The Elliott Wave Theory is a method of explaining market movement using a series of waves that are based on naturally occurring patterns. The system is named after Ralph Nelson Elliott, an accountant who developed the model in the 1930s. Today, Elliott Wave Theory is the basis for a whole school of technical analysts, including yours truly.

So, what’s the theory saying right now about stocks?

The S&P 500 chart below has a 3 wave (abc) look to it jright now. The only problem was the fact that its prime entry took place in the form of a gap, and within minutes traced out the bulk of Thursday’s move.

One look at last week’s action in the NASDAQ Composite below tells us that a potential 5 waves down pattern has taken place. Typically after a 5-waves down affair the next is a 3-waves up affair. Remember, the NASDAQ Composite typically leads the other broad-based indexes, so the suggestion that the downside pattern is over points to a recovery in the S&P 500 and the Dow very soon.

But the recovery may be short lived. As the market sets off on its final wave, we could be in store for a final 3rd wave well to the downside to complete the 5-waves down pattern. Check out the drawing to the left of the chart above for an idea of what to expect… To give you a clue as to what the downside might look like, we don’t have to go back in time too far: we’ve already been there back in March.

We could be very close if not already there for a counter trend rally (that means short term ABC up) then the “Wonder To Behold” to the downside. This could take place in the span of a few days to a few weeks or even a month or two. But the bottom line is the overall trend is down and all rallies are shortable.

Sincerely,
David Grandey
AllAboutTrends.net

February 9, 2010

The Market’s Following a Script: Here’s How to Profit from It was originally featured in the Penny Sleuth.

After all, 2009 started off on an even sourer note, only to be followed by one of the strongest rally years in history…

This week we’re going to try to capitalize on any hint of a reversal with our weekly Penny Stock Watchlist… we’re also going to take a look at a downside play just in case this week fails to live up to investors’ expectations.

In case you’re not familiar, each week, we take a look at a list of penny stocks that are exhibiting abnormal volume, strong technicals, upcoming news, or another catalyst that suggested they might be making a material move in the coming week.

As usual, while our Watchlist errs on the safe side of small-caps, using technical analysis to tell us where a stock is headed, we opened the comments up to readers again this week, giving you the chance to offer up more speculative penny stock plays.

Check out the comments after this article to get a glimpse at a slew of new user-submitter penny stock picks — and the chance to submit your own!

First, though, let’s take a look at this week’s breakout penny stocks worth watching…

Beach First National Bancshares (NASDAQ: BFNB) – Shares of this tiny regional banking stock broke out last month, hitting resistance right around the $1.20 level. But consolidation right under resistance right now suggests that shares could stage another breakout in the short term. Still, stay away from shares until a close above the black line.

R.G. Barry Corp (NASDAQ: DFZ) – I know, this isn’t the first time DFZ has made our watchlist… But with shares continuing to form a picture-perfect ascending triangle pattern, the imminence of a breakout should make the wait well worth it. Don’t consider going long until the trigger set last week is breached.

Ebix, Inc. (NASDAQ: EBIX) – E-commerce software provider Ebix is this week’s downside play. Shares of the company have been set on a bearish head and shoulder pattern for several months now, and a breakdown below shoulder level last week could turn into some palpable gains this week. Wait for a confirmation bounce down off of the blue line before taking the trade.

Quality Distribution, Inc. (NASDAQ: QLTY) – This trucking company bounced off of its 50-day moving average during Friday’s trading. That move should set us up for some upside movement to start this week.

Share Your Penny Stock Picks…

Once again, we’re going interactive this week…

Just post your recommendation in the comments section of this article between now and the market’s close on Friday, February 12 to share your favorite penny stock play with the rest of the world.

Cheers,
Jonas Elmerraji

February 8, 2010

Four More Stocks with Gain Potential in February: QLTY, DFZ, BFNB, EBIX was originally featured in the Penny Sleuth.

According to the Japan Robot Association (JARA), the consumer robotics market is projected to reach $24 billion this year and balloon to $66 billion by 2025. By comparison, the digital music market was $5 billion in 2007 and will be about $15 billion this year.

Personally, I think that the JARA’s long-term estimate is actually pessimistic. Bill Gates is on record for predicting that by that year, personal robots will be as common as computers are today.

If he is even half right, investors who get in on promising robot techs today will be fantastically compensated for their vision and patience in the long run. Investing in the next wave of robotics now will be like buying Intel, AMD, Apple and Microsoft in the 1980s.

