Ian Cooper - Angel Publishing

96% Success as Rome Burns

In August 2011, even as the Dow plunged some 8% off 11,700 highs, one analyst closed out 24 winners (96%) success with 55% average gains.

Why are you missing out?

With successful calls on a broken UK economy, Treasuries, subprime and troubled banking institutions, the major breakdown of the Dow, and my latest predictions of U.S. and global economies spiraling out of control post-Bernanke efforts, the markets in the coming months will offer some incredible investment opportunities — both on the short and long sides of the market.

And the only way to trade it is with options... but only if you're interested in making money.

You see, it really all comes down to a simple fact: Options offer the potential to make hundreds — even thousands — of percentage point gains on your investment, often in just days.

And with our economy still in flux, the opportunity for epic gains in options has never been greater. All you need is the right guide.

Tell me this: When a stock rallies just 15% from your entry price while the option runs up 150%, which gain would you take?

Options are the reason we were able to easily rake in hundreds, if not thousands, in gains. In 2007, during the height of the subprime fiasco, we took:

Fremont General September 2007 12.50 puts - 291% in 16 days
Lennar January 2008 25 puts - 279% in 40 days
Pulte January 2008 15 puts - 224% in 40 days
New Century January 2008 25 puts - 214% in 16 days
Centex January 2008 25 puts - 207% in 40 days
Countrywide January 2008 27.50 puts - 203% in 69 days
Thornburg October 20 2007 puts - 188% in 6 days
MGIC Investments December 35 puts - 175% in 80 days
Capital One January 2008 65 puts - 160% in 59 days
New Century January 2008 25 puts - 89% in 1 day

In 2008, we called for the downfall of Lehman, Fannie Mae, and Freddie Mac, walking with gains of:

Lehman Brothers October 20 puts - 188%
UBS AG September 2008 22.50 puts - 42%
Freddie Mac January 2008 6 puts - 94%
Fannie Mae December 2008 puts - 46%
Lehman Brothers January 2009 puts - 95%, 49%, 208% and 135% gains
Morgan Stanley January 2009 25 put - 71% gains in a day

By 2009, we saw monster gains from all sectors:

Financial Select Sector SPDR June 2009 8 puts - 32% in days
Equity Residential April 2009 puts - 30% in a week
Prudential Financial June 2009 17.50 puts - 68% in 12 days
Dendreon August 2009 7.50 calls - 338%, 107%, and 208% gains in a week
Marriott January 2009 20 puts - 27% in just five days

By 2010, the success with options continued:

Thermo Fisher March 2010 50 calls - 167% and 111% gains in just a day
Coinstar May 2009 35 calls - 60% and 38% gains in just five days
XLF June 2009 16 puts - 139% in just 15 days
BP October 2009 30 puts - 141% in five days, followed by gains of 87%, 68%, 74% and 69%
Arena Pharmaceuticals August 2009 5 calls - 192% and 333% gains in two weeks
Hewlett Packard September 2009 40 puts - 91% and 82% gains in days
Netflix October 2009 150 calls - 95% and 171% gains in about a month

As for 2011, we've already taken:

Molycorp February 2011 49 puts - 60% in 9 days
Dow Diamond April 2011 117 calls - 104% in two weeks
Silver ETF July 2011 42 calls - 165% and 103% in two weeks
Corinthian Colleges August 2011 6 puts - 75% in 6 days
Exxon Mobil January 2012 80 calls - 51% gains in a month

And that's just a taste of what we've raked in for readers, all while the underlying stocks moved at just a fraction of those figures.

Point is, the only way you'll make money in this market is with options, pure and simple.

As one of the most active options trading sites around, you'll have access to all options trades, market news, investment research, and actionable commentary we offer.

Again, why are you missing out?

Trading the Rare Earth Deficit

News is circulating this week that Japan may have just found 200 years' worth of rare earth elements in the Pacific about 200 miles off the coast of Minami-Tori Island — the first deposit ever found in Japanese waters.

You may remember back in 2011 when Japan reportedly found 100 billion tons of rare earth minerals 20,000 feet under the sea...

To date, I haven't heard about any rare earths from the 2011 discovery being brought to surface.

Pardon me for pointing out the obvious, but finding rare earths and bringing them to surface are two very different things.

For the last two years, we've feared a rare earth price shock triggered by Chinese power plays.

Until Japan can produce the fruits of these deep-sea discoveries, this fear remains intact.

Officials say it's only a matter of pumping up rare earths from the ocean floor and using acid to extract the metals: "Sea mud can be brought up to ships and we can extract rare earths right there using simple acid leaching. Within a few hours we can extract 80% to 90% of rare earths from the mud."

For this to be a feasible plan, the cost of the rare earths must also be high enough to make it worth the trip 20,000 feet under water — a costly measure.

But there's still hope, especially since researchers are saying a single square kilometer of oceanic rare earth deposits would provide nearly one fifth of the current global annual consumption.

According to the professor leading the research in Japan, rare earths contained in the seafloor deposits could amount to 80-100 billion metric tons.

(Compare this to the estimated global reserves by the USGS for all rare earth deposits on land of 110 million tonnes, a figure that includes China's sources.)

Where There's a Will...

There's a way — especially when undercutting Chinese dominance is part of the package.

China already controls about 99% of dysprosium and terbium, both vital in the manufacture of green energy technology and military applications such as missiles.

These same elements are facing critical risks of supply shortfall until 2015 (at the earliest).

Rare earth expert Jack Lifton will tell you it'll take another two to four years for us to see any new dysprosium production outside of China, and that this element will be in short supply for a great deal of time:

Everybody talks about how the price dropped from $2,500-1,200/kilogram (kg) of 99.9% metal...

That is comical, because the peak people are using is the speculative bubble last year.

China isn't likely to back down or loosen its restrictions and will wait to see what is actually being produced before folding its hand.

If Japan really wants to get things moving, they'd be loading up ships with rare earths from the site they found in 2011...

Harness the Power of Rare Earths

Join Wealth Daily today for FREE. We'll keep you on top of all the hottest investment ideas before they hit Wall Street. Become a member today, and get our latest free report: "How to Play Rare Earth Today"

It contains full details on how you should be investing in rare earths.

Producing deep-sea rare earths would help bring down the overall cost, headache, global anxiety attacks, and growing tension in international relations.

In the meantime, the outlook for rare earth is growing worse.

China still controls a majority of the supply and is now cautioning the world that its own reserves can't last forever. The China Securities Journal reports China is already stockpiling terbium, dysprosium, europium, and yttrium.

The price of rare earths will only rocket from here...

Trading the Rare Earth Deficit

Know this: Rare earth stocks are not for the weak-hearted. They're volatile.

But there's a good chance that with patience, these two trades will add another 20% of upside given the current environment.

Continue buying the Market Vectors Rare Earth/Strategic Metals ETF (REMX) long-dated February calls. The REMX holds most of the hottest rare earth names, including Molycorp (MCP).

Buy Molycorp (MCP) long-dated calls, too, as it finds long-term support.

Molycorp is a company I believe has the highest chance of completing projects and generating cash flow over the next year. Higher prices are very likely.

I'm still a heavy buyer.

Remember, China holds the cards here.

It doesn't matter what Japan finds... If they can't bring enough to surface at a good cost, China won't bend.

Stay Ahead of the Herd,

Ian Cooper

@IanLCooper on Twitter

Ian Cooper has been trading stocks and options for 12 years. He contributes options, stock, and energy commentary to Wealth Daily, Wealth Wire, and Options Trading Pit. He's the Coach behind Options Trading Coach, a beginner's guide on how to trade options. Ian teaches thousands of loyal subscribers the many ways to be profitable from options rather than simply buying stocks alone. For more about Ian, take look at his editor's page.

