InvestorsGuru.com Breakout Small-Caps: DANG E-Commerce China Dangdang, CEL Cellcom Israel, ACRX AcelRx Pharma, MEIP MEI Pharma, TCX Tucows, MEET MeetMe, MJNA Medical Marijuana, tsx/v: PTA Petroamerica Oil

Guru Trader Tweet of 8 Notable Market Movers - High Volume, Price Action & News:

NYSE:
DANG E-Commerce China Dangdang $4.16 +$0.48 2.7m - %G,
CEL Cellcom Israel Ltd $8.86 +$0.31 .6m - %G,

NASDAQ:
ACRX AcelRx Pharmaceuticals $3.36 +$0.16 1.7m - %G|YH,
MEIP MEI Pharma Inc $1.63 +$0.05 .6m - %YH,

AMEX:
TCX Tucows Inc $1.38 -$0.01 .1m, FT@ $0.84
MEET MeetMe Inc $2.65 +$0.41 .4m - %G|$G,

OTC:
MJNA Medical Marijuana Inc $0.125 +$0.01 23m - VA,

TSXV:
PTA Petroamerica Oil Corp $0.265 -$0.005 4.2m - VA,

Top 10: VA Volume Active, %G Percent Gainer or $G Dollar Gainer. YH 52-Week High, NH 10-Year New High, FT@ First Tweeted at price (within a year +/-) - verify or follow live at twitter.com/InvestorsGuru or subscribe to blog.InvestorsGuru.com

Recent News Headlines

- Nov 15, (NYSE: DANG) Dangdang Announces Third Quarter 2012 Results (Year-Over-Year Q3 Revenues: Net +42%, Media +33%, General Merchandise +56%)
- Nov 13, (NYSE: CEL) Cellcom Israel Announces Third Quarter 2012 Results (free cash flow +58%, continues efficiency plan, nets 5,000 new cellular subscribers)
- Nov 11, (NYSE: CEL) Cellcom Israel Announces Update Regarding Purported Class Action Pending Against the Company
- Nov 15, (NASDAQ: ACRX) AcelRx Announces Primary Endpoint Met in Phase 3 Non-Inferiority Study of Sublingual Sufentanil NanoTab PCA System vs. IV PCA Morphine for Post-Operative Pain (conference call and webcast today to discuss top-line results)
- Nov 06, (NASDAQ: ACRX) AcelRx Pharmaceuticals Reports Q3 2012 Financial Results
- Nov 06, (NASDAQ: MEIP) MEI Pharma Reports New Data Showing High Response Rates in Clinical Trial of Pracinostat and Azacitidine in Myelodysplastic Syndrome (Data Accepted for Presentation at American Society of Hematology Annual Meeting on Dec 10)
- Nov 05, (NASDAQ: MEIP) MEI Pharma Announces $27.5M Private Placement Financing Led by New Institutional Investors Vivo Ventures and New Leaf Venture Partners
- Nov 15, (AMEX: MEET) MeetMe Inc. Ranked Number 32 Fastest Growing Company in North America on Deloitte’s 2012 Technology Fast 500
- Nov 07, (AMEX: MEET) MeetMe Inc. Reports Financial Results for Q3 of 2012
- Nov 13, (AMEX: TCX) Tucows Plans to Commence Dutch Auction Tender Offer
- Nov 13, (TSX: TC) Tucows Reports Continuing Strong Financial Results for Q3 2012
- Nov 15, (OTC: MJNA) Medical Marijuana Portfolio Company CanChew BioTechnologies Inc. Announces Final Day for Market Survey and Free Product Trial Registration
- Nov 15, (OTC: MJNA) Medical Marijuana Inc. Reports Third Quarter 2012 Revenue and Income Quarter Over Quarter Increase Of Over 1500% From Same Period Last Year
- Nov 7, (OTCPK: MJNA) Medical Marijuana Inc. Sees Growth Opportunities For Its Portfolio Company with Historic Washington 502 Vote to Legalize Marijuana for Recreational Use, Massachusetts New Medical Marijuana Initiative and Michigan Vote to Decriminalize Marijuana in Four Major Cities
- Nov 7, (PINKSHEETS: MJNA) Medical Marijuana Inc. Anticipates Increased Opportunities For Its Portfolio Company with Colorado Voters Passage of Amendment 64, Becoming First State to Legalize Marijuana for Recreational Use
- Nov 13, (TSXV: PTA) Petroamerica Announces Light Oil Discovery at La Casona-1 and Provides an Operations Update for its Colombian Activities

