Top Stocks Report For 2010: Slow Volcano Erupt In A New Energy

California Senate Bill 107 Will Legally Force California to Produce 20% of Its Electricity From Sources Like "Slow Volcano" Power by Dec. 31, 2010...

AND 18 MIT Scientists Say That "Slow Volcano" Power Can Produce 2,000 Times the Amount of Electricity That America Consumed in 2005...

This Company Is the Only Pure Play on Californian "Slow Volcano" Power... and You Could Buy 100 Shares for Only $26.50...

Dear Curious Reader,

Right now, a "slow volcano" broils deep beneath the brown mountains 72 miles north of San Francisco.

Don't worry, though. This volcano will never erupt.

You see, unlike other volcanoes you know about, this "slow volcano" has no opening to the Earth's surface.

It's completely underground. So it can't erupt. That's why I call it a "slow volcano."

But did you know that you could harness the "slow volcano" heat to light the streetlamps of San Francisco? Same for the air conditioners, stoves, refrigerators and flat-panel TVs.

Let me explain...

How "Slow Volcano" Power Could Soon Light the Streetlamps of San Francisco

Although it sounds mysterious and impossible, it's simple.

A "slow volcano" spews out heat. This cooks the nearby groundwater.

The water turns into steam.

Then, you drill a hole in the ground and let that steam spin a turbine.

The turbine spits out electricity.

It works just like a coal or natural gas power plant.

Except those two types of plants use heat from burning fossil fuels to boil water. Then they use the steam to spin turbines.

Same with nuclear power. But the heat that makes the steam comes from an atomic reaction.

But as you probably noted, "slow volcano" power pumps out hot steam WITHOUT burning any fossil fuels or using rare uranium.

That stunning fact makes "slow volcano" power the ultimate in renewable energy. More on that in a moment.

But first: Why San Francisco, and why now?

The largest, most productive "slow volcano" in the world sits a short 72 miles north of San Francisco.

Nestled under the Mayacamas mountain range in Sonoma wine country, today, this "slow volcano" pumps out 750 megawatts of electricity. That's enough to power 750,000 homes, or a city the size of San Francisco.

You ask, "OK, but why now?"

How the California Government Will Force Massive Growth in Energy Sources Like "Slow Volcano" Power Over the Next 1½ Years

California recently passed Senate Bill 107.

This bill says that 20% of electricity sold in the state must come from renewable sources by Dec. 30, 2010. And Gov. Schwarzenegger hurried to place a 33% target by 2020.

Let's put those numbers into perspective...

First, you should know that California has the world's sixth largest economy. That's big. Bigger than the entire countries of Italy and China!

And according to a 2006 estimate, over 36,000,000 people live in California. Further, the state adds 500,000 more folks every year.

So that means that by December 2010, at least 7.6 million Californians are slated to get all of their electricity from renewable sources like "slow volcano" power.

And when you add the huge amount of juice that runs the businesses such as Google and the Silicon Valley crowd, you have a massive and urgent need for increased renewable energy capacity.

That gives California just under a year and a half to meet a deadline that drastically increases the amount of renewable electricity sold in the state. That will benefit the producers of renewable energy like "slow volcano" power...

So renewable energy must grow a lot. And fast.

But just how much must it grow?

Well, right now, the state generates 10.2% of its electricity from renewable sources. So that means the amount of renewable energy must DOUBLE in just under a year and a half.

Quite an ambitious goal. A goal that could pay off for the investor willing to find the best California renewable energy play. And I've found the best way to play California "slow volcano" power.

I'll send you the name of this company right now in a free report called Profit From the Gov't-Forced Boom in Renewable Energy With "Slow Volcano" Power.

This small company — a share costs less than a newspaper — is the only "pure play" on California's government-forced explosion in renewable energy.

I'll tell you exactly how to get the company's name in just a moment. For now, let's return to "slow volcano" power's potential.

You saw that the California state government has mandated the increased generation of clean and renewable power like "slow volcano" power. The U.S. Supreme Court has done pretty much the same thing...

U.S. Supreme Court Rules in Favor of "Slow Volcano" Power

In April 2007, the Supreme Court ruled that greenhouse gases like carbon dioxide are pollutants under the Clean Air Act of 1970.

So now the Environmental Protection Agency has the power to restrict greenhouse gas emissions. As do individual state governments.

"Slow volcano" power emits no carbon dioxide. So this Supreme Court ruling should boost its development in the same way the California renewable energy law should.

Now, the common view is that cars and trucks emit the vast bulk of greenhouse gases into the air. False.

Power plants, by far, churn out the largest chunk of greenhouse gases in the U.S.A. For instance, power generation emits 29.5% of the carbon dioxide released into the air.

Coal- and natural gas-fired power plants spew out the lion's share of that carbon dioxide. So you know that "slow volcano" power should get a large boost when the individual states carry out the Supreme Court's decision.

To sum up, the California Senate, Gov. Schwarzenegger AND the U.S. Supreme Court are forcing energy sources like "slow volcano" power to grow very quickly in the near future.

That means "Slow Volcano" power grants you government-mandated profit potential.

You might have these questions: So what's so great about 'slow volcano' power? What makes it better than other renewable energies like wind, solar and hydro?

Good questions...

Why "Slow Volcano" Power Crushes Solar, Wind and Hydro

Let's lay out how "slow volcano" power beats the other renewable energies that California could use to meet its goal of 20% by 2010. You'll see that "slow volcano" power is the best-known form of renewable energy. It's also one of the cheapest to produce.

But let's start by comparing it to solar power.

How "Slow Volcano" Power Churns out Juice Nearly 4 Times as Long as Solar

"Slow volcano" power plants operate 24 hours a day. You can suck steam out of the ground around the clock. Obviously, solar cells don't capture any juice at night. Further, they capture less on cloudy days.

The percentage of time that a power source can make electricity is called "capacity factor." Solar power has a capacity factor of 25%. So over a one-day period, solar cells crank out juice for only six hours.

"Slow volcano" power's capacity factor, on the other hand, ranges from 90% to as high as 98%. So a "slow volcano" plant whips up electricity for at least 21.6 hours a day.

So on average, a "slow volcano" power plant can blast out electricity for almost four times as long as solar power.

