Thursday, December 31, 2009

~Itz Top Surprises For 2010~

Well, after having read several 'predictions' for the markets and moving events for 2010...I decided to add my 2 cents too.

Financial stocks will resume their leadership again after consolidating in late 2009.

US Dollar trends sideways as it struggles from higher interest rates and a growing deficit.

Silver will outperform gold as the metal to be in.

Warren Buffett steps down from Berkshire Hathaway.

Newt Gingrich emerges as the presidential candidate for the Republican party in 2012.

Housing market revives as buyers rush to lock in on expectations of rising rates.

Bears disappointed as markets 'never' correct more than 10%.

Republicans win big in November and take control of House.

Iran enters into civil war.

Oil hits $100 per barrel.

Happy New Year!!!!

Tuesday, December 29, 2009

Will Energy Stocks Repeat 2004?

For those that follow my blog, know I've been touting crude oil and energy for several weeks now. On a technical basis, oil tends to lag or echo gold's movements by roughly 3 to 4 months. Just watch one of the financial shows and how their reporting on oil possibly making a technical breakout over $80.
Another view I've held to is that the market is replicating the 2002/2003 market and we may see the S&P500 consolidate as we enter 2010, similar to 2004. Several sectors have lagged in 2009 as did in 2003, one being the energy sector. For sake of comparison, I've used the S&P Energy Index ($SPEN) in the annotated charts below.

2003 the S&P500 ($SPX) outperformed $SPEN:

While in 2004 $SPEN played catchup as the $SPX consolidated:

For 2009 again $SPEN lagged $SPX...will 2010 be bullish for energy stocks?

These 2 charts I've set up a gold/crude oil ratio, will the ratio decline in 2010? My view is that gold will continue to rise, but that crude oil will rise~ by a greater percentage. I see gold hitting $1300, and crude oil around $95 to $100.

Is Crude Oil ($WTIC) Going To $95?

For over a month now, I've reported that crude oil ($WTIC) was approaching a pivotal inflection point. In that it has traded on a 4 month lag period to the movements in gold ($GOLD). I've also suggested that the oil drillers were attractive, especially Transocean (RIG) and the the higher beta Pride Int'l (PDE). >>READ

Watch the $82 level a break over that and $WTIC can rally to $95 early 2010. My price targets for RIG is $100 & PDE $40.

Monday, December 28, 2009

Update: Gold & Dollar

Is the dollar ($USD) heading lower? After hitting the 78.40 level and gold ($GOLD) bouncing off my targeted $1075 level, I still believe near term we could see a retest of that level or even lower to $1050. Longer term I still see the dollar heading lower.

Yield Curve Bullish For Stocks


Update on RIMM:China Telecom Corporation Ltd. lately announced that a sales agreement had been inked with Research In Motion Limited to sell BlackBerry and provide related service in China. >>READ
RIMM in my opinion is not only expanding it's global reach but is set to expand its product line as 4G rolls out. RIM recently bought a company that has a WebKit-based browser (like the iPhone, WebOS, and Android OS), which may signal an acceptance that wireless broadband is real and should be used.

So far, RIM's iPhone-like product, the Storm, has been a failure composed of an awkward touchscreen and old-fashioned UI not suited to the modern mobile world. However, I believe they are reinventing the BlackBerry -- or coming up with a separate platform for the iPhone/Android crowd -- that would be good for the industry and for users. Just imagine an iPhone-like device with the security, the manageability, and even the keyboard of the BlackBerry Bold 9700.
RIM has not yet formally announced the BlackBerry Tour2, but that hasn't stopped information about it from leaking out. >>READ
Thomas Weisel recently raised their rating on RIMM to overweight price target from $85 to $90, based on an 18X '10 eps of $5.04. Today they raised their AAPL target from $245 to $250 on a 22p/e based on '10 eps of $11.23. So...AAPL @ $209 to $250 represents a nearly 20% gain...while RIMM @ $67 to $90 a +34% move...hmmm???

