Newmont Mining (NEM), first discussed here on June 3, 2009 at a price of $46.42, continued to retreat this winter, falling from about $60 to about $51, in bear-hug fashion, hence it's best to stand aside for now.

From a fundamental standpoint, NEM still looks promising. Newmont has the right commodities for globalization's third decade: copper and gold. However, it's not a stock for squeamish or low-risk investors.

Newmont Mining (NEM) is primarily a gold producer with significant assets or operations in the United States, Australia, Peru, Indonesia, Ghana, Canada, New Zealand and Mexico. Newmont Mining competes with other international gold producers like Barrick Gold (ABX), AngloGold Ashanti (AU) and Goldcorp (GG).

Launch of Coverage on Newmont Mining; $80.90 Price Estimate

We recently launched coverage on Newmont Mining with an $80.90 price estimate for the company's stock. Our number stands roughly 35% above market price.

While gold may be in a new bull move, the shares of Newmont Mining (NEM) have been slipping lately. In Thursday morning trading, the stock price was off 2.24% even though the company posted a solid earnings report.

Profits came to $812 million, or $1.61 per share, up from $558 million, or $1.13 per share in the same period a year ago. During this period, revenues increased slightly from $2.52 billion to $2.55 billion.

Newmont Mining (NEM), first discussed here on June 3, 2009, at a price of $46.42, retreated slightly in late 2010 after pushing through $65, but that may be viewed as opportunity to consider the shares, if you missed the June 2009 entry point.

Newmont has the right commodities for globalization's third decade: copper and gold. However, it's not a stock for squeamish or low-risk investors: Newmont's stock practically defines uptrend volatility. Therefore, if you're looking for a steady, predictable, staircase north, it's probably best to skip NEM.

Stocks discounted a higher jobless claims release on larger issues. Many called today an extension of QE2, but it was a two-part issue. First was Bernanke issuing a defense of QE2 in in an op-ed piece and second was the note from the White House that Obama may compromise on certain Bush tax cut extensions for all income brackets.

Here were today's unofficial closing bell levels:

Dow Jones 11,434.77 +219.64 (1.96%)
S&P 500 1,221.04 +23.08 (1.93%)
Nasdaq 2,577.34 +37.07 (1.46%)

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Analyst Upgrades

• Goldman upgraded BP (BP) to buy from neutral.
• STEC (STEC) was upgraded to buy from hold at Needham.
• MCG Capital (MCGC) was upgraded to buy from hold at BB&T.
• Corporate Office (OFC) was upgraded to market perform from underperform at FBR Capital.
• Citigroup upgraded K-Sea Transportation (KSP) and Post Properties (PPS) to hold from sell.
• BofA/Merrill upgraded Embraer (ERJ) to buy from underperform.
• Wilmington Trust (WL) was upgraded to neutral from underperform at Macquarie.
• Parkway Properties (PKY) was upgraded to hold from sell at Stifel Nicolaus.

Newmont Mining (NEM) reported Q3 EPS on Nov. 2. Gold is recently down 0.43% to $1,363, according to Bloomberg. Put option implied volatility is at 37, January is at 36, near its 26-week average, according to Track Data, suggesting non-directional price movement.

EXCO Resources (XCO) announced that its Chairman and CEO, Douglas H. Miller, has proposed to purchase all of the outstanding shares of the company for $20.50 per share. November option implied volatility of 31 is below its 26-week average of 41, according to Track Data, suggesting decreasing price movement.

Update is by Stock Specialist Paul Foster of theflyonthewall.com.

It will be a busy week. Republicans are poised to gain control of the House of Representatives and gain governorships in Tuesday's mid-term elections. Also, the Federal Reserve is expected to announce another round of quantitative easing Wednesday, following the FOMC meeting. Major retailers are scheduled to report October same-store sales Thursday, while the October unemployment rate, announced on Friday, is expected to remain at 9.6%.

Toyota's (TM) fiscal second-quarter results will be one of the highlights on the earnings front this week. After three periods of way underestimating Toyota's earnings, have the analysts surveyed by Thomson Reuters got it right this time? The stock sure could use a boost. Teva Pharmaceuticals (TEVA) is in a similar situation; i.e., high expectations for this week's quarterly results but a stock in need of a boost. Marathon (MRO) and Starbucks (SBUX) are also expected to post strong earnings growth this week, but both stocks are riding high.

