Is Silver Wheaton A Buy?

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Those that follow ITZ on Twitter or on this blog, know that Silver Wheaton (SLW) is a favorite in the silver market. Having the highest margins, due to the fact that it doesn't mine, but simply enters into long-term silver purchase agreements with other actual miners. In the past year this has avoided the a 10% rise in mining costs.

Silver Wheaton fundamentals: Forward P/E 12.27, 5 year EPS growth of 20%, ROE of 18% & long term debt-to-equity ratio of 0.

Further Downside In Market Correction

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Federal Reserve Chairman Ben Bernanke took a major overhang off this market and reduced the uncertainty for investors moving forward, giving them more clarity on Fed policy through the end of the year. Bottom line means we'll see some near term downside, ITZ continues to see the 200ma- 1500 area being tested. But longer term stocks will be the place to be as the economy continues to improve and earnings rise.

Last month ITZ called for a decline in the $SPX & $COMPQ towards their respective 200 day moving averages LINK

Crude Oil Observations

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Just a few crude oil observations--

WTI Crude Oil Nears Pivotal Level

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WTI Crude Oil is knocking on $97 level...will it break higher or head lower? The Federal Reserve meets next week, will the continue with QE or taper? ITZ has called for a market correction, $SPX to decline to it's 200ma around 1,500 level.

WTI crude oil to around the $90 a barrel area, having entered Proshares Ultra Short Crude ETF (SCO) with two (1/4) positions @ $37.25 & $36.50. Next entry level $36, came close today. Here's a daily SCO chart, you can see a Head & Shoulders pattern with $36 neckline. ITZ will add to position @ $36 & set a $35 stop level on the entire position. SCO Chart

API & EIA inventory reports this week showed that there is more than adequate supply of crude oil.

Early this week, monthly forecasts from the Organization of the Petroleum Exporting Countries and the EIA gave a more pessimistic picture of the oil market. The EIA said Tuesday in its short-term energy outlook it expected the growth of oil demand in China, the world's second-biggest oil consumer, to slow to 4.1% this year, a drop from the 4.4% growth projected last month. OPEC modestly lowered its forecast for global oil-demand growth this year. Read Story

ITZ Weekend Review

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Stocks rose with the dollar and bond yields, as traders viewed the May jobs report as strong enough to signal continuing economic growth, but not so strong as to push the Fed toward a wind down of easing. The markets have been fixated on when the Fed will begin to slow down its bond purchases, and there's been a lot of volatile trading as Fed officials discussed "tapering" purchases in the past several weeks.

 *Note... We'll have three more employment numbers before the Fed meets in September.

Greenspan: Taper Now, Even If Economy Isn't Ready --- "The sooner we come to grips with this excessive level of assets on the balance sheet of the Federal Reserve—that everybody agrees is excessive—the better,"

Dollar-Yen Shake-Out Could Just Be the Start: A day after the U.S. dollar suffered its largest one-day fall in three years against the yen, strategists say the wild currency moves may be far from over and much is dependent on Friday's key U.S. jobs report. READ

 Economic growth in China slowed in May according to government reports released over the weekend. READ

'Hindenburg Omen' Revisited

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The 'Hindenburg Omen': Bear Signal Scares Market Read

Three years ago ITZ touched upon this signal READ

As of Friday...all five criteria have been met.

Below are the current Charts

#1 The daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 2.2 percent of total NYSE issues traded that day.

#2 The daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 69.

#3 The NYSE 10 Week moving average is rising.

#4 The McClellan Oscillator is negative on that same day.

#5 New 52 Week Highs cannot be more than twice the new 52 Week Lows (however it is fine for new 52 Week Lows to be more than double new 52 Week Highs). This condition is absolutely mandatory.

Crude Oil Bounces Back

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WTI crude oil rallied back this morning after the EIA weekly inventory report   @ 11a.m. nearly $2 in 45 minutes.

West Texas Intermediate crude climbed from a four-week low and the dollar tumbled against the euro as worse-than-expected economic data spurred speculation that the Federal Reserve would maintain stimulus measures. read

ITZ has been highlighting a possible complex Inverted H&S right shoulder setting up link

A famous oil trader is warning the shale revolution will only "temporarily" boost oil production while prices will remain high. David Greenberg, Greenberg Capital president and founder, disagrees and explains why he believes the United States will "get this right" and find cheaper ways to extract the oil.

Current WTI Crude Oil Observations

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WTI Crude tested it's 200ma today and again rallied above the 50ma. ITZ via Twitter & on this blog suggested entering a 1/2 position via Proshares UCO @ $28.25 ($28.30 stop). The ETF closed today @ $29.21.

 

ITZ highlighted a possible right shoulder developing on an Inverted Head & Shoulders pattern, with the Neckline being the daily resistance around the $97 level.

 

Use a trailing stop on your position, crude should continue higher, but ITZ is cautious here, noting a Negative Divergence, again run a trailing stop & let the market take you out.

 

Indexes At Extreme Levels Above 200 MA's

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How long have we've been hearing that the markets are due for a correction now? Granted it seems as if nothing can bring this market down...but something to consider, the S&P500 & Nasdaq daily charts relative to their respective 200 day moving averages, do suggest could see a pullback at any time. