Thursday, March 31, 2011

Proshares SCO Update

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WTI Crude Oil is currently testing recent highs @ $106 levels. Itz has suggested taking a 'partial' position short oil via Proshares SCO ETF, which tested it's recent lows around $41.50. Chart
Why is oil up today? Well as ITZ has mentioned several times, this commodity is very news driven and volatile, today's news... Crude-oil futures advanced as the U.S. dollar fell and Libya rebels suffered a setback in a key oil town. Col. Gadhafi's forces reportedly overran the eastern oil town of Ras Lanuf, a rebel stronghold. The development might be a hint that the conflict in the North African country could take longer than widely anticipated just a few days ago. Not to forget,  Nigeria begins elections on Saturday amid uncertainty over a major overhaul of its oil industry that has led to a freeze in new investment despite relative calm in the restive Niger Delta region. read more

API & EIA reported bigger than estimated supplies of WTI crude oil this week.
Meanwhile, the disparity between Nymex's West Texas Intermediate crude contract and Brent crude continued to hover around $11 a barrel, despite a government report showing record oil inventories at Nymex delivery point of Cushing, Okla.
Cushing stocks hit a record 41.9 million barrels in the oil town last week, the Department of Energy said. The high inventories have helped keep a lid on the price of WTI, while Brent crude has soared past $117 a barrel. Overall U.S. inventories rose 2.9 million to 355.7 million barrels, the DOE said Wednesday.
So Libya news, weaker U.S. Dollar, end of quarter maneuvering. Itz also believes we maybe seeing a pop in oil here ahead ot tomorrows BLS Jobs Report, a bigger than expected jump in jobs could mean an improving economy and stronger demand on oil, after all gasoline inventories had a large draw down. Note, ITZ PIX is involved in SCO in conjuction to its other long energy positions, eg. RIG, PGH, PWE, WLT, SU... understand this is a hedge and a short term trade.
Suggest those with a partial position in SCO place a $41 STOP and lets see how tomorrow plays out.

Monday, March 28, 2011

Time To Get Short WTI Crude Oil?

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Itz is suggesting shorting WTI crude oil here, via Proshares Ultra Short DJ-AIG Crude Oil (SCO) ETF, look to get in around $43. Chart  The daily chart indicates a Bullish Divergence pattern with $41.50 as a bottom.
Itz also suggests taking a partial position, watching over the next few days on how geoplitical events play out. As mentioned in previous blog posts, the energy market has been trading on headlines and been very volatile... so keep stops tight.

UCO Exits Itz Pix

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Itz Pix was stopped out of its position in Proshares Ultra DJ-AIG Crude Oil (UCO) @ $54 having entered March 18th @ $51.50 for a $2.50 or a 4.85% profit. Itz mentioned in this weekends report that WTI was getting toppy & suggested to raise the stop to $55. Positive news from the middle east that should see oil flow easily along with a stronger U.S. dollar has the oil market selling off. Stayed tuned, ITZ may suggest shorting oil via $SCO.

