't believe [they] always give the worst results."

Actually, yes. Yes, I do. Another Shooter presciently comes to my aid…

"'Too bad you were born with the dreaded Conservative gene. But soon modern medicine will be able to block it. Then you may be free to evolve into the full potential that human beings are capable of.'
 
"Whiskey & Gunpowder, Mar 10, 2009
 
"I generally ignore any comments liberals make but I'll make an exception here.
 
"Liberals, like this one, typically use ad hominem attacks because they cannot defeat conservatives in logical, fact-based debates. Their brain has been marinated too long in socialist juices for them to imagine that some of us actually prefer taking charge of our lives and resent the government ruining them. We are not constrained by socialist dogma to behave in certain ways and think in certain ways. We can analyze global warming based on scientific evidence because we are not ideologically committed to it because our elders tell us to be.
 
"We don't subscribe to a creed which demands to be taken care of. I submit that we are far more likely to achieve our human potential than are the socialists. They have surrendered their potential to become slaves to a dogma which has been proven a failure many times over.
 
"Maybe socialists don't mind paying 40% of their wages in taxes so they can 'socialize' while they wait in emergency rooms and clinics for treatment. I do mind, paying the 40% and the long wait! That's why I'm a free man, not a deluded acolyte. I like people who think for themselves and tell the government to go to hell.
 
"Finally, it is the height of arrogance and conceit to believe that another human being, mortal and flawed like everyone else, can dictate to another their idea of utopia. Their utopia is my prison.

"Liberalism is a form of insanity for which there is no cure. It is easier for a gay person to go straight than for a liberal to regain his self, a self surrendered long ago to indoctrination and propaganda."

Might as well try to thread a needle with a camel, huh?
 
Personally, I could care less what other people do or believe, but when they insist that I do as they say (usually for the sake of some great lie), then we have a problem.
 
The Whiskey Room is figuratively covered in fantastic responses this week, much of which make it clear that there are some very good thinkers out there with a knack for writing.
 
You people really impress me. I am proud to be your editor. You're a bunch of liberty-lovers, obsessed with limited-to-no government and sound money...and you're not afraid to say what's on your mind. There aren't enough of you in the world and you need to be heard.

A Bear Stock Market Rally?

The Dow roared back yesterday. It ended the day up 379 points. Gold fell $22 - to end the day below $900.

We're going to take our "Crash Alert" flag down for a while. Finally, the Dow shows signs of life. We won't know for a few days...but we'll take a guess: the rally will continue.

Stocks in the United States have lost $11 trillion in value - more than cut in half - without a single major bounce. We expected one after Obama was elected. All we got was a 15% ricochet. Then, after he announced his major stimulus/bailout/boondoggle program...we thought, surely, stocks would rally then. Nope. Instead, globally, stocks are down 20% since Obama office.

But a rally in a bear market is one of the surest phenomena investors can count on. After so many years of rising prices - the bull market began in August 1982 - investors have learned to 'buy the dips.' Now, they're looking at a Grand Canyon of a dip; many can't help themselves. All they need is a little encouragement.

Yesterday, the encouragement came from Citigroup - which said it had made money in the first two months of '09 - and from Ben Bernanke, who said we needed to regulate the financial sector better.

The rest of the news is terrible, awful...revolting.

Unemployment in the United States is up over 8%. A Bloomberg survey says it will go to 9.4% before the end of the year. Our own guess is that it will top 10%. By summer, one out of every ten people in the 'workforce' will be out of a job.

There are always some people living on the margins...hand to mouth...paycheck to paycheck. The trouble is that the margins are getting wider. "24 Million Go from Thriving to Struggling," says a headline at USA Today. Not hard to see why. When you live from paycheck to paycheck, losing a job is a disaster. And in February alone, 651,000 jobs were lost.

Obama says he's going to put millions to work with his spending proposals. He pointed to 60 new jobs in Maryland, on a highway-paving project:

"That's how we're going to get this country back on its feet," he said.

When we lived in Maryland, the only people who worked on paving crews were immigrants from Latin America. No one else wanted the job. But maybe things have changed.

Meanwhile, Congress has gotten into the spirit of the Boondoggle Age. It sent a $410 billion spending bill to Obama for his signature. Included in the bill were 7,991 "earmarks," or pet projects that didn't make it into previous bailout, stimulus and boondoggles programs. Included in the spending bill, for example, is a program to pay for eyeglasses for people who are supposed to be blind...and to increase funding for Amtrak. The passenger train system has been losing money for as long as it has existed. According to classical economics (and plain good sense) Amtrak makes us all poorer. It takes valuable resources - labor, steel, electricity and so forth - and turns it into a service - transportation - which consumers judge to be worth less than the resources that went to provide it. Yet, that is the whole theory of the Obama stimulus program! Spend money on things that are unprofitable. (If they were profitable, they wouldn't need public funding.) Somehow, wasting wealth is supposed to make us all better off.

As we think we reported yesterday, the bill for all these crisis- related boondoggles (including financial guarantees) is headed towards $12 trillion. And Paul Krugman, Nobel Prize-winning economist at the New York Times, believes even that is not enough!

Using Volatility to Profit from Energy Top Stocks

Volatile. Adj. 1. evaporating quickly 2. a) unstable; explosive b) fickle

Indeed, all those adjectives describe the current market.

Long-term positions and savings have evaporated quickly. And broader market indexes have certainly been unstable and fickle.

But it's the explosive aspect of volatility I'd like to explore today, especially when it comes to clean energy companies on Wall Street.

Clean Energy: Capitalizing on Wall Street Volatility...

Between Hope and Fear

President Obama told the American people last night that the country is in trouble, but he vowed that the United States would recover and emerge stronger than before. In his first address to a joint session of Congress (don't call it a State of the Union), Obama gave a "sobering speech" but also "sought to spark optimism and confidence in his plan for recovery," notes USA Today. The Wall Street Journal declares that Obama "straddled the divide between fear and hope" throughout his speech, and the New York Times describes it as a mixture of acknowledging the seriousness of the economic problems "with a Reaganesque exhortation to American resilience." The Washington Post points out that Obama's optimistic tone had "been absent from his speeches in recent weeks," a fact that many, including former President Bill Clinton, had criticized. In what the Los Angeles Times calls "a significant departure from the George W. Bush years," Obama barely mentioned foreign policy and focused squarely on the economy and other domestic priorities.

In his 52-minute speech, Obama declared that the "day of reckoning has arrived" and called on Americans to "take responsibility for our future once more." He said it was time to bring an end to the era where people inside and outside Washington avoided making tough decisions in order to maximize short-term gains. He never implicated his predecessor by name, but the message was clear enough when he declared that his budget would reflect "the stark reality of what we've inherited." Obama pointedly noted that everyone in Washington, "and that includes me," will have to sacrifice some "worthy priorities" in order to deal with the burgeoning deficit. But he insisted that getting out of the current mess won't be possible unless the country starts to deal with some long-term issues, such as health care and energy policy.

