The CrazyTrader

Future of Gold

2005-12-23T00:10:00.000-06:00

Here is an interesting observation.. as you can see, this is the historical chart of the Dow Jones Average since 1900:

And here is a chart of the price of gold since the year 1900:

Now for the fun part.. if you go into Excel and graph the ratio of the Dow Jones Industrial Average to the historical price of gold (DJI/Gold) you get a very interesting figure:

As you can see, a trend has been established. Over the years, as the stock market has risen and fallen, so has the price of gold. The important part is their relationship to one another.. the greater the ratio, the higher the Dow and/or the lower the price of gold. As the ratio gets smaller, the DJI is falling and the POG is increasing.

Why is this so important you ask?? Well, if history repeats itself (which is most likely always the case)... The Dow to gold ratio will go down. This means one thing and one thing only: The price of gold will rise as it has been for the past few years. For the ratio to hold true gold must go up.. even if the Dow continues to rise (increasing the numerator of the ratio), the price of gold has to be that much greater to maintain the ratio.

You do the math. Lets say the DJI/Gold number goes back down to 5 which it does every thirty years or so (and appears to be doing right now).. Just for the sake of example, if the Dow maintains its current level of just under 11,000 that would set the price of gold at $2000 per ounce!! If for some reason, something reaaaaaly bad happens and the stock market crashes and the Dow sees a 50% correction, that would still put the price of gold at over $1000 per ounce. The bottom line is, gold is going up. Its as plain as day. Take a look at all the gold stocks out there.. they are all doing really well.. hmm I wonder. Just a thought.

TRE Update

2005-11-01T15:05:00.000-06:00

Today was a good day. Everything was right for TAN Range Exploration Corp. (TRE). The stock took a breather after its amazing run to 2.99 and began to set up for the next leg which just so happened to begin today.

The technicals are perfect.. triple bottom support at 2.25, the MACD began to curl upwards as the fast and slow line were getting ever so close together. Today was the pop.. huge volume, MACD crossover.. the stock broke above both the 10 and 20 day moving averages... Everything is right.

Congrats to those who if like me have been buying in anticipation of this very move. I've been bullish on this stock since 1.55 and I am very confident in the future of this company.. not to mention they have wonderful management.. In the famous words of LeVar Burton, "But don't take my word for it".. see for yourself tanrange.com

previous posts:
10-12
9-14
9-9
9-1
8-17

CSTR

2005-10-28T11:46:00.000-05:00

Ok.. Coinstar Inc. (CSTR) released their quarterly earnings yesterday. Their net profits rose 3 percent. The company also projected fourth-quarter revenue above analysts' current target. By no means is their earnings results the reason why I decided to feature CSTR. Here's the good part.. also on Thursday, they announced a deal with Wal-mart. They agreed to install its coin-counting machines in 100 Wal-Mart stores on a test basis. This could mean huge things for Coinstar if Wal-mart later agrees to take them in on a larger scale. Wal-mart is perfect for Coinstar. But with situations like this, you have to be careful.. there's a lot of hype involved with "Wal-mart deals".. remember Host America Corp.(CAFE) back in July. (I am merely using CAFE as and example of what happens when people speculate and it's story is in no way comparable to CSTR.) In my opinion, if you are not already in this stock, I believe you should wait a bit.. I think there is a lot of speculation involved especially around this Wal-mart deal. Think about it, company's profits rose 3%.. has good outlook for next quarter.. but the stock is up over 20% Wwaaaallll-mmmaaaarrrrt. CSTR is a great company, they make lots of money, and I wish I owned some.. though I eventually will, just not now

AMLN Earnings

2005-10-26T13:26:00.000-05:00

As we all know, earnings announcement is today. Since I first covered this company in august, many positive things have occurred within Amylin Pharmaceuticals Inc. (AMLN). It has been upgraded by three firms and coverage was initiated by a fourth, we've seen a new addition to the board of directors, and most importantly, people have been buying the stock. Here is what one analyst wrote about their new drug Byetta that treats type 2 diabetes, "We continue to believe that Byetta will exceed Street expectations and upside to estimates could result in a second leg of stock appreciation near term." I will be surprised if they release anything other than good news after the bell today.

**update** AMLN hit the low end of the estimate and the stock is heading south in after hours trading... say no to drugs

NTRI Earnings

2005-10-25T13:17:00.000-05:00

Be sure to listen in on NutriSystem's Inc. (NTRI) earnings conference call five o'clock today. For the past year, their business has been growing at an exponential rate and there is no sign of it slowing down. They also significantly raised their guidance by almost 50% earlier this month, so be prepared for numbers with lots of zeros.

GOOG and Earnings

2005-10-18T12:33:00.000-05:00

As far as technical analysis goes, Google has recently seen a nice bounce off the 50 dma. The 50 dma has been an excellent tool to show areas of support for Google since the beginning. One can talk about technical analysis and blab about various indicators all day long, but there is one thing that these indicators cannot predict.. the market's reaction to earnings. Google's earnings announcement is in two days so stay alert. Pay attention after the close today when Yahoo announces its quarterly earnings.. Be especially attentive to their numbers regarding ad revenues.. this could serve as an indicator of things to come for Google's numbers on Thursday. Personally I rarely.. RARELY hold any stock through earnings.. yes you will get lucky many times, but you will also get crushed just the same.. you never know what's going to happen or how people are going to react.