Saturday, March 26, 2011

Itz Week End Review 3-26-11

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Nice comeback on most indexes this past week and it amazes me how resilient this market has been considering all the geopolitical & economic events occurring. The winners were silver +5.88%; oil index +4.80%; SOX & Nasdaq up around 4% the banks & gold losers. Final Q4 GDP, which ended stronger than expended at +3.1% growth compared to the prior revision at +2.8%. The Fed is continues to forecast real GDP of +3.1% to +3.9% for the rest of 2011. The upcoming week should be interesting as end of the month as well as quarter comes into play, but Friday is the beginning of a new month as well as quarter. The NonFarm Payrolls on Friday are expected to show a gain of +188,000 jobs but there were 192,000 jobs added in February.  With QE2 nearing its end and several Fed presidents made comments this past week on QE2 with a month to go before their next FOMC meeting. Bernanke's decision to host a press conference after the April meeting could go a long way towards smoothing the public's perception of a fragmented Fed. Philly Fed president Charles Plosser believes the Fed has overstayed its welcome in the treasury market and should begin to exit sooner rather than later.
If the Fed speak wasn't enough, there was plenty of news headlines on geopolitical events. Portugal's political parties opted to hold an early election rather than form a new government even though that could force the country to take an unwanted bailout. The socialist government quit last week in a dispute over needed austerity measures. Portugal is likely to need a 75B euro bailout from the new EU bailout fund. The president of Yemen is beginning to give into demands and the situation there could be stabilizing at a high level of unrest and for now its not worsening. It appears he has agreed to leave office but the conditions are still in dispute. While in Syria  public unrest and protests turned violent , reports that at least 37 people were killed in Daraa by security police and dozens more wounded. More than 100,000 people gathered in the protests. Protesters want the ruling Assad family to step down after 41 years of reign. In Bahrain another series of protests planned for Friday were immediately crushed by security forces smothering the crowds in tear gas. In Libya, NATO appointed a Canadian general to take charge of the no-fly zone but coalition forces are still responsible for the attacks on tanks and artillery on the ground.
JP Morgan raised their estimates for Brent crude for Q2 to between $120-$130. while, competitor Bank America called for Brent prices to average $122, up from $88, and reach as high as $140. That assumes Libyan crude remains offline for up to six months. 
In Canada, the conservative minority government collapsed on Friday with the passage of no confidence vote in the House of Commons.
Itz continues to see the major averages trend higher, targeting 1,400 on the S&P500. WTI crude oil is starting to look as if it is losing momentum near term. The weekly COT Commitment of Traders Report came out Friday @ 3:30pm. It showed that the Non-Commercials (Specs) decreases their Net Longs by 840 contracts, while the Commercials (Smart Money) reduced their short positions by 6,223 contracts. Looking at this weekly chart of oil you can see the contraction on the COT, from multi-year extremely high levels. >>LINK ... COT link
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ITZ Chartz


A weak dollar could provide investors with an opportunity to cash in. Louise Yamada, Managing Director, Louise Yamada Technical Research Advisors, LLC lays out a strategy.

Oil prices spiked again today but could prices come crashing down? Brian Kelly of Kanundrum Capital predicts a correction in this high flying commodity.

The markets are still digesting the fallout from the disaster in Japan, with Laszlo Birinyi Jr., Birinyi Associates president.

Doug Kass, Sebreeze Partners Management, discusses the tipping point for oil and whether $105/barrel oil could damage the recovery. Those high prices hurt consumer confidence and, in turn, the economy.

Sectors fall in and out of fashion all the time. Cramer looks at the charts and sees the energy and materials stocks beginning to outperform, which could go on for years.

Insight on which metal is a better bet, with Joshua Brown, Fusion Analytics Investment Partners and Thomas Winmill, The Midas Funds.

Gold prices are soaring but is it too late to buy in? John Kilduff, CNBC analyst and founding partner at Again Capital, lays out a strategy.

Friday, March 25, 2011


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ITZ suggests raising the STOP from $54.50 to $55. UCO tested $55 this morning and is now @ $55.60, Crude tested yesterday afternoon's lows $104.80 level. WTI crude is losing momentum here, the charts indicate it is topping. ITZ is looking to exit the long side of oil & enter the short side via Proshares Ultra Short Crude Oil SCO around $42. Chart Stay tuned here or follow ITZ on Twitter

Wednesday, March 23, 2011

Oil Update: Proshares UCO

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ITZ is suggesting raising the trailing STOP on ITZ PIX portfolio holding Proshares Ultra DJ-AIG Crude Oil (UCO) from $53.50 to $54.50. WTI Crude Oil is trading at near $105.50 on futures link , note EIA weekly report is out at 10:30. Oil continues to react to every headline in moment to moment events.

Tuesday, March 22, 2011

ITZ PIX Update: Raise STOP on UCO

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Crude oil broke out of an Ascending Triangle formation on the 60 minute chart @ $103, ITZ is targeting $107. Currently UCO is trading @ $54.50, ITZ suggesting rasing that trailing STOP on UCO from $52.50 to $53.50.

