At issue may be a stock market stabilization, or perhaps it is a stabilization aimed solely at the commodities and those companies which profit from either the rise of commodity prices or the rise of the demand for those commodities. It was just yesterday evening that Dennis Gartman of the Gartman Letter was talking up gold miners as his method of choice to play the current bounce in gold.

To show just how much implied upside there is we found some large cap gold stocks that have upside of about 100% and many of the big players have implied upside of well over 50%.  The key ETFs for these miners show just how widespread the damage was during the last sell-off.  The Market Vectors Gold Miners ETF (AMEX: GDX) trades at $43.35 against a 52-week trading range of $39.08 to $66.98 and that is down about 35% as a group from the highs.  The Global X Silver Miners ETF (AMEX: SIL) trades at $18.00 against a 52-week range of $16.54 to $29.05 and that is down almost 38% from its high in the last year.

We included the implied dividend yields but due to foreign issues and ADRs causing currency translations and due to some payouts not being quarter like U.S. companies do, we would urge you to only consider the dividend as a footnote and something you should be verifying on your own.  Besides that, who buys gold (and silver) miners because of their dividend yields only?

We have evaluated the following large-cap gold stocks: Barrick Gold Corporation (NYSE: ABX); Goldcorp Inc. (NYSE: GG); Newmont Mining Corp. (NYSE: NEM); AngloGold Ashanti Ltd. (NYSE: AU); Kinross Gold Corporation (NYSE: KGC); Agnico-Eagle Mines Ltd. (NYSE: AEM); Gold Fields Ltd. (NYSE: GFI); Yamana Gold, Inc. (NYSE: AUY); IAMGOLD Corp. (NYSE: IAG); Harmony Gold Mining Co. Ltd. (NYSE: HMY); Eldorado Gold Corp. (NYSE: EGO); and Royal Gold, Inc. (NASDAQ: RGLD). We have covered also two of the larger silver players of Silver Wheaton Corp. (NYSE: SLW) and Pan American Silver Corp. (NASDAQ: PAAS).

Barrick Gold Corporation (NYSE: ABX) traded at $37.60 and has a market value of $37.6 billion.  The consensus target price from Thomson Reuters is $59.10 and the 52-week range is $34.82 to $55.95.  Barrick has a dividend yield of 2.2%. The implied upside to the consensus target: 57% but we would note that the target is above the 52-week high.

Goldcorp Inc. (NYSE: GG) traded at $34.90 with a market value of $28.2 billion.  The consensus target price from Thomson Reuters is $60.42 and the 52-week trading range is $32.16 to $56.31.  Goldcorp’s most recent yield was listed as 1.6%. The implied upside to the consensus target is 73% but we would note that the consensus target is still above the 52-week high.

The move is also weighing on the more speculative silver market.  What is happening is a bit of an identity crisis as the metals markets are currently fighting for relevance. What happens when the shiny yellow metal’s natural purpose as a currency and inflation hedge and even when a risk-on trade is dwarfed by dollar gains and other macro-issues like trading margin requirements and more?  This is called a fight for relevance.

SPDR Gold Shares (AMEX: GLD) is down 0.3% at $150.86 and the Market Vectors Gold Miners ETF (AMEX: GDX) is down 1.1% at $40.51 as almost every single miner and exploration outfit is lower today.  One of the only exceptions of any size is Royal Gold, Inc. (NASDAQ: RGLD) as one of the few gold mining (well, royalties on mining) outfits that is up on the day with its shares up 0.7% at $62.14 but the volume is rather light.

Silver is down as well with the iShares Silver Trust (AMEX: SLV) down 0.7% at $27.22; shares of Silver Wheaton Corporation (NYSE: SLW) down 0.9% at $24.17.

What really has to happen for the gold and silver market to stabilize is perhaps multiple issues.  The dollar has to stop rising so much, the ‘risk-on’ attitude has to return or at least not be so dead, the European meltdown has to stabilize, and/or the PIIGS resolution needs to go at least one or two days without dire news from Greece, Italy or one of the other PIIGS.

Looking at a brief chart and saying that both gold and silver are oversold technically is getting easier and easier to do.  Unfortunately, oversold and overbought readings can go on and on even if trading bounces come based solely on short covering and speculative buying.