We filter today's market movers, then focus on 5 or more small-cap stocks with seemingly positive news and/or technical chart momentum, while excluding one-day-only events such as a buyout. Click symbols above, or Submit any symbol to our Detailed Quote Portal at InvestorsGuru.com, for its stock quote, chart, news, research and to view/post/share comments at any ticker's bulletin board. Sign-up for our Small Cap Stock Observer Newsletter, Featured Stock Profiles & News by Email, and to setup your own My Portfolio, My Watchlist & Alerts and email preferences. Free!

AnyTicker Bulletin Boards; Metals Stocks To Outperform Bullion; Contrarian Plays; URZ Receives DDW Permit - InvestorsGuru.com

Our New AnyTicker Bulletin Boards

Do you post on stock Bulletin Boards? Have you ever requested or waited for new boards to open? We asked why there isn't a comment board already setup for every valid ticker symbol that can be quoted. Seems logical... right? But as far as we know there just isn't one, so we built it - marrying our quote data feeds to the best comment platform out there IMHO.

We now invite you to comment about your favourite stocks, investment ideas, trends, market news, or post interesting charts etc. Simply go to www.InvestorsGuru.com, submit a quote symbol, login with any Facebook, Twitter, Google+ etc. account, and type away. You can even add pictures or media, star or vote posts up or down, subscribe via email or RSS, and share posts on your social pages.

To focus discussions, every valid symbol has its own board, including every stock, put or call options, warrant or preferred share, ETF, mutual fund, index, commodity etc. Multiple listed companies have distinct boards, e.g. to facilitate German on a Frankfurt board, English/Spanish on U.S. boards, or English/French on a TSX Canadian board. With 60k+ public companies, and just as many mutual funds and ETFs, plus multiple listings, options etc., our boards already number in the hundreds of thousands! We'll even add a comment board at the bottom of this newsletter, at our website.

Every bulletin board has a Community tab with the Top Discussions, and below this are links to recent comments Also On our site. Use these links to discover new boards, or simply Quote and Post!

Join One Of Our Recent Discussions

Recent comments are shown on our homepage and we have started the discussion with posts about some of the stocks we are watching:

• Cash Offer with 2-Spinouts: Galway Resources (TSXV: GWY) then $1.57 +.22 on 4M+ shares, although their newest release of 3 new high grade gold zones was a week earlier on October 9, 2012. For over a year GWY has been releasing impressive drill results and we wanted to know more - towards adding the stock to our Top 30 Small-Caps list. Three days later the company announced a cash offer of $2.05 per GWY share, PLUS shares in two new companies (0.9 share to hold the Vetas gold project and US$18 million cash, and 1.0 share to hold the Victorio tungsten-molybdenum project and US$12 million cash). Unfortunately we didn't move faster as V.GWY is now $2.23. We'd like to know your thoughts about Galway, their drill program etc. and the potential of the two new SpinCo's and their metals projects?
• Merger: Prodigy Gold (TSXV: PDG) then $0.99 +.30 on an agreement to be acquired by Argonaut Gold (TSX: AR), representing $1.08 per PDG share. Longer-term this seems like an interesting combination of PDG's Magino mine with AR to potentially produce 300-500k Au-oz per year. Any thoughts on where AR will settle out, and its potential looking forward?
• Two More Buyouts: Lorex Technology (TSXV: LOX) agreed to be acquired by FLIR Systems (NASDAQ: FLIR) for $1.30 cash per share. Similarly, Hana Mining (TSXV: HMG) agreed to be acquired for $0.82 cash per share. LOX is new to us but our Guru Trader Tweet has mentioned HMG six times since January 2010, between $1.48 and $2.05. HMG traded as high as $5.68 in December 2010. Both stocks caught our eye last week on high trading volumes with all-cash offers that are slightly higher than where they are trading. Is there more here?
• Two Oil & Gas Plays: Donnycreek Energy (TSXV: DCK) then $2.01 +.21 on 1M+ shares, recently acquired Deep Basin Montney assets in Alberta and closed a $29M private placement. Petroamerica Oil (TSXV: PTA) then $0.25 has been mentioned in our past Guru Trader Tweets and newsletters about the Colombia Oil Boom. On October 1, PTA announced drilling start-up of the Las Maracas-5 well and a production update. Both PTA and DCK have been trending up for months, with PTA's 52-week high of $0.28 made on October 22, and DCK's all-time high of $2.35 made on October 18. What's your opinion of these oil plays?
• Split It: Apple Inc. (NASDAQ: AAPL) makes great products, although overpriced IMHO. The stock doesn't seem expensive with a 13 P/E, ok dividend and strong 1, 5 and 10-year charts. Apple is the biggest company, but it's not a conglomerate like Berkshire Hathaway (NYSE: BRK.A), yet even they have a lower priced share (NYSE: BRK.B). The question is would shareholders be better served if AAPL split 10 for 1, or issued a sub $100 class B share?