Patriot Coal Files for Bankruptcy

A week ago, I said:

Near term, coal stocks, like Peabody Energy (BTU), are likely to pull back after crossing that upper Bollinger Band.

We also have an overbought read on Williams % Range, and the latest spikes in MACD and DMI are unsustainable.

It's likely stocks such as Peabody (BTU) will pull back from the runs.

This can be played by either shorting the stock or by buying an August 26 put.

At the time, the BTU August 26 put traded around $2 a contract.

Since then, BTU has pulled back under $23, sending the August 26 put above $3.70.

That's an 85% gain in less than a week.

While further downside is likely on today's Patriot Coal bankruptcy news, we believe coal will head higher over the long-term.

As we also reported last week:

Gregory Boyce, CEO of Peabody Energy (BTU), explains Chinese demand has been growing sharply in recent months. Demand for coal is expected to reach 285 million tons in China this year.

And China's not the only nation that's hungry for coal...

Boyce expects global coal use to run 25% higher by 2016.

Coal consumption is expected to explode in India as it continues to develop thermal power generation plans.

Europe is burning coal at its fastest pace in six years. European demand grew 3.3% last year as natural gas sales fell 2.1%.

"Coal will continue to remain in the money in Europe because it's more competitive to burn than gas," says Barclays.

On the next BTU stock pullback, I'd buy the underlying stock as well as the January 2013 26 calls.

Commodity Stock Booms

In June, I recommended buying uranium — specifically Cameco (CCJ) and the CCJ January 2013 20 calls as they traded at $2.50 a contract.

I told you upside was imminent.

I was laughed at, ridiculed for making such a call...

No one wanted to hear that our R-4 MACD and DMI triggers just gave us a buy cross, or that the stock found solid support after consolidating.

“Who in their right mind would buy such an unfavorable sector, post-Fukushima?” asked one reader.

Here's how the stock has done since that call:

Cameco ran from $19 to more than $22.50, an 18% move in the stock.

The January 2013 20 calls ran from $2.50 to more than $4 — a 60% gain over the same time.

Chesapeake Energy

I reiterated a buy on Chesapeake Energy (CHK) as natural gas began making a strong comeback to the upside just days later.

I had initially recommended a buy around $15 a share as CEO allegations and company wrongdoings made headlines.

Here's how the stock has performed since my initial recommendation:

It was another great call made shortly after the stock crossed below the lower Bollinger Band, coupled with a bullish move off oversold Williams % Range, MACD, and DMI.

Still, investors didn't want to hear the stock was oversold and ready to bounce...

They didn't want to hear the logic behind buying at extreme lows. They wanted nothing to do with it.

And we were able to cash in when others were running scared.

Fat is Your Friend

For years, we've been fed the idea that a low-fat diet is essential for weight loss and good health.

This is WRONG!

It's much easier than you think to eat large portions and still be healthy and thin.

Here is the "missing link" you've been waiting for. Every day counts, so act now and start truly enjoying your life today.

The Next Opportunity: Coal

At the end of May 2012, Goldman Sachs foolishly upgraded Peabody Energy (BTU) from Neutral to Buy with a $37 price target.

At the time, the stock traded around $26.

But I knew further downside was likely...

I knew coal fundamentals were weak because of declining coal prices. I knew it'd be difficult for these stocks to make any money in this operating environment. And I knew many of the coal companies would see lower profits.

Still, based on Goldman's call, naive investors bought.

I, on the other hand, bucked the trend and went short the underlying stock.

I recommended readers ignore the upgrade.

The stock would fall from a high of $26 to less than $21 — a 19% profit on the short side — before rallying off lows to more than $26.

And while we missed that eventual bounce from below the lower Bollinger Band, the latest moves and recent news give us two ways to trade coal...

Near-Term Coal Trade

Near term, coal stocks are likely to pull back after crossing that upper Bollinger Band.

We also have an overbought read on Williams % Range, and the latest spikes in MACD and DMI are unsustainable.

It's likely stocks such as Peabody (BTU) will pull back from the runs.

This can be played by either shorting the stock or by buying an August 26 put.

Long-Term Coal Trade

Coal stocks were absolutely obliterated in the first half of the year on falling U.S. demand.

But they're just now making a comeback on strong demand from other parts of the world...

Gregory Boyce, CEO of Peabody Energy (BTU), explains Chinese demand has been growing sharply in recent months. Demand for coal is expected to reach 285 million tons in China this year.

And China's not the only nation that's hungry for coal...

Boyce expects global coal use to run 25% higher by 2016.

Coal consumption is expected to explode in India as it continues to develop thermal power generation plans.

Europe is burning coal at its fastest pace in six years. European demand grew 3.3% last year as natural gas sales fell 2.1%.

"Coal will continue to remain in the money in Europe because it's more competitive to burn than gas," says Barclays.

I strongly believe coal prices have found their bottom — with no place to go but up.

That's why I'm buying coal stocks at depressed levels... and I'm recommending you do the same.

On the next BTU stock pullback, I'd buy the underlying stock as well as the January 2013 26 calls.

Buying long-dated calls (just as we did with CHK and CCJ) limits your exposure to time decay issues.

Stay Ahead of the Herd,

Ian Cooper

@IanLCooper on Twitter

Chesapeake Energy Stock

Back in December 2011, I inked a piece for Wealth Daily about the absurdity and unpredictability markets would undergo in 2012.

I said the Dow would test 9,500 this year, based on what I was seeing in the latter part of 2011.

While 9,500 is no longer likely – with money printing staving off the implosion of economies – we could still see a 3% to 5% pullback in the Dow.

Economic news is still embarrassing. Americans are still suffering. China is cooling off. Europe is on life support with a heavy debt burden and more requests for bailouts.

And “calm” analysts are running scared.

The Dow has had a hard enough time tacking on 300 points to the upside since the year began.

I'd love nothing more than to tell you all is fine. That the economy is rebounding. That Europe is saved.

But I can't. And I won't.

That's not to say there aren't pockets of strength in this market. For instance, since the start of June 2012, my options readers raked in:

46% and 36% gains on Facebook September 30 puts
57% and 167% gains on Arena Pharmaceuticals 6 calls
67% and 35% on Navistar July 30 puts
26% on Vivus Inc. September 24 calls
84% on Arena Pharmaceuticals July 8 calls
45% on Arena Pharmaceuticals July 8 puts
And 30% on Facebook 30 calls

It's all about being in the right place at the right time in this market...

These days one of those right places is in cheap, beaten down commodity stocks.

Here's why...

At the beginning of this month, the dollar spiked to unsustainable highs. We explained that the 5% upside move just couldn't last.

And it didn't...

It pulled back from a high of 83 to 81.5. And commodities rallied. Gold was up from 1,560 to 1,630.

Since then, the dollar spiked again. And the Fed can't be happy.

While we don't expect the Fed to act in any way, we do expect to hear that they “have the tools to fight this if necessary.”

That alone would bring the dollar back down, send commodities back up, and hopefully keep a 3% to 5% correction at bay.

A Golden Pattern of Fortune

Each time the XL Gold Cycle has turned over, millions — even billions — of dollars have been made.

This time around, it’s going to be bigger than ever.

Don’t believe me? Think the idea of gold going to $16,000/oz. is absurd?

Well, you’re probably not alone. But for those of us who already know how the XL Gold Cycle works, it’s not crazy at all.

Today, it's your turn to see how it works.

Chesapeake Energy (NYSE: CHK)

A month ago, I urged readers to buy into Chesapeake Energy and the January 2013 17.50 calls at market.

I didn't really care what the overall market was doing.

I was trading a technical R-4 Trigger setup.

The stock had been on my watch list since a 44% beatdown on allegations that its CEO had a conflict of interest because he used stakes in CHK wells as collateral for loans.

As I wrote, “it's wildly oversold after another 13% drop. That, and MACD and Williams % Range all say its oversold, as it trades at the lower Bollinger Band.”

