Exit ERX...Enter ERY

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ITZ exited its position in Energy Sector  being stopped out of ERX and switching into the ERY. Prior position post

Kodiak Oil & Gas KOG

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ITZ has Kodiak Oil & Gas (KOG) on the radar. A top play in the Bakken Shale, ITZ believes Kodiak's stock price can double within a year.
KOG's PEG is at a 85% discount to its Oil & Gas Exploration & Production Industry; Forward PE Ratio 54% discount.
Buy under $11

NEW BUY: LULU

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ITZ suggests entering Lululemon Athletica Inc. (LULU) around $58 level, taking a 1/2 position, looking to add to position should it pullback further. ITZ mentioned several times on Twitter, that $LULU could test $55.

LULU crashed by more than 11% last Thursday as the company's earnings report included a worrisome reduction in sales and earnings guidance. The numbers for the third quarter where actually better than expected, LULU reported a year-over-year increase of 20% in revenue to $379.9 million. They reported better than expected earnings per share of $0.45 versus $0.39 in year-ago quarter. Wall Street analysts were on average expecting earnings of $0.40 per share.

Guidance was a big disappointment, though: Management reduced its sales expectations for the fourth quarter of fiscal 2013 to between $535 million and $540 million versus a previous guidance of between $565 million and $570 million.

Earnings:  FY ending Jan 2014 $1.95 & 2015 est $2.36; trailing p/e 31.8 & forward p/e 24.9 with a 1.61 PEG.
ITZ's believes  management playing it safe by with a low guidance outlook, so it can easily over deliver in the coming quarters. ITZ entry point $58.50

New Energy Position

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The Energy Sector SPDR has pulled back, ITZ suggests taking a long position via Direxion Bull Energy ETF (ERX) under $79. Take full position set stop @ $77  PT $90

NEW BUY: NUAN

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Nuance Communications, Inc. is a provider of voice and language solutions for businesses and consumers globally. LINK
 

Icahn Boosts Stake In Nuance Communications To Nearly 19% READ

For the nine months ended 30 June 2013, Nuance Communications Inc. revenues increased 17% to $1.38B. Net loss applicable to common stockholders totaled $82.9M vs. income of $88.5M. Revenues reflect Healthcare segment increase from $184.5M to $684.9M, Mobile and Consumer segment increase from $132.4M to $358.9M, Enterprise segment increase from $74.5M to $237M, United States segment increase from $294.4M to $1B.

Nuance could find more growth is in electronic health records. With the ability to transform spoken instructions into digital records. This technology sector has been a source of growth for Nuance, with revenue from health care rising 29% in its most recent quarter, compared to a 16% drop in its consumer and mobile segment.

ITZ is taking a new position, in Nuance Communications (NUAN) around $14 -- set PT $18- STOP $13

WTI Crude Rallies

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WTI crude oil is finally starting to rally: ITZ has entered thus far three 1/4 positions $29.25; $29.60 & $30.30. EIA reports tomorrow, ITZ is looking to add the last 1/4 position. Follow updates on Twitter

API data show crude supply down 12 million barrels Read

U.S. supplies of crude oil probably fell for the first time in 11 weeks as refineries boosted operating rates and fuel production Link

U.S. oil futures jump as TransCanada prepares to start up pipeline Read

Nov 5th | Time To Start Getting Long Crude link
Nov 9th | ITZ Weekend Update: Crude Oil  link
Nov 27th | Crude Oil Buy, Sell or Hold? link
Nov 30th | Crude Oil Update: Iran Agreement link

click on charts to expand images

Crude Oil Update: Iran Agreement

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Crude oil futures dropped to the six month low on 27th November Wednesday pricked by high supplies taking the energy commodity below $92 a barrel.
NYMEX light sweet crude oil futures for December delivery tumbled to as low as $ 91.77 per barrel after the U.S. government showed a 10th weekly rise in crude supplies. link
On the week the oil futures are down 1.5% per barrel at $ 92.72.

'In the next six months, Iran’s crude oil sales cannot increase.' link

It's been a week now since the nuclear deal signed with Iran. The agreement will not allow any more Iranian oil into the market, nor let western energy investors into the country. However, it does freeze US plans for deeper cuts to Iranian crude exports.

The Iranian agreement with the U.S., along with other permanent members of the U.N. Security Council as well as Germany, runs for six months and includes a halt to Iranian efforts to improve its uranium-enrichment capacity. However, Iran to continues low-grade uranium enrichment link

It allows increased monitoring of its nuclear program. The deal also will suspend U.S. pressure for progressively deeper cuts by importers of Iranian crude oil, including countries such as China.

Analysts see limited oil price impact from Iran deal link

Oil analyst Dan Dicker wrote an excellent report on why he sees oil heading higher Read

Eugen Weinberg, head of commodity research at Commerzbank, says Brent prices are "elevated and ahead of fundamentals" and that the spread with WTI currently has "a life of its own....but spread is likely to narrow"

Crude Oil Buy, Sell or Hold?

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Crude is testing support around $92/$93 level.

ITZ gave a buy on crude via Proshares Ultra Crude Oil ETF (UCO) a few weeks ago LINK
Legging in with 1/4 position entries, $29.25, $29.60 & $30.30.

Over the last few weeks, crude has been pressured to the downside as the U.S. brokered a nuclear deal with Iran. Which many remain skeptical of... Read

American Petroleum Institute late Tuesday reported a 6.9 million-barrel jump in crude supplies for the week ended Nov. 22 Read

U.S. Energy Information Administration showing that crude supplies climbed by 3 million barrels for the week ended Nov. 22. Read

 

Crude is facing a 'Death Cross' on the daily chart, not necessarily a bad thing. Last time it did, June 2012, it rallied a few weeks later. ITZ has placed a stop using $92 WTI & $28 on UCO. We could see a quick selloff to $90 or even $86 over the next few weeks. If so ITZ will get 100% long via UCO.

Check out this report from Dan Dicker Read

 

QE, Inflation & Deflation: Gold, Bonds & Equities

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ITZ takes a look at gold, with several charts this weekend. Those trading/investing in gold will be interested, because they can indicate whether deflation or inflation is the major theme in play. ITZ observation on MZM (Money Zero Maturity) chart is especially interesting, because it excludes large time deposits. MZM is a comprehensive money supply measure designed to represent money that is immediately available for spending by consumers, and it has been declining since gold peaked in 1980. MZMV (velocity of money).

Earlier this year, Market veteran Art Cashin alerted us that a key indicator was giving a warning READ

Most expect the Fed will begin tapering soon...or will they?
The Federal Reserve will remain accommodative for years with a mix of tools, and it won't taper its bond-buying until the economy is ready and financial markets are prepared, Atlanta Federal Reserve President Dennis Lockhart told CNBC on Friday LINK

Peter Schiff appears on BNN and explains how the FED will do the exact opposite of Tapering. They will print MORE money! He says the FED has checked in to a roach motel and is stuck. LINK

Looking at the equity and bond market as well as that of gold. Stocks have been the best performing asset via QE. The chart compares the S&P500 to the total assets held by the Fed.

Will all of this QE someday bring us inflation?  It already has, in recent decades, many people including Fed officials have come to think of "inflation" as what happens to consumer prices.  But the original definition of inflation refers to the excessive expansion of the money supply.
 Inflation Or Deflation: Which Is The Greater Risk?
 

Performance charts of Gold, Bonds & $SPX:

EBAY -Channel Trade

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EBAY has been trading in a channel for almost 1 year now, lets enter a half-position around $50

Bank of America (BAC) & Banks Breaking Out

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Banks/financials are breaking out, ITZ fave has been Bank Of America (BAC). Near term PT objective is $16, then reassess at that level. Recent news

ITZ has a full position in BAC see details in comments section

Fed Minutes Spook Markets

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Despite the recent slowdown in the housing recovery, Federal Reserve policymakers last month said they still expected to dial down their easy-money policy within a few months, according to meeting minutes released Wednesday. Fed officials also debated whether to pull back the bond-buying program even before the job market shows clear improvement if concerns about its costs and risks increase. The minutes' release at 2 p.m. sent stocks down as investors reacted to the possibility that the Fed could start tapering its economic stimulus soon. Read

Link to Fed Minutes

ITZ recently re-entered a position in Proshares Ultra Short S&P500 (SDS) LINK

ITZ current open trade positions:

AAPL full position 7/23/13 $400 ~ Stop $500 (50ma) 
ERY 10/25/13 full position $22 ~ $21 stop on close
UCO 11/7/13 1/4 position $29.25 & 1/4 @ $29.60 looking to add
HIMX 1/4 position 11/10/13 $8.00 looking to add
YHOO full position 11/3 half $33 & 11/12 half $34 ~ Stop $34
CLF 11/16/13 full position $27 ~ Stop $25.50, PT $35
SDS 1/2 position 11/19/13 $32 ~ stop raised to $32
BAC 10 half position $14.45 & half on 11/19/13 @ $15.00 STOP $14.90/17/13

Currency Glance: Dollar, Yen & Euro

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Three weeks ago ITZ mad these observations on currencies LINK , since then the dollar rally out of a Falling Wedge and now appears to want to head lower. The Euro just the reverse....

As for the Yen, the bias there is to the downside.

Cliffs Natrual Resources (CLF) Looks Attractive Here

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ITZ takes a look at Cliffs Natural Resources (CLF), the iron ore producer's stock price has gone from $95 over two-years ago to test $15 and currently around $27.50. The company & stock price is turning around. Its debt load and China's economic slow down painted a bearish outlook for the raw materials provider, but recently has seen cost cutting help reduce its debt profile.

