Saturday, June 30, 2012

S&P 500: Market Weight Vs. Equal Weight

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Markets rallied strong Friday capping off one of the best performing days of the year (2012) & one of the best June's in several years. ITZ  believes that this rally could easily selloff in coming days link...takes a look at the different S&P500 index charts .... read

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Friday, June 29, 2012

Long Crude Oil

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ITZ has been calling for a bottom in crude oil for a few weeks, WTI under $80 was giving a screamig buy and extremely oversold. One tool ITZ employs is the GOR- Gold Oil Ratio along with stochastics & RSI indicators. Crude Oil has under performed the SP500 and will play catchup.. chart. On the weekly chart it's been giving a buy and as noted last week (read) looking for a 'catalyst'. The EU gave that today and oil took off. ITZ prefers using the Proshares ETF long (UCO) & short via (SCO).

Oil Over A Barrel?
 Is the market too complacent about Middle East risks and oil prices? Helima Croft, Barclays Commodities Research Group, and Kevin Book, ClearView Energy Partners, weigh in on the direction of oil and how to play it..

Sell The Rally

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 News out of the EU is rallying the market today, but Nike & Ford earnings paint a different picture. El-Erian of PIMCO believes this rally will run out of steam. We have resistance @ 1360 100ma. ITZ took a 1/4 position short via SPXU will add @ 1360...looking for a retracement. ITZ has taken a 1/4 position in  Proshares Ultra Proshort S&P500 ETF (SPXU) @ $48.35.  Look to add as the S&P500 tests resistance 1360. Note- this is the end of the quarter and market is being bid up, next week we have a holiday & BLS Jobs Report, for July... China CPI,PPI & GDP, FOMC minutes, U.S. GDP, earnings season begins on the 10th. That's a lot of data coming that could quickly extinguish this rally.

Mohamed El-Erian, Pimco CEO & co-CIO, says it is increasingly inevitable that Greece will exit the euro zone, adding that Spain shows investors are losing confidence in policymakers.

Wednesday, June 27, 2012

S&P500: Will It Sell Off On Obamacare Ruling?

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Investors are waiting for the historic ruling on Obamacare, officially known as the Affordable Care Act, which is widely expected to come down on Thursday.

ITZ believes the most likely outcome, that the Supreme Court ruling will strike down the individual mandate - the requirement to buy insurance - but keep most of the legislation in tact. A bearish outcome for stocks.

One way to hedge a decline is via Proshares Ultra ProShort S&P500 >>CHART
click on chart to expand image

Friday, June 22, 2012

Time To Buy Or Sell Silver?

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Silver has reached a most critical juncture, albeit its volatility,as it has moved by 2% or more either up or down in a third of all trading days since the beginning of the financial crisis. During periods when the Fed was engaged in aggressive balance sheet expanding stimulus, Silver would rise given its status as a store of value against money printing and currency debasement. It has also served as a reliable safe haven during times of crisis. But has not performed during Operation Twist program.

Without explicit currency debasement, Silver loses its store of value appeal. But with only balance sheet neutral monetary stimulus, the system does not become sufficiently unstable to persuade investors to seek safety from crisis. The Fed's announcement that they will only be extending Operation Twist through the end of the year is not bullish for the metal.

In it's statement the Fed notes; " The Committee is prepared to take further action as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability."  link
Basically if conditions worsen in Europe, they stand ready to intervene with balance sheet expanding QE3. It even remains possible that the ECB will launch a balance sheet expanding policy stimulus of its own. Silver would likely respond extremely well given either of these scenarios.

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ITZ has suggested Silver Wheaton (SLW) 1/2 position on 4/30 @ $30; 1/4 positions on 5/8  & 5/9 @ $26.75 link

Dennis Gartman is widely followed for his keen understanding of commodities, especially gold. And he tells us the way he’s trading the precious metal has just changed.
(Silver Wheaton SLW has a 4.6% weighting in the GDX)

Thursday, June 21, 2012

Risk Off: Market Update 6-21-12

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ITZ posted this S&P500 chart this afternoon on Twitter

Several factors combined to the sell off today...the disappointment that the Fed yesterday didn't give the markets QE3. Today the Philly Fed’s June index was expected to be flat given prior signs of a slowing economic recovery, but the negative 16.6 figure was far worse than anticipated. Meanwhile, Goldman analysts advised clients to short the S&P, with a downside target of 1,285, some 5% below Wednesday’s close.