Obama acknowledged the anger that many people feel over the costly bailouts of banks and automakers but warned that the "cost of inaction will be far greater." He also warned that more money would probably be needed but said that the U.S. economy won't recover until the country's financial system has stabilized. "It's not about helping banks," he said, "it's about helping people." Obama once again repeated that he plans to cut the deficit in half by the end of his first term but made it clear that won't stop him from pursuing an ambitious agenda that was at the centerpiece of his campaign, and yesterday he spent lots of time talking about energy, education, and health care. But he mostly stuck to broad strokes and didn't reveal any significant details about his policy initiatives or how he plans to cut the deficit beyond repeating the tired mantra about how his administration is going "line by line" through the federal budget to find wasteful and ineffective programs.

The gold stocks are back!

The gold stocks are back!

After some trying times, the gold stocks are making a major rally… and if you've been considering making a move into these companies, I'd tell you right now: Do it fast.

Because it looks like with 0.25% interest on bank inter-lending - 0% interest on T-bills - people are going to be flocking into real investments like gold en masse...

With gold prices on the rise recently, you might argue that they've already begun their migration.

And while many of our favorite picks � like Kinross Gold and Agnico-Eagle Mines � were down substantially over the last few months, I still consider companies like these the star performers in the mining sector � and exceptional values right now...

Digital River (DRIV) Challenges Long-Term Resistance Following

Digital River (DRIV: sentiment, chart, options) has vaulted more than 10% higher today following an upgrade to "buy" from "hold" by Deutsche Bank analyst Jeetil Patel. Patel also lifted his price target on DRIV to $30 from $20 per share. In a research note, the analyst said, "business trends have been improving" in the first quarter, and that "future prospects look particularly healthy."

Patel believes that DRIV could diversify revenues shifting more toward direct Web distribution and facing growing costs in managing e-commerce internally. As a result of his improved view of the company, Patel upped his first-quarter earnings estimate to 51 cents from 49 cents per share, with full-year earnings seen at $2.05, up from $2 per share.

Checking in with the rest of the brokerage bunch, Deutsche Bank has gone out on a limb with today's "buy" rating. Currently, only 3 analysts rate DRIV a "buy," while 10 have doled out "holds" and another 2 have issued "sells," according to Zacks. Meanwhile, Thomson Reuters reports that the consensus 12-month price target for DRIV rests at $26 per share - a discount to the stock's current trading range just shy of $27. Any additional upgrades or price-target increases could provide additional buying pressure for the security.

Technically speaking, DRIV has rallied into long-term resistance at the 27 level following this morning's upgrade. Despite several attempts to best resistance in the region, the shares have not closed above $27 per share since Oct. 20, 2008. If DRIV can best this technical hurdle, the next region of resistance doesn't materialize until the 30 level - which is home to the stock's February 2008 lows and its declining 10-month moving average.

A 379-Point Rally for the Dow Jones Industrial Average

The day ends with a massive rally as the Dow Jones Industrial Average (DJIA) surges 379 points. The S&P 500 (SPX) jumped 6% while the Nasdaq Composite (COMP) and Russell 2000 (RUT) each advanced 7%.

Continuing the pattern we saw earlier, the sector graph shows most stock-related groups rallied. The only decliners were bonds, oil, gold and the Amex Gold Bugs Index (HUI). Financials led the charge as the Regional Bank HOLDRS (RKH) jumped 16%. The SPDR Homebuilders (XHB) gained over 10%.

Looking at the SPX, this marks the largest single-day advance since November 24. While that sounds impressive, you may want to consider the daily chart below. I have put my cursor on the day of that rally. It is true that we did see a rally off the lows. However, it is equally true that the bounce was relatively short-lived and the market went on to make new lows. In other words, rallies in a bear market may "feel" good but they must be viewed in context. By that, I mean it is important to understand they can be violent but short-lived. Bulls markets trend higher with sudden pullbacks. Bear markets grind lower with sudden rallies. 

My intent here isn't to spread gloom. I simply want to remain objective. On the bright side the Dow Jones Industrial Average (DJIA) did break the downtrend shown below. This opens up the possibility of a run to 7500 or even 8000 before heavy resistance is hit. However, if we do rally that much, we will likely be overbought. In other words, when the rally "really" starts to feel good, it will be at its most vulnerable. That will be the point where we will get a true test of how strong the buying demand really is. But I am getting way ahead of where the market is now.

For now, we head into tomorrow with the broad market indices trying to rally off their lows. A short-term downtrend has been broken and we are coming out of an oversold condition with room to run before serious resistance is met. If this can't entice buyers to step in from the sidelines, I am not sure what would. And that is where I will pick up in the morning. Have a nice evening.

A 379-Point Rally for the Dow Jones Industrial Average

The day ends with a massive rally as the Dow Jones Industrial Average (DJIA) surges 379 points. The S&P 500 (SPX) jumped 6% while the Nasdaq Composite (COMP) and Russell 2000 (RUT) each advanced 7%.

Continuing the pattern we saw earlier, the sector graph shows most stock-related groups rallied. The only decliners were bonds, oil, gold and the Amex Gold Bugs Index (HUI). Financials led the charge as the Regional Bank HOLDRS (RKH) jumped 16%. The SPDR Homebuilders (XHB) gained over 10%.

Looking at the SPX, this marks the largest single-day advance since November 24. While that sounds impressive, you may want to consider the daily chart below. I have put my cursor on the day of that rally. It is true that we did see a rally off the lows. However, it is equally true that the bounce was relatively short-lived and the market went on to make new lows. In other words, rallies in a bear market may "feel" good but they must be viewed in context. By that, I mean it is important to understand they can be violent but short-lived. Bulls markets trend higher with sudden pullbacks. Bear markets grind lower with sudden rallies. 

My intent here isn't to spread gloom. I simply want to remain objective. On the bright side the Dow Jones Industrial Average (DJIA) did break the downtrend shown below. This opens up the possibility of a run to 7500 or even 8000 before heavy resistance is hit. However, if we do rally that much, we will likely be overbought. In other words, when the rally "really" starts to feel good, it will be at its most vulnerable. That will be the point where we will get a true test of how strong the buying demand really is. But I am getting way ahead of where the market is now.

For now, we head into tomorrow with the broad market indices trying to rally off their lows. A short-term downtrend has been broken and we are coming out of an oversold condition with room to run before serious resistance is met. If this can't entice buyers to step in from the sidelines, I am not sure what would. And that is where I will pick up in the morning. Have a nice evening.

Your Path to Real Wealth - That The Stocks Markets Can't Touch

I'm giving credit where credit is due.

Being "in front of a story" - having the story right, before the crowd - is priceless.

Editor Patrick Cox at Breakthrough Technology Alert predicted the current Presidential stance on science and technology - well before Obama took the Oath of Office.

Patrick's readers are enjoying the payoff as I write to you today. They're sitting on some huge gains already.

So here's the due credit for Patrick: He's well in front of what could be the biggest market story of the next decade.

His ideas could be your ticket to generations of wealth. Real wealth. Family wealth.

The major announcement from the White House on the morning of Monday, March 9, 2009 just tipped the scales in your favor.

By that I mean ― what you're about to read will become the most important investing story of our lifetimes.

And I called it ― months ago. I've done the research. I've interviewed all the key players...and I'm ready to tell you everything.

And the readers savvy enough to have acted on my initial recommendation in these companies are up as much as 208%. Don't worry ― you can still act in time to make your own life-changing gains.