Further, since demand for solar power has rocketed up so much over the past few years, a supply crunch has spanked the solar cell makers. The solar cells' main raw material is silicon. And silicon refiners have scrambled to refine enough silicon to meet the rising solar cell demand. This scramble tightened silicon supply.

The semiconductor industry's large need for this same silicon chokes the supply problem even more. And since it takes many years to get a new silicon refinery online, you know the shortage won't solve itself overnight...

Now, none of that means that solar investments have performed poorly in the recent years. Take a look at some solar stock performances:

First Solar for 492% MEMC for 79% Evergreen Solar for 66%

JA Solar for 219% Trina Solar for 224% SunPower for 236%.

Yup, solar stocks have had an impressive run so far.

Now, since we just proved that "slow volcano" power makes a better renewable energy source, don't you think it has more investment potential than solar?

Especially when you consider the California Senate mandate and that the largest "slow volcano" in the world sits right outside of San Francisco.

Kind of makes you wonder why no one talks about "slow volcano" power.

Kind of makes you want to know the name of the tiny 27-cent company that's the ONLY pure play on San Francisco "slow volcano" power.

Of course, you can have that best stocks for 2010  symbol.

Just ask for your FREE copy of Profit From the Gov't-Forced Boom in Renewable Energy With "Slow Volcano" Power.

More on how to get your free copy of that limited-edition investment research report in a minute. For now, let's get back to showing how "slow volcano" power makes the best renewable energy opportunity...

We showed how "slow volcano" power beats solar power. Now let's compare it with wind power.

How "Slow Volcano" Power Can Help Heat Homes 3 Times as Long as Wind Power

When you read that solar cells can produce power only 25% of the time, I bet you immediately thought about wind power. After all, the wind doesn't always blow.

Wind power's capacity factor clocks in a tad better than solar, with an average of 30–40%. But obviously, the 90–98% capacity of "slow volcano" power trumps that figure...

Furthermore, "NIMBYism" makes it tough for wind power to spread to certain areas. "NIMBY" sounds funny, but it simply means "not in my backyard." In some areas, large groups of people object to large construction and industrial programs that could change the environment.

This "NIMBYism" happens frequently with wind power. In populated areas with high average incomes, few people care to watch a sunset sliced up by hundreds of towering windmills. Not from the deck of a million-dollar home!

"Slow volcano" power plants, on the other hand, look tiny. They're sometimes as small as houses. So few, if any, NIMBY complaints get lodged against "slow volcano" power generation.

So now that we've shown how "slow volcano" power outperforms wind power, let's take a look at how some top stocks for 2010 have done:

Vesta Wind Systems for 107% Gamesa Corp. for 79% American Semiconductor for 168%

NaiKun Wind Energy for 404% Western Wind Energy for 132% Kaydon Corp. for 31%.

Those gains look pretty good, don't they?

So if wind has done that well this year and "slow volcano" power performs better than wind power, shouldn't "slow volcano" power attract your investment attention?

Thought so... and you'll soon learn how to obtain your FREE report about the best pure plays on "slow volcano" power...

But for now, let's finish the comparison with the other possible renewable energies that California can use to boost its portion of renewable electricity generation to 20% by the end of 2010.

Let's turn our sights to hydroelectric power.

"Slow Volcano" Power Pumps out Juice More Than Twice as Long as Hydro

Hydroelectric power simply means power made from moving water. Here, we discuss large-scale hydro. That means power that comes from damming up a river and forcing the trapped water to spin a turbine.

Returning to the capacity factor question, large-scale hydroelectric power runs 35% of the time. As we saw above, "slow volcano" power runs at least 90% of any given day. So you see that "slow volcano" power works more than twice as long as hydropower.

In addition, in today's world, a new American dam would face extreme opposition.

The not-in-my-backyard crew would never allow the flooding of hundreds or thousands of acres that would stem from damming up a river.

You'd also get grief from environmentalists who want to preserve the existing river ecology.

In short, don't expect to see any new large-scale hydro dams built. Especially in a wealthy and liberal-leaning state like California...

Now, that said, we ought to take a look at how hydro stocks have performed ...

Canadian Hydro for 45%

TransAlta Corp. for 60%

Boralex for 65%

Brookfield for 20%.

Once again, if "slow volcano" power beats hydroelectric, don't you think that "slow volcano" should perform better as an investment? I think so, too...

Now let's quickly sum up the case for "slow volcano" power.

Why You Should Invest in "Slow Volcano" Power Right Now:

That explains my enthusiasm for "slow volcano" power. And it explains my eagerness to give you the only pure play on San Francisco "slow volcano" power.

This unknown little company sells for under 27 cents per share — so you can control a thousand-share block for just $265! I reveal this company's name in an exclusive memo called Profit From the Gov't-Forced Boom in Renewable Energy With "Slow Volcano" Power.

But please allow me to introduce myself before I get ahead of everything...

Why This Old Rockhound Got Obsessed With "Slow Volcano" Power

Hello, I'm Byron King.

You may know me from the investment research newsletter Outstanding Investments, which I helm as managing editor.

Outstanding Investments focuses solely on resource-related stocks. We're talking gold, oil, cement, timber, alternative energy, uranium, coal and water. You know, all the "stuff" we need to live and build things.

Or you may have read my resource- and history-related writings in the internationally renowned e-letter Whiskey & Gunpowder.

You see, I focus most of my time on the resource, energy and commodity sphere of investing. And you've obviously seen my present obsession with the innovative resource of "slow volcano" power.

Why does the commodity segment of the market demand my time?

Enter the "old rockhound" part... I've studied geology for almost 40 years now. Back in the '70s, I graduated from Harvard with a geology degree.

I immediately went to go work in the exploration and production division of an oil major. The geologist's main task: to tell the oilman where to drill. Quite important, yes?

I've also held membership in the American Association of Petroleum Geologists for over 30 years. So after I stopped working as an active geologist, I turned all of my attention to discovering investment opportunities in oil and the resource sector in general.

That's why I love to research and write about commodity and resource hot stocks to buy in Outstanding Investments.

I also have quite some pride in the fact that Outstanding Investments has been the best-performing newsletter in the world over the past five years. The independent watchdog Hulbert Financial Digest judged this.