Proshares Oil Update: UCO

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WTI Crude Oil is backing off this morning down about 0.50% about $102.35, in pre-hour trading Proshares UCO is flirting with the $52.50 STOP.  The hourly chart of crude is showing an ascending triangle formation and @ $102.50 oil is testing the trendline. ITZ longerterm is calling for oil prices to grind higher, however ITZ will hold to the STOP and most likely will exit the position today. Again as noted in this weekends review oil is and will remain very volatile nearterm. ITZ will trade frequently between UCO &SCO. Follow updates on Twitter, Facebook & on this blog.

Monday, March 21, 2011


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WTI Crude Oil is up today Futures Link trading around $103 per barrel. Itz suggest those in the Proshares Ultra DJ-AIG Crude Oil ETF (UCO) raise the current STOP from $50 to $52.50. In pre-hours trading UCO is trading $54.00. UCO was entered Friday March 18th @ $51.50.  Note the oil market is very volatile, ITZ suggests using a trailing stop. Follow ITZ on Twitter for up to the minute alerts, Itz is also on Facebook.

Saturday, March 19, 2011

Itz Week End Review 3-19-11

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Geopolitical and economic events were the drivers of the market this past week. On Friday financials rallied on the approval by the Fed to allow some banks to raise their dividends. The UN passage of the no-fly, no-drive resolution against Libya's armed forces late Thursday also provided the market with support, but early morning announcement from the Libyan defense minister said Libya had declared an immediate cease fire and was complying with the resolution. As of Saturday, Qaddafi was not adhering to that promise, fighting did not stop and government forces actually stepped up attacks on cities held by the opposition. Also on Friday was the G7 currency intervention to weaken the Yen, this raises the value of the Yen against other currencies. The dollar collapsed to a new 15-month low on the dollar index. Some good news this weekend,  Japan the engineers working on the stricken plants have connected reactor one and two to an auxiliary power line and hope to have "some" cooling pumps running by Sunday. Crude oil had dropped on the events hiting Japan last week,  most expected Japan to be severely limited in refined oil products. However it now appears that refineries in Japan are coming back online sooner than expected. The Petroleum Association of Japan (PAJ) said it expects 780,000 bpd of refining capacity to be restored next week.  Experts had forecasted a drop in demand from Japan , however it now appears demand is actually going to rise by 500,000 bpd with 200,000 bpd going to additional electricity generation and 300,000 bpd going into refined products to support the relief and rebuilding effort. The problem is where to get those barrels since Japan uses light sweet crude. Itz had been short WTI via SCO, but as of Friday afternoon entered a long position via Proshares UCO. It doesn't appear as if the Lybian military action will resolve that quickly, in addition there's the other nations in that area to deal with, Bahrain, Yemen and soon Algeria. Itz continues to see oil hold above $100 a barrel for sometime.

As for the equities market, the $SPX looks as if it has put in a near term bottom and quite possibly the low for the year. It has had quite a bit of geopolitical and economic news thrown at it in recent weeks and really has been very resilient. The Index gave way finally to the 50 day moving average and seems to have rallied off of it's 100ma. Still. some out there say that it is vulnerable to testing it's 200ma, the only powerful event that could do that is violent protests in Saudi Arabia, which would send oil to $200 along with higher gold & silver. Setting us back into another recession and QE3. Watch 1,300 on the S&P500 if the index can hold above that level for awhile, it would provide some conviction and confidence for investors.

Note* Itz Pix entered 2 new positions Southern Copper (SCCO) @ $39.80 & Proshares Ultra DJ-AIG Crude Oil (UCO) @ $51.50.

Itz Pix Videos of the Week

"There's going to be a much bigger demand for oil from power plants because nuclear power plants are being shut around the world." ~ Jim Rogers

”If you take the multiple of the market pre-Japan crisis of 13.5 times, that means it costs the market 40 S&P points. The fact is we’re down almost 70 points,” ~ Doug Kass

Chris Johnson, Johnson Research Group CEO/chief investment strategist discusses the VIX Volatility Index.

The charts say the pullback is a normal part of a bull market trend, with Carter Worth, Oppenheimer Asset Management.