Thursday, December 24, 2009

~Merry Christmas~

Just wanted to touch base after a holiday shorten market today. News of Apple introducing an electronic tablet in January propelled it to a new high $209.04. RIMM was lower about 1% to $66.92. Again I continue to favor RIMM on a valuation/PEG outlook, looking back to Oct 30th lows, Apple is up +10.9% while RIMM, even with the pullback this week is up +13.95%.

Oil is also up and now analysts see $100 by early 2010...hmmm didn't I post something like that a few weeks ago?

And gold is heading higher too in 2010, I'd suggested accumulating on a pullback to $1075 (AUY, SLW & HL)

On that note, I wish everyone a Merry Christmas!

Wednesday, December 23, 2009

A Look At The 2 Year Treasury

A look at the Two-Year Treasury Yield chart (daily) and you can see that it is set to rise, noting the bullish divergence formation.

A view of the longer term (30 years) is interesting. Back in '82 when rates were 17%+ when they came down the market took off. Yet the past few years showed that when the UST2YR declined the $SPX did as well. Of course each period encompassed diverse reasons why rates were too high or too low. Bottom line is that we are entering a transitional period soon and in 2010 the focus will be on "interest rates"!

Intraday Review: AUY & RIMM

As I highlighted yesterday on the dollar/gold, I'd held to my call of $1075 Gold, as an accumulating point. I have also been targeting my favorite gold stock,Yamana (AUY) suggesting adding or buying as it neared $11.00. ~link~...Well yesterday gold's intraday low was $1074.53 & Yamana's intraday low $11.05!
As I type Gold is @ $1094, Dollar 77.94 & AUY $11.78

I drew up some charts this morning, running a 50 EMA & 200 EMA...note the breakout over 50-ema resistance and now encountering resistance at the 200 EMA? This morning the dollar sold off on the negative November New Home Sales >read

Now not just Yamana is rallying here, so are SLW, FCX & HL, which also hit my $6.00 buy objective yesterday. That said this rally could see some pullbacks to retest the recent lows, there could still be more upside for the dollar towards the 79+ level/200-sma and retracement levels as highlighted in the above charts. This is why I suggested an accumulate on gold/silver and to look for confirmation. As markets transition into the new year we need to continue to watch what the Fed does with interest rates-or at least the markets perception of what they'll do.

Now to Research in Motion ( RIMM), the stock is volatile after 2 days of selling following a great earnings report. This is due to two-events, first, a short squeeze that caught some traders off guard and bought on the bullish report last week. Secondly, the outage last night, which is the 2nd this week and 3rd this month, caused by a software upgrade on RIM's messenger service. The bears are trying to bring this stock down, citing the downed service and highly competitive sector as negatives for RIMM. However, as I've written over the last several weeks and what the recent earnings reports indicates...RIMM is growing and presents an good value relative to other competitors. The move into "smart phones" is going to be huge in 2010, with 40% of North America owning smart phones and only 18% globally, the pie is growing and there is room for competition. Use the pullback to buy/add to position.

Tuesday, December 22, 2009


Gold intraday has tested the Itz Price Objective of $1075 today, actually $1074.53, at the moment it is trading $1085. It could go lower as I've pointed out in my previous blog posts, $1050 or the India buy of $1035. Many are now raising the question..."could the dollar carry trade be over?"...Taking a look at the past few decades and how gold did versus the S&P. One should ask how could gold have beaten equities in the last 10 years, when there was no inflation? And why did gold not perform in the '90s?
One of the major reasons for this performance in gold has been the actions of world central banks, in the '90s they were net sellers of gold and this decade net buyers. Market strategist Marc Faber recently stated, that he expects more central banks to follow India’s example and gather reserves of gold. Earlier this month, a top Chinese official announced that the country is eager to increase its gold reserves to 6000 tonnes in the next 3-5 years and 10000 tonnes in the next 8-10 years. China, the fifth largest holder of gold in the world with 1054 tonnes, has been aggressively trying to mop up gold reserves to its foreign exchange reserves. China is also eager to buy IMF gold, but not at this high price that India has paid ($1035). China obviously wants prices to crash, so that it enables the country to amass more gold reserves at a lower price. China wants to wait and watch so that prices of the yellow metal crashes to realistic levels in fact, wants to buy gold cheap, around $800. Will IMF sell gold to China at $800? I don't believe so.
One other note, the Volatility Index ($VIX) is below the 20 level today, 19.70. It hasn't been this low since August 2008, the markets are complacent.