Don't take my word for it, though. Let's look at some specifics:

How about some samplings of past triple-digit Outstanding Investments recommendations:

332% on Glamis Gold 668% on Metallica Resources 162% on Intrepid Minerals 137% in KeyWest Energy 263% on Coeur D'Alene 228% on Niko Resources 151% on Tocqueville Gold

104% on ICON Energy Fund 174% on PetroChina 160% on Western Oil Sands 182% on Talisman Energy 118% on Norsk Hydro 108% on Anglo American 147% on BG Group.

Of course, you should never frown on a nice double-digit gainer.

Outstanding Investments has pumped out a healthy helping of these kinds of gains, as well:

96% on EOG Resources 75% on American Water 84% on Corner Bay 57% on Waste Management 88% on Northgate Exploration 55% on Atacama Minerals 80% on Anadarko Petroleum

70% on Suez SA 86% on Kerr-McGee 73% on Wheaton River Minerals 85% on Precision Drilling 88% on INVESCO Energy Fund 83% on Placer Dome 78% on OMI Corp.

The above triple- and double-digit closed plays could've made my Outstanding Investments readers rather wealthy.

But just to complete the picture, let's take a quick look at some of the plays still open in the Outstanding Investments portfolio*:

361% and 119% on gold funds 712% on an oil sands refiner 237% on a sour crude refiner 235% on a natural gas driller 70% on a silver miner 144% on a construction company 25% on a gold miner 28% on an oil shipping company

94% on a Mexican cement maker 40% on an oil refiner 162% on a coal company 69% on a trash-to-energy generator 104% on a gold miner 29% on a geothermal power supplier 84% on a gold ETF 102% on a coal shipping trust.

* Please note:In fairness to existing Outstanding Investments subscribers, I can't reveal the names of the companies still open in the portfolio. All gains as of Aug. 19, 2008.

Here are a few comments from satisfied readers:

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Profits of 560% and 652%... I'm up $45,000!
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"On Monday, I sold for a profit of 560%. Today was my birthday, and you gave me the greatest birthday present I have ever had (financially) — a profit of 652%...

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So you wonder why I don't share my tiny "slow volcano" power company with Outstanding Investments members? Simple answer: because I can't.

You see, since Outstanding Investments has the best five-year record in the world, it has attracted a large number of eager members. Over 46,500, to be exact. And at under 27 cents per share, the California "slow volcano" play is just too small for that amount of interest.

But here's the thing... I'm so excited by the potential of "slow volcano" power I had to find some way to help Outstanding Investments readers take advantage.

Luckily, while I was researching the "slow volcano" phenomenon, I found a solution. I recommended the only midcap pure "slow volcano" play on a major American exchange. (There is no large-cap pure play in "slow volcano" power.)

Those lucky Outstanding Investments readers have had a chance to make a nice 29% — and still climbing — in just over a year.

Unfortunately, that's the only "slow volcano" pure play big enough to reveal to such a large number of potential investors.

But there's a world of difference between that 29% midcap gainer and the San Francisco "slow volcano" stock market.

There's no way I can possibly send out that "slow volcano" recommendation to the high number of potential investors who read Outstanding Investments.

You see, the company is so small that the stock is a microcap. It costs less than 27 cents per share. And further, a relatively small number of shares trade each day. This makes the stock fairly illiquid.

If we told 46,500 people about a stock that small — frankly — all hell would bust loose.

The share's trading volume could get slammed up by all of the buying interest. This could artificially affect the stock's price. We can't have that...

But a problem comes up with my silence about this awesome "slow volcano" opportunity. This particular "slow volcano" stock has such strong profit potential that I can't possibly keep silent about it.

So I thought hard until I came up with a solution. I had to create a new research service that focuses only on these tiny, unknown microcap resource companies.

Companies so small that I can't recommend them to more than a small handful of skillful opportunists. Companies that promise outsized, underground gains.

Introducing Energy & Scarcity Investor

I call my new small and midcap resource stock research service Energy & Scarcity Investor.

Energy & Scarcity Investor follows the premise of my life's passion and present work in Outstanding Investments: finding great resource stocks. Resource stocks that promise incredible gains in the continued multidecade commodity bull market...

The basic tenet of the new service is to show you gains from the most necessary — and scarce — resources through the realm of speculative and tiny commodity and energy top stocks.

Stocks exactly like the 27-cent "slow volcano" power maker that I'll reveal to you in three minutes.

Whether those stocks trade on the Amex, the Bulletin Boards, the Pink Sheets or even a foreign exchange like the TSX Venture... Energy & Scarcity Investor will scour any exchange, anywhere, to show you the best tiny, unheard-of commodity stocks.

For instance, the "slow volcano" play I'll reveal to you trades on one of the Canadian exchanges. On top of that, as we just went over, it's very small.

Now, we must have a word about risk and sophistication.

Why Energy & Scarcity Investor  Isn't Right for Beginners

Clearly, these microcap plays are more speculative than getting involved with, say, an established blue chip major like Exxon.

For this reason, you need an increased tolerance for risk to use the research in Energy & Scarcity Investor. As you know, the larger the chance for gain, the larger your risk. That simple fact will never vanish.

Now that doesn't mean we should shy away from the explosive profit potential that microcap resource plays like the San Francisco "slow volcano" company offers. It just means that we have to treat these companies with more diligence. We must approach the opportunities with more sophistication. With more courage against risk.

These important qualities make Energy & Scarcity Investor a smaller, more elite service.

Beginning investors probably shouldn't subscribe.

This necessary exclusivity has forced me to place a firm limit on the number of copies I send out at any given time of the free special report Profit From the Gov't-Forced Boom in Renewable Energy With "Slow Volcano" Power.

The San Francisco "slow volcano" power play — and the four other "slow volcano" plays in your free report — are so small that currently I can send the report to only the next 2,500 people who subscribe. That's about 5% of my Outstanding Investments member base.

So less than one in 20 of my existing readers currently have the chance to get a look at this report. More on this limit in a bit... for now, let's take a look at some stocks in the sector that Energy & Scarcity Investor covers.

Explosive Gains From Tiny Resource and Energy Stocks

For proof of the concept behind my new service, let me show you some past impressive gains from micro- and small-cap resource stocks just like the ones that Energy & Scarcity Investor will focus on:

700% on Almaden Resources 450% on Antares Minerals 1,258% on Bear Creek Mining 4,500% on Brett Resources 1,236% on Dynasty Metals 2,860% on Denison Mines 428% on Cirrus Energy 1,376% on Enexco

214% on Pan Orient Energy 211% on Ur-Energy 1,062% on Virginia Mines 958% on Seabridge Gold 1,076% on Minefinders 732% on Pan American Silver 208% on Compass Minerals 2,568% on Silvercorp Metals.