A decent jobs report this morning was followed by a report that credit keeps shrinking. The markets were up and down today as investors are just seemingly trying to get their ducks in a row ahead of the unemployment and non-Farm Payrolls data, as well as ahead of earnings reports this evening.

Here are today's unofficial closing bell levels:

Dow Jones 10,948.58 -19.07 (-0.17%)
S&P 500 1,158.06 -1.91 (-0.16%)
Nasdaq 2,383.67 +3.01 (0.13%)

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Retail Sales Winners/Losers

Put volume skyrocketed Tuesday on Newmont Mining (NEM), with roughly 22,000 contracts crossing the tape within the first 90 minutes of the session. By contrast, NEM was only expected to see about 1,800 puts change hands -- so this surge represents about 12 times the norm.

The equity's November 60 put is far and away the most active. By 11 a.m., this out-of-the-money strike had already seen in excess of 13,200 contracts exchanged, with 59% of these puts trading at the ask price. Implied volatility on this back-month option has climbed by 2.6 percentage points to 35.2%, so it seems likely that buyers are driving the bulk of today's volume.

Newmont Mining (NEM), first discussed here on June 3, 2009 at a price of $46.42, continues to break new ground (pun intended) share price-wise, but it's not a stock for low-risk investors.

However, if you can tolerate volatility -- Newmont's stock practically defines uptrend volatility -- Newmont still has the right commodities for globalization's third decade: copper and gold.

Newmont will likely post a 10-15% revenue gain in 2010, on both higher production and higher average prices for copper and gold. Global demand should support copper prices, and currency market uncertainty (and low, real interest rates) will continue to benefit gold prices.

Anyone investing in the stock market for a while has heard some variation of the story about the old investor that returns to his office after lunch and tells his partner to sell out the portfolio and go to all cash.

His astonished partner asks what in the world happened at lunch that convinced him to do this? The old veteran investor tells him that he went to get a haircut and his barber started giving him stock advice. If the market had reached a point where the barber was giving him stock advice, then everyone that could possibly be in the market was, and it was time to get out.

Sometimes the adviser is cab driver, or the grocery clerk, or shoe salesman, it matters not, the point is the same. By the time an investment becomes water cooler chatter it is time to be leery.

JP Morgan (JPM) closed up 96 cents to $39.40. Option volume of 48K contracts compares to put volume of 28K contracts. August put option implied volatility is at 30, below a level of 37 from July 14, according to Track Data, suggesting decreasing price movement.

Newmont Mining (NEM) is closed up 84 cents to $59.01. NEM is expected to report Q2 EPS on July 28. Gold is recently up 0.85% to $1,191, according to Bloomberg. NEM option volume of 11K contracts compares to put volume of 3K contracts. August option implied volatility is at 34, and December is at 35, versus its 26-week average of 36, according to Track Data, suggesting non-directional price movement.

CBOE Volatility Index - VIX down 1.12 cents to 24.52.

Update is by Stock Specialist Paul Foster of theflyonthewall.com.

"While gold prices have surged 90% since year-end 2006, shares of Newmont Mining (NEM) still trade below their 2006 high of nearly $63 per share," observes Richard Moroney.

The editor of Dow Theory Forecasts, a blue-chip focused newsletter that has been published since 1946, explains, "Newmont generates more than 80% of its revenue from the sale \of gold, and the metal's recent strength has pushed earnings and cash flow sharply higher. As a result, the stock has seldom looked better under our "growth-at-a-good-price" approach.

Analyst Upgrades

• Deutsche Bank upgraded Barrick Gold (ABX) to buy from hold and reiterates a buy rating on Newmont Mining (NEM) after upping its 2011 gold forecast to $1,450 per ounce and 2012 forecast to $1,600 per ounce. The firm upped its target for Barrick shares to $53 from $45, for Newmont shares to $74 from $72, and on hold-rated Goldcorp (GG) and Kinross Gold (KGC) to $40 and $20, respectively.
• Citigroup upgraded General Dynamics (GD) to hold from sell following the recent pullback in shares. The firm keeps a $67 price target for the stock.
• UBS upgraded Public Service (PEG) to buy from neutral and has a $34 price target on the stock. The firm cites the company's solid balance sheet, earnings profile, and valuation for the upgrade.
• News Corp. (NWS) was upgraded to buy from hold at Soleil.
• AK Steel (AKS) was upgraded to neutral from underperform.
• Progress Energy (PGN) was upgraded to buy from neutral at BofA/Merrill.
• PNC Financial (PNC) was upgraded to outperform from market perform at Keefe Bruyette.