“The best way to trade this situation is by buying long-dated calls, such as the January 2013 CHK 17.50 calls at market. As soon as the smoke clears, the stock is likely to move up from here. And I'd rather not have to deal with near-term time decay with the bears battling for further immediate term downside,” I said.

The crowd had simply gotten far too bearish. They were crowding the wrong side of the trade, as over-abundant negativity was priced in.

We were buying Chesapeake as the headlines screamed scandal, sending the stock to $15.

We got the stock for a cheap $15 a share before it ran to $20.

It was a 33% gain for stockholders. But an 80% gain for those smart enough to buy the options.

Buy More

I'm now recommending you buy more on dips at or below the lower Bollinger Band. Williams % Range is telling us CHK shares are grossly oversold here and could be heaed higher.

Chesapeake was one of the only stocks up Thursday morning after hitting those R-4 triggers.

It's been quite a wild ride for shares of CHK, and we like it that way. We're buyers... again.

Stay Ahead of the Herd,

Ian Cooper

@IanLCooper on Twitter

Rare Earth Options

We've been in a depression since the crash of 2008.

Unemployment will surge from here. Europe will die off. And Americans will continue to suffer under the weight of poor decisions.

Anyone who has read my rants knows I'm not overly optimistic about the global community's near-term outlook. And that's because I'm aware of the reality that there is no economic recovery...

We're fed an endless stream of misguided misinformation designed to confuse and blur the real facts and figures of domestic and global economic standing.

But unlike some people who cry in their beer, whining about how bad things are, we are doing something about it.

We're not using the daily flux of the markets to guide investments — that's the biggest mistake investors are making these days. Instead, we're looking for the smaller opportunities buried in the muck.

And you can, too. You just have to know where to look.

I've been running an options advisory service for the better part of 12 years.

I've called the top of housing, the fallout in subprime, the chaos destroying Europe. And as the markets whipsaw these days, destroying middle class net worth and any thoughts of near-term baby boomer retirement, my options readers have been laughing all the way to the bank...

We're up 168% and 68% on Arena Pharmaceutical calls. Navistar puts gave us 67% in less than a day. And we just found our next profitable play in China.

Rare Earths Back in the News

We've discussed rare earth elements, their uses, and their significant role in modern-day technology at length in these pages.

This week, China warned the world its rare earth reserves are in decline. The BBC reported Wednesday:

The decline in its rare earth reserves in major mining areas is 'accelerating' as most of the original resources are depleted...

After more than 50 years of excessive mining, China's rare earth reserves have kept declining and the years of guaranteed rare earth supply have been reducing.

How are we trading China's warning? Two ways:

By trading the Market Vectors Rare Earth/Strategic Metals ETF (REMX) long-dated February calls. The REMX holds most of the hottest rare earth names, including Molycorp (MCP). For every one dollar REMX moves up (a 7%) move, you can make as much as 20% on the same move, using an option.
You can buy Molycorp (MCP) long-dated calls, too, as it finds long-term support. For every dollar MCP moves up (an 8%) move, you could be looking at a 15% in a long-dated option... and you don't have to deal with near-term time decay issues with a long-dated call. That's the beauty of it.

We're using longer-dated calls with these commodities to trade a long-term supply-demand trend.

More Metals Plays

I'm also recommending readers check out tungsten, the next big runner in the commodities space.

You can trade it using the REMX long-dated calls as well.

Also called wolfram, this metal has the highest melting point of all non-alloyed substances on the planet.

It's primarily used to make hard metal alloys such as high-speed steel that are used in the manufacture of rocket nozzles, metal coatings, and turbine blades. It's also frequently used in the mining drill industry. The metal has been in increasing demand as touchscreen technology explodes.

During the early oughts, China flooded the tungsten market with cheap material. That and the 2008 recession sent tungsten prices plunging and put many mines out of business.

From 2009 to 2011, the search for newer sources of tungsten was put on hold...

Now China (which controls 80% of the market) is restricting exports, buying up as much tungsten as it can.

At the same time, demand is booming.

The United States and Europe just classified tungsten as a metal that needs to be stockpiled, as demand increases 6% a year.

Since there is no substitute for tungsten, the search for more supply has been reborn.

The major problem is the time it takes to explore, develop, and mine the material.

The entire production process can take two to three years. But we need that material now.

This Indicator Predicts Which Options Will Jump 88% or More

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Buffett to the Rescue?

IMC International Metalworking, part of Berkshire Hathaway, just plunked down $80 million in Woulfe Mining's Sangdong South Korean tungsten project.

Woulfe has plans to ship up to 400,000 metric tons of tungsten (or 4,000 tons of metal) from the mine that closed back in 1992 as a result of low mining prices.

They're expected to begin output by August 2013.

Woulfe (WOF.V) is just one way to play this metal. Another way is to buy Malaga (MLG.V; OTC: MLGAF).

The safest way to trade these plays is with REMX long-dated call options.

We're buyers here.

You should be, too.

Stay ahead of the herd,

Ian Cooper
Analyst, Wealth Daily

Editor's Note: Over the weekend, I recommended investors position themselves in uranium. I advised they buy a long-term options contract on Cameco (CCJ) as it consolidated at support levels just above $19.50. I predicted the stock would move higher on oversold conditions and a range of catalysts that make me bullish on nuclear...

Two days into the trade, we were up $2 on the stock — and more than 35% on a long-dated call option.

Nuclear Bull Market

Nearly everyone in recent months has lost a ton of money, swearing to never touch the space again.

But it'll be their loss as oversold stocks in one of the most hated sectors start to move higher...

I'm talking about uranium.

Take a look at oversold shares of Cameco (CCJ):

MACD and DMI just gave us a buy cross — where the blue line crosses above the red.

The stock has found solid support at current prices of $19.50, and after consolidating for the last month or so, we could begin to see Buy catalysts on coming news.

Fukushima absolutely destroyed nuclear stocks, no question.

But smart investors are lining up to jump back in. Here's why you should join them...

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The Next Bull Market

Uranium has one of the strongest outlooks I've seen.

The number of reactors is expected to surge from 430 today to more than 820 by 2030.

Coupled with a nuclear resurgence around the world, this bodes well for underpriced nuclear stocks...

Japan Prime Minister Yoshihiko Noda is expected to restart nuclear sites in just days to “protect jobs, the economy and the survival of the economy...” There are great fears that one region could have 15% energy shortages over the summer.

China could re-launch nuclear power ambitions to stimulate the economy. Leaders have already approved its 2020 nuclear-safety strategy and have already inspected existing nuclear reactors. The move could be a sign that more reactors could soon be built. In short, China has very little intention of abandoning nuclear ambitions. A multi-month safety inspection of current nuclear operations indicates all is well.

China's National Nuclear Power Company is planning to IPO on the Shanghai Index to finance new nuclear power projects.

India has plans to grow nuclear power capacity from 5,000 megawatts to 63,000 megawatts by 2030.

The UK and France recently inked a declaration for cooperation on nuclear energy.

And then there's the supply-demand issue: Uranium demand has always outpaced supply. And it'll only get worse.

According to Cameco, the largest producer of uranium in the U.S., we could soon see a much wider gap in supply and demand.

Last year, 170 million pounds of uranium were consumed — but only 140 million pounds were produced.

And the Russian-U.S. Highly Enriched Uranium agreement, expected to expire next year, could remove as much as 23 million pounds of uranium from the market:

The problem with uranium stocks right now is that they're too cheap (cheaper than before Fukushima).

To me, this says investors are still coping with fear over more meltdowns — but they shouldn't be.

As long as countries like China and India (the "smart money") are forging ahead with plans to develop nuclear power, uranium demand will remain strong.

Uranium may be out of favor right now, but the stocks I'm finding are just beginning to gain ground.