Energy & Scarcity Investor aims for those impressive quadruple- and high triple-digit gainers.

In fact, I have a good feeling that the "slow volcano" play that got me so excited has potential like that.

But wait. The San Francisco "slow volcano" play that I'm writing you about isn't the only pure "slow volcano" power play that you'll get in your free report called Profit From the Gov't-Forced Boom in Renewable Energy With "Slow Volcano" Power.

In fact, I have four other impressive "slow volcano" power plays I want to send you.

First, I should point out that "slow volcano" power works in many more places than Northern California.

Massive "Slow Volcano" Potential in the Western U.S.

Put simply, the red areas hold "slow volcanoes" that broil close enough to the Earth's surface that you can drill into them to harness their heat to spin a turbine. The ideal potential lies in the states of California, Idaho, Oregon and Nevada.

And it just so happens that I want to tell you the names of some more tiny pure play "slow volcano" power producers in those states...

Western "Slow Volcano" Dynamo #1:

This unheard-of company controls 10.8 square miles of choice "slow volcano" land in southern Idaho. An independent firm estimates that this field can produce enough electricity to sell power to 110,000 households.

What's more, this company got lucky. This site started as a U.S. Department of Energy "slow volcano" power installation. So the government did all of the grunt work, proving the "slow volcano" resource could crank out a good deal of juice. Then this company stepped in and took over.

This company could get a big hit soon, though, because it just started generating electricity. If Wall Street takes notice, the $2 stock will move fast... so make sure you get your free copy of Profit From the Gov't-Forced Boom in Renewable Energy With "Slow Volcano" Power. Right away.

Western "Slow Volcano" Dynamo #2:

Your second "slow volcano" pure play operates mainly in power-starved and growing Nevada. This company has a combined approach of generating power from proven "slow volcanoes" and acquiring potentially productive fields.

Their existing project has a minimum potential to power 30,000 homes. But the higher estimate states that the field could sell power to as many as 47,000 homes.

But the company's unproven fields show potential, too. It's bought the rights to three more fields in Nevada and Oregon. Just one of these sites at one time shot superheated steam out of the ground 147 feet into the air. Independent estimates state that this field should produce enough juice to power 50,000 households.

Western "Slow Volcano" Dynamo #3:

Your third "slow volcano" play holds interest in 15 geothermal projects in Nevada.

The initial estimates on the amount of power these fields can churn out amount to120– 245 megawatts. That's enough to power 120,000–245,000 homes. So you can see the massive potential of this tiny company...

Western "Slow Volcano" Dynamo #4:

This little "slow volcano" company operates in western South America, not the Western United States. Take a look at the following map to see the hottest "slow volcano" regions across the globe, colored in red:

This company operates in western Latin America. It focuses on Nicaragua. The project it's nearly completed has an estimated power generation potential of up to 277 megawatts — or enough to provide 277,000 homes with electricity.

So that sums up the five total "slow volcano" pure plays you'll get in your free copy of Profit From the Gov't-Forced Boom in Renewable Energy With "Slow Volcano" Power.

As I explained, these microcap "slow volcano" stocks are so small that I have to limit the number of reports that I send out at any time to 2,500.

And this offer ends right at midnight on Aug. 28.

That means that you must accept your Energy & Scarcity Investor invitation before midnight on Aug. 28.

But there's even more urgency for you. If 2,500 people sign up before the midnight deadline on the 28th, I'll have to close the doors on the "slow volcano" report. I simply can't send it to any more people than that now. So it's wise for you to act quickly and accept your invitation.

Now let's cover the additional benefits you'll receive when you join Energy & Scarcity Investor...

Here's What You'll Get With Your Membership to Energy & Scarcity Investor  :

A FREE copy of Profit From the Gov't-Forced Boom in Renewable Energy With "Slow Volcano" Power. This special memo on microcap "slow volcano" companies contains five pure plays for you to take advantage of. I will e-mail you this report if you're among the next 2,500 people who subscribe. Value: $795

A full year of monthly Energy & Scarcity Investor issues. You'll receive at least one — possibly more — new recommendation every month. You'll get specific stock symbols and specific buy ranges. You'll get the issue immediately by e-mail, and we'll mail you a hard copy, as well. Value: $1,495 per year

Urgent updates at least once a week. These e-mails will update you on any urgent news on your open recommendations in the Energy & Scarcity Investor portfolio. Also, I'll weigh in on important developments in the commodity market and the general market at large. Value: $495 per year

Flash buy and sell alerts. Sometimes the market forces us to act swiftly. If an event arises that forces us to recommend you sell out of a position, we'll let you know anytime. That way, you won't delay locking in gains. Likewise, if I discover an opportunity that can't wait for the scheduled monthly or weekly updates, I'll send it to you right away. Value: $295 per year

Instant 24-hour access to the private, members-only Energy & Scarcity Investor Web site. Here you'll find everything I write to you in one convenient spot... your special investment reports, the monthly issues and weekly updates. You can also access a real-time portfolio that tracks all of your Energy & Scarcity Investor plays

Free subscription to the Agora Financial Executive Series. The series forms an exclusive benefit to our valued paid readers. It consists of Rude Awakening and The 5 Min. Forecast. Rude Awakening selects writings from all of Agora Financial's paid investment research and publishes the best and most profitable specific recommendations. The 5 Min. Forecast aims to sum up the day's financial news and mix it with profitable and lighthearted recommendations in one brief bulletin that you can read in 5 minutes or less

Total value of one year of Energy & Scarcity Investor = $3,080 per year

$3,080 looks pretty cheap, compared with what you'd pay for other high-end research services.

And you can bet you'd have the opportunity to recoup that $3,080 in no time if we showed you a triple- or quadruple-digit winner...

But don't worry: You won't pay nearly that much to accept your membership.

The price for one year is just $1,495. That's a 50% discount off the one-year value of $3,080.

Then I thought about it some more. To show how serious I am about this new service — and the potential for you to make gains with my "slow volcano" picks — I dropped the special price from $1,495 to just $995 per year. You save 33%!

But there's one last catch:

Hold on — you could actually get four months of Energy & Scarcity Investor completely risk free...