Granted, the Great Recession has dealt temporary blows. A mainstay of the robotics industry has been assembly line machines for the automobile manufacturers. This sector is currently down. The overall robotics industry, though, is diversifying.

The automotive industry itself gives a good example of innovating during downturns. During the Great Depression, automobile sales plummeted. Crucial improvements in automotive technology, like fully automatic fluid transmissions and hydraulic brakes, were made, however. When the Depression ended, motoring was revolutionized. Profits and sales went up, along with share prices.

Robots are already being used for dangerous jobs that humans would rather not do. I’ve already written about robots being employed by the U.S. military and manufactured by one of my Breakthrough Technology Alert companies.

Recently, the U.S. Commerce Department decided to fund a project to develop robots able to repair aging water transmission pipelines from the inside. The R&D costs are more than justified by doing away with the need to tear the infrastructure out of the ground for repairs.

Berkeley researchers are developing small inexpensive robots that can enter collapsed buildings to find survivors after earthquakes.

The economics of robotics is based on one simple fact: While cost of production for goods generally declines over time, prices for services generally fall less or not at all. Your computer costs a fraction for the performance you receive compared with two decades ago. The technician who repairs it, however, has probably raised prices.

Similarly, food prices have fallen steeply, due to improved agricultural technologies. This includes automation technologies that are, in fact, robotics. From John Deere to Alice-Chalmers, from balers to combines, automated ag equipment has drastically reduced what we have to pay to consume our daily bread. Nevertheless, we have only scratched the surface of the benefits robotics will bring to many areas.

Today, health care services have proven resistant to price declines partly because of labor costs. Improved robotic automation is one of the fastest ways to increase productivity and reduce labor costs. With the leading edge of the boomer generation entering retirement, the financial incentives for improved robots is enormous.

We’re not only talking about cutting-edge remote diagnostics and surgical procedures. Much of the cost of elder care is in simple housekeeping and personal services. Families that want to keep older members out of assisted care facilities and closer to home will increasingly look to improved robotics for help.

The Japanese, in fact, know this well. The famous Japanese enthusiasm for humanoid robots is often scoffed at, but they will tell you there is a logic behind their efforts.

More than a fifth of Japan’s population is over 65 years old. A major thrust of Japanese investment is aimed at developing robotics capable of providing the sorts of care that now depend on human workers. With a dwindling work force and an increasing demand for basic care in homes and health care facilities, the solution is very likely to resemble a humanoid robot.

I’ve got my eye on a couple of small robotics companies that could bring the first humanoid robots to commercial applications. I’ll continue to fill you in as the situation progresses…

For transformational profits,
Patrick Cox

February 5, 2010

Your Window to the $66 Billion Robotics Revolution was originally featured in the Penny Sleuth.

With that in mind, here’s a look at why commodities are heating up in 2010 – and how penny stock investors can best play them…

Emerging markets were kicked into high gear over the past two years — this was fully evident in the middle of 2008 as many commodity prices reached all-time highs. As global demand increased, the prices for commodities like oil, corn, sugar and cotton rose to dizzying heights.

The market cooled off in late 2008 and early 2009, but now we’re beginning to tick back up. Many commodities have achieved a 50% retracement to 2008 highs, which to me signals a continuing uptrend.

(Take a look at CRB commodities index below.)

After worldwide demand destruction in late 2008, a solid uptrend has formed.

This uptrend is a combination of fundamental factors, but the most important is coming from markets like China and India. These emerging markets consumed everything from oil to orange juice — and believe me, after 2008’s hiccup their craving for so-called luxury goods has just started.

Worldwide demand for these staple commodities (fuel for a car, coffee as a new delicacy, corn-fed meats on the dinner plate, etc.) will continue to rise.

Is Gold Headed Higher in 2010?

My gut feeling about gold is that it’s headed higher.

I know, I know, I really went out on a limb with that prediction. But past all of the investment bank upgrades and positive market consensus, there are plenty of solid reasons that gold is set to rise in the next 12 months.

Technically speaking (and I’m sure you’ve heard this before) gold hasn’t even reached its inflation-adjusted all-time high. For that to happen, we’d need to see gold over $2,000 an ounce — a 75% increase from today’s price.

Will that happen in 2010? It easily could.

But a more conservative, yet realistic goal would be $1,500 gold — which could easily happen in the next 12 months.