I annotated these charts today, comparing the S&P500 ($SPX), PHLX Gold/Silver Index (XAU) & the AMEX Gold Bug Index (HUI) A)1990-1999 B) 2000-2009.
click charts to expand images

Research In Motion (RIMM) : Updated Chart

Here's an interesting report from Sham Gad; Managing Partner of Gad Partners. >>READ

How High Can The Dollar Go???

This market for most of 2009 has been all about the US Dollar and its inverse relation to equities and commodities. I've noted over several posts that I expected a rally upto the 78 level ~link~. But now the charts are suggesting that more upside might be in store.
I've annotated several charts of the dollar, gold, silver and two Itz Pix stocks; Yamana (AUY) & Silver Wheaton (SLW) and some key support/resistance levels.

The Dollar break seems to be carrying all of the proper technical credentials that might allow it to transform into a major trend reversal- eventually. The possibility of higher interest rates for "2010 forecasts" currently promoted by analysts in the media as 2009 approaches year end has investors fearing an end to the dollar trade.
Gold is trading over it's 30 week moving average and appears ready to track higher towards its 38.2% Fibonacci Retracement level of 80. Having already rallied nearly 4 points, from 74 to 78 in a few weeks. While gold has retraced from $1225 to $1090 or $135 (11%).  Based on these moves, gold should then have another $60 downside as the dollar rises 2 more points towards the 80 level. I've held to the $1075 area inwhich to add or begin buying more gold for several weeks now. More than likely the movement will overshoot  to the downside as it has to the upside.
Yamana Gold (AUY) is looking very atractive as it approached the $11 area, not a bad spot to begin accumulating, however watch for a reversal higher to confirm and hold  to $10 as a stop. Joe Terranova on CNBC's Fast Money comments on gold. ~read~
As for the price of Silver, the charts indicate that the $16 level maybe be next as key support. If so that would pressure Silver Wheaton (SLW) as well as Hecla Mining (HL) to trend lower. For those who agree on lower silver prices should consider selling a forward month covered call . Perhaps a SLW Jan at the money ($15) for $0.70? (almost 5% yield)
Bottom line, the dollar may trend higher as we close out 2009. Longer term, the  fundamental outlook for the US Dollar doesn't seem likely to improve, at least not until the deficit spending is brought under control. However, the dollar has already experienced two powerful bear market rallies since early 2005, and this current move certainly looks like it has the makings of rally number three. The transition into 2010 looks like it will be an inflection point.
*click charts to expand images

Monday, December 21, 2009

Big Opportunity In JPMorganChase (JPM)

A couple of key points I wish to review today are the yield curve and the Barrons' Report this weekend on bank stocks.

As for the yield curve, more specifically the spread on the 10 year/2 year note is at 2.80% as of today (chart is of Friday). The Treasury yield curve, a barometer of the health of the U.S. economy, widened to a record as investors bet an accelerating recovery will fuel inflation and hurt demand for unprecedented sales of government debt. >>READ FULL STORY

The next story is from a Barrons' Report this weekend pointing out that 4 banks stocks offer huge opportunity. One of Itz Pix has been JPMorgan Chase (JPM).It may have the clearest path to higher profits, the strongest management and one of the industry's best business mixes. JPM trades at 1.6 times tangible book, JPMorgan controls about a third of the American deposit. Price-to-tangible book is a conservative valuation measure because the book value excludes goodwill from acquisitions and other intangible assets. Banks look even cheaper, based on stated book, which includes goodwill and other intangibles. JPMorgan trades for little more than its stated book value of $39 a share.