Why You Can Try out My "Slow Volcano" Power Research for $0

That's right. I want to give you the chance to pay nothing to try out my Energy & Scarcity Investor. $0!

How it works: You receive your "slow volcano" report. You decide if you want to invest in any or all of those hot stocks. Soon, your monthly issues arrive. You get your weekly updates and exclusive password access to the member-only Web site...

You decide which recommendations you want to act on. Whichever you want.

My guarantee: If, after four months, you're not satisfied with the opportunities my Energy & Scarcity Investor picks have shown you, you can call me and demand a full refund.

You heard that right. If you're not satisfied with your membership, you pay nothing for it.

Even in the last hour of the 119th day. No questions asked. And you keep every single thing I've ever sent you.

I think that's the simplest guarantee in all independent investment research.

Couldn't be fairer than that, could it?

 

How We Learn For Stocks Investment

After last weekend's article, a subscriber wrote an important and thought provoking note on the blog. He indicated that he was unable to learn very well by reading books or watching DVDs and believed the only way he could learn to trade was by actually doing it. I guess the smart alec in me is grateful that this fellow didn't decide to be a pilot, but learning to trade through trading real money may be nearly equally dangerous. What struck me as so important about the posting was that the writer recognized that learning through reading or watching and listening to someone else just did not work well for him. He had learned that he grasps new information most successfully with a hands on approach. I sincerely believe the writer should congratulate himself on understanding where both his strengths and weaknesses lay with regard to learning. Once he achieved that understanding he can embark on a course of education specifically dedicated to his personal learning skills even without putting real cash at risk.

In the seminars I have given and in the coaching sessions I have conducted, it is apparent that each of us learn in different ways. Some may be auditory learners while others are visual and some do best reading a book. Though I probably shouldn't be, I am often amazed at how the "light goes on" for a student when they are first exposed to a chart of price and volume after they had great difficulty in picturing a trend or understanding how they might use Japanese candlesticks to set stops. Most of us seem to learn best using a combination of methods from attending seminars to reading books to watching DVDs to practice trading. Again, most of us seem to have at least an intuitive feel for how we can best study and understand information.

If we really want to commit to becoming better traders, I suspect it is worthwhile for each of us take a little time to focus on how best we learn then formulate a plan by which we can add to our trading knowledge and abilities. If, like our friend, we can only learn by doing, I urgently suggest it not be done by risking real money at first. One can learn a great deal about methods and strategies by paper trading, for example. When we paper trade, we can see how things work and when we might want to enter a position and under what circumstances we might want to exit. We can test strategies and practice adjustments to trades, but we don't have to worry about losing the farm while we practice. Please understand, I advocate paper trading as a way to gain knowledge about trading and about ourselves. It is not the same as trading real money. When we do put real money on the line, our emotions will be much different than they are with a paper trade and at that point we may have reached the point where we have no choice but to learn by actually doing and, perhaps, using a coach to help us through some of the emotionally driven issues we may face when real money is at risk.

If you learn well by reading, you may want to check out "Trade Your Way to Wealth" or my new book, "Smart Investors Money Machine." If you like to learn using videos, you might want to take a look at the DVD that was made of my presentation in Chicago before a live audience for Traders Library that is about to be released. Of course, while I'd love to see you get my books or DVDs, there are a number of great tools available beyond what I have done. Dr. Alexander Elder's "Trading for a Living" is an excellent book for those who want reading material as is Charles Kirkpatrick and Julie Dahlquist's "Technical Analysis." Many brokerages offer free webinars to those who prefer a visual presentation, and seminar companies abound. Trading software companies also often put on presentations and I have found it is quite worthwhile to attend seminars put on at events like Traders Expo.

Most of us can improve only with study and practice. Trading education generally must be self-directed since few institutions yet offer courses and even if they did, I'm not too sure that I'd want a purely academic approach in any event. As has long been my mantra in this area, if you really want to be a good trader I believe commitment to study and practice are essential.

MTL (Mechel Open Joint 2010 Top Stocks Company)
Company Profile
MTL has been showing a number of positive technical signs during its recent trend up. This one could present an entry on a pullback and has a long way to go to reach its split-adjusted highs of nearly $60 last year. $10 Trader is watching for an entry to keep the 2 month winning streak in tact.

CCE (Coca-Cola Enterprises, Inc.)
Company Profile
A trade Option Trader closed this past week realized a 38% gain in 4 months. The best stock for 2010 is dealing with an area of resistance and a break above could be reason for me to re-enter a LEAPS call position.

JWN (Nordstrom Inc.)
Company Profile
Trend Trader captured an 8% return before commission in just 6 days. Nordstrom's has been making an impressive run and if it can hold above nearby resistance may well offer yet another opportunity.

MCD (McDonald's Corp.)
Company Profile
Our Success Trading Group members scored another winning trade this week by closing our recently opened position in McDonald's Corp. (Ticker: MCD).

PII - Polaris Industries Inc. is currently trading at $35.32. The June $35.00 Calls (PIIFG) are trading at $2.95. That provides a return of about 8% if PII is above $35.00 on expiration Friday in June.

 

Top Stocks Market: The Dollar Dike Gives Way?

"China stuck in dollar trap," says the headline on the front page of the Financial Times.

The FT says China is buying more U.S. bonds than ever. It must...according to the news report...because it has too many. Unless it supports the dollar, it risks a big collapse in the value of its foreign exchange holdings (mostly in dollars).

China has its finger in the dike. But it may need a bigger finger. This morning it is trading at $1.40 per euro - a new low for the year. Measured against gold, it now takes 958 dollars to buy a single ounce of gold.

"We have a huge amount of money in the United States," said Wen Jiabao, premier of the People's Republic of China, back in March. "I request the U.S. to maintain its good credit, to honor its promise and to guarantee the safety of China's assets."

In response to this request, U.S. Secretary of the Treasury, Timothy Geithner, answered in the positive. Whether he had his fingers crossed behind his back, or not, we do not know. But for the moment, the United States is honoring its promises in the short run...but doing so in such a way that dooms the Chinese in the long run.

Now, the Fed is buying U.S. Treasury bonds. So are the Chinese. Supporting each other, they are also supporting prices of bonds - which happen to be the largest single source of financing for the U.S. government and the largest single liquid asset of the Chinese government. Despite the support of the biggest investors in the world, the price of bonds and the price of the dollar both sank last week. Which makes us wonder: what happens when both the United States and China turn into sellers?