You're invited to add to these discussions, or start a new one at your favourite stock boards. Just Quote and Post! Note: for Canadian TSX quotes, simply add :CA to the symbol and then Submit.

Metals Stocks Set To Outperform Bullion This Time?

Over the past decade it seemed that while commodity metals prices moved higher, prices of mining shares refused to keep pace - let alone outperform as they had done in previous bull markets. As mentioned in our recent newsletters, we believed that metals prices would rally this fall and that junior mining stocks may be finally set to make their move.

Despite generally weak equity markets (S&P 500 -2.0%, DJIA -2.5% in October), gold, silver, platinum, palladium and most base metals prices have moved higher this fall. Our mining stock posts above are just a glimpse of all the consolidation, financing, merger and buyout activity lately. Perhaps together this is an early indicator that unless the economy goes off the fiscal cliff in December, that 2013 could be one of the best years ever for exploration and mining shares versus bullion or ETFs.

Contrarian Resource Plays - Nat Gas, Diamonds, Uranium

The contrarian in us is always looking for low tides that may be ready to reverse trend and break new waves higher again. This time last year we wrote that we like, "beaten up natural gas and diamond plays that have an established resource, for a turnaround sometime over the next year".

While carat prices have mostly recovered from the 2008 economic crisis, diamond-mining stocks have yet to show clear signs of a commodity-price macro-driven uptrend. Similarly, decade low natural gas prices have recovered close to double its sub-$2 price set last April, but this 6-month uptrend is not as easily identified in share prices - as most natural gas companies also produce oil, or are utilities. Small-cap diamond and natural gas exploration plays remain of interest and on our radar.

Uranium investments are very interesting to track, as they tend to establish clear trends with big moves. U3O8 made its record high of $138 a pound in June 2007, one year before oil made its new high of $145 a barrel. Both crashed by the end of 2008 during the economic crisis. Oil has since recovered to now over double its 2009 low, with uranium barely above its $40 trough low.

In 2010 U3O8 prices were again over $70 a pound. Uranium mining stocks were one of the hottest investments right up until March 2011 when Japan's record 9.0-earthquake and tsunami hit the Fukushima-Daiichi nuclear power plant. Our past newsletters describe how the media, public, governments and markets overreacted in punishing anything nuclear reactor related. We've shown how much nuclear power capacity is being built worldwide, and how uranium is not just a long-term growth story, as the world's mined supply doesn't even cover current demand. Japan's nuclear reactors are already being put back online, as practical and economic realities are sinking in.

It's ironic how all the uranium good news recently has so far only resulted in even lower prices. That's what makes uranium a contrarian resource play today, as the market's momentum and price trends don't seem to recognize the fundamental positives. As any contrarian sector starts to turn around, focus on the strongest and best-positioned companies, as these tend to move first and farthest!