But only if you're one of the first 558 406 folks to respond to this urgent memo.

I'll explain that urgent limit in one moment. For now, back to the story:

It starts with one man...

He isn't a politician.

And he's not a Washington insider.

He's a scientist.

The man I'll introduce to you is one of several top scientists who have President Obama's ear on what could be the most critical market story of the next decade.

The ideas he controls are powerful enough to start a stream of wealth that could last your family three generations, or more.

What I'm about to share with you is the most important story you'll learn about all year.

I'm talking about the chance at millions of dollars for you and your loved ones.

In just a moment, I'm going to tell you all about this brilliant scientist.

I'll tell you about the company he controls.

I'll show you why his company (and companies he used to work for) could be so important to your financial future.

And I'll outline step-by-step why Barack Obama should listen to him so carefully.

Because the man you're about to meet is on the cutting-edge of a field with the potential to grow America out of our current economic mess.

Better yet, you could make huge profits from him regardless of your political beliefs.

What I'm about to share is "beyond" politics. In fact, two influential Senators (one from each party), have pledged to support President Obama's world-changing science declaration that took place just this Monday, March 9, 2009. More on this in just a minute...

But first, know this: The scientist I'll introduce could change the way every single person on the planet lives.

For the better.

Get in early enough, and you'll have a chance to rack up a pile of wealth that could even last your family three generations or more.

Because the world stands to change a great deal during President Obama's first 100 days in office. In fact, things are changing before our eyes. Today. As I write.

Let me explain...

Your Path to Real Wealth - That The Stocks Markets Can't Touch

I'm giving credit where credit is due.

Being "in front of a story" - having the story right, before the crowd - is priceless.

Editor Patrick Cox at Breakthrough Technology Alert predicted the current Presidential stance on science and technology - well before Obama took the Oath of Office.

Patrick's readers are enjoying the payoff as I write to you today. They're sitting on some huge gains already.

So here's the due credit for Patrick: He's well in front of what could be the biggest market story of the next decade.

His ideas could be your ticket to generations of wealth. Real wealth. Family wealth.

The major announcement from the White House on the morning of Monday, March 9, 2009 just tipped the scales in your favor.

By that I mean ― what you're about to read will become the most important investing story of our lifetimes.

And I called it ― months ago. I've done the research. I've interviewed all the key players...and I'm ready to tell you everything.

And the readers savvy enough to have acted on my initial recommendation in these companies are up as much as 208%. Don't worry ― you can still act in time to make your own life-changing gains.

But only if you're one of the first 558 406 folks to respond to this urgent memo.

I'll explain that urgent limit in one moment. For now, back to the story:

It starts with one man...

He isn't a politician.

And he's not a Washington insider.

He's a scientist.

The man I'll introduce to you is one of several top scientists who have President Obama's ear on what could be the most critical market story of the next decade.

The ideas he controls are powerful enough to start a stream of wealth that could last your family three generations, or more.

What I'm about to share with you is the most important story you'll learn about all year.

I'm talking about the chance at millions of dollars for you and your loved ones.

In just a moment, I'm going to tell you all about this brilliant scientist.

I'll tell you about the company he controls.

I'll show you why his company (and companies he used to work for) could be so important to your financial future.

And I'll outline step-by-step why Barack Obama should listen to him so carefully.

Because the man you're about to meet is on the cutting-edge of a field with the potential to grow America out of our current economic mess.

Better yet, you could make huge profits from him regardless of your political beliefs.

What I'm about to share is "beyond" politics. In fact, two influential Senators (one from each party), have pledged to support President Obama's world-changing science declaration that took place just this Monday, March 9, 2009. More on this in just a minute...

But first, know this: The scientist I'll introduce could change the way every single person on the planet lives.

For the better.

Get in early enough, and you'll have a chance to rack up a pile of wealth that could even last your family three generations or more.

Because the world stands to change a great deal during President Obama's first 100 days in office. In fact, things are changing before our eyes. Today. As I write.

Let me explain...

This Trillion-Dollar Market Is Turning Into a Free-For-All During Obama's First 100 Days ― Play it Right, And You Could Get Rich

One scientist I'll tell you about leads an industry that could grow tremendously in Obama's first term. It could even take off like a rocket during his first 100 days.

So I'm not kidding when I say this could be the biggest market story of our lives.

I can predict that with confidence because this scientist has a stellar 20-year track record of success.

In fact, some people consider him the "father" of this industry.

And Barack Obama knows just how important his field is to the future of the country. 

How?

How Profitable Has Following the Conventional Wisdom Been For You?

What kind of financial and economic information do you use in planning your investments? Is it unique or simply more of the same? How much of the information you get simply follows the consensus? How profitable has relying on the herd in recent years been to you? We think it's time for a new voice, one that is fiercely independent.

We think that voice is respected columnist, economist and stock market forecaster Gary Shilling. Early last year, in his monthly Insight newsletter, editor and Forbes magazine columnist Gary Shilling laid out 12 investment themes for 2007. You can review them below. A number of those themes, led by the expected collapse in the housing bubble, were well-timed. While others have yet to unfold, Gary feels these themes remain valid. One thing these themes are not are just a rehash of what most Wall Street analysts, economic forecasters and other cheerleaders have been saying. All 12 are contrarian to the core and, therefore, could help you reap significant financial rewards when the Wall Street and other investors are caught off-guard.

Gary Shilling's 12 Investment Themes

1. The housing bubble has burst.

2. The Fed will ease; meanwhile, the yield curve will remain flat or inverted

3. U.S. stock prices will fall, perhaps below the 2002 lows, in the midst of a major recession

4. China will suffer a hard landing due to domestic cooling measures and U.S. recession

5. Weakness in the U.S. and China will spread globally, dragging down economies and stocks worldwide

6. Treasury bonds will rally

7. The dollar will rally, but not before the recession is global

8. Commodity prices will nosedive

9. Maybe global and chronic deflation will commence in

10. Maybe U.S. consumers will start a long-run saving spree, replacing their 25-year borrowing and spending binge

11. Maybe deflationary expectations will become widespread and robust

12. Speculative areas beyond housing may suffer in 2008.

Now, Gary Shilling has released 13 New Recommendations for thriving during the market melt-down. We call it his "Bear Market Tool Kit." You can access his recommendations when you subscribe to Gary Shilling's Insight.

Are the brokers and television analysts who constantly parrot the "conventional wisdom" paying serious attention to any of Shilling's predictions? Probably not. Gary looks for hidden investment opportunities, which often means going against the conventional wisdom. And when you learn more about Gary's credentials and his track record, you will realize that everyone who doesn't pay attention to what he says might end up with some serious egg on their faces.

Gary has twice been ranked as Wall Street's top economist by polls in Institutional Investor; he was also named the country's number one Commodity Trader Advisor by Futures magazine. And in 2003, MoneySense ranked him as the 3rd best stock market forecaster, right behind Warren Buffett. He also challenges the consensus in appearances on CNBC.

Gary also has a long-standing reputation for independent thought...and for getting it right. Back in 1969, he correctly predicted, to the surprise of many, the 1969-1970 recession. In the early 1970s, he stood alone in predicting the severe 1973-1975 global recession. In the late 1970s, when double-digit inflation was raging, Gary was nearly unique in forecasting dwindling inflation rates as well as the wonderful stock and bond markets that lay ahead.

Gary has been running away from the herd for years, and he's been nearly alone in making some early, and accurate, calls:

•In early 1999, in the midst of the Internet stock boom, Gary Shilling was nearly alone in warning of a collapse in tech stocks. In January 2000, with stocks still strong, Gary Shilling said a major bear market was at hand. In November 2000, he foresaw total declines of 30%-40% in the Dow Industrials, 40%-50% in the S&P 500 and 70%-80% in the Nasdaq—right on target with the overall decline of 35% in the Dow, 49% in the S&P and 78% in the Nasdaq.

•Unlike the near-unanimous consensus forecast, Gary Shilling correctly predicted that Treasury bond yields would decline in 2004.

•Gary has pointed out to Insight readers that despite investors' affection for stocks in the 1980s and 1990s, bonds, especially zero-coupon Treasuries, far outperformed stocks—throughout the long 18-year bull market of 1982-2000 and during the 2000-2002 bear market.

•He has been nearly alone for years in seeing increasing signs of mild, good deflation driven by new tech-inspired productivity advances and excess supply, not the 1930s-style bad deflation of deficient demand that scares the Fed and the few others who also foresee deflation.

•Last year, as oil prices skyrocketed and many feared a return to 1970s-style inflation, Gary noted that energy is less important to the economy than in past oil shocks and, as a result, an inflationary surge was unlikely, especially in a highly competitive global world.

Wouldn't you have benefited from such insights? Gary Shilling's Insight readers were not only well-prepared when the bad news began to unfold, but were also equipped to make money while others suffered.

Each month's information-packed issue of Gary Shilling's Insight contains:

•In-depth analyses of current economic, political and financial trends and how they affect the investment world.

•A look at our specific investment themes that are derived from our overview, like our positive views on healthcare productivity enhancers, Treasury bonds, dividend-paying stocks and the dollar as well as our negative stances on consumer discretionary spending, subprime lenders and conventional homebuilders.

•Charts, graphs and data on all of the relevant indicators.

•Gary's famous back page Commentary on matters great and small, complex and mundane, serious and frivolous. 

Our Guarantee To You

Gary Shilling's Insight is not a "tip sheet." We don't guarantee 1000% returns. We provide a serious and sober examination of macro forces such as Fed policy, global competition in goods and services, and U.S. consumer attitudes—and their effects on the U.S. and foreign economies and financial markets.

With Gary Shilling's Insight, you'll be able to understand how these forces affect your investment decisions. We bring you independent, informed, carefully-researched economic analysis and investment advice—not just more of the same old melodies from the chorus of the consensus or perennially bullish and perennially biased Wall Street analysts.

FORBES SATISFACTION GUARANTEE

Your satisfaction is 100% guaranteed. If you're not happy with your subscription for any reason, just cancel and receive a refund on the balance of your subscription term.* No questions asked.

Relatively Heavy Call Activity on eBay Inc, Yahoo! Inc, and Cit

eBay Inc (EBAY), Yahoo! Inc (YHOO), Apple Inc (AAPL), Cisco Systems Inc (CSCO), Microsoft (MSFT), Bank of America (BAC), and Citigroup Inc (C) were among the many stocks seeing a bias to toward call buying in the International Securities Exchange (ISE) Monday. The SPDR Trust Series I (SPY) and PowerShares QQQ Trust (QQQQ) also saw some activity.

Regular readers of this column may note that the call activity seems heavier than usual. Further evidence of this can be seen in the ISE Sentiment Index (ISEE), which the International Securities Exchange publishes here. This is a call to put ratio that measures opening long customer transactions only. The "All Equities Only" ratio hit 201 yesterday while the "All Securities" ratio surged to 220. Both of these are relatively high numbers.

The SPY, which tracks the S&P 500 (SPX), and QQQQ, which tracks the NASDAQ 100 (NDX), sit at the top of today's scan. More than 90,000 calls were bought on the SPY, while the QQQQ "only" saw 43,000 calls.

In broad strokes the call buying was on many of the usual suspects we have discussed recently. Tech stocks, discussed yesterday, were once again popular with eBay Inc, Yahoo, Apple, Cisco Systems, and Microsoft all making the list.

The upside bets on Bank of America and Citigroup also continue. Both stocks are being bid up this morning in pre-open action so the bulls might get a chance to see how strong a rebound can be. 

A Pile-Up on the World's Financial Highway

I will wear my pant-legs rolled And walk along the beach... Then, I will drown myself in the pool

The terrible pile-up on the world's financial highway has left us all in shock. We check to see if our fingers move. We look in the rear-view mirror to see if there is blood on our face. And then we crawl out of the car. Thank God, we can still walk! No broken bones.

What's our name? Count back from 10.... Okay, no brain damage.

But oh...look at our ride! The car is totaled. There's only about $100 trillion worth of wealth in the world. At least, that's the figure we read recently. We've also read that the total loss of wealth from the global financial crisis could be as much as $50 trillion. That was Rupert Murdoch's estimate. And he's probably not far off. Half the world's stock market value. Twenty percent of property values. Trillions in derivatives, SIVs, CDOs and IOUs. It adds up fast.

But wait...what luck!...we're still in one piece. And there, on the side of the road, there's still a gas station...a pizza shop...a mall. Life goes on. Most of the wealth that was lost was only imaginary wealth - confections spun out of sugary dreams. Put a little water on them and the melt away... But the real wealth is still there...more or less.

So cheer up. It's not so bad!

Those who feared the 'end of the world' can relax. A financial crack-up doesn't mean that real assets disappear. Houses are still right where they were before the crack-up began. Factories are there too - with their assembly lines and heavy machinery. Every backhoe and tractor- trailer is still just as ready-for-service as it was before the crisis began.

So what's the problem?

Who said there was a problem? We don't have a problem...do you have a problem?

It's just that the world economy is going through a major re- examination of its life. It was shaken up by the accident. Not just physically... emotionally too. It stared death in the face - or so it explained to friends, a bit too often and too dramatically, after the crash. So, it's decided to take a long vacation... After many years of working day in and day out...buying, selling, investing, speculating, leveraging, borrowing...whew!...it is ready for a rest. So, it's taking some time off. Thinking about things...re-evaluating things.

'What am I really doing with my life?' it wants to know.

'Is this the right way to go?' 'Does this take me where I want to be? Maybe I should have gone to law school like my mom wanted.'

'And my marriage...what the heck is going on there? Evelyn was so nice and sweet when I married her. Now, all she thinks about is redecorating the house...and hanging out with her friends. And look what she did to her face! She's got those cardboard lips that never crack a smile... And now, she's mad at me because I lost money in the worldwide financial meltdown. But who didn't?'

While all this deep reflection is going on, the world's income is falling rapidly. Businesses are closing their doors. Working stiffs are working a lot less. Machines are slowing down. The capitalists are just trying to hold on to what they've got - forget about making more.

On Friday, the Dow fell another 100 points. It's headed down to the 3,000-5,000 level. Could there be a big rally first? Could it fall like a stone...even lower than 3,000? You bet.