JON C. OGG

The unofficial closing bells put the DJIA down more than 34 points to 12,820.53 (-0.27%), the NASDAQ rose less than 1 point (0.01%) to 2,933.82, and the S&P 500 fell -0.34% or nearly 5 points to 1,353.38.

There were several analyst upgrades and downgrades today, including Apple Inc. (NASDAQ: AAPL) maintained ‘outperform’ but estimates cut at Credit Suisse (more coverage here); AT&T Inc. (NYSE: T) raised to ‘outperform’ at Credit Suisse; Best Buy Co. Inc. (NYSE: BBY) cut to ‘neutral’ with a target price of $20 at Credit Suisse; Verizon Communications Inc. (NYSE: VZ) raised to ‘outperform’ at Credit Suisse; and Arena Pharmaceuticals Inc. (NASDAQ: ARNA) raised to ‘buy’ at Jefferies and to ‘outperform’ at Leerink Swann.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Dillard’s Inc. (NYSE: DDS) is up 7.3% at $70.99 after posting a new 52-week high of $72.47 earlier today (more coverage here); ReneSola Ltd. (NYSE: SOL) is up 5.6% at $1.89 (more coverage here); Nvidia Corp. (NASDAQ: NVDA) is up 6.9% at $13.28 (more coverage here); and Uranium Resources Inc. (NASDAQ: URRE) is down -2.4% at $0.80.

On Monday we are scheduled to get earnings from Groupon Inc. (NASDAQ: GRPN), InterOil Corp. (NYSE: IOC), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), Kior Corp. (NASDAQ: KIOR), and Silver Wheaton Corp. (NYSE: SLW).

Other standouts from today include the following stocks:

A number of ETFs had reverse splits of 1-for-5 today, and showed gains of 400% as a result. These included the ProShares UltraPro Short S&P500 (AMEX: SPXU) and other ProShares funds.

Arena Pharmaceuticals is up 76.2% at $6.45 after posting a new 52-week high of $7.01 earlier today. The drug maker received FDA approval to sell its lorcaserin diet drug in the US. Orexigen Therapeutics Inc. (NASDAQ: OREX) and Vivus Inc. (NASDAQ: VVUS) also have similar drugs in development and posted nice gains today as well.

Chesapeake Energy Corp. (NYSE: CHK) is down -10.7% at $15.35 after posting a new 52-week low of $15.21 earlier today. The company filed is proxy statement with the SEC today and it’s a doozy. More coverage here.

Stay tuned for Monday. We have noted the following events on the schedule (all times Eastern):

• 11:30 a.m. – 3- and 6-month bill auction

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Have a great weekend!

Paul Ausick

The charts have turned ugly for gold and silver and it bleeds right back to what Carter Worth of Oppenheimer said in mid-March about gold going back to $1,500.00.  Our take is that gold is currently suffering from identity crisis: it is not an inflationary nor a dollar hedge, nor is it proving to be the risk-on asset that investors, traders and speculators had been hoping it was.

Today’s prices on gold and silver matter if you are a pure chartist.  If the prices fail to hold here, gold has another $100 or so in downside and silver could see another 10% easily come out of its still-elevated price.  The iShares Silver Trust (NYSE: SLV) and the SPDR Gold Shares (NYSE: GLD) are experiencing different forms of chart failures right now.

The Gold Trust failed its 50-day short-term test last month and it has now been proving to fail on its 200-day moving average test for the longer-term outlook.  If the GLD does not get a bounce soon, there could be dead air down to $152 or so before technical buyers start sniffing again.

Be sure to see the Stockcharts.com charts below.  The Silver Trust failed its 200-day for longer-term investors back at the end of February and the beginning of March, but its short-term chart was failing at the 50-day moving average back to mid-March.  If this Silver Trust share closes under $30 and hangs out there for long, there is really a bunch of dead air down to $28 or even $27 before technical buyers will start sniffing.

Before you think that the end will never come, Kitco’s Allen Sykora noted today in a longer presentation, “analysts and traders suspect that the market will find some kind of footing before long.”  As we always say, charts matter but they are often corrected by a whole host of excuses as to why they did not work in a particular instance.