URZ Outperforms All Tracked Uranium Investments


Uranium prices stubbornly continue to be the weak outlier in an otherwise seasonally strong metals environment. While precious and base metals continue to build technical support, with many believing that gold will take out previous highs and $2,000 an ounce over the next year, uranium prices have not yet participated. Instead, the spot U3O8 price has fallen another $4.00 to $42.50 a pound, down another 8.6% over the past month.

Here’s how the uranium stocks, ETFs and holding companies that we track have performed, based on month-end closing prices on October 31 compared to September 28, listed from worst to first:

• Uranium Resources (NASDAQ: URRE) -19.6%
• Fission Energy (TSXV: FIS) -13.4%
• Denison Mines (NYSE: DNN) -12.8%, (TSX: DML) -11.6%
• Uranium Energy (AMEX: UEC) -9.6%
• Ur-Energy (AMEX: URG) -8.1%, (TSX: URE) -7.2%
• Paladin Energy (TSX: PDN) -7.8%
• Uranium One (TSX: UUU) -7.7%
• Global X Uranium ETF (NYSE: URA) -7.5%
• Uranium Participation (TSX: U) -5.0%
• Cameco (NYSE: CCJ) -0.5%, (TSX: CCO) +1.1%
• Uranerz Energy (AMEX: URZ) +1.8%, (TSX: URZ) +3.8%

This includes a variety of uranium miners, from small-cap exploration and development companies to some of the world's largest uranium producers. Not included are integrated majors like BHP Billiton (NYSE: BHP) and Rio Tinto (NYSE: RIO) that produce uranium but are more influenced by precious metals and other base metals prices.

URZ has not just outperformed every other pure uranium investment that we track; it's the only name on the list that's not down over the past month! This seems even more impressive when you compare news flows of these various uranium companies, with URZ not releasing any news for almost two months prior to October 23rd.

Uranerz Energy Receives Deep Disposal Well Permit

Uranerz Energy (AMEX: URZ)(TSX: URZ)(FF: U9E) has been our featured uranium company since late 2010. Around then uranium was the hot sector, and Uranerz seemed ideally positioned to become America's next uranium producer. The company already had NI 43-101 resources of 19M+ pounds of U3O8, with 30+ projects to explore and develop in a prolific uranium-mining region.

URZ was one of the best performing uranium stocks back then, doubling in just a few months from under $3 to almost $6 as the company achieved several financing and permitting milestones. Then suddenly Fukushima hit all uranium investments hard, and most have still not recovered.

Summary of Uranerz Energy accomplishments since March 2011:

• Initiated Powder River Basin drilling program (205 wells drilled as of August 15, 2012)
• Added to the Russell Family of Indexes (one of only two uranium small-caps still listed)
• Final NRC permit approval (Nuclear Regulatory Commission)
• Commenced construction of the company's first mine (plant is near completion)
• Signs processing agreement with Cameco (sales contracts with Exelon and another utility)
• Production well and development updates (discovers new U3O8 trend, Monument Project)

As you can see, Uranerz Energy has been busy! Since Fukushima the company hasn't missed a step in its exploration, development and mine construction plans. However, when looking at URZ' current $1.55 share price, with 6.65M shares sold short as of October 15, you might wonder how close this company really is to becoming a uranium producer. After a quiet period since August, the company may have delivered the last piece of the puzzle and your answer in its October 23 news release:

"Uranerz Energy Corporation announces that the Wyoming Department of Environmental Quality has issued the Class I Underground Injection Control (deep disposal well) permit for the Company's Nichols Ranch ISR Uranium Project located in the Powder River Basin of Wyoming, U.S.A. This deep disposal well authorization is the last permit required to begin operations and commercial uranium production at Nichols Ranch.

'The receipt of the deep disposal well permit concludes a long but successful effort to obtain all of the regulatory permits and licenses needed to construct and operate an ISR uranium mine in Wyoming,' stated Mike Thomas, Vice President of Environment, Health and Safety.

'With this final permit in hand, Uranerz will focus on installing two deep disposal wells this winter while completing the remaining construction activities,' stated Company President and CEO, Glenn Catchpole. 'We are all very excited at the prospect of becoming America's next ISR uranium producer in 2013.'