Friday, December 18, 2009

Gold Mining Index & The Dollar

(1 gm) .999 Fine Gold Bar - (No Assay Card)The US Dollar is finding resistance at the 78 level. The first chart (posted 12/15/09) shows that the gold mining index (GDX) is a buy, now trading at the lower end of it's uptrend channel. However...has the dollar hit a near term top at 78 or does it have more upside? I believe we are at an inflection point for gold, stocks, dollar and oil. First of all as I write this we're going into the final hour of quad options expiration not to mention alot of managers are doing some end -of-the-year reallocating. The technicals say buy or at least start accumulating gold here, but my gut call is suggesting that gold has further downside...I still maintain a $1075 target. I would say start "accumulating" gold, I like Yamana Gold (AUY) at $11, now at $11.50. I also like Silver Wheaton (SLW) at $14 now $15, Hecla (HL) at $6 and Freeport McMoran (FCX) at $73. Long term these should all perform as I expect the dollar to head lower.
*click to expand images

The Dollar, Gold & OIl...What's Next?

In this past Weekend Review, I highlighted; as I have for several weeks now...that the energy sector ($WTIC) crude oil was set to takeoff. >>read more

Here's an updated chart of the dollar, which hit my target, gold and crude oil.
*click chart to expand image

I've been voicing my view over the past few weeks to lighten up on gold, silver & copper and to allocate more into crude oil. I also pointed out that the metals would decline much more so than crude oil. Look at this chart over the last 5 days of Pride Int'l (PDE), Transocean (RIG), Silver Wheaton (SLV) & Yamana (AUY).

Shorter term I see some more downside for gold and silver, but longer term they should trend higher, silver more so than gold. Note on the Silver Wheaton chart, the Bearish Flag formation.

Thursday, December 17, 2009


Research In Motion Ltd. said Thursday afternoon that earnings jumped 59% for the third fiscal quarter on strong sales of the company's BlackBerry line of smartphones.Net income for the period ended Nov. 30 came in at $628.4 million, or $1.10 per share, compared to net income of $396.3 million, or 69 cents a share, for the same period the previous year. Revenue grew 41% to $3.92 billion for the quarter. Analysts were expecting the company to report earnings of $1.04 per share on revenue of $3.78 billion, according to consensus estimates from FactSet Research. Subscription sales 4.4 million to 4.7 million estimates were for 4.4 million. Sold 10.1 million units for the quarter!

Stock is rallying huge in AHT $71.50
I'd suggested buying a deep out of the money put option earlier today as insurance, tomorrow I will be suggesting a covered call most likely.

ITZ PIX Intraday Update; RIMM, AUY & SLW

Research in Motion (RIMM) reports after the close today. They should beat earnings expectations...however the key metric will be "guidance" in 2010.
related story
Suggest hedging RIMM, BUY Jan. $55 PUT option currently $1.10 Ask ticker RFY-MK

Itz Pix Updates on Yamana Gold (AUY) & Silver Wheaton (SLW):

For those that own these suggested Itz Pix portfolio stocks and have sold covered calls against them here's an update....

Silver Wheaton (SLW) current open position December $16 call (SLW-LE) expires tomorrow currently trading bid 0/ask 5 cents. You can buy to close or let the option expire tomorrow and keep the premium. I don't see SLW spiking to over $16, but for peace of mind its up to you to close the position on the call option.
Entered SLW in September @ $12.66, sold Dec $15 call (SLWLC) for $1.10, bought back to close for $1.40 on November 11th. Simultaneously sold a DEC $16 call for $0.85, bottom line cost basis is $12.11

As for Yamana Gold (AUY): the January $14 Call option (AUYAP)was sold for $0.90 back on Oct. 8th, suggest buy back to close for $0.10 netting $0.70 and lowering the initial cost basis from $8.50 to $7.70.