CLF is a global company, recent positive PMI news from China, Europe and the U.S. has helped in a rebound. Manufacturing PMI is a key indicator, it has recently crossed above the 50 level in China & Europe and continues to rise here.

Analysts continue to remain bearish even though the world is experiencing an earth-shaking resurgence in manufacturing. In October, the JP Morgan Global Manufacturing Purchasing Managers’ Index (PMI) grew to an incredible 29-month high, rising to 52.1 in October. A number above 50 indicates expansion in manufacturing, and if manufacturing is expanding, so should the economy.

Organization for Economic Co-operation and Development (OECD) Composite Leading Indicator has been heading in a positive direction. This leading indicator provides early signals of turning points in business cycles, including economic activity. Historically, metals performance has closely followed this leading indicator, so as developed markets improved, the S&P GSCI Industrial Metals Index increased.

On a bullish observation-  global manufacturing is the relationship between growing strength in PMIs and higher returns from certain commodities, including copper, crude oil, as well as energy and materials stocks. ITZ has recently turned bullish on Crude Oil and suggested entering Proshares UltraCrude ETF (UCO) and continues to favor Silver Wheaton (SLW). Freeport McMoran (FCX) has been in the news recently as hedge funds are getting back into it, looking for copper to go higher.

Iron ore is hot right now READ

Found this of interest, 
Executive Vice President, Legal, Government Affairs and Sustainability & President – Cliffs China
P. Kelly Tompkins   Reported Insider Data Link

Summary: ITZ is bullish on CLF due to several factors; mining industry has stabilized and its outlook has improved, CLF's balance sheet is continuing to improve, generating improved cash flow and profits, the Bloom Lake mine issue has been priced in and stock remains undervalued. With a PEG of 0.83 and the material sector at 1.61 -the market is to bearish on the stock and is attractive around $27.

The technicals are also bullish, with a Golden Cross, Inverted Head & Shoulders. It has broken above it's neckline with a throwback reversal. ITZ  BUY $27 stop $25.50 & PT $35

Shorting S&P500

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Market looks toppy, taking a short position in S&P500 via Proshares UltraShort levered etf (SDS) around $33.

Himax Technologies (HIMX)

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Himax Technologies (HIMX)  The key driver to Himax's success is its development and manufacturing of liquid crystal on silicon (LCoS) micro-displays, a component of wearable technology.
 In July, Google  bought a 6.3% stake in Himax's display subsidiary to ramp production on LCoS chips and micro-displays once Google Glass launches. It also has the option to buy up to 14.8% in Himax within one year of the deals closing date.

The stock is high Beta and speculative, but not that expensive comparable to other momentum stocks. Himax is looking for 2013 earnings of $0.39 per share and estimates call for $0.63 in 2014 (60% earnings growth). With a trailing eps of 25xs and a forward of 13.9xs. Price to sales of 1.89 and a PEG of 0.75. It has $0.79 per share in cash and a dividend yield of 2.9%. ITZ 12 month PT for HIMX $16.

The stock is up 280% YTD,  it went through an Inverted H&S mid-year and now is nearing the measured move of a Head & Shoulders. ITZ suggests entering under $8.00 or nibbling around 100-ema

Recent News: GE is testing Google Glass LINK

ITZ Weekend Update: Crude Oil

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Secretary of State John Kerry has joined the talks with Iran over its nuclear program. Experts say an agreement could drive prices down $10 a barrel. Six western nations and Iran were expected to iron out an agreement during a meeting in Geneva that could ease sanctions against Iran, which have removed more than 1 million barrels per day (bpd) of oil from world markets.

However, talks hit a snag on Saturday with a French objection that the proposed deal did not do enough to curb Iran's nuclear ambitions. LINK

Israeli Prime Minister Netanyahu warned Kerry and his European counterparts that Iran would be getting "the deal of the century" if they carried out proposals to grant Tehran limited, temporary sanctions relief in exchange for a partial suspension of its nuclear program and a pledge not to expand it. LINK

Emerging legislation from Republican Sen. Bob Corker could block Obama from easing sanctions on Iran and create tougher conditions for reaching an interim deal with Tehran. LINK


For now, ITZ believes the decline in WTI Crude Oil is over done to the down side, $93 being support near term and is looking for a rally from here. On November 5th ITZ made the call to go long crude via Proshares Ultra Crude Oil ETF (UCO) LINK

ITZ entered UCO with 1/4 positions this past week *see comments to above link- @ $29.25 & $29.60.

The gasoline chart $GASO has been a reliable indicator in the past, as with $WTIC the RSI is testing the oversold 30 level.