Friday, October 30, 2009

Transocean (RIG) Attractive

Get ready to back up the truck on Transocean (RIG) looks attractive here. This is the time for long term investors to accumulate shares, I believe oil will head higher in coming months as the global economy picks up.
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Hecla Gold (HL) Looks Attractive

Hecla is looking attractive any further declines should be bought..but keep your stops tight.
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Google (GOOG)

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Freeport McMoran (FCX)

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Abbott Lab (ABT) Covered Call Trade

Lets Sell a coverd call on ABT
Sell to open Jan '10 $52.50 call ticker ABT-AX $1.35 bid lowering cost basis $43.54

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Treat or Trick???

Yesterday's news off the GDP report was the the bears are in control and we're seeing the Trick....
NOTE~ today is the last fiscal day for most mutual funds, you're seeing allot of profit taking and tax selling going on.
On the Volatility Index ($VIX) I highlighted the "Expanding Triangle" formation the other day, looks likely that the 32.5 level is the upside target there. On the $SPX I see the 1025 as minor support and the 1000 level as major technical as well as psychological support, also it happens to be the 100-ma/ 19.1% Fibonacci retracement level.
SHOULD you sell here? NO!!! As I stated the other day with the GNK post...KEEP YOUR POWDER DRY! Meaning add to positions and keep some cash on the sidelines.
Those that sold covered calls might consider buying them back at lower prices, several of the Itz Pix stocks are extreme bargains..RIMM is being given away under $60...back up the truck there, upside target is $85. SLW under $12, AUY near $10 all bargains. Make your list next week will still be shaky as we get the all important jobs report next Friday!
Hang in there!
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Thursday, October 29, 2009

Dollar Falls On GDP Report

Dollar decline on bullish GDP report? Play has been buy equities, oil & metals on declining dollar...and it continues to work...for now!
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Itx Pix Portfolio

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Yamana Gold; Silver Wheaton & Genco Shipping

GDP report @ 3.5% has rallied the markets, however...the dollar ($USD) has declined to 75.96 as I type? Why..stronger economy, yield more need for commodities, thus lower dollar...go figure!?

Both Silver & Gold are storng today, as I suggested Yamana & Silver Wheaton up strong!!! Genco Shipping (GNK) reported before the open and beat consensus, BUT forecasted a shaky 2010, still they are the best situated "DRY BULK" shipper and a bet on global economic recovery. Those who entered or added to positions yesterday @ $19.50 caught a great trade.

Recap on Covered calls, Yamana (AUY) October 8th sold Jan $14 call (AUYAP) entered July @ $8.50 sold call for $0.90 cost basis $7.60. ~link~
Silver Wheaton (SLW) Entered SLW in Sept @ $12.66, sold covered call Oct 7th the December $15 (SLW-LC) for $1.10, lowering cost basis to $11.56 ~link~
Genco Shipping (GNK)entered $22.90 sold Jan $25 call (GNK-AE) for $1.70 lowering cost basis to $21.20 ~link~

Wednesday, October 28, 2009

Yamana (AUY) & Silver Wheaton (SLW); Look Attractive

Gold & Silver more specifically Yamana (AUY) & Silver Wheaton (SLW) are looking extremely attractive here.
AUY & SLW Reports ~AUY~
and ~SLW~

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Watch the Utility Index ($UTIL)

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S&P 500 & NASDAQ Key Levels

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ET...'Smart' Phone Home?!

Motorola introduced along with Verizon the Google powered "ANDROID" phone is clear this is getting to be a very competitive market for smart phones.
The Itz Pix portfolio has both Apple (AAPL) as well as Research in Motion (RIMM) in its portfolio.
Looking at the chart definitely shows how Apple has dominated since May...BUT has the under performance in RIMM made it a value-play. After all it still is the largest in the mobile phone market, even with the increased competition.
Can it still compete? ~read story~
AAPL:RIMM ~chart~
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Market Glance

Just a quick glance at a few indexes. Note~ small caps & commodities are breaking below their respective 50-ma's. As I noted last would pullback near term. Mostly on profit taking & tax reasons. I see some reallocation going on too...

Check out these charts... ~LINK~

Updates: Those looking to enter or add to Genco (GNK) hit my $19.50 level add some more to position, keep powder dry for after their earnings report tomorrow.

Transocean looks very attractive again in the low $80's. same for Research in Motion (RIMM) in low $60's. Still see AUY & SLW going slightly lower, get ready to buy back covered calls as they lose premium. more later...