Higher Rates Maybe Bullish For Stocks

The Prime Interest Rate: the interest rate charged by banks to their most creditworthy customers (usually the most prominent and stable business customers).
In a “60 Minutes” interview Sunday, President Barack Obama’s message to the “fat-cat bankers”,who were summoned to the White House Monday and told to open the lending spigot. Obama chastised bankers for their irresponsible actions that got us into this mess. >>Read More

*click chart to expand image

As you can see in this chart, a higher Prime rate is bullish for stocks, at least for the last decade it has been. Interest rates affect but don't necessarily determine the moves in equities. The interest rate, commonly bandied about by the media, has a wide and varied impact upon the economy. When it is raised, the general effect is to lessen the amount of money in circulation, which works to keep inflation low. It also makes borrowing money more expensive, which affects how consumers and businesses spend their money; this increases expenses for companies, lowering earnings somewhat for those with debt to pay. Finally, it tends to make the stock market a slightly less attractive place to investment.

Keep in mind, however, that these factors and results are all interrelated. Granted what's described above are very broad interactions, which can play out in a number of ways. Interest rates are not the only determinant of stock prices and there are many considerations that go into stock prices and the general trend of the market - an increased interest rate is only one of them. Therefore, one can never say with confidence that an interest rate hike by the Fed will have an overall negative effect on stock prices.
The Fed's decision not to raise rates this week, doesn't mean their not thinking about it. Most likely, there was discussion of an exit strategy at the meeting, as was the case in November, low inflation expectations give the Fed a chance to hold off on a rate hike as long as possible. The timing of a rate hike will also depend on how fragile the psychology in the financial market is. The last thing the the Fed wants is to precipitate another financial crisis by implementing the exit strategy too soon. My view is and continues to be, that you won't see interest rates move higher until there's job growth!

On another note the Senate Banking Committee voted 16-7 to confirm Fed Chairman Bernanke for a second term.

Wednesday, December 16, 2009


The FOMC stated that economic activity has continued to pick up and that deterioration in the labor market is abating. The FOMC also expressed that conditions in the financial markets are improving, so some of the Fed's special liquidity facilities will soon end as planned. The Fed also indicated that the target range for the federal funds rate will remain at 0.00% to 0.25% and that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. The overall language in the statement is consistent with previous statements, so it helped calm concerns that the Fed may look to raise interest rates sooner than later.
Despite that, the dollar advanced against competing currencies and gave the Dollar Index ($USD) a momentary gain. I found today's action interesting, we had the dollar dip and then rally back, while gold, silver and oil put in gains for the day. Most likely due to the FOMC statement, which was supportive for the dollar and while also dovish- signaling continued money flow.

I'm still holding onto the dollar going to 78 and gold to $1075 near term. Oil, which I've stated is lagging golds move and appears to have started its run. I'm in the same camp as Larry Kudlow, that inflation is picking up. I also believe the fed is behind the curve.

Back to the energy markets, OPEC meets next Tuesday >>READ...
the Organization of Petroleum Exporting Countries said it expected the world would consume 70,000 barrels more crude next year than previous estimates. The group, which supplies about 35 percent of the world’s crude, said developing nations would drive demand up.
I continue to favor energy near term, especially the drillers Transocean (RIG) & Pride Int'l (PDE).

*click chart to expand image

FOMC: Rates Remain Unchanged

Press Release

Release Date: December 16, 2009

For immediate release
Information received since the Federal Open Market Committee met in November suggests that economic activity has continued to pick up and that the deterioration in the labor market is abating. The housing sector has shown some signs of improvement over recent months. Household spending appears to be expanding at a moderate rate, though it remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment, though at a slower pace, and remain reluctant to add to payrolls; they continue to make progress in bringing inventory stocks into better alignment with sales. Financial market conditions have become more supportive of economic growth. Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.

With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. In order to promote a smooth transition in markets, the Committee is gradually slowing the pace of these purchases, and it anticipates that these transactions will be executed by the end of the first quarter of 2010. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets.

In light of ongoing improvements in the functioning of financial markets, the Committee and the Board of Governors anticipate that most of the Federal Reserve’s special liquidity facilities will expire on February 1, 2010, consistent with the Federal Reserve’s announcement of June 25, 2009. These facilities include the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Commercial Paper Funding Facility, the Primary Dealer Credit Facility, and the Term Securities Lending Facility. The Federal Reserve will also be working with its central bank counterparties to close its temporary liquidity swap arrangements by February 1. The Federal Reserve expects that amounts provided under the Term Auction Facility will continue to be scaled back in early 2010. The anticipated expiration dates for the Term Asset-Backed Securities Loan Facility remain set at June 30, 2010, for loans backed by new-issue commercial mortgage-backed securities and March 31, 2010, for loans backed by all other types of collateral. The Federal Reserve is prepared to modify these plans if necessary to support financial stability and economic growth.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.