Other than technical indicators and charts (which are tough to decipher long term for a commodity like gold), there are plenty of fundamental reasons to assume the metal will go higher.

Here are the two main reasons I believe gold will shoot up to $1,500 an ounce…

First and foremost, there is an implicit flaw with Western government. Governments like ours here in the U.S. inherently choose short-term fixes for long-term problems (it probably has to do with re-elections and such). And I don’t see that trend magically stopping in 2010 — chances are it will continue.

As short-term fixes expose more government-monetized debt, the prices of precious metals will rise, that’s for sure.

The second reason that gold will shoot to $1,500 in the next 12 months is supply related.

With prices around $1,100 an ounce, it’s clear that demand is strong, but will supply be able to match it?

No way, José.

As gold demand rises, you can bet that miners are doing everything they can to pull gold out of the ground. So when scarcity rears its head, watch out! Prices will have nowhere to go but higher.

Yours for resource investing,
Matt Insley

February 4, 2010

Commodity Demand 2010 — Set to Move Higher? was originally featured in the Penny Sleuth.

Tuesday was day two to the upside of the potential Elliot Wave B Wave up. There is an old trading adage that comes to mind right here: On the third to fourth day, watch for a reversal.

This is also why an “IBD O’Neil follow through day” – a strong signal that a rally is set to ensue, based on research conducted by Investor’s Business Daily – takes place on the 4th through the 7th day after a correction. If the market is going to fail, it’s usually going to happen before the 4th day. At the rate we are climbing, the 50-day average and the 50% Fibonacci level are just a day away…

On your mark, get set, wait.

Fibonacci retracement levels, which mark mathematically significant price levels between a stock’s short-term high and low price, are a very important factor to consider. They show us significant levels of support and resistance.

Let’s look at some upside levels per Fibonacci theory. In addition to that, we’ve also got overhead supply and the 50-day average to deal with too.

Said another way? There’s upside resistance all over the place.

Notice how we are fast approaching the 38.2% Fibonacci level? If we are going to the 50-day average we need to get through this level first. At the rate we are going, it’s going to be one more day and we are there — or at least in the zone. Then we have some choices: Wait to see what develops or start to lay out some probing positions in the Inverse Index ETFs and select individual issues on the short side.

Inverse Index Action ETF’s (Short Selling Exposure for IRA’s)

Recently we talked about Elliot Wave ABCs to the downside. The flipside to that are – not surprisingly – ABCs to the upside. If the indexes are in the process of building out potential ABCs to the downside then it stands to reason that inverse ETFs would be building out ABCs to the upside.

If you know about myy longside set-ups, then the short side set-ups are just as easy. Essentially the short-side patterns are long-side patterns that are inverted. That’s pretty neat, and keeps it simple.

Each of the inverse ETFs are pulling back off of their highs right now, just setting up a prime time, low risk buying opportunity which allows us to have short exposure in our IRAs.

So the next couple of days, I’ll be looking to deploy cash into individual stocks that are setting up on the short-sell side and to buy inverse ETFs on the longside.

Sincerely,
David Grandey
AllAboutTrends.net

February 3, 2010

Watch for a Reversal in the Markets was originally featured in the Penny Sleuth.

When it comes to oil, there are many numbers out there, but most of these involve a lot of guesswork. For example, we really don’t know just how much oil the world will need. The U.S. Department of Energy says we’ll need 106.6 million barrels a day by 2030, buy how does it know? It can’t know. It can’t know what the world will look like in 2030.

We don’t really know how much oil we’re discovering or how much will actually come to the market any time soon. We don’t really know how much it will cost to get this oil. We can guess, but our guesses are frequently wrong. Goldman Sachs wrote in a research report issued in February of last year (230 Projects to Change the World) that the cost of bringing on additional oil sands project would come to $80–90 a barrel. It sounds nice, but it’s a guess.

We don’t know a lot, even though we put decimal points on lots of numbers as if we knew precisely. And there is plenty of room for people to fudge numbers and make up stuff. It happens all the time.

Of course, no one knows what the price of oil will be, but there is no shortage of forecasts. Goldman Sachs says it will be $95 by the end of 2010. Deutsche Bank says $65. They are all guessing.

There is one thing we do know. And fortunately, this is the most important thing to remember as an investor in oil: The market is still pricing proved oil reserves at less than replacement cost.

In other words, it is cheaper in today’s market to buy proven reserves in the stock market than to drill for new ones.