ALO Alert

2005-10-17T11:10:00.000-05:00

Alpharma Inc. (ALO) is breaking out on the news of they have agreed to sell its U.S. and International Generics businesses to Actavis Group for $810 million.

Amazing..

2005-10-12T17:09:00.000-05:00

The market has been brutal lately.. Today all but one of the stocks I follow finished red.. the other had no change. At times like this, if you don't like to short stocks, a good way to see green is to keep it green.. Cash Is King. Also, this may be a good time to add to your golden oldies.. I've been adding to my position in TRE a little bit last week and some more today.. That about it for me though.. Happy trading.

Insider Buying

2005-10-11T18:17:00.000-05:00

There was significant insider buying reported today in CapitalSource, Inc. (CSE). Insiders can sell their stock for any number of reasons.. but they only buy for one: They think their stock will go up.. and who knows better than the people who run the company.

LUB

2005-10-07T01:40:00.000-05:00

Keep an eye on Luby's Inc. (LUB).. The company has been working hard this year as they have dramatically improved their balance sheet. Also Luby's was just upgraded to "Buy" status by Sanders Morris Harris... I think they liked the fish and macaroni 'n cheese

CPSI Alert

2005-10-05T17:31:00.000-05:00

One stock to take note of is Computer Programs & Systems Inc. (CPSI). The stock recently saw a healthy pullback and now is once again trading above the 50 day moving average.. Also, this July, the company declared regular quarterly dividend of $0.22 per share.

CFW

2005-10-05T16:41:00.000-05:00

Shares of Cano Petroleum Inc. (CFW) exploded on huge volume today after it announced that it completed the transaction of selling 2,100,000 shares of Cano common stock to certain "accredited investors".... I'm putting this one on my watch list for now.

SWN Update

2005-10-04T14:34:00.000-05:00

Southwestern Energy Co. (SWN) has really exploded since I first started picking it up.. I have decided to take my profits though.. We have seen an excellent run up in share price recently and it looks like the MACD and the stochastic are indicating its time to take some off the table.

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PLAY

2005-10-04T11:54:00.000-05:00

PortalPlayer Inc. (PLAY) was featured on Mad Money last night.. the stock is definitely taking a ride on the Cramer Train today..

NTRI Update

2005-10-03T12:18:00.000-05:00

NutriSystem Inc. (NTRI) is breaking out today.. The MACD is nice and bullish.. lots of upside potential.. I've been buying this one since the low 20's

The Next Google?

2005-10-02T23:46:00.000-05:00

This is why Google is going to be the next Google...

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One Strange Trip

2005-09-23T02:13:00.000-05:00

I decided to try this whole evacuation thing again. Although it took me 13.5 hours to get to Austin, I feel I made the right decision... See ya Monday

WTF?

2005-09-22T07:11:00.001-05:00

It's been pretty stressful in Houston for the past 24 hours.. I just tried to leave my house and head up to Austin, but since yesterday, every route out of town is completely bumper to bumper.. no one is moving.. It took me an hour and a half to go 7 tenths of a mile on I-10. People on the radio are telling stories of evacuees sitting on the freeway for ten hours or more and making no progress. People have run out of gas, cars broken down, it is complete chaos. I decided to turn around and come back home. If nothing more, I hope my stocks go up today.

AEP

2005-09-20T14:14:00.000-05:00

Last week I posted an article that talked about the advantage of buying stocks that paid dividends.. American Electric Power Co. Inc. (AEP) is a great company and a wonderful example of what I'm talking about. Right now, this company will pay you 3.6% of your investment annually in dividends. Over time, this can really make you some money.

As you can see, if you had bought this stock 10 years ago, you would now have a gain of 72% from the dividends alone!

STEM

2005-09-20T13:32:00.000-05:00

Shares of StemCells Inc. (STEM) are on the move today.. The stock gapped up this morning accompanied by huge volume on the news that its stem cells helped restore lost muscle use in mice with spinal cord injuries.

Stocks I Like

2005-09-19T12:05:00.000-05:00

All of these are stocks I not only like, but also currently own..

Apple Computer Inc. (AAPL)

TAN Range Exploration Corp. (TRE)

Google Inc. (GOOG)

Williams Companies Inc. (WMB)

Southwestern Energy Co. (SWN)

Quanex Corp. (NX)

BECN Alert

2005-09-16T10:19:00.000-05:00

Take a look at Beacon Roofing Supply Inc. (BECN). Lots of people need new roofs after Katrina and this company has what it takes to get the job done. One thing to note is that Beacon is working on acquiring a company called Shelter Distribution, a major distributor, which operates two locations in New Orleans.

Energy Plays

2005-09-15T12:01:00.000-05:00

These three stocks are definitely worth taking a look at..

Able Energy Inc. (ABLE)

GeoResources Inc. (GEOI)

Blue Dolphin Energy Co. (BDCO)

Dividends

2005-09-15T11:52:00.000-05:00

Stocks that pay dividends are excellent long term investments... Get to know a few of them.

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TRE Update

2005-09-14T13:52:00.000-05:00

TAN Range Exploration Corp. (TRE) is making new highs today on more than double the average volume.. look for support at the 50dma