The Nichols Ranch ISR Uranium Project is expected to become the first new uranium mine built in Wyoming since 1996. The project is licensed for a production level of up to two million pounds of uranium per year with initial annual production targeted for 600,000 to 800,000 pounds after ramp-up. The project will also serve as a platform to develop the Company's other Powder River Basin properties with enhanced economics for adjacent and satellite projects."


Nichols Ranch Aerial View, Sept. 2012.
More URZ Mine Construction Photos: Uranerz.com/s/Photos_Nichols_Ranch.asp

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InvestorsGuru.com Breakout Small-Caps: ARNA Arena Pharma, SIFY Sify Tech, MTG MGIC Invest, ONCS OncoSec Medical, tsx/v: RTK Artek Expl, CQE Cequence Energy, DCK Donnycreek Energy

Guru Trader Tweet of 7 Notable Market Movers - High Volume, Price Action & News:

NASDAQ:
ARNA Arena Pharmaceuticals $9.75 +$0.39 14m - VA|FT@ $3.20,
SIFY Sify Technologies Limited $2.78 +$0.49 3.5m - %G,

NYSE:
MTG MGIC Investment Corp $2.03 +$0.29 13m - %G,

OTCBB:
ONCS OncoSec Medical Inc $0.395 +$0.06 3.5m - VA,

TSX:
RTK Artek Exploration Ltd $2.90 +$0.47 2.8m - VA|YH,
CQE Cequence Energy Ltd $1.94 +$0.17 6.3m - VA,

TSXV:
DCK Donnycreek Energy Inc $2.01 +$0.21 1.4m - $G|NH,

Top 10: VA Volume Active, %G Percent Gainer or $G Dollar Gainer. YH 52-Week High, NH 10-Year New High, FT@ First Tweeted at price (within a year +/-) - verify or follow live at twitter.com/InvestorsGuru or subscribe to blog.InvestorsGuru.com

Recent News Headlines

- Oct 12, (NASDAQ: ARNA) Arena Pharmaceuticals Initiates Phase 1 Multiple Dose Clinical Trial of APD811 for Pulmonary Arterial Hypertension
- Oct 17, (OTCBB: SIFY) Sify Reports Revenues of INR 2059 Million for Second Quarter of Fiscal Year 2012-13
- Oct 08, (NYSE: MTG) MGIC Releases Monthly Operating Statistics
- Sep 28, (NYSE: MTG) MGIC Announces Status Update Regarding Freddie Mac
- Oct 17, (OTCBB: ONCS) CE Certification Enables Commercialization of OncoSec Medical System (OMS) Electroporation Device in European Economic Area
- Sep 13, (TSX: RTK) Artek Exploration Ltd. Provides Drilling Results Update at Inga
- Oct 04, (TSX: CQE) Cequence Energy announces appointment of new director
- Sep 10, (TSX: CQE) Cequence Energy announces Falher discovery at Simonette/Resthaven
- Oct 15, (TSXV: DCK) Donnycreek announces Closing of $29 Million Private Placement Equity Financing and Acquisition of 169.5 gross (115.5 net) Sections of Deep Basin Montney Assets

We filter today's market movers, then focus on 5 or more small-cap stocks with seemingly positive news and/or technical chart momentum, while excluding one-day-only events such as a buyout. Click symbols above, or Submit any symbol to our Detailed Quote Portal at InvestorsGuru.com, for its stock quote, chart, news, research and to view/post/share comments at any ticker's bulletin board. Sign-up for our Small Cap Stock Observer Newsletter, Featured Stock Profiles & News by Email, and to setup your own My Portfolio, My Watchlist & Alerts and email preferences. Free!

Eye-Popping Election Cycle Stock Market Returns; Metals Rallying; (AMEX/TSX: URZ) Uranerz Energy - InvestorsGuru.com

But Which Trend, Is Your Friend?