I would cite the 2008 reserve and finding cost study published by Howard Weil. It shows the average cost of reserves through the drill bit is about $43 per barrel, with the median (or midpoint) around $25 per barrel. These are hard numbers, not soft guesses. You can do this yourself and find out how much it costs for your favorite oil company to add a barrel of proved oil reserves by drilling for it.

So we have a good idea of what it costs to create a barrel of proved oil reserves today. Figuring out these numbers is easier than guessing what the price of oil will be in the future. Granted, even these cost numbers will change. There are no constants.

But here is the trick. You want to buy oil companies when you can pick up proved oil reserves for a lot less than what it costs to produce them. In the market, that’s where we are today. In fact, you can pick up proved reserves for less than $15 a barrel.

Here is a scatter plot by an energy firm I respect a great deal, Lucas Capital Management. It shows you the universe of stocks it follows. EV is enterprise value, which you can think of as the cost to acquire the entire business, both the stock and the debt. So EV/BOE shows you how much you are paying per barrel of oil. It plots this number against reserve life. Take a look:

The math is easy. You have lots of companies here in which you can buy oil in the ground for under $10 a barrel… and remember it costs on average $25 a barrel to replace it.

I could not make a more compelling argument for oil stocks than this.

Buying for less than replacement costs is one of my main compasses in investing — whether I’m buying potash mines or gold mines or factories or oil rigs or what have you. If I can buy it in the stock market for less than it costs to replace those assets — and as long as I’m not buying buggy whips — then I’ve got a good chance of making money.

That’s because the stock market is, after all, just a market. Eventually, prices correct. In the oil market, we’ll see more acquisitions. It’s cheaper and easier to grow reserves that way. The buying pressure will lift the price of oil stocks so that the disparity is not so great. Simple as that.

In the case of oil, we are also looking at strong odds that the costs of producing a barrel of oil reserves will go up. Recently, The Wall Street Journal ran a piece titled “Cramped on Land, Big Oil Bets at Sea.”

Now, you’ve probably heard of all the big deep-water oil projects. All the major oil companies are moving farther offshore in their quest for oil. The WSJ article leads with this: “Big Oil never wanted to be here, in 4,300 feet of water far out in the Gulf of Mexico, drilling through nearly five miles of rock. It is an expensive way to look for oil.”

Yes, it is. This is another of the great unknowns. We don’t know how much it will cost at the end of the day to get this oil. We know that it will cost a lot. Chevron spent $2.7 billion over 10 years on just the first phase of a deep-water oil project in the Gulf.

That’s one of the more tame projects. Some of the sub-salt discoveries involve drilling more than 30,000 feet. They will be the most expensive wells ever drilled. You really don’t need to know a lot about geology or oil to guess that this deep-water oil is going to be more expensive than the good old oil wells onshore.

So that average cost of reserves is likely to go higher. Meaning, that if you can lock in quality, low-cost, long-lived reserves today for only $15 a barrel or less — you should do it. That’s why you own oil stocks today.

Sincerely,
Chris Mayer

February 2, 2010

The Most Important Thing to Remember As an Oil Investor was originally featured in the Penny Sleuth.

One again, investing in our small-cap watchlist would have left you well ahead of the S&P 500 last week, with the potential for 32.7% net gains. Not too shabby for five bear-market trading days…

In case you’re not familiar, each week, we take a look at a list of penny stocks that are exhibiting abnormal volume, strong technicals, upcoming news, or another catalyst that suggested they might be making a material move in the coming week.

As usual, while our Watchlist errs on the safe side of small-caps, using technical analysis to tell us where a stock is headed, we opened the comments up to readers again this week, giving you the chance to offer up more speculative penny stock plays.

Check out the comments after this article to get a glimpse at a slew of new user-submitter penny stock picks — and the chance to submit your own!

First, though, let’s take a look at this week’s breakout penny stocks worth watching…

R. G. Barry Corp. (NASDAQ:DFZ) – If you’ve been following our daily penny stock watchlists at the bottom of each day’s Penny Sleuth, the name R.G. Barry shouldn’t be new to you: we took a look at it in Thursday’s issue. But with its bullish ascending triangle continuing to form perfectly, I couldn’t help but bring this small footwear maker back to your attention. The buy signal is a breakout above the horizontal blue line.