The weakness in metals is turning the key gold shares into value traps rather than value stocks.  The $41+ billion dollar in value of Barrick Gold Corporation (NYSE: ABX) is even down 4% at $41.21 and that is $1.00 under its prior 52-week low.  A 4.3% drop in the Market Vectors Gold Miners ETF (NYSE: GDX) down to $46.65 is down $1.40 under its prior 52-week low of $48.05.  And silver is proving to be the devil’s metal for Silver Wheaton Corporation (NYSE: SLW) with a 4.2% drop to $31.30, but its 52-week low does not come into play until $25.84.

This is a difficult time to play a chartist in gold and silver.  The underlying theme is that both metals are weak and could get much weaker.  We usually prefer more fundamental analysis and the fundamental analysis is not supportive either.  If no more easing measures are going to be invented, then the dollar’s rise against the Euro will only help put pressure on gold and other commodities.  And more specifically, investors as of today are not able to successfully claim that gold is a hedge asset nor that it is a risk-on asset worth buying.

Stay tuned.  Maybe silver is not the only devil’s metal.

JON C. OGG

Chart provided by Stockcharts.com:

iShares Silver Trust (NYSE: SLV) is up 5% at $36.06 and we have seen 20.6 million shares trade at 12:45 PM EST versus an average volume of 18 million shares.  The ProShares Ultra Silver (NYSE: AGQ) is up 10% at $73.20 and it has already crossed its average daily volume as well with its double-leverage.  The SPDR Gold Trust now has more than $71 billion in assets and it is up ‘only’ 1.2% at $173.80.

The individual stocks are lagging today.  Silver Wheaton Corporation (NYSE: SLW) is up 3.45% at $39.83.  Pan American Silver Corporation (NASDAQ: PAAS) is up 2.7% at $26.08.  Even the most battered of the lot in Hecla Mining Company (NYSE: HL) is up only 1.9% at $5.33.

Silver has more industrial use than gold, besides silver is called the devil’s metal for a reason.  We’ve seen this movie before.

JON C. OGG

The companies we examined were United States Steel Corp. (NYSE: X), Nucor Corp. (NYSE: NUE), Steel Dynamics Inc. (NASDAQ: STLD), Newmont Mining Corp. (NYSE: NEM), Barrick Gold Corp. (NYSE: ABX), Silver Wheaton Corp. (NYSE: SLW), Freeport-McMoran Copper & Gold Inc. (NYSE: FCX), Southern Copper Corp. (NYSE: SCCO), Alcoa Inc. (NYSE: AA), and Molycorp, Inc. (NYSE: MCP).

Since November, gold prices have gained about 3%. Silver prices are essentially flat, and copper prices are up by about 5%. Titanium prices are about 6% lower, steel prices have been falling and are now about 7% lower than in November, and rare earth minerals exports from China were below expected levels in 2011, causing a price drop in the latter part of the year. Chinese production projections for 2012 are roughly equal to the 2011 production quota of 31,000 metric tons.

Newmont’s consensus target price has fallen from $81 in November to $77.92. At a current price this morning of $62.98, Newmont’s implied gain is 23.7%. Since the beginning of the year, the stock has gained more than 5%, with a 12-month share price gain of about 6.8%. The company raised its quarterly dividend to $0.35, a jump of 133%, following a pledge to raise dividends if gold price targets were met. The company’s dividend yield is now 2.3%.

Barrick’s target price has also been cut, from $68 to $64.72. At its current price of $49.62, Barrick’s implied gain is 30.4%. Year-to-date shares are up about 9.6%, but for the preceding 12 months, Barrick’s stock is down 5.6%. Shares are trading at less than 6% away from the 52-week high of $55.95. Over the past month, Barrick’s shares have gained 12%.

Molycorp’s target price fell from $70 to $52.83. At a current price of $28.68, the potential upside is a whopping 84%. Molycorp’s shares have lost about 38% in the past 12 months, though since January shares have risen about 20%. The company is expected to report EPS of $0.41 on revenue of about $135 million after markets close today. The company has begun a phased launch of its new manufacturing facility and expects to produce 19,050 metric tons of oxides by the end of the third quarter. That would be good news if prices weren’t falling.