I've always been told and believed that timing the market daily is a mug's game. I mean that going bug-eyed watching a trading screen all day in hopes of scalping an extra fraction of a point here or there is fine for some; but for most of us doing something else for a living, trying to flip stocks daily in the hopes of consistently outperforming the market has proven to be a total waste of time. In fact, it's usually detrimental to long-term returns compared to a simple Buy-&-Hold investment strategy.

This doesn't mean hold-forever; I'm just not a big believer in short-term Day Trading. But I do believe that intermediate to long-term Trend Trading can be very useful in timing better entry and exit points - because it takes more than a few days momentum data to confirm a meaningful trend.

My favourite momentum data comes from established market cycles. They repeat often and therefore tend to be more reliable. However I'm not talking about the Super-Bowl Market Predictor that says that an old NFL-team win means rising stocks, while an old AFL-team win means falling stocks. Yes I know it's been around a long time, with an impressive 80% accuracy, but there still needs to be some common sense reasons why a trend worked, before betting your savings on it repeating.

Market Timing Around The 4-Year Presidential Election Cycle

One of the most important market trends to consider has been the Four-Year Presidential Election Cycle. You too may have known about this for years, but I'll guess that after looking closer that you had no idea just how predictable and powerful this market indicator is. I didn't, but will from now on!

History suggests that during the first two-years of a presidential term, that the market underperforms compared to the last two-years. The first year is usually the worst, and the second year is also below average. Wars, recessions and bear markets tend to start or occur in the first-half of a term. The third year is usually the strongest and the fourth year, an election year, also tends to be above average.

S&P 500 Total Return Index - 1948-2008 average by U.S. Presidential Term-Year:

1. 7.41%
2. 10.21%
3. 22.34%
4. 9.79%

This only makes sense as politicians are always campaigning, wanting to get any unpopular new policies and actions out of the way and forgotten by the next election. Budgets, tax changes and law reforms can have considerable impact on the economy and the stock market. The basic re-election formula for both parties has been to cut early and hold off spending until the second-half of the term.

In 1936 Keynesian Macroeconomics introduced the need for governments to use these spending taps. This theory called for governments to ease business cycle recessions by stimulating demand through fiscal policy. A decade or so later the idea became government gospel, especially as a political tool to influence the timing of when the economy (and voter enthusiasm) would be inflated.

Although the Federal Reserve is supposed to be independent of the president and Congress, monetary policy appears to follow the presidential election cycle. Monetary policy expanded 65% of the time during the third year, compared to 48% for the other years. Does it still seem like a coincidence why the third year of a president's term is usually the market's best year?

Huge Second-Half Gains Versus First-Half Losses

There are many similar tables and graphs that demonstrate market returns for each year of any four-year presidential term. However it is not as meaningful to look at election years prior to 1952, because other than for WW2 the government generally did not attempt to influence the economy before then. When analysing market performance the S&P 500 (SPDR ETF (NYSE: SPY)) is the benchmark, excluding commissions, dividends, interest, and of course taxes, that are not factored in for simplicity.

The best investment returns were not surprisingly provided by the 27-month period from October 1 of year-2 until the end of a presidential election year. This is compared to the 21-months starting on the first trading day of the inaugural month until September 30 of year-2. What did surprise me is the consistency and magnitude of how far these grouped cumulative returns were apart!

Starting with the 1952 election year, $1,000 reinvested only during the first-half of every presidential term would have returned a measly $643 in the year 2002, a loss of 36% after 50-years - not including inflation! If you had instead invested only during the second-half of every presidential term this would have returned $72,701, a gain of 7,170%. Wow!

Further, second-half'ers won during all thirteen terms from +16% to +70%, and averaging around 40%. First-half'ers won seven times from +7% to +49%, but lost six times from -2% to -47%.

The problem is that these tables only go up to the year 2000. A lot has happened since then including 9/11 and the so-called Great Recession from December 2007 to June 2009. I'd like to also know how well this trend predictor held up under these extreme conditions. Using our website's Historical tab after quoting the symbol ^SP500 allows me to calculate returns for the 2004 and 2008 election years.

