Looking at the technicals, that all important 1130; Inverse Head & shoulders Pattern/Neckline gave way as expected. Bottom line more upside to go, near term resistance, ultimate upside target over 1200 on the S&P500. Gold is approaching $1300, more importantly, crude oil is undervalued and should rally off the bullish action in equities as well as silver & copper. Continue to favor ProShares Ultra Crude ETF $UCO.link from Sept 20th post
Watch the Australian Dollar...commodities will follow...crude oil is playing catch up.
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Silver Wheaton Corp (NYSE: SLW) was downgraded by Credit Suisse from “outperform” to "neutral." SLW's shares closed at $26.54 yesterday.
What a week in the markets, what looked like a possible topping in equities the market got a shot in the arm from David Tepper, president & founder of Appaloosa Management.*see post/videos below.
He basically see equities in a win-win scenario, he also commented on the recent Federal Reserve FOMC statement >>link Tepper stated that the Fed wants economic growth and they don't care and actually want inflation...when has the Fed ever taken that stance? Pointing out that M2 money supply for the last 2 weeks has turned up similar to March 2009, which is a leading indicator of the equity markets will follow.
The Fed’s statement shows that deflation is a concern affecting the future course of monetary policy...Fed makes clear that it wants to boost inflation
Changes in money supply have implications both for domestic economic activity and inflation. The Fed ceased publishing M-3, its broadest money supply measure, in March 2006. The SGS M-3 Continuation estimates current M-3 based on ongoing Fed reporting of M-3’s largest components (M-2, institutional money funds and partial large time deposits) and proprietary modeling of the balance. So why is M3 important? Because the money supply controls how much inflation we have.
Been awhile since the Itz Pix portfolio has appeared, one note the UCO holding, those that follow Itz on Twitter know that we've been trading around this and the SCO for several months now. But on a longer term basis see oil trending higher.
In recent days there has been an increase awareness of silver and more specifically one mining company, Silver Wheaton. This silver stock has been one of the top performing picks in the Itz Pix portfolio over the the last year. Below is the profile of the company from their website. Company Profile
Established in 2004, Silver Wheaton has quickly positioned itself as the largest metals streaming company in the world. The company currently has fifteen silver purchase agreements and two precious metals agreements where, in exchange for an upfront payment, it has the right to purchase all or a portion of the silver production, at a low fixed cost, from high-quality mines located in politically stable regions.
Forecast 2010 production, based upon the company's current agreements, is 22.2 million ounces of silver and 20,000 ounces of gold, for total production of 23.5 million silver equivalent ounces. By 2013, annual production is anticipated to increase significantly to approximately 38 million ounces of silver and 59,000 ounces of gold, for total production of over 40 million silver equivalent ounces. No ongoing capital expenditures are required to generate this growth and Silver Wheaton does not hedge its silver production.
Silver Wheaton’s industry-leading growth profile is driven by a portfolio of world-class assets, including silver streams on Goldcorp’s Peñasquito mine in Mexico and Barrick’s Pascua-Lama project straddling the border of Chile and Argentina. The company’s unique business model creates significant shareholder value by providing considerable leverage to increases in the silver price while reducing the downside risks faced by traditional mining companies. Silver Wheaton has an experienced management team with a strong track record of success and is well positioned for further growth.
Silver Wheaton is the largest metals streaming company in the world, and the only company that derives more than 95% of its revenue from the sale of silver. The company has entered into fourteen silver purchase agreements and two precious metals agreements with nine operating partners, including Barrick Gold Corporation and Goldcorp Inc.
It is estimated that 70 percent of silver production comes as a by-product from base metal and gold mines. This characteristic, along with Silver Wheaton management’s bullish sentiment for long-term silver prices, was the basis for creating Vancouver-based Silver Wheaton in 2004. Silver stream agreements allow Silver Wheaton to purchase, in exchange for an up-front payment, the by-product silver production from a base or precious metal mine that it does not own or operate. The predetermined price that Silver Wheaton pays for future silver production is typically US$3.90 per ounce, with a small inflationary adjustment, ensuring that costs are fixed. This allows the company to stabilize operating costs and reduce downside risk, while providing the upside of significant leverage to the price of silver. Other than the initial up-front payment, no additional capital expenditures or exploration costs are required. Yet, Silver Wheaton benefits from the production and exploration growth of its operating partners.
Silver Wheaton’s low-risk business model, which was designed specifically to create long-term shareholder value, has a number of unique aspects. At its core are multi-year agreements to purchase, at a low fixed cost, all or a portion of the silver production, and a small amount of gold, from high-quality mines in Mexico, Chile, Argentina, Peru, Sweden, Greece, Portugal, Canada and the United States. The company has fixed operating costs, no currency risk, and no ongoing capital expenditures or exploration costs. In addition, a large percentage of the company’s revenue is derived from low-cost and long-life mining operations and it does not sell forward its silver sales. All of this provides significant leverage to increases in the price of silver while mitigating the downside risks associated with traditional mining companies. As a result, Silver Wheaton has an industry-leading growth profile, and it is very well positioned for further, sustained growth.
Currently silver is making 30 year highs @ $21.48, Silver Wheaton's costs is around $4.00 per ounce and with silver @ $21 equals $17.00 profit per ounce. So, 23 million ounces this year and increasing to 40 million in 2013...one can see that SLW stock should see further upside. Itz has maintained a $27.50 near term price objective, Itz is raising the 12 month target to $40.
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CNBC Fast Money crew discuss gold at the $1300 level with Bill Fleckenstein. Guy Adami mentions Itz Pix fave Silver Wheaton SLW, Adami's Final Trade pick tonight. link
Gold is rapidly approaching the $1,300 mark, and James DiGeorgia, publisher of the "Gold & Energy Advisor," says this is just the beginning of the bullion breakout.
According to Dow Theory, the primary trend of the stock market is “up.” That upward trend would be reconfirmed if the D-J Industrial Average ($INDU/10607.85), and the D-J Transportation Average ($TRAN/4433.66), break above their respective August 9th closing highs of 10698.75 and 4516.35. Such action would also suggest a run toward the Dow’s April 26th closing high of 11205.03.
Risk was firmly back in play during the New York session as markets await tomorrow's conclusion of the latest FOMC meeting. The S&P broke above crucial resistance at 1,130, and ended the session up more than 1.5%.
Earlier today the president had a Town Hall Meeting on CNBC. Even though it didn't meet Itz expectations, the markets rallied anyway, which was a positive. Below James Cramer chimes in on his thought...
Looking at the technicals, that all important 1130; Inverse Head & shoulders Pattern/Neckline gave way as expected. Bottom line more upside to go, near term resistance, ultimate upside target over 1200 on the S&P500. Gold is approaching $1300, more importantly, crude oil is undervalued and should rally off the bullish action in equities as well as silver & copper. Continue to favor ProShares Ultra Crude ETF $UCO.
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