US Steel’s target price remained nearly flat from November’s $34.50 to today’s $35.21. At the current price of $28.19, the implied gain is 24.9%. Falling steel prices in the fourth quarter hurt all steel makers. Global crude steel production grew 6.8% in 2011, which combined with a slower growing economy depressed prices. Global production was down -7.8% year-over-year in January, which could herald a comeback in pricing.

Nucor’s target price has risen from about $45 to $48 since November. At the current share price of $43.44, the potential upside is 10%. Two recent analyst downgrades have chopped share price gains, but Nucor’s stock is still up nearly 10% since January.

Freeport-McMoran’s target price actually rose from$53 to $55.28 in the last three months. At the current share price of $43.89, the potential upside for the stock is 26%. Freeport had a lousy fourth quarter, due mainly to labor strife in Australia. Slowly rising copper prices should help, but production may have to be reined in to keep prices moving up.

Silver Wheaton’s consensus target price fell from $49.50 to $47.80, while the share price has gained more than 26% in three months. At the current share price of $39.29, the implied gain here is 21.7%. Silver prices are roughly flat since November, and unless they improve, Silver Wheaton’s share price won’t either.

Alcoa’s target price has dropped from $13 to $11.53 since November. At the current price of $10.46, the implied gain in Alcoa stock is about 10%. Alcoa appears to have little attraction at its current share price, which is more likely to suffer than prosper from a glut of aluminum.

The target price for Steel Dynamics has risen from $16 to $18 in the past three months. At the current price of $14.75, the implied gain in the stock is 22%. As with US Steel, whether or not Steel Dynamics has a chance to add value depends on demand for steel and what that will do to prices if production continues to grow.

Southern Copper’s target price hjas fallen from $36.25 to $35.58. At the current price of $33.45, the implied gain for Southern Copper is 6.4%. The only thing that will boost Southern is a rise in copper prices.

The underlying softness in commodity prices makes any play other than gold a risky choice. Newmont and Barrick, the two gold producers in this bunch, offer significant upside potential, and rising gold prices should help, provided the miners can keep costs under control.

Paul Ausick

Silver Wheaton Corporation (NYSE: SLW) is up 6.7% at $34.07, and the 52-week trading range is $25.84 to $47.60.

Pan American Silver Corp. (NASDAQ: PAAS) is still only flat at $21.85 but it was lower before the FOMC comments today. The 52-week trading range is $19.93 to $43.06.

Goldcorp Incorporated (NYSE: GG) is up 5.2% at $46.70, and the 52-week trading range is $39.93 to $56.31.

Newmont Mining Corporation (NYSE: NEM) is up 3.4% at $59.43, and the 52-week trading range is $50.05 to $72.42.

Kinross Gold Corporation (NYSE: KGC) up over 6% at $11.23, and the 52-week trading range is $9.96 to $18.25.

Agnico-Eagle Mines Limited (NYSE: AEM) up 8% at $37.23, and the 52-week trading range is $34.36 to $76.49.

ETFs are rocking as well.  The Market Vectors Gold Miners ETF (NYSE: GDX) is up 5.3% at $54.58 against a 52-week range of $49.22 to $66.98.  Market Vectors Junior Gold Miners (NYSE: GDXJ) is up 6.5% at $28.66 against a 52-week range of $22.58 to $42.97.  The Global X Silver Miners ETF (NYSE: SIL) is up 3.9% at $23.69 and the 52-week range is $19.05 to $31.34.

The logic is simple enough… This signals extremely low interest rates and low costs of borrowing.  It also signals that investors will have to look elsewhere yet again to seek higher returns than short-term and intermediate-term Treasuries.  As this means that rates will be low in the U.S. for longer than expected, that is going to drive a weak dollar policy as long as things remain static in Europe and in other major economic zones.  That is the perfect storm for gold and silver as they are often inversely correlated to the dollar.

JON C. OGG

Gold prices have gained about $60/ounce, about 3.6%. Silver prices are up roughly 9%. Copper prices are up by about 8.6%. Titanium prices are unchanged, steel prices have been drifting though more varieties appear to be selling at lower prices, and rare earth minerals vary widely depending on the particular mineral. Lanthanum oxides are selling for about $61/kilogram, while terbium oxide goes for $605/kilogram.

All stock data comes from Yahoo! Finance and current prices were gathered in the early afternoon today.