Tuesday, October 27, 2009

Short Term Pullback

Charts indicating near term pullback. Further rise on the dollar, leading to further pullback in equities & commodities. Silver looks more attractive than gold. Also interesting comments from Doug Kass market topping and Peter Schiff on the dollar.

Chart of the Day

As long as the dollar remains weak these sectors should perform. *click chart to expand image

Genco Shipping (GNK) Update/ Baltic Dry Index ($BDI)

FOLLOW UP to initial entry post ~link~

As I originally posted, I suggested entry into GNK with a covered call I also suggested that I would look for a lower price to add to the position. Today GNK traded as low as $20.38, currently it's at $21 as I type. Should one add here? I was tempted, but with earnings due out Thursday morning I will stay on the sidelines. With the general market in a corrective phase and the GNK chart giving a bearish signal, lets wait a few days for confirmation. My original partial entry is at a cost basis of $21.20 any way...we may see $20 or $19.50 in a few days (buy more @ $19.50), if not I'll reassess the earnings report and decide then.

Genco Shipping & Trading Limited Earnings Conference Call (Q3 2009)
Scheduled to start Thu, Oct 29, 2009, 8:30 am Eastern

Monday, October 26, 2009

Downside Target on S&P 500 & NASDAQ 100

Look for further declines in the major indexes, short term bearish, longer term bullish, use pullbacks to buy or add to positions.
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Market Recap

The market took a hit today, especially the commodity & financial sectors. Needless to say the Itz Pix portfolio did not avoid the crush downward.
What's to blame??? The rally in the dollar or the decline in the Euro ($XEU). Is this a long term reversal or a pause that refreshes? I say the later, after all gold, oil, copper and silver have had a nice run over the last several weeks. I still believe that the dollar will continue lower as our government spends like a teenager with their parents credit card!
As for Gold, in the chart below I'm using the GLD ETF, could see the $100 level ($1000 for $GOLD) tested. USE THE PULLBACK TO BUY! I still see the Euro rising to the 160 level and the US Dollar ($USD) to the 72 level. Gold should reach about $1300, my target in 2010.
Oil ran close to my $83 target on the breakout, I posted a few weeks ago. Now I still believe oil ($WTIC) can still run up to the $95 level, but expect a retracement near term to the $74 level. Again use this to buy or add to positions.
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OUCH!!! Baidu Misses in After-Hours!


Baidu reported after the close. After a weak forecast from Web portal and games operator (SOHU) this morning, Baidu (BIDU) shares are coming under pressure this evening following weak top-line results for Q3 and a Q4 forecast that missed estimates substantially.

Revenue in Q3 rose 39%, year over year, to $187.3 million, below estimates of $189.6 million, yielding profit per share, excluding options expense, of $2.16, well ahead of the $1.83 estimate.

For Q4, the company forecast revenue of $174 million to $180 million, short of the $203 million average estimate.

Baidu shares are down $46.73, or 11%, at $386.24.

My suggested "HIGH RISK" trade didn't pan out. As I'd suggested using the call spread for conservative traders, close the position out for a loss. For those who really wanted to assume more risk by selling the put option (extremely highly risky trade) can either close positions or may wish to own the stock, evaluate your positions.

On another note, Google (GOOG) is trading down $7 in after hours trading $547 off of the Baidu news.

Dow Theory!

The Dow Jones Transportation Average ($TRAN), for those who follow the Dow Theory, fell 5.4% for the week and was particularly hard hit on Friday....and it's down today!

Two of the three railroads in the $TRAN reported earnings and while the bottom line numbers were impressive, investors were spooked by substantial revenue declines. Burlington Northern Santa Fe (BNI) reported a quarterly revenue decline of 27% from the comparable quarter in 2008, while Union Pacific (UNP) reported a 24% drop in revenues for the same period. The weak revenue picture helped to push the $TRAN to a "DOUBLE TOP" formation.

