Mining Stocks Are Oversold: Gold, Silver & SLW

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Gold miners relative to the metal itself has now hit extreme oversold levels. ITZ believes gold will rally here, but that the miners will outperform. Silver and silver miners will follow, favorite play remains Silver Wheaton (SLW) link

Gold - Silver Ratio & Euro Followup

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Silver has been in a tight ($1) trading range for a week now, most likely it will test long term support around $27. But several weekly charts point to higher levels, $31 then $35. The Euro needs to rally and/or Dollar weaken, ITZ is looking for EU investor to flock towards precious metals as banking/financial worries continue. ITZ has updated some charts since last post on Euro- Gold/Silver Ratio LINK

ITZ Weekend Review 3-23-13

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More pieces to the puzzle- sentiment indicators- pointing to a market pullback. However, this market continues to defy all the negatives thrown at it and climbs higher. All this does is stretch the rubber band more for a larger pullback, that is long overdue.

BofA Merrill Lynch Fund Manager Survey LINK

Wien: Liquidity Driving the Market: Taking a close look at the corporate environment, and how to play the markets, with Byron Wien, Blackstone Advisory Partners. "As long as money if flowing out of the Fed, stocks keep going higher," he says.

 

The S&P500 is trading about 10% to 12% above it's 200 day moving average. Whenever it gets to this extreme level historically it signals a sell. 

 

 

 

 

 

 

 





S&P500 - Are We There Yet?

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Are We There Yet?

Just as kids on a family trip... we kept asking every few minutes... that question. We continue to ask when will this market correct?

Dow/Gold Ratio: How High Can The Dow Go?

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The Dow Jones Industrial Average $INDU has been making new highs, however the 10-day streak ended this Friday and the S&P500 came within 4 points of it's New High.

 ITZ has in the past looked at several gold ratios, to see how much gold was need to buy an index or commodity?

The Dow/Gold Ratio (DGR) measures how many ounces of gold it takes to buy the $DJIA.
Below are several charts, one going back 200 years, another some 30 years and a look at some more specific periods.

Currently, the DGR rests at 9.12, with the $DJIA @ 14,514 and $GOLD @ $1,591.15

If, gold held firm at $1,591 an ounce and the DGR went to 15:1 the DOW would be at 23,865; 25:1 = 39,775 and at the historical peak of 45:1 = 51,595.

Lets say the DOW stayed flat 14,500, then for a 15:1 DGR Gold would need to fall to $968 an ounce; @ 25:1 = $580 and at 45:1 = $322!

Near term ITZ is looking at gold to test $1,800, if the ratio held to 9:1, that would put the $DJIA around 16,415.... about 13% higher from here.

Let's see what happens when the Fed ends QE and rates begin to raise and/or inflation creeps in.

National Oilwell Varco (NOV): Update 3-15-13

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National Oilwell Varco (NOV) weekly chart is looking very bullish. On the technicals- Positive Divergence and fundamentals- trading on the low end of it's recent p/e range. ITZ has a $90 price target. Click here for past NOV post

ITZ added to the position today

WTI Crude Oil - More Downside?

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ITZ suggested shorting WTI crude oil @ $98 with a $89/$90 near term target. We're seeing a bounce here, could test $92.50, that said ITZ believes $83bbl as a possible downside target.

Update on Proshares UltraShort Crude Oil ETF (SCO): entered 1/4 position Jan 23rd $37 stopped 3/1 @ $41.80; entered 1/4 position 2/8/13 $36.60, stopped 3/7/13 @ $41; remaining 1/4 position entered 1/29/13 @ $36 using 21 ema as stop $39.78~ should WTI break under $89bbl, looking to add to SCO position.

Silver Wheaton SLW Update

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ITZ has been bullish on silver for some time now, more specifically one company... Silver Wheaton (SLW) 

Here are links to past posts: Jan 3, 2013  Jan 12,2013  Feb 19, 2013

Reports March 21st --- Add to position under $31

Randy Smallwood, CEO of Silver Wheaton, says silver is a good precious metal in this environment. "We like it more than gold," he tells Mad Money host Jim Cramer.

 

 

Don't Worry. Silver Will Snap Back , Says Silver Wheaton CEO

 

 

ITZ Weekend Review: Gold, Silver, Euro & More...

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Two weeks ago ITZ posted several charts on gold, silver, the euro etc (LINK) indicating approaching opportunity levels. These markets have been driven on technicals and ITZ is looking for some upside here.

Also this past week, Federal Reserve Chairman Bernanke testified in front of the Senate Banking Committee and continues to remain dovish. LINK

Last week, gold came under heavy fire from the sellers. The shiny yellow metal fell below the $1600 mark for the first time in a while, and it even hit the "death cross" – a technical indicator formed when the 50-day average gold price dips below the 200-day average – indicating rapidly deteriorating sentiment. LINK

The 'Death Cross' Is Actually Bullish For Gold