Cubist Pharmaceuticals (NASDAQ:CBST) ­– While we’re big fans of speculative pharmaceutical plays here at the Penny Sleuth, the pattern forming in biopharma firm Cubist Pharmaceuticals is even more promising than most. Shares are forming a pennant pattern, which suggest they’ll start a second leg of their rally in the coming days.

j2 Global Communications (NASDAQ:JCOM) – The market hasn’t been kind lately to investors in this tiny company, which specializes in helping small businesses streamline their electronic communications. But a recent breakout in j2’s share price past a key resistance level signals a buy if the stock can manage to bounce off of the blue line.

NTELOS Holdings (NASDAQ:NTLS) – Our sole downside play this week is NTELOS Holdings, a communications provider that services customers in Virginia and West Virginia. The company got hit late last month by a downgrade, followed by a breakdown below its support levels. Expect to see shares continue to struggle into this week.

Share Your Penny Stock Picks…

Once again, we’re going interactive this week…

Just post your recommendation in the comments section of this article between now and the market’s close on Friday, February 5 to share your favorite penny stock play with the rest of the world.

Cheers,

Jonas Elmerraji

February 1, 2010

February’s Most Promising Small-Cap Charts: DFZ, CBST, JCOM, NTLS was originally featured in the Penny Sleuth.

But one thing I’d like to stress in today’s Sleuth, with the Volatility Index ($VIX) around 25, is that I believe we’re still at a reasonable level of volatility – and if anything, last week’s correction was long due.

The sell off was the worst since March 2009 with a 5% drop in the last three days of the weak week. Put in perspective, though, 15 Month S&P highs were made Monday January 19th – only a few trading days ago.

My focus lies on the recently humbled physical commodity markets that were down 6.5% as the raw materials sector retreated on Chinese concerns. Their coordinated announcement of slowing growth from the official 10% latest quarter GDP jump is designed to temper inflationary pressures – but contrary to some published obituaries the Red Dragon is still very much alive.

Last week has definitely gotten our attention but remember we have seen this action repeatedly before. For the last 10 months, every time the market looks like it will turn down it has responded with a rally to new relative highs.  Take a look:

One component in pricing for the options that my Resource Trader Alert readers invest in is volatility. For our purposes it helps us determine simply to buy an outright option if price are cheap or to purchase a spread if expensive (in relative terms). An increase in volatility is an increase in price movement – and don’t forget we need the markets to move in order to make money on our positions.

Stocks had slowed in the last couple of weeks and the $VIX, which measures the S&P 100 stocks, was solidly below 20 and as low as 16 January 11th. No fear, no movement as you saw quiet market conditions with tighter daily trading ranges while the market searched for a catalyst for prices.

Earnings have begun once again feeding the beast with its necessary diet of market information to digest. Banks have been permitted to make back some money from interest rates held low by the Fed. They had to make some money the old fashioned way:  they Earned it with the risk free policies of the Central Bank allowing them to replenish their dwindled cash coffers.

Is This Just a Pullback, Jack?

After any turnaround (in any market), traders look for price support. The logic is to start small with not making new lows for an hour, then a day, then the week. For example, the highly traded e-mini S&P 500 futures declined to 1089 in today’s session but not below Friday’s lows at 1086 and reversed to move higher on the day.

As a group commodities have done much the same with Gold and Oil closing higher after testing last weeks lows. Crude actually made a lower low at 73.97 Monday for the March contract but closed higher on the day which is a positive technical sign with that reversal on lower volume than Friday.

Another clue can be taken from the action in Treasuries, which benefited from the stock uncertainty last week. 30-Year Bond futures are off by nearly half a basis point as some fear has subsided in the short term. The next round of market volatility will tell us a lot about the market’s future direction.

It may be cliché, but my nearly 20 years of experience makes me most afraid when others are not and gives me a sense of calm when the public is frantic and unhinged.

This from Bloomberg:

Traders are piling into bets that the biggest sell-off in U.S. shares since March will increase stock market volatility, pushing call options on the VIX Index to the highest level in 19 months.

The VIX jumped 55 percent to 27.31 in the last three sessions, the biggest surge since February 2007, as demand rose for options to protect equities from losses. Futures show traders are betting it will remain above 25 for six months after averaging 20.29 over its two-decade history.

The VIX had its biggest annual drop ever in 2009, falling 46 percent, as the smallest stock-market swings in two years reduced the value of equity derivatives. The gauge is still down 66 percent from a record 80.86 in November 2008.

