Sunday, February 27, 2011

Itz Week End Review 2-27-11

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The equity markets finished Friday on a high note, snapping a week-long losing streak, as stabilizing oil prices eased concerns that the economic recovery could be derailed. Concerns that unrest in Libya would spread to other oil producing nations sent oil prices to over $100 a barrel mid-week, leading the stock market to drop for three straight days before reversing direction on Friday. Which was a surprised, since most expected the longs to hold off until Monday pending further unrest over the weekend. Moving the rally Friday was a strong read on consumer sentiment and Saudi Arabia stepped in and said they would produce any quality and quantity of oil that Europe needed to replace Libyan supply.The Michigan Consumer Sentiment Index rose to 77.5 in February, its highest level in over three years. Economists were expecting the reading to remain unchanged at 75.1.
For the week ahead, the markets face continued geopolitical risks as well as some key economic reports, expect more volatility. The contagion factor is our worst worry, new demonstration in Tunisia indicate that unrest can reappear just as quickly as it faded. There were also new demonstrations in Egypt and Bahrain over the weekend. Saudi seems to have dodged a bullet so far with the $35 billion giveaway to the people but nobody knows how long it will last. Hopefully, positive U.S. economic reports can offset the negative reports out of the Middle East. The Fed Beige Book should show a ramping economy and the payroll report should show the biggest job gains since November 2005.
So that is what we face this week, but looking ahead about a month from now....investors will begin to worry over the Fed ending QE2 starts to impact the institutional sentiment. The March 15th FOMC meeting could be the turning point. If Bernanke keeps talking about the possibility of QE3 we could see that bearish decline postponed. The offset to the end of QE2 is of course a much stronger economy.
Was Friday's rally a bear market bounce or the start of a lasting rebound? This week will be pivotal, should Gaddafi fall and economic reports come in positive, the bull market continues. However, if the contagion spreads and the jobs reports disappoints, watch those 50 day moving averages on the major indexes give way.
Markets should be positive on Monday, Warren Buffett letter to Berkshire shareholders on Saturday said America's best days lie ahead. He believes a housing recovery will begin soon, He said "the prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted and the American system for unleashing that potential, a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War, remains alive and effective."

ITZ PIX Portfolio Updates: we had 3 positions exit the portfolio this past week, PDE, VLO & UCO. Pride International  PDE was entered back on Nov. 9, 2009 @ $31 and exits with a 29% gain. Pride has a buyout bid from Ensco Drilling ESV. Valero was entered back on July 1 2009 @ $15.82 exits with a 71% gain. ProShares Ultra Crude Oil UCO was entered last Friday February 18th @ $10.75, it exits with a +16.3% gain. All 3 positions were in the oil sector, PDE is moving partially on ESV's price action, but partially since $16 is a cash buyout. VLO was exited on WTI West Texas Intermediate crude's move higher and UCO on it's technical chart move. Now does exiting UCO indicate ITZ is ready to short crude oil via SCO? Not necessarily, Oil could consolidate and trend higher in coming weeks, similar to December 2010. The bias for oil is on the upside, but we'll stick to what the charts signal, expect some volatility. But for now as far as the ProShares trades go, remain on the sidelines. On the ITZ Radar, just to give reader's the heads up is a tech play, Broadcom BRCM. The chart looks interesting there, almost gave a buy on this stock but hesitated on the possibility we could see further downside on the markets this week. 


 WTI Crude Oil has finally broken out, ITZ had forecasted the move last October >>READ


In a live interview on CNBC's Fast Money Dennis Gartman says anything much higher than ”$100 isn’t sustainable over any period of time...the market still has an awful lot of new crude available and investors need to understand that. I have a hard time believing that WTI can sustain itself above $100."



The escalating unrest in Libya could lead to a major impact on oil prices. Insight with CNBC's Brian Shactman; Daniel Dicker, independent oil trader; John Kilduff, Again Capital.



A look at where oil is headed and how high prices will have to go to impact the markets, with Joe LaVorgna, Deutsche Bank chief U.S. economist.









Friday, February 25, 2011

$60 SILVER!

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Today's blog focuses on silver's demand & supply, Eric Sprott a leading asset manager in the silver & gold market gives his views. >> link $60 Silver!!! >>>link
Itz Stock Chartz has been long silver since inception of this blog back in July 2009. Favoring Silver Wheaton (SLW) placing a $65 price objective on the stock within 2 years.
Brian Kelly of Kanundrum Capital and of CNBC's Fast Money >> link

Speaking at the Casey Research Gold and Resource Summit, Eric Sprott told investors that there is no more silver left to go around, "There's $22 billion of silver available in the world, of which the ETFs already own half, and between you guys and us we probably own the other half... Which means there's nothing left."





Thursday, February 24, 2011

UCO Exits Itz Pix

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ITZ was stopped out of ProShares Ultra Crude Oil ticker symbol UCO @ $12.50, as suggested this morning on a Twitter alert. UCO was entered last Friday February 18th @ $10.75, it exits with a +16.3% gain. Note, Itz may re-enter this position in the near term.