That may not happen soon. But it will happen.

For now, the United States has to sell trillions more in bonds to finance its imperial ambitions, bailouts and boondoggles. The Fed will have to buy them...along with the Chinese. If top stocks market fall - as we expect - they are likely to be joined by many other buyers too - all seeking safe haven in the world's leading credit.

But at some point, as always, what must happen will happen. Not forever can the United States spend $2 for every dollar it receives in tax revenues. Not forever can the Chinese support the value of a bad investment, in which they are already too heavily invested, by buying more of it. Not forever can the dollar hold its value when the Fed is busy creating hundreds of billions more of them. And not forever can the Fed continue to inflate the currency when the dollar is falling.

Since the Fed inflates by buying bonds, when consumer price inflation begins to menace the bond market, it must deflate by selling them. When that moment approaches, even if it is months or years ahead, Daily Reckoning readers are warned: that will be a bad time to be visiting China...and a bad time to be holding U.S. Treasury bonds...and a bad time to be standing behind the dike. Make sure you are fully prepared - get your dollar crash insurance here.

Meanwhile, the International Herald Tribune says that Latvia is being crushed under a huge government deficit. Formerly middle-class citizens are out of food, says the paper. Further down on the socio-economic ladder are scenes of "Dickensian misery."

What provoked this horror, according the IHT, is a current budget deficit equal to 12% of GDP.

Wait! The US budget deficit is 13% of GDP. Sooner or later, that deficit will crush Americans too...

On Saturday, we gathered with the family - what is left of it - in Southern Maryland. A cousin took us on a little tour and kept up a lively monologue:

"Yeah...things have changed around here. But not necessarily as you would expect.

"My business is doing so well I can barely keep up with it. Of course, that's because the state decided to protect the Chesapeake Bay by paying people to put in new septic tanks. They've got a new device that is supposed to aerate the water in the tank to that it puts out less nitrogen. It looks like it should cost about $100...so the state pays about $2,000 for it. And then, they'll pay the entire cost of replacing the old septic tanks. My guess is that it does very little good. But I'm putting in these new tanks all over the place...

"Housing speculators are getting hurt...but we haven't seen any major bankruptcies.

"When the stocks market of 2010 was hot they were putting up these huge boxes," he continued...pointing to a group of what looked like brick McMansions. "They just staked out the lots and plopped these monster houses down on them and sold them for $1.2 million each. These houses are huge...7,000...8,000 square feet...but they have no charm at all. Just big brick boxes with plastic windows. No view. No gardens. No trees to speak of...

"This fellow here built a 10,000 square foot house...look at it. It's meant to look like an English manor house, I guess. It's even got a little cupola on the roof...I think you can go up into it. I know the fellow so I went over and he gave me a tour of it. Every time we came to a window he said 'look at that view...' There's a beautiful horse farm in the distance. But between the horse farm and his house there are these huge power lines. So, when I looked out the window all I saw was the power lines.

"He was trying to sell the place for $4 million. I doubt if he'll get $1 million for it now."

We drove up to Parole, an out-cropping from Annapolis. It got the name during the Civil War when it was the site of a Union prison camp.

"And look what they've done to this...it used to be a shopping mall...but that went out of business when they built the new mall down the road, so they developed this into upscale apartments with shopping beneath them. I think they sold about half of them before the bottom fell out of the top stocks market for 2010."

Near the apartments was an immense Fresh Fields store. It was the first time your editor had ever seen the inside of one. The array of food - all of it very well presented - was staggering. We had never seen so many varieties of things we didn't even know existed. Shoppers are said to be scaling back and moving down-market. They're supposed to be giving up Fresh Fields and going to the Safeway. But we saw no obvious signs of it. There were hundreds of shoppers. Still, the cost of laying out so much food, much of which must go to waste, is probably as staggering as the display. There were dozens of clerks in red frocks. And thousands of square feet of space. The whole thing seemed like a relic of the Bubble Époque.

"Let's go back down the road," our cousin continued. "Let's go look at the old family farm...and we'll stop in and take a look at the Lansdowne place too. Old John died a couple years ago. The house was empty. Then it burned down. Too bad. That house had been there for more than 200 years. You know, John had spent his career in the army. He must have moved around a lot. And he had five daughters. I guess the daughters never got attached to the place, because when John died none of them wanted it. Kind of sad...because it had been in the same family since the Revolution and it's a wonderful farm."

We drove in the driveway...past a sign that said 'No Trespassing Any Time'...then down a long gravel road lined by old oak trees. Finally, we came to the house site. There was nothing there but a patch of brown dirt with a few broken bricks...where the ruins had been bulldozed to the ground. As we stood there...looking at the bits of brick and tableware...and then down the lawn...the sweet smells of the locust trees in bloom were intoxicating.

"What a great place for a house. It looks down the hill and then through the gate down the long driveway with those old trees. Makes me kind of sad every time I come here. More than two centuries of family history...and there's nothing left of it...just these cinders in the dirt. Those girls have all left the area. I'm just glad John was already dead. Maybe he won't know..."

Later, we drove to our own farm. There, we saw signs of neglect. Trees need to be pruned. Fences need to be repaired. Shutters need to be built. Even when it is under the eaves and painted, wood seems to rot.

"It's not the same wood they used to use," our cousin explained. "They used to use heartwood of oak. Now, all you get is pine. Get it wet, even a little bit wet, and it will soon be punky.

"Things are always going wrong. I was just thinking of John. He must have kept having children, hoping to have a boy who'd want to keep the farm...and every time he got another girl.

"Then, those poor developers...they probably knew the end of the boom was coming...but they kept building...hoping to get things old before the boom ended.

"And then, it seems there are always family problems. You know Dennis? He took over the family's construction company. The other boys became accountants or lawyers...or something. It's always a story of the outsiders against the insiders. Dennis ran the business. But the other brothers wanted money from it. And Dennis is having a hard time now that people aren't building so much. So when the time came to renew the lease on the headquarters building all hell broke loose. The brothers who weren't in the business thought Dennis was living too high on the hog. I don't know about that. He was always driving around in that old company pick-up truck every time I saw him. But the brothers wanted a lot more rent; the building...and the land is still owned by the family. Dennis only had a lease on it. But Dennis got mad and moved out. He took the whole company and rented a space across town. Now, the family's got an empty building and no rent.

