Michael Michaud's  Instablog

The Gold Meltdown - What Happened?

May 22, 2013 - Gold Mining Stocks Forecast Outlook by By Market Trend Forecast

I used to half joke with some of my investing friends that the best time to buy stocks is during or right after a crash. Think 1987, 2000-2002, 2008-09, and now perhaps Gold Miners?? Well, before we get too far ahead of ourselves, lets examine evidence of a "Crash": I like to use crowd behavioral, empirical, and technical evidence in combination.

1. In a recent money managers poll, virtually nobody was bullish on Gold or Gold stocks, and over 80% of those polled were bullish on the SP 500 and US stocks.

2. The percentage of Dumb Money traders (non-reportable traders) in the futures markets with short positions on Gold is at all time highs, they tend to be very long at the highs and very short at the lows.

3. The insider buying ratio of Gold Mining stocks to sellers is running over 10 to 1, the highest since October 2008 when Gold bottomed out at $685 per ounce from $1030 highs. Quoting Ted Dixon, CEO of Ink Research, "such a high level of buying interest among officers and directors within their own businesses in the resource sector has correctly foreshadowed a recovery in share prices in the past: That high point of nearly five years ago came about six weeks before the Venture market bottomed on Dec. 5, 2008…While the excitement that surrounded mining stocks as recently as two years ago has waned, experienced value investors recognize that such periods of investor neglect often give rise to the best deals" Source: Theglobeandmail.com

4. The ratio of the HUI Gold Bugs Index to the SP 500 is at multi year lows and in near crash mode on the charts. The RSI Index (Relative strength) on the weekly charts is at 10 year lows at -13.71, which is off the charts low!!

5. Most trading message boards I view at Stocktwits and others are universally bearish on Gold and Gold stocks.

6. Gold is in a wave B or Wave 5 down re-testing the 1322 lows which we have discussed here for weeks as very likely if 1470 was not taken out on the upside… this is a normal sentiment pattern and re-test.

7. Gold has been in a 21 Fibonacci month correction pattern off a 34 Fibonacci month rally from 686-1923. In August of 2011 I penned articles from 1805 right up to 1900 warning of a massive wave 3 top forming. Everyone was bullish, now it's the complete opposite.

8. Currency debasement continues around the world with negative real interest rates. This is bullish for Gold once this correction has run its course.

9. Hulbert Digest Gold Sentiment index is at an all time low (gold newsletters at -35 sentiment readings!!)

10. Gold -Silver put to call ratios are at all time highs

I could go on and on with headlines and such, but you get the idea. This is the same type of sentiment I wrote about on the stock market on Feb 25th 2009, here is that article... and nobody on the planet was bullish.

Below is a chart showing the Bullish % index for Gold Miners, as you can see the last time we were at 0% was late 2008 when Gold had bottomed out and insiders were also buying like crazy like now:

The GLD ETF chart also shows a likely re-test or slightly lower of the 1322 futures lows of April, when Insider buying hit 10 year record levels:

Obviously Gold could end up going a lot lower than we think, and the Gold Mining stocks could sink further yet. But for those with a 3-6 month horizon, we expect the 21-24 month Gold correction to complete by no later than October 2013. During the next several months the opportunities to buy some miners on the cheap will potentially make some investors a lot of money in the coming few years.

Click Here for a Free Trial of Market Trend Forecast

Intraday Forecasts on Gold Silver Copper and Aluminum
You get short, clear forecasts for the direction throughout the trading session, most with short-term Elliott wave-labeled charts. And you get precise support and resistance points, so you always stay in control of your position risk.

Instaforex Metatrader
Forex - Gold Silver Copper Oil - Commodities - Futures - NYSE CFD's
Industry standard Metatrader platform. ECN & Standard Spread Accounts. ECN Spreads As Low as 0.10 Pips. 3 Pip Standard Account Trading Spreads. Trade Gold Silver Copper Oil and Agriculture Commodities Also. Forex Analytics Buy Sell Trade Signals. Metatrader Expert Advisors Auto-Trading & Free VPS Service. Mobile SmartPhone Metatrader Software Trading. ForexCopy Trade Copier. Forex Training Course & Videos. Instaforex TV. Trading Contests. No Minimum Opening Account Balance. Easy Deposit Withdrawl. Earn Annual Interest Paid Monthly On Your Cash Account Balance. Swap-Free Accounts Available. Easy Online Adjustable 1:1 to 1:500 Leverage. Hedging Allowed. New Account Bonus Deposits. 24 / 6 Support

By Wall Street Cheat Sheet
Join Chicago Mercantile Exchange commentator Eric McWhinnie as he covers Gold, Silver, Gold & Silver stocks, and miners. We look for companies that based on their price today are trading at a discount now or likely bigger discount 12 months from today. The takeover game is a huge part of the resource business. Quality undervalued companies will not remain so for long.