While I am by no means a strict adherent to Dow Theory, I do think the transports are important to watch, particularly when they signal a different economic client than is being reported by the manufacturing sector. The transports will be an important sector to watch going forward.
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Friday, October 23, 2009

Baidu (BIDU) Directional Trade

Looking at a few stocks that have just recently reported blowout earnings after already amazing stock climbs.
Will Baidu make it a Trifecta?
Chinese Internet search powerhouse has forecast a third quarter EPS of $1.80.
Baidu Earnings Conference Call (Q3 2009)
Scheduled to start Mon, Oct 26, 2009, 8:00 pm Eastern

Now if you wanted to buy 100 shares @ Friday's close of $ would cost you $43,500, alot of money...especially after a four-fold increase this year. The play here is via options and to get the direction correct. Based on recent rallies on market leading tech companies post earnings news...I'd say higher is the play.

Here's the play using OPTIONS (note this is a risky trade):

Buy the November $430 call option ticker BPJ-KF $25.00 Ask
to fund this will limit the upside by Selling the November $450 call option, ticker symbol BPJ-KX for $15.50 Bid.
So the call spread will cost $9.50 [BIDU closed @ $435.31 break even $439.81]
Now, if you really want to turbo charge this trade, sell a put.
Sell the November $390 put, ticker symbol BPJ-WR for $6.30 bid.
This will bring the total cost of the option trade to $3.20.
***NOTE; selling the put means you may have to either buy the stock @ $390 or buy back the put. Again this is a high risk trade. Conservative traders stick with the call sprerad only.

Baltic Dry Index ($BDI)

Today's chart looks at the underlying sector chart for dry bulk shipping, the Baltic Dry Index ($BDI). In a recent Business Insider report ~link~, Drewry painted a positive recovery for shipping in 2010. It pointed out that in 2009 rates declined 27% & for 2010 it should rise (in context) 18%. Meaning that the $BDI has further to rise as well as Itz Pix Genco Shipping ($BDI). That said the 2nd half of 2009 is still projected to slightly recover, and we could see a pullback in GNK with in the asymmetrical triangle formation.
In the chart below I used a comparison against the $BDI, the FXI of iShares China, since most commodities and manufactured good are driven by the China trade. Note how the FXI has remained resilient!
Again, I'm bullish on GNK longer term, it may pullback to the $20/$21 level near term. Recently entered @ $22.90 with a covered call (Jan $25) reducing the cost basis to $21.20 [see previous posts]
Genco reports earnings on Oct. 29th
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Thursday, October 22, 2009

Profiting from a Declining Dollar

The U.S. dollar is trading around $1.50 per euro, but it is only a matter of time until the euro heads back toward $1.60. As a result, Bloomberg reported last week that central banks are dumping dollars in favor of euros and yen, pushing the dollar lower. In particular, China (with $2 trillion in foreign reserves) is shunning the dollar as never before.
Bloomberg link

Whats BAD for the U.S. Dollar is good news for U.S. investors in global stocks, since it provides them with a “currency tailwind.” In addition, nations rich in natural resources have extra-strong currencies due to their commodity exports. Below is a chart of leading commodity-rich global markets and their comparative returns in U.S. dollars vs. local currencies.

With the declining dollar, a good strategy continues to be to buy shares in companies that create earnings in foreign currencies. But U.S. companies can profit from a weak dollar, too. Caterpillar is an example of a manufacturer with positive earnings guidance, since a weak U.S. dollar makes it more competitive. Also, multi-national companies like Colgate-Palmolive are paid in foreign currencies that are appreciating to the U.S. dollar, so they benefit from a weak U.S. dollar, too.

The current stock position in the Itz Pix portfolio has benefited from the falling dollar.
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Genco Shipping (GNK) Action


For those who own GNK @ suggested entry level of $22.90, suggest SELL to Open the Jan. 2010 $25 Call Option, ticker GNK-AE, for $1.70.
This will lower the cost basis to $21.20. If called @ $25 by opex, gains would be +18%. If stock pulls back towards $21/$20 level close call position. Reminder, accumulating GNK as to prior posts.

Transocean (RIG) update

Deep oil driller Transocean (RIG) is hitting resistance @ its 400-day moving average.