And look at what's going on with gold - up $25 on Friday to close over $1,000! The Dow is on it way to 3,000...and so is gold. Remember our 'Trade of the Decade?' Never mind...of course you do. Buy gold on dips...sell stocks on rallies. So far, so good...and only 10 1/2 months left to go.

(More on gold, below...)

Gradually, a stark and uncomfortable realization is setting in. It's like a middle-aged man who suddenly realizes he's wasted the best years of his life...

The world's enterprises are set up for an economy that no longer exists! Factories were built...along with a whole chain of production, delivery, and sales...to provide too many things to too many people who can't pay for them.

And now, in these moments of soul searching...of walking along the beach and hearing the seagulls speaking each to each...comes another realization: almost nothing is worth as much as it used to be. Take IOUs from people who can't pay their debts, for example. Houses lived in by people who don't have jobs. Shares in companies that sell stuff to people who can't afford to buy it. The 'wealth' that these things represented was mostly imaginary. And now that imaginary wealth is disappearing - poof!

Dear reader, we are in a period of discovery - 'price discovery,' as economists call it. It's a time of growing self-awareness...of dawning reality. At moments...it is terrifying. For all of a sudden, it occurs to us that we have been dunderheads. We have paid too much...saved too little...

We have misspent our time...mislaid our fortune...and misunderstood everything...

..and now, terrible truth strikes us like a Mac truck. We have been rear-ended, so to speak. Our life is a wreck...a wasted opportunity...a dead end.

Is it too late to start a new one? A new career...maybe as a bankruptcy lawyer. And a new love in our life - maybe with one of these young surfer bunnies from California. Or perhaps a local girl...?

*** Our intrepid correspondent, Byron King, with his thoughts on the recent gold rally:

"I'm bullish on gold. Actually, I think that gold could go to $3,000 per ounce in the next 30 months. Really bullish.

"There's no fever like gold fever. Right now, we are on the cusp of a great run-up in gold. I believe that there's still time to get into some excellent stocks. The gold miners have room to grow. They should benefit from rising gold prices. And we might see higher dividends down the road.

"Is there a caution? Always. Could gold prices tumble? Well, yes. That would hurt us. But for gold prices to tumble would take a lot of investor dishoarding. That is, people would have to hit the 'sell' button en masse. And that would require some tectonic shifts in worldwide tax, fiscal and monetary policies by a host of socialist- leaning governments. For the moment, I think we're safe from any counterrevolutionary antics like that. As Charles de Gaulle once noted, 'People get the history that they deserve.'"

Even though the stock markets are vicious, Byron sees the precious metals environment as healthy...especially for some of the elements in his Outstanding Investments portfolio.

In fact, he knows of one way for his subscribers to buy gold - without taking delivery...or worrying about storage...bookkeeping...or security. You just benefit when the price of gold rises. And the way it's looking now; that's a pretty safe bet. Learn more about this 'golden opportunity' here.

*** Colleague Manraag Singh brings us up to date on what's going in the monetary experiment known as Zimbabwe:

"The Cato Institute estimates Zimbabwe's inflation rate at 89.7 sextillion percent. That is 89.7 million million million, or twenty-one zeroes behind the number.

"Putting that into perspective, the official count of stars in the universe is about 70 sextillion, apparently...

"On the plus side, Zimbabwe's share index is expected to double this year now that are re-opening it with trading in US dollars...

"Gideon Gono had shut it down about three months ago after accusing some traders of using fraudulent cheques worth '60 hexillion' Zimbabwe dollars to buy shares. I haven't been able to find out how much a hexillion is..."

*** Last night, at the bar...a friend told this story. Every word is true, as far as we know, except those that aren't:

"You know, Nicaragua is a poor country. And you gringos are rich. I know, you're not all really rich. But the local people don't know who's rich and who's not. They figure you are all rich.

"And when you gringos come down here, I guess it is just inevitable that there are some problems between the local people and you. That's why, here anyway, we don't let the local girls fools around with the visitors from North America. I mean, we can't stop them...but if they do, they are fired. We have to do it. Otherwise, it leads to trouble. The local guys don't like the gringos taking their women. And then, they get into fights. And down here, bar fights usually end up with someone dead.

"And think of the poor girl. He goes back to the States and the poor girl has problems with her family and the community...you can imagine.

"Well, not here, but up the coast I was working with a guy from Cincinnati. He was in his 50s, I think. He and his wife decided to build a house on the beach, so I was helping them with it. But then they got divorced; and he came down here to live to put his life back together.

"He was there by himself. I don't know what he did. Maybe real estate. And he had a nice woman, named Rosalita, come in to cook and clean. She was just a girl, only in her early 20s, I think. A beautiful girl, and very nice. I liked her. I knew the family. Very sweet smile...always smiling...so I felt like looking out for her.

"After a few months, though, I was visiting and I noticed that he was treating her like hired help. They smiled at each other all the time. She patted him on the shoulder. He put his arm around her. And then I realized that she was living there with him.

"'Russell,' I said, 'what is this, my friend? If I understand what is going on, I am happy for you...but this can be trouble too. She is a young girl. She needs to find a husband. Of course, she is happy to go with you because she thinks you have money. No, I didn't mean it exactly that way. But these people are poor. And they think you are all rich. And you offer her a better life, which is maybe a good thing. But it isn't that simple. Because she wants to get married and have kids. And in this country people get married when they are young. And if they don't get married then, they have a hard time getting married later. That's just the way it is.'

"'And when you leave, what is going to happen to her? I'm not trying to make trouble for you, my friend; I just want you to understand what is involved here. You don't want to take advantage of her because she is young and naïve...and very poor.

"'And you have to watch out too. Because when you go to a local bar on Saturday night you might run into a boy who liked her...or maybe her brother. And somebody makes a comment. And her brother gets into a fight. You don't understand. Family honor means a lot down here. And a lot of the local men don't like it when you take their girls as girlfriends. Sometimes they want to start fights with in bars. And those kind of fights usually end up with someone getting killed. And I can tell you something, it's usually not the gringo; he just stands on the sidelines and doesn't know what is going on.'

"Well, I talked to him. My friend, Russell, I mean. But he didn't listen to me. He was probably lonely down here. And why shouldn't people get together if they want to? But I didn't like it. I felt sorry for her. She must have thought he would marry her. And that he had a lot money. And I knew she was wrong about both of those things, because I had gotten to know him. And I knew he didn't want to get remarried. And I knew he didn't have any money, because after the divorce, he had a hard time paying me.

"But a couple of years went by...and I saw them once or twice. And the last time I saw them, she wasn't smiling so much. And he wasn't smiling so much either. I thought something was wrong.

"You know, money is funny. I don't think she liked him because she thought he was rich. She wasn't, what do you call it, a fortune hunter. It wasn't that simple. But because he was a gringo, she must have assumed he had some money. It probably wasn't because he had money that she liked him; on the other hand, having money is just something that is part of being a gringo. Or, at least that is the way they look at it down here. So, if she realized that he really didn't have any money, maybe she was disappointed about the money. And maybe she was just disappointed because he wasn't the man she thought he was.

"All I know is that I had a beer with them...and nobody smiled.

"Then, a couple months later, a friend of mine called me. He said, 'Did you hear about Russell?'