That said, I recommend you open a long-term options contract in Cameco.

But don't wait until the Wall Street crowd figures out they missed the momentum.

Stay ahead of the herd,

Ian Cooper
Analyst, Wealth Daily

Being Prepared: Preparing for Economic Collapse - Part 1
The world in general seems afflicted on so many different fronts. Greg McCoach talks about the importance of being prepared for any single catastrophic event or combination of events and steps you can take to ensure the financial stability of you and your loved ones.

Global Police State: Preparing for Economic Collapse - Part 2
In Part 2 of his report on being prepared for economic collapse, Greg McCoach details six Items to Consider in preparing yourself and your family for problems that could potentially threaten our way of life.

Protecting Yourself in a Global Crisis: Preparing for Economic Collapse - Part 3
In the final chapter of his three-part report on being prepared for economic collapse, Greg McCoach continues his list of Items to Consider in preparing for problems that could potentially threaten our way of life.

3 Infrastructure Stocks Finally in Play: Patience Pays Off Every Time
Energy and Capital's Keith Kohl explains why the greatest investments are the ones that can withstand the test of time.

Taking Out the Eurotrash: Buy Silver
Spain is in trouble. Throwing another $124 billion at the problem won't solve it... it'll only make things worse.

America's Fracking Boomtowns: Shale Oil Leads to Jobs, Wealth in Multiple Sectors
Thanks to advances in horizontal drilling and hydraulic fracturing (fracking), the United States is producing more barrels of oil per day than it has in a decade, bringing all the jobs and newfound wealth that come with it.

The Global Economy and Gold: Where Are We Now?
Precious Metals guru Greg McCoach gives his latest take on the global economy and gold.

China's Natural Gas War: Settle Your Natural Gas Investments
One set of natural gas investments is proving the long-term value in natural gas.

G-20 Infrastructure Investing: This is How Jack Became a Millionaire
Global infrastructure investments may not be exciting, but they have doubled over the past two years... and things are about to get even hotter.

America's Infrastructure Report Card: Fail
Every few years the American Society of Civil Engineers (ASCE) issues a report card on public facilities. We've had a failing grade of D in every report card since 1988.

Gold and Silver Bull Market

As investors send the dollar screaming to new highs, they're forgetting one thing...

A 5% move up in any currency in just weeks is an unsustainable move.

It can't last.

It won't last.

Just look at the chart:

The dollar is also topping out at overhead resistance, and there's a very real possibility of QE3 this month.

Investors are far too dollar bullish. They're selling stocks.

They're selling gold and silver — and that's the worst move they can make.

Conditions that supported gold's move higher over the last few years have not changed.

Greece is still on the verge of collapse; bank runs continue in Spain.

U.S. growth was just revised down... Consumer sentiment is in the toilet... Housing prices are still, uh, “bottoming”... Unemployment is soaring... And industrial production is nothing to write home about.

Last Friday's jobs number alone sent gold up close to $60.

And as unemployment worsens heading into November's elections, we'll see another round of quantitative easing — which will send gold higher.

The Fed is Panicking

Not only is the Fed under pressure to get U.S. growth up and running again, but the global system is under such strain that the scale of intervention necessary will be very supportive of gold going forward.

The global financial market is up to its armpits in one of the most bizarre crises in history — no sooner does the dust settle in one part of the world than another crisis pops up.

Yet, investors have been dropping gold and silver from their portfolios...

Bad move.

While Bernanke didn't promise imminent Fed action on Thursday, he also didn't squash any hopes for QE3.

Bernanke stated yesterday economic growth is expected at a moderate pace... and that "more rapid gains in economic activity will be required to achieve significant further improvement in labor market conditions."

While it's still unknown how economic activity can be sped up, we can imply from Bernanke that more Fed action is necessary.

FOMC voters like Janet Yellen have cited housing risks, the jobs market, and horrendous financial conditions as reasons for further Fed action.

Others like Dennis Lockhart seem to be on board, too...

"The situation we face requires that the FOMC maintain a state of readiness to respond to financial or economic instability should the need arise,” Lockhart said.

So it's quite possible Bernanke shares these fears — but doesn't want to give away too much ahead of the FOMC meeting later this month.

Another possibility, says the NASDAQ, "is that these central banks are gearing up for coordinated action and want to keep it a surprise. The decline in jobless claims won't be enough to convince the Fed that additional easing isn't necessary."

The Best Free Investment You'll Ever Make

Join Wealth Daily today for FREE. We'll keep you on top of all the hottest investment ideas before they hit Wall Street. Become a member today, and get our latest free report: "Gold Outlook for 2015"

It contains full details on something incredibly important that's unfolding and affecting how gold is classified as an investment..

Buy Gold and Silver Now

As investors foolishly run to the dollar, gold may pull back a little more before moving higher on dollar devaluation.

I'd like to see gold eventually challenge that bearish gap down at $1,800 over the next few months.

With that in mind, I'd position my portfolio for the coming move with gold stocks, mining stocks, and even ETFs.

Silver is at triple bottom support with buyers' support.

Every time it gets this low, we see a challenge at $35...

Deterioration of the dollar could send us there in the next few weeks.

I'd pick up call options on the Global X Silver Miners ETF (SIL) and the iShares Silver Trust (SLV) to benefit further.

Finally, I'd look into buying PowerShares DB U.S. Dollar Bearish (UDN) call options in anticipation of a global Fed move.

Stay Ahead of the Herd,

Ian Cooper

@IanLCooper on Twitter

Natural Gas Vehicle Boom

“I was supposed to retire in seven years. Seven years,” my Uncle Robert was telling me over hot dogs at a Memorial Day picnic on Sunday.

“I want to retire already. This is insane.”

He's not alone.

But as the United States struggles through a recession, baby boomers like my uncle are in a bad place.

Their 401(k) plans and other investment savings have taken a big hit, along with their homes. Others have found themselves unemployed and unemployable just years from retirement with insufficient savings.

Millions have saved less than $50,000 for retirement.

Millions more are in for quite a rude awakening.

Unfortunately, many are making the same mistakes over and over again, letting the over-leveraged hijinks of Wall Street chase them away from the market.

They're letting the Facebook, banking, and global government shenanigans deter them from the real money-making trades.

But I'll tell you what I've been telling my uncle for months: Bet on natural gas.

Natural gas is offering smart investors the opportunity of a lifetime.

The Recent Run-up Won't Last

I said this at $3.60. I said it below $2. And I'll say it again...

Demand for natural gas will not catch up to supply. We will never consume all the gas we have in this country.

In fact, there's so much gas out there that analysts fear we'll run out of places left to store it.

"I cannot in my memory recall a time like this, when we have created a surplus that may be beyond our capacity to store," says Weeden & Co.

According to MIT, we have 90 years' worth at current consumption rates (or 650 trillion cubic feet of recoverable supply). An Energy Information Administration report estimates 750 trillion cubic feet — more than a 100-year supply. The Marcellus Shale could extend these figures.

The bottom is not in.

I have no intention of going long — and neither should you.

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The lower the cost of natural gas, the lower the cost for switching vehicles to gas.

It's why Pickens' company, Clean Energy Fuels Corp., has 273 fueling stations and is spending $450 million to build a network of LNG stations on major trucking corridors across the country.

They're partnering with Pilot Flying J to add natural gas tanks at more than 100 truck stops by year-end.

Waste Management (WM) will only buy natural gas trucks.

FedEx will have its first long-haul nat gas truck on the highways this summer.

UPS bought 48 natural gas-powered rigs just last month.

Wal-Mart, AT&T, General Motors, and Coca-Cola are all switching over.

Even Frito-Lay says running natural gas powered trucks costs about 40% less a mile...

The company is replacing most of its long-haul trucks with natural gas vehicles.