Wednesday, February 23, 2011

SELL VALERO VLO

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As per Twitter Alert today...Itz Pix portfolio holding, Valero (VLO), EXITING position @ $27. As WTI flirts with $100. Valero was entered back on July 1 2009 @ $15.82 exits with a 71% gain. More on this in the Weekend Review

Tuesday, February 22, 2011

~~ Pride International (PDE) Exits Itz Pix Portfolio ~~

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ITZ PIX holding Pride International (PDE) exits the portfolio today @ $40. Those that follow Itz on Twitter were alerted to a $40 STOP suggestion this morning. PDE was entered back on Nov. 9, 2009 @ $31 and exits with a 29% gain. Pride has a buyout bid from Ensco Drilling ESV >>LINK

Saturday, February 19, 2011

Itz Week End Review 2-20-11

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Itz left off in last week's review noting the Middle East... 'demonstrations could be new bricks in the bull's wall of worry'. The domino's are falling as protests have indeed escalated and of these weekend become very deadly.  Reports that demonstrations in Bahrain, Yemen, Jordan, Algeria and Libya have left more than 100 killed by the security forces so far in Libya and several hundred more wounded. Reports out of Iran claimed between 2 and 10 protesters were killed.  As each domino falls it puts more pressure on those remaining countries. If these protests continue to gain strength it will eventually weigh on the U.S. markets again. Up until now Israel as been quiet, but has voiced concern on news that Iranian gunboats were preparing to cross the Suez canal, headed toward Syria.
Geopolitical and economic news didn't just center around the Middle East, news on Friday China boosted its reserve rate by 50 basis points only ten days after raising interest rates. Friday's move will force banks to send another $55 billion to the central bank and take that money out of circulation.

The China inflation story plus the tensions in the Middle East combined to push the precious metals back to their highs. In the case of silver that is a 30-year high at $32.  Gold returned to $1389 and within shouting distance of resistance highs at $1425. The oil market was also as volatile, with Brent crude now taking the drivers seat as the global oil benchmark, while West Texas Intermediate WTI continued to hold around $85. The Brent/WTI spread was at historical highs over $16, but managed to narrow in on Friday.


What's Fueling Oil's Wild Disconnect?
Discussing the unrest in Bahrain and some momentum plays in oil, with John Kilduff, Again Capital; Daniel Dicker, independent oil trader/TheStreet.com and CNBC's Yousef Gamal El Din.







Silver futures have more than doubled, the metal has been in a secular bull market for over a year. This is not a fear trade or a trade to control risk. While gold prices hit a nominal all-time high above $1400 an ounce earlier this year, silver is still nearly $20 shy of its record peak. Itz continues to believe silver has far more room to run, PT $37. There maybe a pullback this coming week after last weeks rally,producers may lock in some of the recent price gains with forward sales.

Discussing how much the geopolitical risk is playing into the price spikes in metals, with Jim Steel, HSBC, and Andre Julian, Opvest Wealth Management. [Silver Wheaton SLW]



BofA Merrill Lynch Global Research recently raised its 2011 earnings-per-share estimates on the S&P 500. Both Credit Suisse and UBS AG boosted its year-end projection for the S&P. Credit Suisse is looking for 1,450, while UBS expects 1,425. The Volatility Index $VIX has been low recently, some complancency has set in, There is definitely high anxiety because everyday it looks like the market is at the top and it's going to have to correct. Are we due for a pullback? Yes. When? that's the big question. Money just keeps flowing into equities.


Friday, February 18, 2011

~~ Re-Enter Proshares 'UCO' ~~

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On Tuesday Itz Pix portfolio was stopped out of the Proshares Ultra Crude OIl ETF (UCO) @ $10.50. Itz had called for a possible re-entry if warranted. The chart today gave a BUY >>Chart
Brent is coming in & WTI is rising, the spread is narrowing...more in this weekends update.
ITZ is suggesting to re-enter @ $10.75.

Tuesday, February 15, 2011

Commodities Update: Brent and West Texas Oil Spread

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SAN FRANCISCO (MarketWatch) -- Crude-oil inventories declined 354,000 barrels the week of Feb. 11, the American Petroleum Institute said late Tuesday. Analysts polled by Platts had expected oil stocks to increase 2.8 million barrels. Gasoline stocks rose 1.23 million barrels; they were seen rising 1.7 million barrels. Supplies of distillates, which include heating oil and diesel, declined 1.2 million barrels. The analysts surveyed had expected a decline of 1.1 million barrels. Crude-oil futures settled at $84.32 a barrel on Tuesday, an 11-week low. link EIA reports tomorrow @ 10:30 am EST.

Brent and West Texas oil spread, with Stifel Nicolaus' David Lutz.



CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil, silver, gold and other commodities are likely headed tomorrow.

~UCO Hits Stop~

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Proshares Ultra Crude Oil (UCO hit the suggested $10.50 STOP today, exited position with a -4.5% loss. Oil supplies rise in survey on Cushing Pipeline read >>  WTI in process of testing $80 level as discussed in previous posts. ITZ STOCK CHARTZ may re-enter UCO in coming weeks if conditions warrant...remains on the radar.