Relatively Heavy Call Activity on eBay Inc, Yahoo! Inc, and Cit

eBay Inc (EBAY), Yahoo! Inc (YHOO), Apple Inc (AAPL), Cisco Systems Inc (CSCO), Microsoft (MSFT), Bank of America (BAC), and Citigroup Inc (C) were among the many stocks seeing a bias to toward call buying in the International Securities Exchange (ISE) Monday. The SPDR Trust Series I (SPY) and PowerShares QQQ Trust (QQQQ) also saw some activity.

Regular readers of this column may note that the call activity seems heavier than usual. Further evidence of this can be seen in the ISE Sentiment Index (ISEE), which the International Securities Exchange publishes here. This is a call to put ratio that measures opening long customer transactions only. The "All Equities Only" ratio hit 201 yesterday while the "All Securities" ratio surged to 220. Both of these are relatively high numbers.

The SPY, which tracks the S&P 500 (SPX), and QQQQ, which tracks the NASDAQ 100 (NDX), sit at the top of today's scan. More than 90,000 calls were bought on the SPY, while the QQQQ "only" saw 43,000 calls.

In broad strokes the call buying was on many of the usual suspects we have discussed recently. Tech stocks, discussed yesterday, were once again popular with eBay Inc, Yahoo, Apple, Cisco Systems, and Microsoft all making the list.

The upside bets on Bank of America and Citigroup also continue. Both stocks are being bid up this morning in pre-open action so the bulls might get a chance to see how strong a rebound can be. 

Solar Profits, Short- & Long-Term

You all know a global recession is currently underway.

Layoffs. Bailouts. Deleveraging. Tight credit. You've heard it all.

But as green investors, you need to know exactly how overarching economic conditions are affecting individual sectors in the cleantech space, and how you can still make a buck with all the carnage in the markets.

Solar power top stocks seem to be the most sought-after cleantech destination, so let's see how that market is responding to the turmoil.

Solar Stocks Battle Falling Prices

I'm not just talking about falling stock prices, I'm talking about falling average selling prices (ASP)―a new must-add term to your cleantech vocabulary.

Average selling prices, with respect to solar, include both the price of the raw material, polysilicon, and the selling price of the finished module.

Poly prices stood at about $400 per kilogram not long ago, but have fallen to about $120 per kilogram in the past few quarters as demand for computer chips waned. All indications point to further price reduction in the near future.

The rise and fall of silicon prices is evident in a long-term chart of companies that operate in that sector:

polysilicon production companies

Companies that process, refine, and sell polysilicon enjoyed extraordinary runs when their product was in high demand and short supply. But they witnessed an equally dramatic fall when demand eased and prices began to fall.

Expect this trend to continue, with Renesola (NYSE: SOL) being the earliest to rebound as the current Chinese cost advantage is magnified by continued falling prices.

The other average selling prices relevant to the solar market are those of the finished product, panels. Keep in mind that the long-term goal of the solar industry is to drive down prices in order to compete with traditional sources of energy.

While rapidly falling prices like we're seeing now help reach that goal, they also take away dollars in the short-term from the almighty balance sheet. This is because solar companies can't reduce operating costs in the short-term as fast as selling prices are falling. But solar companies will begin to make money once again as operating costs are reduced.

The companies that reduce costs the fastest will be rewarded with higher earnings and higher share prices.

Current selling prices for European manufacturers are in the �.50 per watt range ― a significant discount from just a few months ago. Established Chinese producers are selling panels in the �.15 to �.20 per watt range. Yingli (NYSE: YGE) has reported selling panels for �.05 per watt to large customers.

Falling panel prices are due to reduced poly costs and reduced demand spurred by the recession. A slew of new incentives, from the U.S. and elsewhere, should begin to stimulate demand. Prices will slightly rebound when that happens, but remember, long-term overall cost reduction is the ultimate goal.

When selling prices begin to rise with renewed demand, the companies that can keep prices low by reducing production costs and increasing panel efficiencies will win.

I'm sure you don't need a chart to understand how falling selling prices for modules have affected the share prices of major solar producers.

But the deep discounts now available on solar top stocks provide a few unique opportunities for profit in both the short- and long-term.

Here's what I mean. . .

A Depression - With a Capital 'D'

We're glad we hoisted our Crash Alert flag when we did.

Yesterday, markets all over the world plunged to new lows...with the Dow closing below 7,000 for the first time since 1997. At 6,763...it has only a couple of thousand points left to go. Then, we can begin looking for the bottom.

"World markets are taking the long-dreaded 'next leg down'." Writes John Authers in the Financial Times. "The more hopeful scenarios for a swift economic rebound must now be jettisoned..."

What caused yesterday's sell-off, according to the papers, was this statement:

"With the benefit of hindsight, the group wishes that it hadn't made this investment."

Thus saith Mr. Michael Geoghegan, head of HSBC, the world's biggest bank. HSBC bought America's "Household Finance" for $15 billion in 2003. Now, it wishes it hadn't. The U.S. unit 'destroyed' $10 billion in capital, says the bank.

Of course, almost every investor in the world could say the same thing. No matter where they put their money, it got destroyed. We all wish we hadn't done something.

And it's not over.

HSBC is closing down its entire U.S. consumer finance business - some 600 shops nationwide.

California says it is suffering an "avalanche of job losses." Across the country, jobless benefits are at a record high.

AIG is getting another $30 billion in bailout money. The New York Times calls it "propping up a house of cards."

Another house of cards is General Motors. It just reported a loss of $31 billion on sales of $149 billion. By our quick calculation, it must have lost about $3,000 on every car it sold.

GM has already gotten a loan of $13.4 billion from the government. Now, it wants $16 billion more. (And poor Detroit...pity the parasites...more below...)

And don't forget Fannie Mae. Fannie made a loss of $25 billion...now she's drawing more money from the government too - an additional $15 billion.

Good money after bad. But the whole consumer economy is a house of cards....

Remember, this is a Depression...with a capital D...not a recession. It's a depression because it requires a perestroika of the economy...a restructuring, not just a breather and bailouts. The debt cycle is now turning in the other direction. America could be creeping back towards a 10% savings rate - as predicted here in The Daily Reckoning - and now taken up by Nobel-prize winner Paul Krugman. Savings bottomed out in the United States in 2006, when the rate went negative. Now, they're moving higher - fast.

This is good news for the people doing the saving, but it is the kiss of death to the consumer economy. Somehow, businesses have to get along without adding more debt to household balance sheets. House-builders have to make a profit by building houses only for people who can actually afford them. Malls have to give up on customers who spent money they hadn't earned yet. Every business in the world has to adjust to the new economy.

Economists call it the 'paradox of savings.' Savings are good for the individual, but when savings rates go up, spending goes down. The economy suffers. Then, people lose jobs and income, further depressing economic growth.

Many economists came to believe that a little inflation was a necessary thing, since it discouraged saving. But people will believe anything if you give them enough education. They also thought derivatives were a healthy innovation, since they dispersed risk...and that subprime debt was a service to the nation, since it made it possible for people to buy houses they couldn't otherwise afford.

But now it's the "Revenge of the Glut," says Krugman. He's referring to another stupid idea economists had: that the United States was doing the world a favor by consuming Asia's glut of savings.