How to Trade It

You'll want to keep an eye on companies like Westport Innovations (NASDAQ: WPRT, TSX: WPT).

These are the guys that make low-emission engines and fuel systems for natural gas-fueled vehicles.

Companies like Cummins and PACCAR are already seeing big demand for these natural gas vehicles.

Stay Ahead of the Herd,

Ian Cooper

@IanLCooper on Twitter

Taxing Fat: Obesity in America

More than 66% of Americans are overweight — and 33.9% of adults in the U.S. are obese.

By 2020, more than 75% of us may be fat.

I had to put down my Big Mac with extra cheese and push my supersized order of fries aside to type this article today.

(My hot fudge sundae will just have to wait until after my editor sees it.)

The obesity epidemic has reached a level where it's affecting things like plumbing and public transportation...

Hospitals across the United States are replacing wall-mounted toilets with floor models to support the weight of obese patients, according to Reuters.

The Federal Transit Administration is requiring buses to be tested for the impact of heavier riders on steering and breaking.

There's been talk about imposing a "fat tax" on the root of the problem: sugar-heavy soft drinks and processed and fast foods.

A new British Medical Journal study says a 20% tax would help curb obesity:

Economists generally agree that government intervention, including taxation, is justified when the market fails to provide the optimum amount of a good for society’s well-being. [This] include[s] a failure to appreciate the true association between diet and disease, time inconsistency (preference for short-term gratification over long-term well-being), and not bearing the full health and social costs of consumption.

Let's be honest here: People will not eat any better if you tax their burgers and milkshakes at a higher rate.

And we certainly don't need some bureaucrat telling us which foods have been deemed "bad for us."

Folks will continue to hit the drive-thru and buy the supersize portion...

And as they look to weight loss drugs to regain control, savvy investors should look to this sector to line their pockets.

Why We're Still Buying Hand over Fist

I told readers to buy into Arena Pharmaceuticals (ARNA) this month based on a heavily watched FDA decision on an obesity drug.

I recommended hedging with the June 2012 2.50 calls and puts...

Two days later, the hedge was up more than 112%:

We took those gains straight to the bank.

This wasn't the first time we've traded Arena Pharmaceuticals. On March 19th, I recommended jumping into the stock and the July 2012 1.50 call options, as the company faced a near-term FDA panel review of lorcaserin for obesity.

While we were only hoping for a small move in the underlying stock, we got more than 50% instead — and close to a double on the calls in just days!

It doesn't hurt that European regulators recently agreed to allow ARNA to seek approval for the obesity drug a few weeks ahead of FDA panel review...

And it won't be the last time we trade it.

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Big Loss Leads to Biggest Gains

Final approval could come as early as June 27th of this year.

If the FDA approves Arena's drug, it'll be the first new weight loss drug to reach market in years.

As we've noted in the past:

The price of a biotech and pharmaceutical company will go up as the date in questions draws closer. As an FDA decision date, Phase III result date, or conference nears and people expect to hear good news, crowds of speculators and traders start coming in to buy the stock, sending the stock up.

This happens over and over again with many biotechs and pharmaceuticals. The only key is having the information in as far in advance as you can...

Even if the FDA decides to delay its final vote by three months (as it did with Vivus), we'll be alright — because we're simply looking to profit from a spike in the options premium as the date draws near.

Vivus' FDA decision date is July 17, 2012.

We're looking to trade this, too, following a three-month FDA delay.

I expect both to move even higher heading into their respective FDA decision dates...

While you can always just buy the underlying stock and hope for a small bump, we're looking for a triple-digit gain with options.

Stay ahead of the herd,

Ian Cooper
Analyst, Wealth Daily

Editor's Note: "If Facebook was smart, it'd shelve its IPO plans," Ian said in late 2011.

“In what’s likely to be a dramatic first day of trading, investors would be smart to pay close attention to the downward death spirals of Facebook’s buzz-heavy competitors... Stay away from this stock.”

Unfortunately, his warning fell on deaf ears. Ian was called an idiot by more than one reader, and his email inbox saw a backlash.

But as Ian points out, Facebook has been nothing short of a flop so far. The stock ended its first day only 23 cents above the IPO price. The stock dropped another 12% on day two. On day three, it was down to $30 and change...

On day four, Ian found this gem:

News reports indicate that big institutional investors received information about Facebook’s difficulty generating revenue shortly before the stock debuted, information that apparently wasn’t shared with other investors.

Facebook had dialed back its revenue expectations in a revised prospectus on May 9, but in a non-specific way. Reports out in the past 24 hours indicate that someone at the tech company gave Morgan Stanley and analysts at other underwriters more specific information about its revenue struggles. One investor was told revenue could slip as much as 5% below the bank’s previous estimates, the New York Times reported.

Retail investors simply got caught up in an over-hyped stock trading at 100x earnings and more than 25x sales.

And through it all, the "backdoor trades" Ian recommended in the run-up to the IPO have been doing just fine...

Day 3: Facebook Falls

As I reported here:

Wedbush just started Facebook with an outperform rating before the IPO even materializes, and Stern Agee initiated coverage with a Buy rating. But these initiated buys are just too funny — and blatantly consistent with the theme of the shills.

You know that. I know that. And they know that.

Remember when Motor Trend magazine gave the Chevy Volt its “Car of the Year” award before the car pulled off the assembly line?

Remember how much of an embarrassment it must have been for the magazine when the car became an abysmal failure?

Well, Facebook's fate will likely be worse than the Chevy Volt...

And it was worse. It was a disaster.

The stock got down to $30 a share this morning... and could fall even more.

Nice call, Wedbush and Stern Agee. Your clients must be thrilled with your advice.

Here's what's interesting.

Lead underwriter, Morgan Stanley cut its revenue forecast for the company shortly before the IPO.

“The change in Morgan Stanley's estimates came on the heels of Facebook's filing of an amended prospectus with the U.S. Securities and Exchange Commission (SEC), in which the company expressed caution about revenue growth due to a rapid shift by users to mobile devices. Mobile advertising to date is less lucrative than advertising on a desktop,” says Reuters.

"This was done during the roadshow - I've never seen that before in 10 years," said a source at a mutual fund firm who was among those called by Morgan Stanley, according to the same report.

The Facebook Flop

If Facebook was smart, it'd shelve its IPO plans, I said in late 2011.

“In what’s likely to be a dramatic first day of trading, investors would be smart to pay close attention to the downward death spirals of Facebook’s buzz-heavy competitors.”

“Ian, you're an idiot,” I was told. “Anyone with half a brain will buy shares of Facebook when it IPOs. It's a guaranteed winner. “When your recommendations blow up in your face, and Facebook explodes, I'll be asking for my money back.”

But the warnings fell on deaf ears.

And retail investors – like my adoring fan – simply got caught up in an over-hyped stock trading at 100 times earnings, and more than 25 times sales.

So far, Facebook has been nothing short of an embarrassment.

It ended its first day up 23 cents cents above the IPO price. And the stock is already down another 12% on day two. And to be honest, I don't see much upside here in the near-term.

D'oh!

As I said Friday:

If the stock drops as fast as it goes up on the first day, none of us will be surprised.

The glitz of the social network has worn off for me, and I wonder if that will be true for millions of other users.

The business is real — nobody is contesting that. And it's generating great revenue ($3.7 billion in 2011).

But I still can't wrap my brain around a $100 billion valuation.

Facebook is already bemoaning revenue pressures and there are concerns about slowing growth and sky-high valuations.

Profit margins may have peaked. Users aren't trusting of Facebook...

General Motors has already pulled $10 million in advertising, suggesting even GM doesn't have faith in Facebook's operating platform.

Stay away from Facebook. Stay far, far away.

Facebook IPO Hype

“Surprise state is no. 2 U.S. oil producer,” blared a recent Associated Press headline.