Fed link

Tuesday, December 15, 2009


The U.S. dollar index $USD is up today ahead of the Federal Reserves two day FOMC meeting. The Fed is expected to leave rates unchanged on Wednesday but analysts are looking for signs of a potential rate hike, just look at today's higher than expected PPI number. Sustained low interest rates means inflation is more likely and investors buy gold as a hedge. However, speculation of a hike is strengthening the U.S. dollar and putting pressure on gold prices.
Gold has been riding the lower dollar, global liquidity train...could it be switching tracks and looking at higher inflation as global economies recover? Just look at how central banks are buying gold, just recently Russia!
I've annotated a weekly GDX, mining stock etf against the US dollar ($USD). Note the similarities to that of late 2007. Personally I believe that gold will under perform silver as the economy improves and favor miner Silver Wheaton (SLW). Bottom line we have CPI tomorrow and the FOMC rate decision as well as OpEx's going to be a wild ride as we end the year. My call recently was that gold and oil would correct, gold more so that oil. I've suggested RIG & PDE. On the miners I prefer SLW, look to add on further pullbacks...I also like Yamana Gold (AUY) near $11. All these stocks are in the ITZ PIX portfolio.
*click chart to expand image

Research In Motion (RIMM) Update

Several analysts updated their views on Research in Motion (RIMM) prior to their earnings report this Thursday.
Barclays lowered PT (price target) by $5.00 to $85.00, based on higher competitive market, FY '11 $4.82 from $4.99.
Raymond James lower, $80.00 from $85.00
T. Weisel lower, $85.00 from $95.00
S&P maintains BUY 4 Star rating PT $87.00
Citigroup analyst Jim Suva, issued a BUY on MOT & SELL on RIMM & PALM. today read report.
Back on November 2, 2009 he upgraded MOT shares to Buy from Sell, while also downgrading both Palm (PALM) and Research In Motion (RIMM) to Sell ratings. read report

If you had purchased MOT back in November on his call, it would of cost you $9.03, it currently trades @ $8.41, down 6.87%. Now RIMM was $55.75 on Nov. 2nd, currently @ $63.74 a gain of 14.33%.
Is Mr. Suva's call correct this time around? Maybe...maybe not, but his previous call until today would of lost you money.
To be fair I suggested RIMM on ITZ PIX back on October 9th @ $69.50 link and suggested on Nov. 2nd to hold or accumulate/buy more RIMM and to hedge one's position. read
My original call was early, down 8.2%, however my followup call on Nov 2nd is up 14.33%. I continue to view that RIMM has more upside potential than downside risk.

*click on chart to expand

*disclosure, I am long RIMM

Monday, December 14, 2009

Itz Pix Portfolio Update

ITZ PIX Stock Portfolio Update:
Apple exited the portfolio with a +34% gain. Note the open covered call on Silver Wheaton (SLW), December $16 ticker SLWLE expires on Dec. 18th, this Friday. It closed today at bid $0.15/ Ask $0.20, depending on where the stock is trading Thursday, I'll make a suggestion on what action to take.
RIMM Update: Link

*click chart to expand image

Sunday, December 13, 2009


For the market to continue to rally it needs to see JOBS created, not just the decrease in jobs lost.
On ABC's "This Week", the President’s top economic advisor, Larry Summers, told George Stephanopoulos that “by spring employment growth will start turning positive.” >> See Video

This release was reissued on Friday, December 11, 2009 from the U.S. Bureau of Labor Statistics: Total employment is projected to increase by 15.3 million, or 10.1 percent, during the 2008-18 period. >>Read Report

In this chart for the last 42 years I've compared the Unemployment rate as well as those unemployed 27 weeks or more, against the Capacity Utilization, If market demand grows, capacity utilization will rise.
*click chart to expand

Former Fed Chairman, Alan Greenspan comments on "Meet the Press".