Of the companies we survey, all but one enjoys a higher stock price today than they did last month. The single exception is Molycorp, which is getting punished today for missing both EPS and revenue estimates. At yesterday’s closing price of $38.70, Molycorp’s share price was higher than it was a month ago.

More interesting, perhaps, were recent changes in median price targets. Only Nucor and Titanium’s price targets have remained the same in the last month. Two stocks, Newmont and Barrick, had their price targets raised and the other seven had price targets lowered.

Newmont’s target price was raised from $77 to $81. At the new target price and a current price of $70.41, Newmont’s implied gain is $10.59, or 15%. The stock put up a new 52-week high last week, and its forward P/E also rose from 10.2 to 11.47. In the past month, shares have gained more than $7, or 11%. The company’s pledge to raise dividends if gold price targets are met is another reason to look carefully at this stock.

Barrick’s target price was raised from $66.50 to $68. At the new target price and a current price of $52.61, Barrick’s implied gain is $15.39, or 29%. Shares are trading at less than 6% away from the 52-week high of $55.95. Over the past month, Barrick’s shares have gained 12%.

The largest drop in target price was settled on Molycorp, which saw its target price fall from $80- to $70. Even at that, the implied gain for the shares, based on today’s price of $34.04, is 106%. The wide gap is due not so much to any failure on Molycorp’s part but to what might be “irrational exuberance” for the stock by investors. There is also the fact that Molycorp’s mineral reserves tend to be heavy on the lower-priced rare earths and light on the higher-priced metals.

The largest percentage drop in target price was claimed by US Steel, which saw its target price fall from $40 to $34.50, nearly 14%. The company posted a new 52-week low on October 3rd. At the current price of $26.08, the implied gain is $8.42, or 32%. US Steel is widely expected to be acquired — and fairly soon — which is attracting short sellers in droves.

Freeport-McMoran’s target price fell from $55 to $53 in the past month, even though shares have added $5.05, or about 15%, in the same period. The implied gain based on the new target price and the current price of $39.83 is 33%. Freeport’s problem is that demand for copper might be stagnating or worse, given the construction slowdown in China.

Silver Wheaton’s target price fell from $51.50 to $49.50, while the share price has gained 17%. At the new target price and based on today’s price of $36.18, the implied gain here is 37%. There is plenty of headroom for Silver Wheaton’s share price to continue rising, but demand for silver will be the driver.

Alcoa’s target price dropped from $15.50 to $13 in the last month, even as the share price has risen by about 8%. At the new target price and based on the current price of $10.58, the implied gain in Alcoa stock is nearly 23%. Given that shares rose by 8% in the last month, anything’s possible, even that Alcoa may hit the lower target.

The target price for Steel Dynamics fell from $18 to $16, while share prices gained a substantial 23% in the same period. At the new target price and a current price of $13.51, the implied gain in the stock is 18%. EPS estimates for the current quarter have fallen by nearly -20% in the past month, following lowered guidance from the company.

Southern Copper’s target price fell from from $36.75 to $36.25 in the past month, even though the share price rose by 21%. At the new target and at the current price of $32.41, the implied gain for Southern Copper is nearly 12%.

Paul Ausick

The earnings previews are as follows: priceline.com Inc. (NASDAQ: PCLN); A123 Systems Inc. (NASDAQ: AONE); Activision Blizzard Inc. (NASDAQ: ATVI); Pan American Silver Corp. (NASDAQ: PAAS); Toyota Motor Corporation (NYSE: TM); Cisco Systems, Inc. (NASDAQ: CSCO); Computer Sciences Corp. (NYSE: CSC); General Motors Co. (NYSE: GM); Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR); Macy’s Inc. (NYSE: M); Silver Wheaton Corp. (NYSE: SLW); Molycorp Inc. (NYSE: MCP); Nordstrom Inc. (NYSE: JWN); NVIDIA Corporation (NASDAQ: NVDA); and Walt Disney Co. (NYSE: DIS).  Earnings estimates are from Thomson Reuters.

For each day of the week we have also added in the key economic events to watch for as well.

MONDAY, NOVEMBER 7

priceline.com Inc. (NASDAQ: PCLN) is expected to report $9.30 EPS and $1.42 billion in revenues; next quarter estimates are $5.14 EPS and $996.75 million in revenues.