“An unexpected state barrels past Alaska and now trails only Texas in crude production.”

That state is North Dakota, the very “unexpected” oil-producing state we've been talking about for the last umpteen years...

The same place that has returned hundreds of thousands of dollars in profits for our readers for years on end.

I was all set to bash the press for being late to the party, but then I received this note from a reader in reference to my Facebook IPO article of last week:

Ian, you're an idiot.

Anyone with half a brain will buy shares of Facebook when it IPOs. It's a guaranteed winner.

But you're buying Groupon [in Options Trading Pit] and Zynga instead?

When your recommendations blow up in your face, and Facebook explodes, I'll be asking for my money back.

Groupon is a garbage stock stuck in a downtrend. It's over for that stock... over.

I found it quite amusing. Because as much as I love fan mail, I love the hate mail even more.

Shortly after I received that note in my inbox, Groupon would rocket from $10 to more than $15 in less than five days — returning more than 70% and 196% gains in less than four days for my options readers.

I have yet to hear back from my critic.

As for the other recommendations noted in that Wealth Daily article:

Zynga (NASDAQ: ZNGA) ran from less than $8 to close to $9.

GSV Capital (NASDAQ: GSVC) ran from $16.25 to close to $19.
Firsthand Technology (NASDAQ: SVVC) ran from $27 to more than $30.
And the Global X Social Media Index ETF (NASDAQ: SOCL) is up marginally so far.

Even our First Trust IPOX-100 Index (FPX) December 2011 trade has rocketed from $23 to $29.

These are the only Facebook-related trades you want to own going into today's IPO.

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Don't Buy the Hype

As a mere retail investor, we'd have to duke it out with the Big Boys in a volatile session.

I'm not willing to risk my money — or your money, for that matter — in the first few weeks of its existence.

Paying 99x earnings is insane. The initial gap could be insanely high.

And if the stock drops as fast as it goes up on the first day, none of us will be surprised.

The glitz of the social network has worn off for me, and I wonder if that will be true for millions of other users.

The business is real — nobody is contesting that. And it's generating great revenue ($3.7 billion in 2011).

But I still can't wrap my brain around a $100 billion valuation.

Facebook is already bemoaning revenue pressures and there are concerns about slowing growth and sky-high valuations.

Profit margins may have peaked.

Users aren't trusting of Facebook...

General Motors has already pulled $10 million in advertising, suggesting even GM doesn't have faith in Facebook's operating platform.

According to Forbes.com:

Click-through rates are much lower on Facebook than they are on the internet generally, or on Google, according to WordStream (which manages search ads on Google and thus has a conflict of interest):

Facebook: 0.051%
Google: 0.4%
Average: 0.1%

Worse, CEO Mark Zuckerberg doesn't seem to understand that making profits should be the primary goal for a public company, not a secondary...

"We don’t build services to make money; we make money to build better services,” he says.

Look, I've seen and called many bubbles in this crazy market, and I'm telling you to stay away from this stock.

It's over-hyped.

I'll look to buy it when the sky is falling.

Stay Ahead of the Herd,

Ian Cooper

@IanLCooper on Twitter

Facebook IPO

In December 2011, I told you to buy the First Trust IPOX-100 Index (FPX).

I said it would move higher on the anticipatory run ahead of the Facebook IPO.

“Only a fool would buy that here,” I was told by more than one reader at the time.

“I'm just going to buy the Facebook stock when it comes out. You have no idea what you're talking about, Cooper.”

FPX would go on to hit a low of about $23 before rocketing to more than $28 a few short months later...

I even recommended buying the Global X Social Media Index ETF (NASDAQ: SOCL) before it ran to $16 a share:

Why am I telling you this today?

Because both are likely to pop again when Facebook goes public.

I'd also sell them on the day of IPO.

Because as we've seen with other social networking IPOs, things don't usually end well.

Wedbush just started Facebook with an outperform rating before the IPO even materializes, and Stern Agee initiated coverage with a Buy rating. But these initiated buys are just too funny — and blatantly consistent with the theme of the shills.

You know that. I know that. And they know that.

Remember when Motor Trend magazine gave the Chevy Volt its “Car of the Year” award before the car pulled off the assembly line?

Remember how much of an embarrassment it must have been for the magazine when the car became an abysmal failure?

Well, Facebook's fate will likely be worse than the Chevy Volt...

On the first day of trading, everyone and their grandmother will run out to buy Facebook shares.

Demand will outstrip supply based on the idea that advertising revenue will prop up the stock going forward.

But as with most highly sought-after stocks, the game is rigged. You are waaay at the back of the line — behind the Big Boys.

We've seen this play out before...

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Small investors who took a swipe at LinkedIn (NASDAQ: LNKD) on its first day watched their investments crash and burn:

Groupon (NASDAQ: GRPN) got crushed just weeks after going public:

And RenRen (NASDAQ: RENN), "the Facebook of China," fell 75%.

The glitz has simply worn off. The days of hyper-growth are over.

If Facebook shares price at the high end of the range, they would trade at 99x earnings.

That's far too rich for me.

The only way to justify the lower end of Facebook's valuation requires the company "to make $40 billion in revenue within the next six to seven years, while maintaining the same profit margins,” according to the Wall Street Journal. And that won't happen.

The company is even seeing a drop-off in demand from advertisers, as expenses increase across the board.

I'm not going to risk my hard-earned money on a company with these issues...

Facebook creators will get richer, but new shareholders will get the shaft. Investors would be smart to stay away.

Smarter Ways to Trade the Social Network

The FPX trade is still your best bet going into the Facebook IPO.

But if you want to diversify — usually a smart, prudent move — here are some other alternatives:

Zynga (NASDAQ: ZNGA) should benefit from the Facebook IPO because much of Facebook's revenue is tied to this company's gaming software.
GSV Capital (NASDAQ: GSVC) had about 7% of its portfolio in Facebook in Q1 2012. It also just took a stake in Twitter.
Firsthand Technology (NASDAQ: SVVC) supposedly owns 600,000 shares of Facebook Class B Common stock.
The Global X Social Media Index ETF (NASDAQ: SOCL) I told you to buy along with FPX is likely to spike in the first couple days of the Facebook IPO.

I'd buy them all now... and I'd sell them on the day of the Facebook IPO.

I do not expect Facebook's public outing to be successful for long.

If you want to make good money, go in through the back door.

Remember, the Big Boys are at the front of the line... You're not even in the building.

Stay Ahead of the Herd,

Ian Cooper

@IanLCooper on Twitter

Cheap Natural Gas Stocks

Last year I recieved a lot of free advice telling me to lock in low natural gas rates.

[It's] doubly important to lock in today's prices before the winter pricing sets in," said Commercial Energy Consultants in December of 2011. Baltimore Gas & Electric urged me to lock in "low rates" around the same period.

But these companies knew damned well that natural gas prices would fall further. In fact, I wrote as much in these very pages.

I was spot-on. Natural gas prices got slaughtered from $3.60 to less than $2.

In that same article, I explained we wouldn't see high natural gas prices over the next year (unless we saw a brutal winter) because demand is not likely to catch up to supply this year.

So it's no surprise that after another $1.50+ drop, the fools are once again rushing out to call the bottom.

Even T. Boone Pickens thinks natural gas prices “are as low as they'll get.” But we know he talks his own book as they say.

Calling the bottom in natural gas here is like trying to call the bottom in housing. We may have spiked off recent sub-2 lows in recent days, but I don't expect it to last. It is true that U.S. natural gas production fell 0.6% in recent months as producers are cutting back on drilling due to tight margins.

But the natural gas glut is at historical proportions and growing. The Department of Energy is pegging gas production to increase by 4.5% this year.

So barring a late May hurricane, there's little chance for near-term upside here, despite Pickens' hopes.

Now that's not to say natural gas won't eventually bottom out...