How To Forecast Gold & Silver Prices

Buy Gold Bullion Online at Live Gold Prices
BullionVault lets you buy pure physical gold and silver at the lowest possible price. BullionVault gives private investors around the world access to the professional bullion markets. You can benefit from the lowest costs for buying, selling and storing gold and silver. BullionVault is endorsed by the major gold mines and is the world's largest online investment gold service. We take care of $2 billion for more than 40,000 users.

By the Market Authority Speed Retirement Hyper-Compounding Strategy

As we all know, almost every central bank in the world is printing money to boost exports and support asset prices in the stock market. To their credit, the money printing idea has worked as markets around the world have been rallying. Japan is now the most aggressive money printing country. The Bank of Japan (BOJ) said that they would put $1.4 trillion into the economy over the next two years. The Nikkei 225 Index (Japanese stock market) has gained nearly 7,000 points or 80.0 percent since October 2012. This rally in the USD/JPY, and the Nikkei 225 Index has been parabolic and shows the power of money printing or the devaluing of the currency.

At this time, the major stock indexes around the world seem to be trading higher when the Japanese Yen declines against the U.S. Dollar. Traders can simply look at the chart below and see how the S&P SPDR 500 Trust (black line) and the USD/JPY (green line) trade higher together. The red line is the SPDR Gold Shares which is trading inverse to the USD/JPY. The bottom line, if the Japanese Yen starts to strengthen against the U.S. Dollar the current rally in stocks could come to an abrupt end.

Click Here to Review More Currency Forex Trading Resources

May 21, 2013 - Stock Insiders Buys and Sells by GuruFocus

TriState Capital Holdings Inc. (TSC): Chairman, President and CEO James F. Getz Bought 63,064 Shares

Chairman, President and CEO of TriState Capital Holdings Inc. (TSC) James F. Getz bought 63,064 shares during the past week at an average price of $13.06. Stephan Co. is engaged in the manufacture, sale and distribution of hair care and personal care products on both a wholesale and retail level. Tristate Capital Holdings Inc. has a market cap of $361.696 million; its shares were traded at around $13.06 with a P/E ratio of 27.78 and P/S ratio of 3.98

MEMC Electronic Materials Inc. (WFR): President and CEO Ahmad R. Chatila Bought 68,100 Shares

President and CEO of MEMC Electronic Materials Inc. (WFR) Ahmad R. Chatila bought 68,100 shares on 05/14/2013 at an average price of $6.53. MEMC Electronic Material was formed in 1984 as a Delaware corporation and completed its initial public stock offering in 1995. MEMC Electronic Materials Inc has a market cap of $1.43 billion; its shares were traded around $6.53 with a P/E ratio of 55.20 and P/S ratio of 0.61.

Arnold Schneider owns 1,648,240 shares as of 03/31/2013, a decrease of 36.1% of from the previous quarter. This position accounts for 0.66% of the $1.1 billion portfolio of Schneider Capital Management.

WFR recently reported its first quarter 2013 financial results. Operating cash used in the 2013 first quarter was $118.6 million and was primarily driven by changes in working capital related to project construction and timing of collections.

Senior Vice President and Chief HR Officer Matthew E. Herzberg bought 3,000 shares of WFR stock on 12/05/2012 at the average price of $2.99. Matthew E. Herzberg owns at least 3,000 shares after this.

CyrusOne Inc. (CONE): President and CEO Gary J. Wojtaszek Bought 15,000 Shares

President and CEO of CyrusOne Inc. (CONE) Gary J. Wojtaszek bought 15,000 shares during the past week at an average price of $22.23. CyrusOne Inc. has a market cap of $490.436 million; its shares were traded around $22.23 with and P/S ratio of 171.00. The dividend yield of Cyrusone Inc. stocks is 0.72%.

CyrusOne recently reported its first quarter 2013 earnings. Revenue for the first quarter of 2013 was $60.1 million, up from $52.1 million in the first quarter of 2012, an increase of 15%. Recurring rent churn1 was 0.4% for the first quarter of 2013, or 1.6% annualized, compared to 0.5% for the first quarter of 2012 and 4.6% annual recurring rent churn for the full year 2012.

Ron Baron bought 211,800 shares in the quarter that ended on 03/31/2013, which is 0.026% of the $18.31 billion portfolio of Baron Funds. Whitney Tilson owns 15,100 shares as of 03/31/2013, which accounts for 0.3% of the $117 million portfolio of T2 Partners Management LP.

10% Owner Capital Management LLC Marcato bought 257,168 shares of CONE stock on 03/12/2013 at the average price of $21.45. Capital Management LLC Marcato owns at least 2,592,394 shares after this. The price of the stock has increased by 3.64% since.