"This has nothing to do with it, I guess it's just another story about things going wrong...but remember Paul Holland? He and Mimi were getting ready to celebrate their 50th wedding anniversary. As far as we knew they were happy together. They had children and grandchildren. But then, just before their 50th anniversary, Paul said he had fallen in love with a much younger woman and moved out. Of course, Mimi was floored.

"Can you imagine that? He must have thought it was his last chance for love. But you wonder what had he been doing...thinking...all those years? He's over 70...and now, he's starting out all over again. I can't imagine it. Much too much trouble...

"Reminds me of a story...about a conversation that took a bad turn.

"A man and his wife were preparing their wills... The woman asks her husband if he would get married again, if she died first.

"'No, I wouldn't want to marry again,' he said.

"'Well, why not?' she answered. 'Don't you like being married?'

"'Well...yes...'

"'Then why wouldn't you want to get remarried?'

"'Well...okay...maybe I would get remarried.'

"'But where would you live...would you bring your new wife to our house?'

"'I guess so...it's a nice house...I wouldn't want to move.'

"'You mean...you'd let her drive my car and sleep in my bed?'

"'I don't know...I hadn't thought about it...but, yes...I guess so...why not?'

"'And I suppose you'd even let her use my golf clubs?'

"'Oh no, I wouldn't do that. She's left handed.'"

Is The Economy Rebounding Now?

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Chart by StockCharts.com

FSLR (First Solar, Inc.)
Company Profile
Gaps often leave great set ups for further moves upside or downside. Many say that all gaps have to be filled; often they are, but not always right away. A smart trader can make great money watching how top stocks for 2010 react to their gaps.

FSLR gapped higher to end April on unexpectedly good earnings. Many would give up on the stock as a potential way to make money, having thought the move was over. It was, for the time being. We kept watching because on the move FSLR gapped through a key level, the November peak. When a stock gaps through a key level you often get a chance for a big play . . . up or down.

FSLR made the gap and did not look back, continuing to run up through $200 to $207. That is a key level from 2008 when it bottomed there a couple of times. That often leads to a test after a run higher. We kept watching and FSLR did come back to test, holding right at the gap up point. Indeed the 18 day EMA, often used as support on breakout tests, had risen to that level; two layers of support.

We put it on the report as it tested. When we see this kind of test we look for the stock to hold the support. That is the first indication we have an upside play setting up. Then we look for a higher close off of that test. When we see that we move in right in during the last hour when we see the stock is going to make that higher close. Or we can get in early the next session.

We did not catch FSLR at the close so we moved in the next session. Given the price of the stock we were looking at options on this play. FSLR was trading between $185 and $190 and its options are somewhat pricey so we were looking to buy some near money options. We picked up the July $185 strike call options and sold some $185 put options. We bought the call options at $21.20. FSLR closed the session at $189.70, up $4.80. The next session FSLR gapped higher and surged $12.70 to $205, almost matching the surge off the gap. While we are looking for more gain on the play, after three strong sessions in a market that was selling near term we decided to bank some gain. We could sell a few of our positions for $31, and in a day we never did turn down a 42% gain. So we sold part of the position, but kept a good chunk for a continued move higher. FSLR tested Thursday and Friday, fading toward near support at the 10 day EMA on low volume. We are looking for FSLR to hold there and explode on through the 200 day SMA. Indeed we are looking at picking up some more positions as FSLR surges again.

We had other good plays on the week, including SCHN as we continue playing commodities during the inflation rally. We bought into SCHN on Monday as it came off a test of the February peak. We picked up some stock at $49.54 and some August $45 call options at $9.60 as it bounced off that test. SCHN surged up through Wednesday, matching the breakout high, hitting $55.92 on the session high. When we saw it hit that level and stall we saw a nice 4 day surge running out of gas. We sold part of our position for $55.45, banking 11.9%. We sold part of our options for $13.70, banking 42%. Not bad for less than a week, and as SCHN tests and holds near support at the 10 day EMA we will look for another opportunity upside if it can hold and make the next surge higher.

ED (Consolidated Edison, Inc.)
Company Profile
Our Success Trading Group members scored another winning trade this week by trading in and out of Consolidated Edison (Ticker: ED). We like ED for a new position at its current price.

Our Success Trading Group scored 52 Wins in 52 Weeks and has closed over 370 winning trades with 95% winners on our Main Trade Table.

For post-splits, we can play them as we would pre-splits (very short term), but we prefer to stretch our horizons, playing the trend. When playing options, we look further out, 2 or more months at least. We let the trend carry us along if there is one, but we will also take profits if the technical pattern degenerates, e.g., breaks a trendline. The main difference between post-splits and pre-splits plays is that we really have to like the pattern. Pre-splits can run right before their splits even with poor technical indicators. For post-splits, we are looking at the top stocks to buy from more of a longer term "would I buy this stock at this juncture?" position. Now there are times when a hot stock splits and investors pile in to get in while the stock is 'cheaper.' We play those, but with more of a short-term, pre-splits mentality in that we will be ready to get out fast if the momentum fades.

Remember, everything we do has to pass muster with the market that day ... don't fight the market on these plays.

Listen to Stock Split Report Editor Jon Johnson's
stock split interview on CNBC-TV [  Broadband  |  Dial-up ]

Here's a post-split play and our current analysis.

CTRP (Ctrip.com International--$37.04; +0.69; optionable): Chinese travel
Company Profile
After Hours: $37.01
EARNINGS: 05/11/2009
STATUS: Flag. China today announced it anticipated 8% growth this year. A survey was conducted asking citizens what they would do with the money if the economy started expanding again; buy clothes and travel was the response. So, CTRP is a logical candidate to take advantage of that. It gapped higher two weeks back on a strong earnings report, taking it out of a play we had on at that time. It has since proved it can hold the gap, trading in a tight lateral range. Thursday it tested back to the 10 day EMA (36.23) and held. Friday CTRP bounced up off that level. If it continues higher this week we will look for a higher close Tuesday on some decent volume to cue us for the buy.
Volume: 898.301K Avg Volume: 1.439M
BUY POINT: $37.88 Volume=2M Target=$44.88 Stop=$35.77
POSITION: QCT IG - Sept. $35c (65 delta) &/or Stock

We really enjoy trading best stocks 2010 that are $10 and under. Often they provide the chance to enjoy high percentage gains. With that opportunity comes additional risk so we try to watch trendlines and support levels in an attempt to minimize any losses.