These emotional inputs have been successfully interpreted and managed within my readers’ disciplined RTA trading plan through ups and downs. Risk is always quantified and controlled with our strategies and that does not change as volatility increases, but opportunities do. We’re going to take advantage of those opportunities going into 2010.

It all comes back to commodities,
Alan Knuckman

January 29, 2010

Don’t Panic from the Pullback… Profit from It! was originally featured in the Penny Sleuth.

While both of these methods can be effective, it’s important to remember this cardinal rule: No matter what your investment style might be, you should always be sure to buy shares at the best possible day and time to maximize gains.

For some solid advice on the best time to buy stocks, we turn to a true expert: legendary financial writer and market forecaster Justin Mamis. Mamis literally wrote the book on trading strategies. Many of the practices outlined in his book How to Buy are still valid nearly thirty years after it was first published.

Here are three things to look for before you make your next trade:

1. The day of the week. Early gains on a Monday tend to fade; they are usually temporary reactions to weekend news, Mamis says. On Fridays, a strong close can indicate a healthy market. Our most important take-away would be to vigilant when planning to purchase shares at the beginning or end of the week: these days can give you a good indication as to what direction the market as a whole is headed.

2. The time of the day. As a rule, I will avoid the first half hour to 45 minutes after the market opens when looking to buy a stock. Unless you’re acting on a fast-moving issue, it’s best to let the market sort itself out. It’s easy to be fooled by a stock’s strong early performance, only to see those gains evaporate by the afternoon. Adding to this, Mamis suggests that investors should avoid lunchtime rallies as well, since they tend to be isolated.

3. Anticipate the weak and the strong. Mamis advises to never buy weakness in the late afternoon. His reasoning is simple: you could most certainly get just as good of a price early the next day as invetors’ sentiment carries over into the next trading session. The opposite holds true for strong stocks. Buying a strong stock at the end of the day is a great bet — you’re anticipating a gap-up the next day.

As you’ve probably already guessed, market timing techniques like these are important when you’re trading penny stocks — especially when you’re searching for short-term gains. That’s why I tell my readers to never rush into a position. Decide what price you’re willing to pay, use a limit order and hone your timing skills. That way, you’ll always get the shares you want — without succumbing to the emotional pulls of the markets.

Best,
Greg Guenthner

January 28, 2010

Improve Your Market Timing with These 3 Simple Rules was originally featured in the Penny Sleuth.

Simply put, unless you are one of the few people with optimal serum D levels, such as lifeguards and roofers in South Florida, you can cut your risks from most major diseases by 50 to 80 percent. All you have to do is get enough D. This also means we can significantly reduce healthcare costs by taking a few simple steps.

As a financial writer, I bemoan the fact that no one can patent sunshine. I’d buy stock in any company that did. Biotechs with therapies supported by far less evidence have exploded in value. GlaxoSmithKline, for example, bought Sirtris for $720 million to acquire IP for certain resveratrol-like substances. If you compare the evidence supporting the benefits of resveratrol vs. sunshine, sunshine leaves resveratrol in the dust.

I realize, incidentally, that such bold claims probably inspire skepticism. They should, in fact, and I’m going to make even more bold claims. So allow me to make the necessary disclaimers and move on.

I’ve come to the conclusions I’ve written here because my job, as a tech investment researcher, requires that I survey thousands of the most recent scientific studies. In the last few years, an overwhelming flood of new evidence has been produced supporting the view that the medical and nutritional establishments have been fundamentally wrong about vitamin D’s physiological role and optimal dosage.

If researchers on the cutting edge are right, the benefits of raising your serum D levels to about 40 ng/ml are enormous. If they are wrong, the risks associated of the recommended therapy are trivial if not nonexistent, especially if done through supplementation. This is simple Bayesian analysis.

What You Aren’t Being Told About Vitamin D

Behind the scenes even as I write today, the NIH is looking for a face-saving way to change positions on vitamin D without taking too much blame for having resisted those who have urged reassessment for decades.

The stakes are huge as are the benefits of attaining optimal vitamin D levels. The embarrassment for those who must admit past error, however, may be even greater. The reason is that untold millions have suffered and died prematurely because those who challenged the “settled science” regarding sunshine and D decades ago were treated like crackpots and demonized.

Now we know that very few people have optimal serum levels of 25-hydroxyvitamin D [25(OH)D], the principal form of vitamin D circulating in the blood.

Dr. Michael Holick, the researcher most responsible for this radical change in thinking, has described the current state of widespread vitamin D deficiency as a “silent epidemic.”