LivePerson Inc. (LPSN): CEO Robert P. Locascio Bought 35,640 Shares

CEO of LivePerson Inc. (LPSN) Robert P. Locascio bought 35,640 shares on 05/16/2013 at an average price of $9.05. LivePerson Inc. was incorporated in the State of Delaware in 1995. Liveperson Inc. has a market cap of $481.936 million; its shares were traded around $9.05 with a P/E ratio of 172.41 and P/S ratio of 3.16.

LivePerson recently reported its first quarter 2013 financial results. Net loss for the first quarter of 2013 was $(0.2) million or $0.00 per share, as compared to net income of $3.1 million or $0.06 per share in the first quarter of 2012.

Ron Baron owns 1,317,077 shares as of 03/31/2013, which accounts for 0.098% of the $18.31 billion portfolio of Baron Funds.

Director William Wesemann bought 20,000 shares of LPSN stock on 05/16/2013 at the average price of 8.67. William Wesemann owns at least 60,000 shares after this. The price of the stock has increased by 4.38% since.

Ameresco Inc. (AMRC): President and CEO, 10% Owner George P. Sakellaris Bought 33,441 Shares

President and CEO, 10% Owner of Ameresco Inc. (AMRC) George P. Sakellaris bought 33,441 shares during the past week at an average price of $8.11. Ameresco Inc. was incorporated in Delaware in April 2000. Ameresco Inc. has a market cap of $369.424 million; its shares were traded around $8.11 with a P/E ratio of 25.38 and P/S ratio of 0.63.

Director Francis V. Wisneski Jr. bought 4,000 shares of AMRC stock on 05/17/2013 at the average price of $8.09. Francis V. Wisneski Jr. owns at least 28,235 shares after this. The price of the stock has increased by 0.25% since. Other insiders have also increased their positions in the company.

Misonix, Inc. (MSON): Senior Vice President and CFO Richard A. Zaremba Bought 15,000 Shares

Senior Vice President and CFO of Misonix, Inc. (MSON), Richard A. Zaremba bought 15,000 shares on May 13, 2013 at an average price of $2.04.

Misonix, Inc. is incorporated in the state of New York which, through its predecessors, was first organized in 1959. Misonix, Inc. has a market cap of $40.92 million; its shares were traded at around $5.75 with a P/E ratio of 173.10 and a P/S ratio of 2.49.

On May 9, 2013, Misonix reported financial results for the nine months and the third quarter of fiscal year 2013, ended March 31, 2013. Revenue for the nine months increased 7% to $11.1 million, compared to $10.4 million in the first nine months of 2012. Third quarter revenue decreased 17% to $3.0 million, compared to $3.6 million in the third quarter of 2012.

Director Howard Alliger sold 20,000 shares of MSON stock on Nov. 26, 2012 at the average price of $4.10. Howard Alliger owns at least 58,900 shares after this. The price of the stock has increased by 40.24% since the trade.

Danaher Corporation (DHR): President and CEO H. Lawrence Culp Jr. Sold 500,000 Shares

President and CEO of Danaher Corporation (DHR) H. Lawrence Culp Jr. sold 500,000 shares on 05/15/2013 at an average price of $61.92. Danaher Corporation, originally DMG Inc., was organized in 1969 as a Massachusetts real estate investment trust. Danaher Corporation has a market cap of $43.13 billion; its shares were traded at around $63.25 with a P/E ratio of 18.21 and P/S ratio of 2.45. The dividend yield of Danaher Corporation stocks is 0.16%. Danaher Corporation had an annual average earnings growth of 13.5% over the past 10 years. GuruFocus rated Danaher Corporation the business predictability rank of 4-star.

Danaher Corporation reported their 2013 first financial quarter results. The company reported net earnings of $691.9 million and revenues of $4.4 billion.

President and CEO H. Lawrence Culp Jr. sold 628,000 shares of DHR stock in February and May. Executive Vice President and CFO Daniel L. Comas sold 90,460 shares of DHR stock on 01/31/2013 at the average price of $60.31. Director Walter G. Lohr, Executive Vice President James A. Lico and Executive Vice President Thomas Patrick Joyce Jr. sold 116,242 shares of DHR stock on in February, April and May.

Orbitz Worldwide Inc. (OWW): CEO Barney Harford Sold 519,812 Shares

CEO of Orbitz Worldwide Inc. (OWW) Barney Harford sold 519,812 shares during the past week at an average price of $7.68. Orbitz Worldwide Inc. was incorporated in Delaware on June 18, 2007. Orbitz Worldwide Inc. has a market cap of $775.09 million; its shares were traded at around $7.44 with a P/E ratio of 41.70 and P/S ratio of 1.01.

Orbitz Worldwide Inc reported net sales of $202.9 million and net income of $146.2 million for their 2013 first quarter results.