After the close, Moody’s Investors Service downgraded the debt ratings of 15 major international banks and securities firms on Thursday, a move that could cost the banks billions of dollars in extra collateral.

ITZ noted Tuesday to Sell the News read ...perhaps now is time to buy the news?

The $SPX came down quick, testing the 38.2% Fibonacci retracement level and breakout neckline. ITZ believes we could see a reversal tomorrow. Will that reversal take it to the 1390 measured move off the Inverted Head & Shoulder? We'll need to watch for that.

West Texas Intermediate Crude Oil broke below $80 a barrel today. Approaching the October 2011 low of $75 chart
ITZ Gold:Oil Ratio is giving a buy signal on the weekly chart, the play there is Proshares Ultra Crude Oil ETF (UCO). ITZ has suggested to buy this at higher levels with an average cost basis of $31.30. Let's stay with this even though its down.

Wednesday, June 20, 2012

Bernanke Spoke...Market Reaction.

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Federal Reserve Chairman spoke today and basically just bought some time. They extended Operation Twist , while maintaining about the same language as its prior statement. Read Fed Statement 
They left the door open for a possible QE, at first the market was disappointed...but rebounded as they read into the statement.
ITZ is looking for a pullback near term to the Inverted Head & Shoulders Breakout (neckline) level. Then a reversal rally to the measured move on the IHS around 1400.

click on charts to expand images

Tuesday, June 19, 2012

Sell On The News?

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The S&P500 has put in a nice rally here on an inverted head & shoulders pattern, same for the Nasdaq100. But will the ride end when the Fed reports tomorrow around noon on the FOMC meeting. Sell on the news? Below are a follow up to this weekends charts, highlighting several key levels to watch. 
click on charts to expand images

Monday, June 18, 2012

S&P500 Charts - Weekly & 8-Hour

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Silver Wheaton: Update 6-18-12

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Silver Wheaton trades at 17xs trailing twelve month earnings,  has a price to earnings growth ratio of 0.66 and a price to book of 3.47. Return on equity stands at 22.3% and quarterly year-over-year revenue and earnings growth are fairly robust at 26.2% and 20.5% respectively. Silver Wheaton is rock solid financially with a debt to equity ratio of 2.59 and a current ratio of 5.03.
Earnings '10 $0.79; '11 $1.55; '12 est $2.02; '13 est $2.44

Sunday, June 17, 2012

Weekend Charts

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Exit polls from Greece suggest the result of the second election in just six weeks is too close to call, and this could be bad news for sentiment when Asia markets open.

The S&P 500 Bullish Percent Index is a point-and-figure chart that derives its value from the point-and-figure charts of the 500 stocks that comprise the S&P 500. Here’s how it works:
- If an increasing number of those 500 stocks are showing buy signals on their point-and-figure charts, the S&P 500 Bullish Percent Index will be moving higher.
- If an increasing number of those 500 stocks are showing sell signals on their point-and-figure charts, the S&P 500 Bullish Percent Index will be moving lower.

Oil Below $80? CNBC Poll Provides Answer link

Position Update:

Silver Wheaton (SLW) 1/2 position 4/17 $30, 1/4 position 5/8 $26.75 & 1/4 position 5/9 $26.75

Freeport McMoran (FCX) 1/2 position 4/5 $38 & 5/14 $34.80 1/2 position

Apple (AAPL) 1/4 position 4/24 @ $559 /  1/4 position 5/17 @ $539

Qualcomm (QCOM) 1/4 position 4/24 $61.40 / 1/4 position @ $58.50 & 1/4 position @ $57 on 5/17

Proshares Ultra Crude Oil (UCO) 1/4 position 5/9 $36.70/ 1/4 @ $32 on 5/23
                                                           1/4 @ $29.25 on 5/31 / 1/4 $27.40 on 6/1

Starbucks (SBUX) 1/2 position 5/10 $52.50

Proshares Ultra S&P500 (UPRO) 1/4 position @ $70 on 6/14

Thursday, June 14, 2012

BUY The S&P500

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ITZ  suggests entering Proshares Ultra Pro S&P 500 (UPRO) @ $70 chart taking a 1/4 position here as we go into OpEx & the Greek elections and also with the FOMC meeting Tuesday.