Vitamin D deficiency is not one of those metaphoric “epidemics.” It is an extremely serious public health problem that affects virtually all diseases. To understand this change in thinking, we need to review briefly the history of vitamin D and our understanding of its function.

After Decades of Bumbling, One Researcher Strikes Out on His Own Path

In the 1890s, the bone-softening children’s disease rickets was still widespread in northern states, which has more pollution and a thicker ozone layer than the northwest. Ozone blocks the invisible component of sunshine, ultraviolet-B, which produces vitamin D in the skin.

In the early 1900s, it was demonstrated that summer midday sunshine prevented rickets. As a result, there was an effort to educate the public and nearly everybody learned that a little sunshine was good for you. If you’re of baby boom age, your mother undoubtedly told you to “go outside and get some sun.” That’s why.

Ironically, the beginning of the end of this attitude came in 1923 when a means of producing dietary D was found. UW-Madison biochemistry professor Harry Steenbock discovered that the vitamin D content of milk could be increased with ultraviolet (UV) irradiation. This led to the enrichment of milk and the near elimination of rickets. Slowly, the perception of sunshine as healthy began to fade.

For the most part, scientists lost interest in the biological role of sunshine for higher animals. Dr. Michael Holick was the notable exception. For the last thirty years, Holick has been gathering data, doing research and studying the role of sunshine and vitamin D.

When Science Overcomes Conventional Wisdom, Opportunities Pop Up

We now know, however, that D is not actually a vitamin. It is prohormone, meaning that it is a precursor form of a steroid hormone created by conversion in various organs. This active hormone acts to regulate multiple important biological functions. Every single cell in the body has a D receptor; even stem cells.

Holick, a professor of dermatology himself, lost his teaching position when he published his findings. When he wrote a book on the subject, he was targeted by a well-funded PR campaign, aimed at debunking him, by the leading dermatological organization.

Supposedly objective journals, including the New England Journal of Medicine, refused to publish his exhaustively documented research; research now accepted as both accurate and pioneering.

About five years ago, the vitamin D climate began to change. Holick has finally begun to get the recognition he deserves and now serves on multiple prestigious boards as well as advising the NIH. He is, incidentally, Professor of Medicine, Physiology and Biophysics at the Boston University School of Medicine. Holick is also director of the General Clinical Research Center, the Vitamin D, Skin and Bone Research Laboratory and the Biologic Effects of Light Research Center at the Boston University Medical Center.

Holick explains that new breakthroughs in the biological sciences have helped him make his case. With the decoding of the human genome, for example, it now appears that a remarkable 2000 genes are influenced by vitamin D.

A Trend to Watch – Vitamin D Awareness and Opportunities for Investors

Optimal vitamin D serum blood levels, attained through sunlight or supplementation, dramatically reduces the risk of many diseases other than bone maladies. Many of the most serious are ameliorated by an astonishing 50 to 85 percent. These diseases include cancers, from breast and colon to deadly melanoma skin cancers.

Yes, that’s right. The really nasty skin cancers can be prevented by getting moderate, sensible sunshine or through vitamin D supplementation. Non-melanoma skin cancers do increase somewhat with sun exposure, especially with sunburns. These skin cancers, however, are relatively benign as they tend not to spread into other parts of the body. They are easily detected and removed because they appear on skin exposed to the sun.

Melanoma, on the other hand, is the deadly skin cancer that most people erroneously relate to sunshine. Melanomas, however, do not tend to occur on parts of the body that get direct sunlight. The bottom line, which is worth repeating, is that the incidence of truly nasty melanoma skin cancers goes down significantly with sensible exposure to UVB-containing sunshine or with vitamin D3 supplementation.

This is not the end of the list, though. The big killers and most expensive diseases respond similarly to adequate D. I’m talking about hypertension, cardiovascular disease and stroke. So do type 1 diabetes, type 2 to a lesser extent, rheumatoid arthritis, peripheral vascular disease, multiple sclerosis, dementia, autoimmune diseases and apparently even viral diseases such as H1N1 and AIDs.

I predict, in fact, that other diseases will also be linked to vitamin D insufficiencies as more studies are performed. I’ll keep you posted on any further developments I discover. In the meantime, you might benefit from doing some personal research on vitamin D.

Your body and your portfolio might thank you…

For transformational profits,
Patrick Cox

January 27, 2010

What Vitamin D Means to Your Technology Profits was originally featured in the Penny Sleuth.