My chart below plots all of this data for the 1952-2008 presidential election years. It appears that the second-half predictor held up well after 9/11, as the S&P 500 gained around 48% from October 1, 2002 until December 31, 2004. However almost all of this gain was given back during Bush's last term ending in 2008, marking the first second-half loss of any presidential term in over six decades.

The first-halves were up around +10% and +26% for the 2004 and 2008 election years. Not bad until you realize that the 1952-2010 first-half terms cumulative value is still under the initial $1,000.



Stock Markets Predict Presidents And (DO NOT) Do Better Under Republicans

This predictor may even work in reverse, as many believe that the stock market's social mood can predict who wins the next election. The incumbent usually wins if the market is strong and the other party usually wins if the market is weak, going into an election.

Contrary to popular belief, research studies of market data from 1927-2003 show that excess returns for Democratic presidents have been about 11%, while only 2% for Republican presidents. For small-cap stocks this is more pronounced, with a difference of excess returns of about 22% for Democrats compared to Republican administrations. Market volatility for Democrats has even been lower.

This year being another presidential election year, we won't know Obama's second-half return until December 31. However, the S&P 500 was 1,143 on October 1, 2010 and if we apply today's 1,461, this works out to around +28%. Unless there's a crash this month (always a scary thing to say in October) then the stock market may be predicting an Obama win.

Precious Metals Rallying

We often refer to ratios such as the Gold / Silver, Gold / Oil and Dow / Gold ratios. Investments like these compete for investor attention, and knowing their historic ratio averages, and upper and lower ranges, help identify when one might be cheap or expensive overall, and its relative value. Last month's newsletter showed gold's 10-year uptrend, with corrections in 2006, 2008 and 2011, and how metals were seasonally poised to rally again, with the gold/silver ratio indicating that silver was relatively cheap. Gold is now higher... and silver has materially outperformed it!

Gold and silver's biggest ETFs are SPDR Gold Trust (NYSE: GLD) and iShares Silver Trust (NYSE: SLV). Global X's related ETFs include: Pure Gold Miners (NYSE: GGGG), Gold Explorers (NYSE: GLDX), Silver Miners (NYSE: SIL) and a new diversified Junior Miners ETF (NYSE: JUNR).

Now that gold's decade long uptrend appears to be intact and may be gaining strength again, we might be able to extend gold's established trend lines to suggest its next major technical resistance. This assumes that gold's corrective phase that started last fall has concluded, and that gold can smash through its previous high resistance of $1,923 this time. Looking out a year or so, based on these highly conditional technical observations alone, I come up with around $2,650 an ounce for gold.

If this happens then silver works out to $52 if the gold/silver ratio remains where it is now, at 51. However, if the gold/silver ratio drops back to its historic level of 15 at that time, like it did as gold and silver's last major uptrend peaked in 1980, this might suggest around $175 an ounce for silver.

Base Metals Rallying

Since our last two newsletters about bottom fishing gold and other metals and related stocks, most base metals have kept pace with precious metals. Since August 7, the approximate spot price increases were: Gold and Palladium +10%, Platinum +20%, Silver +24%. For base metals: Copper +10%, Zinc and Aluminum +12%, Lead and Nickel +20%.

There are lots of supply and demand reasons, based on monetary versus industrial or other uses, why precious metals and base metals prices shouldn't necessarily run together. In any event, once again gold's established trickle-down trend effect on base metals has held.

Spot Uranium, The Outlier

One metals train that has stubbornly refused to leave the station is the short-term U3O8 price. Stuck at around $50 a pound for a year now, uranium peaked back in 2007 at $137. Back then uranium prices, and similarly record high oil prices, were technically extended and due for a major correction. Oil has since recovered to more than double its lows, while uranium and related investments suffered further and has yet to recover after Japan's record earthquake and tsunami on March 11, 2011.

Investors near abandonment of anything uranium was blamed on the Fukushima-Daiichi nuclear accident. The media hyped nuclear fear, and governments worldwide reacted. Most have reasonably mandated reactor stress-tests and review, while Japan and a few others like Germany didn't wait for the facts before rashly stating they would end their use of nuclear reactors altogether.