Research In Motion (RIMM) Review

With everyone chasing the crowded trade in Apple (AAPL), most have shunned away from Research in Motion (RIMM). Albeit they didn't report blowout numbers or a bullish outlook, still the stock, in my opinion remains undervalued & oversold. I suggested it this month at an entry price of $69.50. I've posted 2 charts today a nearterm focus, with bullish divergent patterns along with a longerterm chart w/200 & 400 ma's. Bottom line Upside $80...downside STOP $60 [2:1]

Research In Motion yesterday released an updated version of its BlackBerry Bold, which the company hopes will help reassert its dominance in the professional market, according to a Reuters article. The company's retail consumer business has come under growing pressure from Apple's iPhone. In the broader consumer marker, RIM has seen competition from Apple's iPhone and handsets from Nokia. The updated Bold's 9700 new features are targeted at defending the business market from the threat of Apple entering it, and are also aimed at attracting wealthier retail users. ~story link~

Don't forget, although RIMM, who still lead in US sales, lost market share to Apple last quarter, it is still gaining globally.
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Wednesday, October 21, 2009

ITZ PIX Update & US Dollar

The markets looked bullish today, until around 3pm when bank analyst, Dick Bove, called Wells Fargo (WFC) a sell and the markets tanked into the close. Also after hours EBAY, disappointed on its earnings report.

Below is the latest Itz Pix portfolio as well as the US Dollar Index ($USD)
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GNK Head Fake???

WOW! What a day for stocks and Genco Shipping (GNK)...I forewarned of the possible pullback @ $24! That said, I also stated last night that one should accumulate shares and load up at $21. This morning entry was $22.90..looking to add more @ $21 and down the road sell covered calls to lower the cost basis. So is GNK's move a head fake? NO as I stated, accumulate near term, this stock is volatile and can move 20% in a week very easily. They report earnings Oct.29th, consensus is for lower earnings..but my outlook is for higher commodity prices and a global recovery., Just look at the recent IPO news for spot prices and shipping, now is the time to get in.

BREAK OUT! GNK Price Target $35

As noted earlier this morning, my intraday charts on the open gave a STRONG BUY in @ $22.90 now up near $24+ near term resistance. Note this stock is very volatile and could as easily sell back down to the $21 level. I've set $35 as my price target. Looking at possible covered calls at higher levels to lower cost basis.

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Entered Genco Shipping (GNK)

Suggested entry on open for Genco Shipping (GNK) $22.90

Tuesday, October 20, 2009

Evaluating the Market & GNK on the Radar

Taking a look at the US Dollar which has broken below the 76 level, I'm looking for a consolidation in gold here, but trend higher longer term.

The Volatility Index ($VIX) looks extremely low, expect a pop near term and for the markets to pullback after this earnings rally. Although there are several buys, like Research in Motion (RIMM)...which is undervalued and over sold. Commodities such as gold are looking like they may consolidate, oil finally broke over $75 resistance at $80. I see it pulling back to $75 support and then making another attempt this time to $85 by year end.
Genco (GNK) looks interesting, the chart appears to indicate a breakout, but the Stochs are over bought...that said maybe look at accumulating here, load up at $20! PnF has a $40.50 Price Objective ~CHART~ . Currently on Itz Pix Radar, give it a few days...may add to portfolio very soon.
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Friday, October 16, 2009


Half the losses in the Dow Jones today is due to IBM. Also Goldman Sachs has been a market barometer of late, it too looks set to pullback. Don't forget today is OPEX.

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Thursday, October 15, 2009

Oil is primed to rally!

Transocean (RIG) up as oil breaks out

Crude Oil ($WTIC) broke out today up +$2.36 to $77.13 as I lags gold. Which $GOLD as well as silver saw declines, obviously some asset allocation going on.

One of the Itz Pix portfolio suggested positions is Transocean (RIG). Studying the chart and I see "double top" formations, there could be a pullback near term. I considered covered calls, but if oil does rally in coming months this stock could ride to $100 easily. Either hedge using puts, which are cheap with volatility down. OR set stops, using the 10 sma & 30 sma to scale out of position. My downside target is $83. ~chart~

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Wednesday, October 14, 2009

Inflation Adjusted, Where's the best place to make money?

In the last ten-years we've seen the Dow Jones Industrial Average ($INDU) hit 10,000 twice, although being just a number, clearly some would say you are even...but are you when adjusted for inflation?

The Dow Industrials from Oct. 1999 through Oct. 2009 has actally had a -20% return although it's at 10,000, gasoline then was $1.20 per gallon and now it's a average price nationally is $2.60. The US Dollar was 100 now it's at 76; Crude Oil per barrel was $16.44, currently $75 (set to break higher) and gold was $280 per ounce now at all-time highs of $1070...but has more to go adjusted for inflation !!!

However, going back to 1980, the inflation adjusted returns would have been: +17% for a home, +42% for gold...and +360% in the Dow Jones.

Below are several "Inflation" adjusted charts that really tell the story.

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