Suddenly, Americans have wised up. They aren't carrying water for Asia's savers any more. As a result, the huge reservoirs of dollar savings in Asia aren't filling up like they used to. And as a consequence (as yet unnoticed by most commentators), Asians aren't going to be in a position to buy so many T-bonds.

Now Americans are saving for themselves. A welcome trend, as far as we're concerned...even if it does bring a Depression.

*** The Oracle of Omaha has spoken - and he is still optimistic about the U.S. economy. The excerpt below comes from his annual letter:

"Amid this bad news, however, never forget that our country has faced far worse travails in the past. In the 20th century alone, we dealt with two great wars (one of which we initially appeared to be losing); a dozen or so panics and recessions; virulent inflation that led to a 21.5% prime rate in 1980; and the Great Depression of the 1930s, when unemployment ranged between 15-25% for many years. America has had no shortage of challenges.

"Without fail, however, we've overcome them. In the face of those obstacles - and many others - the real standard of living for Americans improved nearly sevenfold during the 1900s, while the Dow Jones industrials rose from 66 to 11,497. Compare the record of this period with the dozens of centuries during which humans secured only tiny gains, if any, in how they lived. Though the path has not been smooth, our economic system has worked extraordinarily well over time. It has unleashed human potential as no other system has, and it will continue to do so. America's best days lie ahead."

Mr. Buffett has been unflinchingly positive on the U.S. economy, and is often seen as the lone voice in the wilderness when it comes to seeing the current situation as optimistically as he does. The same holds true with his interview for I.O.U.S.A. You can read the full transcript of his interview in the I.O.U.S.A. companion book, which is available as a part of our "Emergency 'Personal Bailout' Bundle"...along with the I.O.U.S.A. DVD and a free special report. Get yours here.

*** We're back from our vacation with a tan...well, an Irish sort of tan. We came away with a bet too. A Nicaraguan investor has wagered that the price of Russian energy producer Gazprom will rise more than gold over the next five years.

Our Nicaraguan friend is a serious investor...and a serious student of Russian investments. While we lost money in India, he lost money in Russia. So, we were even. But now, he's thrown down the gauntlet.

"Gold is not a very good investment," he points out. "If you take it over the last 30 years, it has produced negative returns. The price is barely higher than it was 30 years ago, while the consumer price index has probably doubled. And even if you're right about gold now, how much do you expect to make? Maybe it doubles. Maybe triples. But Gazprom is a real company with a real product that people really need - energy. It's been beaten down with the rest of the Russian market. But it will come back. And when it does, it has the potential to do much better than gold. For one ounce of gold today you can buy 74 shares in Gazprom. I'll bet that that ratio is lower 5 years from now - meaning that gold goes up less than Gazprom. How much do you want to bet?"

It was not the sort of bet we like. Because we don't really have an opinion about Gazprom; we don't follow it. Still, we took the bet for $10.

"You're on the right side of that bet," said colleague Simone Wapler, editor of the French version of MoneyWeek. "Of course, we don't know what will happen, but gold is low risk. Gazprom is not. Putin can take away Gazprom's profits any time he wants. Who knows what will happen in Russia?"

*** The cover story at the Economist: "The Collapse of Manufacturing."

Factory output in the United States just declined for the 13th straight month. Why make things if people can't buy them?

*** Want to save money? Sell your house. Move to Detroit. The median house in the Motor City sold for $7,500 in December. How about that, dear reader? You can buy a house for the same price as the Dow stocks. A little low on cash? Put it on your credit card.

Of course, then you've got to live in Detroit. The papers report that life in the city is so grim 1,000 people move out every month.

We've never been to Detroit. Out of curiosity, we offered to take Elizabeth for a romantic getaway to Detroit for her birthday. Our offer drew this reply:

"Are you out of your mind?"

Poor Detroit. No one goes to the city for a holiday. Not even students. As near as we can tell people only go there if they have to. And then, they get out as soon as they can.

We can imagine what it is like. We lived in the Baltimore ghetto for nearly 10 years. If you want to know what it is like, there's a TV show that chronicles life there - The Wire.

Was it disagreeable living in the inner city? No, it would have to undergo major improvements to be disagreeable. It was Hell. Drug dealers on the street corners. Trash in the alleys. Everybody with a pistol in his pants and a chip on his shoulder.

Elizabeth was once on the phone with her brother.

"What's that noise in the background?" he asked. "It sounds like popcorn popping."

"Oh, that's just someone shooting in the alley," Elizabeth replied. "I think they're trying to settle an argument."

We'd been there too long. Elizabeth hadn't even noticed the gunfire.

But it shows what government can do when it tries to fix a problem. In the case of Detroit and Baltimore, the government provided massive bailouts. Education standards collapsed...so the government provided money to the local education bureaucracy. Jobs disappeared (largely because people couldn't read or write)...so the government provided massive bailouts in many different bureaucracies - training centers, welfare, food stamps. Pretty soon, the only industry left was the welfare bureaucracy.

We don't know how it works now, but when we lived in the ghetto a girl's best career path was promiscuity. She got more money with each child she had...provided, of course, that the father didn't take responsibility for it. Then, the child grew up...took drugs and stole cars...until he got sent to prison. One problem led to another - but it could all be traced to the government's giveaways. They had the same effect in Baltimore as they had in Burkina Faso. The political elite took the money and lined their pockets...the masses become more miserable than before. And the worse conditions got, the more money the cities received from federal bailout programs.

Baltimore is still in business. But from what we read, Detroit sounds like it has become a kind of Port-au-Prince with snowdrifts. The whole city sounds like a hellhole without the warm fires.

And now Obama is proposing to make things worse. More bailouts...more giveaways...more programs...more bureaucrats... Already, the 'rich' support whole sections of the population. Obama says he will raise taxes on 'the rich,' creating even more parasites. Of course, who cares if the rich have less money? They will still live in their leafy suburbs and send their children to private schools. But pity the poor parasites.

Neither Mr. Obama nor none of the candidates for Mayor of Detroit (the last mayor is doing time in a federal penitentiary) has asked for our advice. We will give it anyway. Want to save Detroit? Here's how:

Abolish all welfare of all sorts...no unemployment insurance...no child tax credits...no welfare...no foodstamps...no nothing, except privately-sponsored charities. Close the public schools. Kick out all the bureaucrats and all federal and state employees. Abolish all rules concerning employment - no minimum wages, no overtime, discriminate all you want. Require all residents to say please and thank you...dress properly...and sneer at people who don't seem to be gainfully employed or polite. Declare the city an Open City and Free Trade Zone. In exchange for cutting all federal aid programs, eliminate federal and state taxes for people living in the city. Allow unlimited immigration into the city...giving all immigrants a U.S. passport after 5 years of residency. Levy a flat 10% tax to pay for basic services. Eliminate elections...have the city controlled by a town council composed of 10 citizens chosen at random.

Within five years, Detroit would be the most dynamic city in the nation.
 