CEO Barney Harford sold 719,512 shares of OWW stock in April and May. GVP, Chief Accounting Officer Thomas L. Kram, President Orbitz & Cheaptickets Christopher Orton and Senior Vice President Global Product Strategy Samuel M. Fulton sold 13,620 shares of OWW stock in March, April and May.

3D Systems Corporation (DDD): President and CEO Abraham N. Reichental Sold 400,000 Shares

President and CEO of 3D Systems Corporation (DDD) Abraham N. Reichental sold 400,000 shares on 05/15/2013 at an average price of $40. 3D Systems Corporation is a holding company that operates through its subsidiaries in the United States, Europe and the Asia-Pacific region. 3d Systems Corporation has a market cap of $4.24 billion; its shares were traded at around $46.66 with a P/E ratio of 69.93 and P/S ratio of 10.78. 3d Systems Corporation had an annual average earnings growth of 159.2% over the past 5 years.

3D Systems Corporation reported that their 2013 first quarter revenues increased by 31% from last year's first quarter to 102.1 million and GAAP net income of $5.9 million.

President and CEO Abraham N. Reichental sold 400,000 shares of DDD stock on 05/15/2013 at the average price of $40. Senior Vice President and CFO Damon Joseph Gregoire sold 45,000 shares of DDD stock on 05/15/2013 at the average price of $40. Director Riper Daniel S. Van, Director Jim D. Kever, and Director G. Walter Loewenbaum II, sold 880,613 shares of DDD stock in March and May.

AVANIR Pharmaceuticals (AVNR): President and CEO Keith Katkin Sold 250,438 Shares

President and CEO of AVANIR Pharmaceuticals (AVNR) Keith Katkin sold 250,438 shares on 05/15/2013 at an average price of $3.26. Avanir Pharmaceuticals Inc. was incorporated in California in August 1988 and was reincorporated in Delaware in March 2009. Avanir Pharmaceuticals has a market cap of $478.861 million; its shares were traded at around $3.32 with and P/S ratio of 7.72. Avanir Pharmaceuticals had an annual average earnings growth of 11.2% over the past five years.

AVANIR Pharmaceuticals reported their fiscal second quarter results with revenues of $17.4 million and net loss of $16.5 million.

President and CEO Keith Katkin sold 268,688 shares of AVNR stock in December and May. Senior Vice President and Chief Commercial Officer Rohan Palekar bought 10,000 shares of AVNR stock on 12/13/2012 at the average price of $2.46. Vice President Finance Christine Ocampo sold 80,545 shares of AVNR stock in December and May.

General Growth Properties Inc. (GGP): Director John Schreiber sold 23,431,803 Shares

Director of General Growth Properties Inc. (GGP) John Schreiber sold 23,431,803 shares on May 10, 2013 at an average price of $22.97.

General Growth Properties Inc., a Delaware corporation, was organized in 1986. General Growth Properties Inc. has a market cap of $22.13 billion; its shares were traded at around $22.97 with a P/E ratio of 24.30 and a P/S ratio of 8.44. The dividend yield of General Growth Properties Inc. stocks is 1.92%.

On April 29, 2013, General Growth Properties, Inc. reported results for the three months ended March 31, 2013. For the three months ended March 31, 2013, funds from operations (company FFO) increased 13.6% to $252 million, or $0.25 per diluted share, from $222 million, or $0.22 per diluted share, in the prior year period.

Executive Vice President, Finance, Hugh K. Zwieg sold 105,765 shares of GGP stock on Dec. 31 2012 at the average price of $19.70. Hugh K. Zwieg owns at least 36,372 shares after this. The price of the stock has increased by 16.6% since the trade.

Profit From Insider Trading
Insider behavior matters because research based on real-time signals has shown that a properly modeled picture of insider actions can provide the most accurate reflection of the prospects for the company, industry, economic sector, or even the stock market in general, going forward. This makes perfect sense from an intuitive perspective. Corporate insiders possess all the necessary skills and characteristics that one could use to describe the "successful" investor. These include: A deep knowledge and understanding of the company and/or industry; A demonstrated ability to produce success; The training necessary to understand risk and to control it; The wherewithal (capital) to take advantage of opportunity when it presents itself and finally; A tendency to go against the crowd. In general, insider buys are more useful. Since insiders have exclusive information on the company performance, if they are risking their own money on the stock, usually they should have good reasons, especially when several insiders buy the stock at the same time.

Stock Picks of Guru Investors
GuruFocus is dedicated to value investing. As employed by Warren Buffett, the greatest investor of all time, value investing is the only winning strategy for the long term. GuruFocus hosts numerous value screeners and research tools, and regularly publishes articles about value investing strategies and ideas. GuruFocus also publishes three newsletters: Monthly Ben Graham Net-Net, Buffett-Munger Best Bargains and Microcap Magic Formula Stocks.