SBLK (Star Bulk Carriers Corp.)
Company Profile
$10 Trader closed another successful trade realizing a 27% gain in 16 days on SBLK. The stock is now dealing with the $5 level and a move up off that level could signal another potential entry.

Our Option Trading Service is for conservative traders that understand leverage principles. We focus on powerful option trading strategies that place volatility and momentum in your favor. And we pride ourselves on minimizing our losses. We always know our downside potential in a trade.

AVP (Avon Products Inc.)
Company Profile
AVP has been in an uptrend and is approaching a resistance at about $26.75 on the daily charts. On the weekly, there appears to be a reverse head and shoulders with the neckline around the current resistance. I am watching for a break above the resistance and considering buying some in or near the money LEAPS calls with acceptable open interest.

TRA - Terra Industries, Inc. is currently trading at $30.02. The June $30.00 Calls (TRAFF) are trading at $1.85. That provides a return of about 6% if TRA is above $30.00 on expiration Friday in June.

The battleground in the stock market these days is the question of whether or not the economy will rebound this year. However, after looking at some compelling data over the past couple of weeks, we think there is a decent chance that the economy may be in the process of rebounding right now.

Okay, before the booing, the name calling, and the accusations of our views falling into the perma-bull/optimist camp starts, please open up your mind and allow me to explain.

For starters, please understand that there is a distinction between the economy being on the mend and the recession actually ending. To be clear, we are not suggesting that the recession has ended at this point. Instead we are of the mind that the end is in sight and it may be closer than most economists believe.

Let's also remember that the official pronouncements of recessions beginning and ending comes from the National Bureau of Economic Research, which uses a VERY healthy dose of hindsight to make their calls. So, since the stock market is a forward looking vehicle and the NBER calls are backward-looking, waiting for the official word that the recession has ended isn't very helpful to investors.

The general consensus is that the recession will end sometime in the second half of 2009 and the economy will begin to grow again in the first half of 2010. And the good news is that, according to my calendar, we are getting pretty close to the all-important second half of 2009.

However, in looking at a bunch of economic reports designed to be leading indicators of the economy, we find that the end of the recession could come in the early part of that "second half of 2009" window.

Searching for Signs of Recovery

With a little help (well, okay - a lot of help) from the good folks at Ned Davis Research, we'd like to review five different indicators that have solid track records in terms of calling the end of a recession ahead of time: The US stock market and data on employment, consumer sentiment, housing, and manufacturing.

The Stock Market

The old joke is that the stock market has "called" nine of the last six recessions. The implication is that the market gets a little jumpy at times and will, on occasion, see things that aren't there. However, it is interesting to note that if one looks at the general consensus of economists, history shows this group has actually called zero of the last six recessions ahead of time. And perhaps this is the reason that the average investor is so good at preparing for what has already happened!

The concept of using the stock market to project the direction of the economy actually makes some sense. Most everyone knows that hot stocks of 2010 look ahead between three to nine months, depending on who you talk to. Thus, if the stock market has been falling and then turns higher, it is logical to assume that the market is then projecting better times ahead.

To put this into an indicator format, NDR uses an eight-month moving average of the S&P 500 as the signal for the economy. When the S&P has been below its 8-month moving average and then moves above it, an expansion signal is given and vice versa.

Going back to 1948, there have been 15 prior signals where the stock market has "called" an expansion in the economy and 9 of the signals occurred while the economy was actually in a recession as defined by NBER. During the 9 recessions, the market effectively got it right in terms of calling for an end to the recession 8 times out of 9.

The signals were not always perfect, but the important thing to note is that the median lead time for the bottom in the stock market calling a recovery in the economy has been about four months. So, the market appears to be calling for an end to the recession in July.

Employment

Nonfarm payrolls is one of the most important indicators used by the National Bureau of Economic Research in defining the business cycle in the U.S. And as anyone watching the market knows, it is the monthly jobs report that is the "big Kahuna" of economic data.

In looking back at recessions since 1948, NDR found that employment is more of a coincidental (to slightly lagging) indicator of the economy and that the maximum monthly job losses typically occurs two months before the economy turns upward. So, if monthly job losses peaked in January, this would suggest that the economy should be turning right now.

Consumer Sentiment

In light of the fact that the consumer accounts for two-thirds of this country's gross domestic product (GDP), it is easy to see that when consumers are happy the economy is usually in pretty good shape.

What we look for in making a call for the economy is a trough in consumer sentiment. Using the Reuters/University of Michigan Consumer Sentiment Index (which goes back to 1952) we find that a trough in this index has led economic expansions by a median of two months. And since the index bottomed in November - you get the idea.

Home Sales

Although we're sure to start an argument with this topic, sales of new homes is a very good indication of how the economy is doing. And since it is safe to say that housing has played a major role in this particular downturn, we need to be mindful of an upturn in the housing market.

While no one is going to suggest that the housing market is improving to any great degree at the moment, the data shows that things have stopped getting worse. And history suggests that a trough in new home sales has occurred a median 2.5 months before the beginning of the next expansion cycle in the economy. However, it is important to note that this data tends to be volatile and the range of lead times is between two and nine months.

The good news is that so far at least, sales of new homes appears to have bottomed in January - so, we'll be watching this one closely for signs of improvement.

Manufacturing

Since this might qualify as hard core economic data that has been proved to induce drowsiness, we'll cut to the chase. The ISM Manufacturing Composite Index measures manufacturing activity and has bottomed a median 2.5 months before the end of recessions. And unless manufacturing collapses from here, we can say that this index bottomed in December. Thus, this indicator also projects a turn in the economy starting any time now.

Here's the Rub

The five indicators we chose to highlight this weekend are not the only ones singing a happy tune at the present time. Thus, the data suggests that the economy may turn around sooner than most economists and investors think; which, of course, is a good thing for the stock market.

So, what could change this rosy scenario? In short, a new low in the indicators would definitely be bad. Therefore, we will need to watch new home sales and the nonfarm payrolls data in particular very closely. As long as the current lows hold, then a rebound in the economy may not be far off and we will argue that there is no need to retest the March lows in the stock market.

However, if the data starts to sink, stocks are likely to follow.