Within the last year, 401(k)s and IRAs have ceased to be a safe haven for Americans' nest eggs. In 2008, employees lost on average 14%, or about $10,000, of their retirement money. Those with more than $200,000 are even worse off - they lost more than a quarter of their savings. No wonder that more and more people are asking whether they can, or should, use an Individual Retirement Account (IRA) to hold physical gold. Our answer to the first part of the question is yes, indeed you can. The tax rules governing IRAs leave room for gold. But our answer to the second part is equivocal.

In 1986, as the U.S. Mint began issuing gold coins for the first time since 1933, a tax rule against holding "collectibles" in an IRA was relaxed to allow gold and silver Eagles. Later, in 1997, the Tax Payer Relief Act opened the IRA door for a broad spectrum of precious metals (gold, silver, platinum, and palladium), whether in the form of bullion or coin. The easier rules now apply to all types of IRAs, including traditional, Roth, Simplified Employee Pension (SEP) and Simplified Incentive Match Plans for Employees (SIMPLE).

The only stipulation is that all bars and all coins other than Eagles must be .995 fine. Thus Canadian Maple Leafs and Austrian Philharmonics qualify, but the South African Krugerrand, minted with an alloy, does not. Numismatic coins are also impermissible for an IRA.

The procedure for putting gold into an IRA is somewhat more complicated than with paper assets, but the requirements aren't onerous.

To begin with, you have to find an IRA custodian that handles investments in metals, and they are few. Don't look to your discount broker or a fund family like Vanguard; they won't touch the stuff. Instead, you'll need a specialist like the two original gold IRA custodial companies, American Church Trust (acquired by GoldStar Trust in 2007) and Sterling Trust. These are the most respected names in the business. An Internet search will turn up others, and if you do your due diligence on them, you might find one that works for you.

But remember that it's especially important to choose a custodian with a solid reputation, because your gold will be stored at a location twice removed from you. A firm such as GoldStar or Sterling would be merely your IRA's legal custodian; for vaulting your IRA gold, it will employ a certified depository, likely either HSBC Bank USA (which is also a COMEX gold depository) or Delaware Depository Services.

So chances are you'll have to open a separate IRA for physical gold, which will be a matter of doing a little paperwork and paying some fees. Then you put money into your account and tell the custodian what to buy. (Dropping in coins you already own is against the rules - a "prohibited transaction.") And if you want to mix in some paper - for example, to consolidate your gold, ETF, and mining stock holdings into one account - that's fine, too.

The custodian will charge either a fixed annual fee or a percentage of the IRA's value, with a ceiling. And the depository will charge its own fee for safekeeping. There also may be a transaction fee each time you add to your IRA. In all, you can expect the basic cost to run between $160 and $340 per year, depending on the fee structure of the custodian you choose.

You can make the same tax-deductible contribution each year to a gold IRA as with any other IRA. The current limit is $5,000, or a "catch-up" limit of $6,000 for those 50 and over. Custodians generally set their minimum initial investment at that $5,000 mark but will accept smaller subsequent contributions.

When the time comes to withdraw from your gold IRA, you don't get any coins or bars, alas. You get cash. The custodian sells the gold and distributes the proceeds, with the money then taxed at your ordinary income rate, just as with any other asset held in an IRA.

That takes care of the how-to. The trickier part is whether it's a good idea. For most readers, the answer is likely no. Here's why.

The idea behind a traditional IRA is twofold. First, reduce present taxes by taking a deduction upfront for your yearly contribution of $5K or $6K. Second, defer taxes on the investment income and gains that build up inside the IRA until after retirement.

Physical gold, of course, doesn't generate income. So you might be wasting part of your IRA's tax-saving power by filling it with gold instead of investments that earn interest, dividends, or trading profits.

Does that mean it never makes sense to have physical gold in an IRA? No. There are some situations when an IRA may be the right place to hold part or all of your investment in physical gold.

No-income portfolio. If you've decided that the outlook for bonds and dividend-paying stocks is so bleak that you don't want any at all, then putting gold into your IRA won't crowd out any income-earning investments.

Strategic switching. Perhaps you plan at some point, when you judge that the gold bull market probably has run its course, to liquidate part of your gold. Whatever gold you have in an IRA then could be sold and reinvested, with no loss to current tax, in something else.

IRA Only. If your IRA is the only investment vehicle you have, and you want gold, then using funds within the IRA to buy gold may be the only way for you to hold it.

In researching this, we chatted with Glen Kirsch of Asset Strategies International, who has been dealing with gold and gold-related investments for more than thirty years. We asked Glen what would be the benefit of a gold IRA. His experience accords with our analysis of when putting gold in an IRA makes sense.

He said he rarely if ever sees people open a gold IRA just to deposit that five grand a year. What he does see is individuals making the flight to quality with their accumulated retirement assets. Say, someone with most of his wealth in a pension fund limited by a menu of poor investments is searching for a way out. If the individual is generally suspicious of paper investments, a gold IRA will look attractive.

Making the move is simple if the pension fund is already an IRA. You're free to transfer funds from an IRA that's invested in stocks or anything else directly into a gold IRA.

Or if the pension fund is run by your employer, when you leave (quit, retire, or get fired), you can roll your interest in the pension fund over into an IRA, without tax consequences, and use the money to buy gold.

Stocks Option Idea: AK Steel (AKS)

AK Steel (AKS) stands out as 1 of the more vulnerable equities within the steel sector. The stock has underperformed the S&P 500 Index (SPX) by 14% during the past 20 trading days, posting a year-to-date loss of more than 23%. What's more, the equity has plunged more than 85% since February 2008, with overhead resistance at the stock's 10-week and 20-week moving averages forging a path lower for the shares since June 2008. AKS has not closed a week above this dastardly duo during this time frame.

More pressing for AKS investors is the stock's break below the lower rail of its recent trading range. Since mid-December 2008, the equity has trended between support at the 8 level and overhead resistance at the round-number 10 level. Recently, AKS' 20-week trendline crashed through the upper rail of this range, helping to push the security below $8 per share. The next backstop for AKS lies in the 6 region - home to the stock's November 2008 lows.

Despite the equity's technical woes, investors are increasing their expectations that AKS is poised for a rebound. Specifically, options traders have loaded up on calls recently. The stock's Schaeffer's put/call open interest ratio (SOIR) has trended lower in recent weeks, with the current reading of 0.46 indicating that calls more than double puts among near-term options. This ratio also ranks in the lower half of all such readings taken in the past year.

This bullish outlook is underscored by data from the ISE and CBOE. Currently, the ISE/CBOE 10-day call/put volume ratio rests at an impressive 15.06, meaning that 15 calls have been bought to open for every 1 put purchased on these exchanges during the prior 2 weeks. This ratio stands at an annual bullish peak, shedding light on the fact that options traders have not been more call-hungry during this time frame.

Short sellers aren't helping matters, either. During the most recent reporting period, the number of AKS shares sold short rose 14.88% to 7.2 million shares. Despite the surge, it would still take less than 1 day at the stock's average daily trading volume for short sellers to repurchase their bearish bets. Should this short-selling trend gain momentum, we could see additional selling pressure send AKS sharply lower as a result.

To capitalize on an extended decline in the shares, traders should consider an in-the-money (7.50 strike) short-term put option – the March put (premium is 22% of the stock price) or June put (premium is 34% of the stock price) – to take advantage of this opportunity that is attractive from our Expectational Analysis® methodology perspective.

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