It will at some point — It's just not a bet I'm willing to make without confirmation.

The Best Way to Trade It Right Now

There are some opportunities here.

One is to buy shares or long-dated call options on Chesapeake Energy. CHK got crushed into oversold territory latly.

As we noted in a recent Wealth Wire Pro report, “despite low natural gas prices, Chesapeake Energy has been hit even harder on news that its CEO has a conflict of interest because he used stakes in CHK wells as collateral for loans.”

“MACD, DMI and W%R all say its oversold, as it trades at the bottom of the lower Bollinger Band. The best way to trade this situation is by buying long-dated calls, such as the January 2013 CHK 17.50 calls at market. As soon as the smoke clears, the stock is likely to move up from here. And I'd rather not have to deal with near-term time decay with the bears battling for further immediate term downside.”

Just days later, shares of CHK spiked from the lower Bollinger Band, and raced to more than $20 a share. We call this the R-4 Trigger bounce.

It's still oversold to this day. And is well worth buying as natural gas sits at historic lows.

A Second Way to Trade Cheap Natural Gas

Here's a chart of Westport Innovations (NASDAQ:WPRT).

These are the guys that make “low-emission engines and fuel systems for light-, medium- and heavy-duty trucks that use natural gas as an energy source,” says Chris DeHaemer.

Even as natural gas companies got slammed on higher natural gas inventory, stocks like WPRT rocketed to heights...

It is estimated that the average long-haul truck that drives 120,000 miles per year at 5 miles per gallon could save $46,000 a year on fuel costs by switching over from diesel to natural gas.

This equates to billions of dollars in savings each year. When you realize that garbage trucks and cement trucks get two miles to the gallon... you can see where it would be worth it to switch over to natural gas as an energy source.

With $4 gasoline becoming so common, natural gas is looking like a surefire bet for truck companies across the nation.

And while the switch hasn't been swift, given the small number of natural gas refueling stations, it's happening. And you need to be in front of it to make money. Companies like Westport are priced to perfection and therefore have inherient risk of a selloff.

Companies like Cummins (CMI: NYSE) and PACCAR (PCAR: NASDAQ) are already seeing big demand for these natural gas vehicles. Clean Energy Fuels (NASDAQ: CLNE) even wants to build a network of 150 LNG truck fueling stations along major truck routes.

Stay Ahead of the Herd,

Ian Cooper

@IanLCooper on Twitter

Gold: The Bargain of a Lifetime

You knew this was coming.

You knew it couldn't last forever.

That bull market in gold you've come to know and love?

It's over...

Done. Kaput.

At least, that's what the fools in the mainstream press would have you believe:

"Gold's Decade-Long Bull Run Is Dead, Gartman Says" — Forbes
"The Gold Bull Market is Over" — Seeking Alpha

That big run-up to unthinkable sub-2k highs in a short period of time, followed by panic selling, has led to the fairy-tale conclusion that the bull market for the yellow metal is over.

But if you're smart — and I know by virtue of the fact that you're reading Wealth Daily that you are — you'd buy gold here on dips for one simple reason...

Fundamentally, nothing has changed.

The main catalysts for gold going up are still there.

And even higher prices are on the way for patient investors.

Gold is climbing on news that the Fed could use further quantitative easing to stimulate the economy — and on reports that economic conditions could warrant exceptionally low levels for the federal funds rate for the next two years, at least...

That means gold will run higher on a loose monetary policy and excessively low interest rates.

And the Eurozone crisis is far from over, strongly suggesting higher gold prices are on the way.

I see no reason to even think the gold bull market is over — not by a long shot.

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Coming June 2012

Mark my words: Shortly after June 28, 2012, gold will begin to climb back to $1,800.

And if I'm wrong about this, I'll eat crow.

Because on June 28th, the National Defense Authorization Act of 2012 (NDAA), signed by President Obama in 2011, will take effect...

It'll try to make it nearly impossible for Iran to sell oil to the world markets.

It will sanction any company or country that attempts to deal with Iran's central bank or buy Iranian oil.

And it will force other countries to choose between buying Iranian oil and being cut off from dealings with the U.S. economy.

However, as the Huffington Post points out, the act could backfire on us...

For the plan to work, oil demand would have to remain steady and other exporters would have to replace Iran’s roughly 2.5 million barrels a day on the global market.

For instance, Saudi Arabia has increased the amount of petroleum it pumps, and is promising a further rise in output this summer in an attempt to flood the market and allow countries to replace Iranian purchases with Saudi ones.

But experts doubt the Saudi ability to do this long term and — most important of all — global demand is not steady. It’s crucially on the rise in both China and India.

For Washington’s energy blockade to work, Saudi Arabia and other suppliers would have to reliably replace Iran’s oil production and cover increased demand, as well as expected smaller shortfalls caused by crises in places like Syria and South Sudan and by declining production in older fields elsewhere.

Of course, other nations are concerned about the repercussions of the National Defense Authorization Act.

Because once that oil is taken off the market, oil will surge.

Japan, which has been supportive of moves against Iran, is uneasy...

"The higher oil prices, the more affluent Iran becomes," says Japan's Finance Minister, referring to the likelihood of some countries ignoring the sanctions and continuing to buy from Iran.

And the act's sanctions put China in a bind because they must now choose between avoiding doing business with Iran and being cut off from dealings with the United States — neither of which the Middle Kingdom can afford.

China will follow India's lead, though, bartering goods, services and gold for Iranian oil, sideswiping any foreseen problems with the United States.

This could send the price of gold screaming higher as China's need to replenish its gold outflow increase in the process.

Why Gold Critics are Wrong

There is absolutely no indication on a long-term chart of gold that the bull market is over...

It's simply pausing and consolidating into a coiled spring pattern after last year's sharp rally.

How can the bull market be over when the only solution to our debt problem is buying more debt, which only further devalues fiat currencies and makes problems worse?

Don't listen to the mainstream press. Gold still has room to run...

So buy the dips. Buy all the gold you can.

Stay Ahead of the Herd,

Ian Cooper

@IanLCooper on Twitter

2012 ASCO Conference Stocks

“This is just too damn easy," said Charles Cimino.

He just walked with a nine-day gain of 220% on Furiex Pharmaceuticals (NASDAQ: FURX).

“I dropped 10 grand into the trade... and doubled it in days. You spoil me, Ian. Thanks.”

He'd soon walk with another 100% and 118% gain on Arena Pharmaceuticals (NASDAQ: ARNA), telling me he “just about risked all the Furiex winnings on it.”

Because every one knows nothing has the power to send a biotech to the moon like the FDA.

Well... unless, of course, that biotech is presenting at the annual – and super influential – American Society of Clinical Oncology Conference in June 2012.

Sure, it's still two months away, but now is when you want to buy.

As I said in 2010: Any time a company is expected to present healthy data at ASCO, the speculation over FDA approval, buyout, and game-changing findings can jet stock prices going into the conference.

Here's what we saw heading into the 2009 ASCO conference:

Seattle Genetics (SGEN) soared from $8.25 to more than $10.50
Pfizer (PFE) jumped from $13.25 to more than $15.50
Exelixis (EXEL) jumped from $4.25 to more than $6
And ArQule (ARQL) jumped from $3.95 to more than $5.

And here's what we saw in 2008:

Immunogen (IMGN) flew from $3 to more than $4.75
Rigel (RIGL) climbed from a low of $20 to more than $24.50
Novartis (NVS) jumped from $50 to $54
And Infinity Pharmaceuticals (INFI) ran from $6.50 to $9.50

Heading into the 2010 ASCO conference, we took a position in Delcath (NASDAQ: DCTH), for examaple. It would run from a low of about $6 to more than $16 before selling off after the event.

Another big runner was Celldex (NASDAQ: CLDX).