Saturday, December 12, 2009

Weekend Review

The key economic news last week was Retail Sales for November and Michigan Sentiment for December, but they gave a larger boost to the dollar than to the equity market. So, the strong dollar move which finally broke out of its downtrend channel, continued to unwind the US Carry Trade.

The Rasmussen Consumer Index, which measures the economic confidence of consumers on a daily basis, jumped over three points to 74.6. That's up three points from its level one week ago as well as one month ago. Consumer confidence is up 15 points from the beginning of the year. >>Read More

Key economic news for this coming week will be Tuesday's Producer Price Index & the FOMC Meeting starts, Wednesday we have the Consumer Price Index and the FOMC rate announcement. Considering recent economic improvements there could be some change in the language other than the "extended period" comment that will show the Fed is setting up for a bias change. Guaranteed this will be the over riding focus of the markets! The earnings calendar will also pick up, with retailer Best Buy (BBY) reporting on Tuesday and tech companies Oracle (ORCL) and Research In Motion (RIMM) on Thursday.

RIMM Update: RBC Capital lowered their Price Target on Research in Motion from $150 to $120 last Thursday, still it's 87% higher than Fridays close. I posted my views on why RIMM it will outperform Apple this past week also... >>Read More Now I believe that it's not so much whether they beat or miss, but the outlook they give for 2010. On the charts the technicals point to a break out to the upside. The 50 and 200 mas have a tight squeeze on the price, the trend line from the March lows give a $60 support and the PnF has a $82 PO.
*click on chart to expand image

Well it finally happened, the dollar broke out of it's downtrend channel. Will it resume its decline or climb higher? I believe it will rise a bit more and that gold and oil will decline too, gold more so than crude oil. Crude oil inventories at the Cushing, Okla., storage hub, which is the delivery point for the Nymex crude futures contract, are 46.5% above a year ago and near record highs, government data show. The Federal Energy Information Administration forecasts that crude oil processing at U.S. refineries this winter will drop 405,000 barrels a day from last winter to a 14-year low. In the U.S., the world's largest oil market, oil demand in the current quarter is expected to average 18.87 million barrels a day, down 2.2%, before posting a narrow gain of 0.7% in the first quarter 2010, the EIA predicted this week. Full-year 2009 U.S. oil demand will be a 12-year low, and a year-on-year drop of 4.1%, the EIA said. In 2010, U.S. oil demand will rise by 1.4%, to near 19 million barrels a day, but will still be 8.8% below the peak level of 2005. So, why am I bullish on oil? Besides my view that the dollar will continue to fall after a short term rally here, I also believe that a global economic recovery is occurring and that demand will spike and catch everyone off guard. Now is the time to accumulate energy stocks...not when oil is at $100 a barrel!
I continue to suggest Transocean (RIG) & Pride Int'l (PDE).
As for the price of gold, I continue to hold my downside PO @ $1075, I would suggest buying at that level with a 12 month PO of $1400. I would also tend to weight silver more than gold, it continues to trail gold and will outperform on an economic recovery, due to its commercial use.

Thursday, December 10, 2009

UnitedHealth Group (UNH) Update

UnitedHealth Group (UNH) broke over resistance today +$1.81 (6.35%) to $30.31, upside target near term is $33. UNH was a suggested BUY back on Oct. 9th @ $24.50 for Itz Pix Portfolio, up 23.7% in 8 weeks. One should consider some protection here, perhaps selling an out-of-the money call and using that money to by a put (Collar). I'll be likely looking at doing so in the near term, based on how the Senate health care bill develops.
*click chart to expand image

Jim Rogers Dollar Call

Legendary investor Jim Rogers makes a bold call on the U.S. dollar.