10:00 AM EST Employment Trends Index (October)

3:00 PM EST Consumer Credit (September)

TUESDAY, NOVEMBER 8

A123 Systems Inc. (NASDAQ: AONE) is expected to report -$0.38 EPS and $66.3 million in revenues; next quarter estimates are -$0.35 EPS and $84.2 million in revenues.

Activision Blizzard Inc. (NASDAQ: ATVI) is expected to report $0.02 EPS and $558.4 million in revenues; next quarter estimates are $0.53 EPS and $2.1 billion in revenues.

Pan American Silver Corp. (NASDAQ: PAAS) is expected to report $0.78 EPS and $260.8 million in revenues; next quarter estimates are $0.66 EPS and $247.58 million in revenues.

Toyota Motor Corp. (NYSE: TM) is expected to report $0.41 EPS and $52 billion in revenues; next quarter estimates are $1.03 EPS and $66.47 billion in revenues. As a reminder, this will originally be in Yen and the Yen has been at record highs and it could impact the figures.

7:30 AM EST NFIB Small Business Sentiment (October)

4:30 PM EST API Weekly Oil Inventories

United States Steel Corp. (NYSE: X) has a median target price of $40.00 from 14 brokers. Shares are trading today at $23.52, for an implied gain of $16.48, or 41.2%. US Steel’s forward P/E is 6.46 and the company’s dividend yield is 0.90%. The stock’s 52-week trading range is $18.85-$64.03, and at today’s price that’s about 25% above its 52-week low and 63% below the 52-week high. The huge difference between US Steel’s 52-week high and its current price indicates a substantial opportunity here, if the company can get its act together. It owns its own sources of iron ore and coke, so it is relatively insulated from the higher costs faced by many other steel makers. The company should be doing better than this, but it’s a tough market out there.

Nucor Corp. (NYSE: NUE) has a median target price of $45.00 from 13 brokers. Shares traded today at $34.85, for an implied gain of $10.15, or 22.6%. Nucor’s forward P/E is 10.34 and the company’s dividend yield is 4.20%. The stock’s 52-week trading range is $29.82-$49.24, and at today’s price that’s about 17% above the 52-week low and 29% below the 52-week high. Nucor stock recently took a hit when the company lowered third-quarter EPS estimates to $0.45-$0.55 compared with analysts’ expectation of $0.64. Demand for raw materials raises costs for Nucor, at the same time that demand in the US has fallen.

Steel Dynamics Inc. (NASDAQ: STLD) has a median target price of $18.00 from 13 brokers. Shares traded today at $10.95, for an implied gain of $7.05, or 39.2%. Steel Dynamics’ forward P/E is 6.49 and the company’s dividend yield is 3.70%. The stock’s 52-week trading range is $8.78-$20.70, and at today’s price that’s about 25% above the 52-week low and 47% below the 52-week high. Like Nucor, Steel Dynamics revised EPS expectations downward last month by at least a third compared with analysts expectations.

Newmont Mining Corp. (NYSE: NEM) has a median target price of $77.00 from 16 brokers. Shares are trading today at $63.24, for an implied gain of $13.76, or 17.9%. Newmont’s forward P/E is 10.2 and the company’s dividend yield is 1.9%. The stock’s 52-week trading range is $50.05-$71.25, and at today’s price that’s about 26% above the 52-week low and 11% below the 52-week high. Newmont is the largest gold miner in the world and its dividend yield is also the highest among the miners. The company has committed to raising dividends if certain gold price targets are hit, making life even tougher for competitors.

Barrick Gold Corp. (NYSE: ABX) has a median price target of $66.50 from 20 brokers. Shares traded today at $46.93, for an implied gain of $19.57, or 29.4%. Barrick’s forward P/E is 7.67 and the company’s dividend yield is 1%. The stock’s 52-week trading range is $42.50-$55.95, and at today’s price that’s about 10% above the 52-week low and 16% below the 52-week high. Gold mining stocks have not been able to keep up with the rising price of gold mainly because the miners’ costs keep rising even as gold prices rise. Barrick is one of the lowest cost producers among the big gold mining companies, and that’s a real positive for the company.