The fact is that the March 11, 2001 Japanese earthquake and tsunami was a natural disaster. Over 16,000 people were killed and 3,000 more are missing. However, a year and half later not one of those deaths are attributed to nuclear radiation.

Another fact is the same earthquake caused a hydroelectric dam to collapse in the same Fukushima district. This resulted in hundreds of deaths and thousands of homes being destroyed. I don't recall any media reports, government statements or public outcry for ending hydroelectric power!

Despite these facts, the U3O8 spot price is now $45.75. It was close to $70 just before Fukushima.

Long-Term Uranium Demand, Supply and Prices Remain Supportive

We have been writing for months about positive fundamental developments in the nuclear power industry. China is the main driver for new nuclear power reactors and is now going ahead on projects that were put on hold after Fukushima. Next in the pecking order for the world's 552 reactors currently in construction, planned or proposed are: India, Russia, United States, Japan, United Arab Emirates, Ukraine, United Kingdom, Vietnam, Canada, South Korea and others.

Not only are these nuclear power programs still going ahead, we have recently cited industry experts and major publications that say many of these countries are now accelerating their nuclear energy efforts. Facing looming power shortages and higher energy costs going into elections over the next year, politicians in Japan and Germany have been back-pedalling on their anti-nuclear positions. Reactor closings may get delayed in Germany, and two reactors are now back online in Japan, with construction now resuming at J-Power's Ohma nuclear power plant, announced October 1.

On September 19 Japan's government retreated from recommendations calling for the elimination of nuclear power by 2040. The New York Times and Kyodo News implied that by dropping this goal, the Japanese government appears less committed to a nuclear phase out. Japan's dependence on imported energy and rising energy costs are unsustainable and many now believe the 35 "safe" idled nuclear power plants will be allowed to restart after the 2013 election.

Weak short-term prices have caused uranium-mining projects, like BHP Billiton's (NYSE: BHP) huge Olympic Dam mine in Australia to be deferred last month. This worsens a supply deficit that the world already has, not including the effects from all the positive demand factors reported recently.

Another major reduction in world uranium supply should happen as the U.S. and Russia complete their 20-year Highly Enriched Uranium (HEU) Program, scheduled to end next year. Also referred to as Megatons to Megawatts, or Swords to Ploughshares, uranium from nuclear warheads is converted for peaceful uses such as nuclear power. By the end of 2013, 500-tons of HEU will have been down-blended. Going forward, this removes about 13% of the world's annual uranium supply.

Raymond James, Morgan Stanley and others seem to agree, forecasting a uranium shortfall after next year, with spot prices around $70. Currently the 24-month or later U3O8 price is around $60.

Uranium Stocks

U3O8 is radioactive and highly regulated, and therefore can't be held like bullion. Uranium also does not have a fully transparent active market, as utilities and uranium producers usually don't announce transaction prices or even the name of the buyer.

To ride the next uranium trend investors have to look at ETFs like Global X Uranium (NYSE: URA), or at specific uranium mining stocks. These include major producers like Cameco (NYSE: CCJ)(TSX: CCO) and Rio Tinto (NYSE: RIO). Our featured uranium stock continues to be Uranerz Energy (AMEX: URZ)(TSX: URZ), a $129-million market-cap company actively exploring, developing and expected to soon be producing uranium in Wyoming's Powder River Basin (PRB).

You have to credit Uranerz' management, or at least their good luck. Just before Fukushima, when URZ traded around $5 a share, they raised $47-million for mine construction and related costs. URZ then sold-off like everything else uranium in 2011/2012, but the fortunate timing of that funding provided much less share dilution compared to today with URZ now trading at around $1.67 a share. This summer URZ remained one of only two uranium small-caps in the Russell Indexes.

Uranerz keeps advancing its projects while many other uranium companies have had to slow down and re-evaluate. The Nichols Ranch plant at the company's first uranium mine is near complete and just waiting for the company's Deep Disposal Well (DDW) permit before hopefully setting a production date soon. URZ is also exploring its 30+ uranium projects in the PRB, with over 200 wells drilled so far this year, including a new uranium trend they just discovered called the Monument Project. URZ remains very well positioned for when uranium prices start to run again!

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