The stock ran from about $4.70 to a pre-ASCO high of $9.43.

We could see another Celldex run into this year's conference, which is why we bought it again in Options Trading Pit.

The company is presenting results from EMERGE, a randomized Phase II study of CDX-011, at the American Society of Clinical Oncology (ASCO) meeting in June 2012. CDX-011 is a treatment for metastatic breast cancer and advanced melanoma.

Keryx Biopharmaceuticals (NASDAQ: KERX) was another one that popped big in 2010.

By 2011, we bought our favorite prostate drug stock, Dendreon (NASDAQ:DNDN) and watched it explode from $35 to $55.

Does that mean all ASCO-related stocks – even our FDA trades – trade higher heading into the conference?

Of course not. But given our success, I don't think you'll be upset.

A Heart Attack In Your Pants?

As you most likely know, there are many ways to restore some of the sexual vitality that is naturally lost as you get older.

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How to Trade the 2012 ASCO Conference

As we mentioned above, we've taken a position in Celldex ahead of the conference. One of the only reasons it pulled back so hard is because of the overall market. Further downside should be limited – in our opinion – as June draws near.

But it always pays to diversify. Here are some other trades we're looking to enter.

Check out ImmunoCellular Therapeutics (OTC: IMUC), for example. It's expected to present survival data for its late stage drug candidate. According to a recent SeekingAlpha.com article:

The company's lead candidate treats glioblastoma, which is one of the most deadly forms of cancer, with the average patient living just 14 months. But when treated with ICT-107, all patients surpassed one year with the disease, and 40% were disease free after three years. The survival rates of ICT-107 have been responsible for its recent rally...

We have an eye on Array Biopharma's (NASDAQ: ARRY) presentation on Selumetinib, an ovarian cancer drug that's shown promising results.

And we're watching Aveo Pharmaceuticals (NASDAQ: AVEO) – expected to offer results from its phase III study of tivozanib in kidney cancer.

We're looking to add even more to the list here and in Options Trading Pit – where every month, we've been revealing which biotech stocks you need to own.

Stay tuned...

Stay Ahead of the Herd,

Ian Cooper

@IanLCooper on Twitter

Natural Gas Prices Headed to $1

Good thing I didn't listen to my local gas and electric company last year, and lock in those "low" natural gas rates.

After reporting on that here in December 2011, natural gas fell from $3.60 to less than $2.

So it's no surprise that after another $1.50+ drop, the fools are rushing out to call the bottom.

Natural gas prices “are as low as they'll get,” said T. Boone Pickens in recent interviews, for example.

But the man may just be out of his mind. Calling the bottom in natural gas here is like trying to call the bottom in housing.

$1 Gas Prices

I remember when it cost me ten bucks to fill up my car.

It was 1998...

I could drive to and from the ocean on a tank of gas and still have enough money left over for a dozen crabs and some beer.

Nowadays, I'm lucky to manage the round-trip drive to the shore for under $50 — just for fuel and tolls.

But for a few lucky drivers in Pasadena, Texas, it was like 1998 all over again this past week when a computer glitch at a Conoco station resulted in $1 gas prices.

“After word of the mishap spread on Facebook, so many people were scrambling to get the low-price gas, police were sent to the station,” an area news station reported.

One woman tells reports she was able to fill up two cars and two Expeditions for only $57.

Another said: “I pumped my gas. I got it for ten dollars. Ten dollars to fill up my whole tank.”

But the price pullback didn't last long...

Same goes for the pullback we've seen in global oil prices.

Oil may have pulled back nicely, but downside is limited — and our sights remain set on $115/barrel by summer on geopolitical concerns.

When it comes to the situation with Iran, things are not likely to end well.

There's no "quick fix" here.

The only real way to fix this is through negotiations over time — not in a weekend of talks.

We're not going to halt Iranian enrichment and remove their stockpile of 20 percent enriched uranium in two days' time.

Iranian President Ahmadinejad has already told us his country can withstand a boycott of Iranian oil exports for two years. That by itself doesn't instill much confidence that negotiations will end well.

It's not like he's just going to abandon their nuclear program.

Israel's defense minister is expressing doubts that sanctions will force Iran to back down.

National security officials and experts say there won't be a deal.

All these things point to one thing...

War with Iran will send the price of oil much higher.

Analysts are already speculating...

"An Iranian disruption of oil supplies could send oil prices to $200 a barrel," said Lynn Reaser, chief economist at the Fermanian Business & Economic Institute.

"It's something we're really concerned about," said Chris Lafakis, an economist at Moody's Analytics. "A military confrontation could push prices to $180 a barrel, which would precipitate a recession."

How to Trade It

For all these reasons and more, we remain bullish on cheap Bakken-related oil stocks.

Geopolitical rumblings are setting the stage for a big event — and a promising investment opportunity in the Bakken.

From what Keith Kohl is telling me, there are still cheap, undervalued Bakken stocks to be had.

You'll want to position yourself in domestic companies before our oil supply becomes further tangled in affairs in the Middle East.

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Stay Ahead of the Herd,

Ian Cooper

@IanLCooper on Twitter

Technical Trading Secrets

I'm just about to issue a hot new trade I've been working on...

This past Monday, I told readers the sell-off in shares of Finish Line (NASDAQ: FINL) was overdone. The stock was selling with an absurd PEG ratio of 0.82 with a price-to-sales ratio of 0.81.

Downside looked limited here, I explained, as the stock now traded sharply under the lower Bollinger Band with an extremely oversold read on Williams % Range.

There were even disturbing spikes in MACD and DMI we know wouldn't last.

A turnaround was imminent.

Buy it now, I said.

That was Monday morning.

Twenty-four hours later, with a long-legged doji confirming change of trend, the stock began its expected turnaround...

It was that easy.

North Dakota's NEW Millionaire-Maker

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“Good call on FINL, got in and am up 30% so far,” a satisfied reader shared on our message board.

It's a simple system that actually works. And it can be done again and again with just five indicators:

The penetration of the upper or lower Bollinger Bands on a six-month candlestick chart can indicate that conditions are wildly overbought or oversold. This is Step 1.

Step 2: Always look at the read on Williams % Range (W%R). W%R is the ultimate momentum indicator that signals oversold and overbought conditions. W%R shows an overbought condition with a numerical range read of 0% to 20%. Oversold conditions are measured with a numerical range read of 80% to 100%.

Step 3: Always look to see if the candlesticks are indicating possible turnaround. With Finish Line, that long-legged doji was our confirmation of trend change. Dojis especially appear at times of market indecision and have called key reversals in indices and individual stocks.

Step 4: While not always necessary, take a look at the moving average convergence divergence (MACD) and the directional movement indicator (DMI). When these two agree, it can be used as a “backup” trend indicator.

The trick to making easy money with the system is to take the money and run.

As I just told my readers: “All we want to do with this trade is wait for the coming bounce and get out. That's it.”

Here's another example.

Check out Kodiak Oil & Gas (NYSE: KOG)...

Notice that every time the upper or lower Bollinger Bands are penetrated — or even just touched — coupled with an overbought or oversold W%R read, the stock has bounced:

Remember the Carnival (NYSE: CCL) Cruise Line disaster back in January?

Check out what happened once the stock gapped under its lower Bollinger Band back in January 2012...

It bounced just as we expected, despite all the negative publicity surrounding Captain “I fell into the life boat” and his victims.

At the time, I told readers this was a perfect crisis opportunity, one we shouldn't pass up:

The sell-off took the underlying stock well below the lower Bollinger Band. The "rubber band" was pulled too tight... and we had confirmation from W%R that we were in deep oversold territory. It's a classic R-4 Trigger setup.

A day later, we were out of half the position with a 34% gain.

To think I'm finding great winning trades like this every single week...

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Stay Ahead of the Herd,

Ian Cooper

@IanLCooper on Twitter