A Look at the Australian Dollar & Gold

Over the last 23 years as a free floating currency, the Australian dollar has usually served as a proxy for gold due to the fact that Australia is the second largest producer of gold after South Africa. Fluctuations in the price of gold have seen corresponding rise and falls in the Australian dollar. >>READ MORE
This is an interesting alternative to consider... ~link~
*click chart to expand image

Wednesday, December 9, 2009

Dollar & Gold Update

Charts continue to point to a higher dollar & lower gold prices.
*click charts to expand images


Itz Pix Portfolio exited Apple (AAPL) this week as it dropped below the $190 stop. Apple rallied 4% today on an Oppenheimer report that it may start production of its tablet in early 2010, however it maybe already factored into its stock price (*see video clip below). In after hours trading Apple was down $5.00 ($192.77).
Itz Stock Chartz has suggested RIMM in its portfolio, granted although RIMM is mainly a wireless company, Apple is also into pc's to be fair. Research In Motion is most famous for its Blackberry.
RIMM expects to earn $4.15 this year and $4.81 next year, as for AAPL $7.78 & $9.40.
For Apple that's a 20.8% YOY growth and it trades at 25 times or 1.2 times growth. Now as for RIMM it's YOY growth is 16% and it trades for 15 times eps. If one were to use Apple's ratios, it would suggest it trade at a 19 P/E and the stock should be trading at $79 this year and $91 next year's earnings. RIMM is trading up 1 cent in AHT @ $64.14 from it's Wednesday close.

RIMM reports Q3 earnings next week, it has beat Wall Street analysts expectations for the last three quarters. While there is no guarantee it will continue doing so, I do think that the company can beat the third quarter estimate (which is $1.04).

2010 is going to be the year of "Mobility" and the market for smart phones will expand, even with Droid, the pie is growing and everyone will see more business. >>Read More

Tuesday, December 8, 2009

JPM & RIG Update

Two of my recent Itz Pix buy suggestions JPMorgan Chase (JPM) and Transocean (RIG)were recommended tonight on CNBC's Fast Money.

Jamie Dimon's comments rallied JP Morgan stock today into the close ~read~

CNBC "Fast Money" Final Trade Call see what they said

Now Is The Time To Start Buying In The Oil Sector

The International Energy Agency (IEA) recently released its World Energy Outlook (WEO), an annual long term forecast for energy and the oil market. ~Read Story~
There is currently an oversupply of oil on the market, roughly 150,000 barrels per day...BUT as the globally economy comes out of this recession, demand will pick up. Just a slight increase from China & the US could see the daily supply fall to a 1 Million barrel shortage per day of supply. Over the last 30 years there has not been a solid correlation between the US dollar and the price of oil. We are in an unusual period, a global turn around or even a geopolitical event could see a spike in the dollar as well as in the price of oil. My views have been that oil echoes golds movement by 3 to 4 months. I've also set a $73 near term support price for crude and a + $90 by early 2010. RIG is selling off and very undervalued, I also like Pride International (PDE).
*click charts to expand images

Monday, December 7, 2009

Apple Exits Itz Pix Portfolio

Apple (AAPL) closed below the $190 stop today @ $188.95. It entered the portfolio back in July at a suggested entry level of $141. Bottom line +$47.95 for a +34% gain in 6 months.

Gold Update

I still believe as I noted last week that gold/silver have more in this correction, reiterating my downside target for gold ($1075). Itz Pix portfolio include Yamana (AUY); Freeport McMoran (FCX); Hecla (HL) and Silver Wheaton (SLW). Yamana has a covered call January $14, which I may suggest buying back, my downside target for AUY is $11. Silver Wheaton has a covered call Dec. $16 strike, downside target for SLW is $12. Both of these open calls are being monitored for possible buy backs to close. As I type the intraday rally in gold is fading $1159.
*click on chart to expand image

Intraday View

Research In Motion is trading higher today after the BlackBerry maker announced a distribution deal with Digital China. Also for those who follow my blog, in the energy sector the driller or the OIH index is signaling BUY! Looking at the ITZ PIX portfolio commodity stocks are down, although higher than their earlier intraday lows after Bernanke's speech @ Economic Club of DC. Apple is flirting with the $190 level, having dropped below intraday, those trading should sell on a close below $190. Or consider an option strategy, perhaps a collar?
*click on chart to expand image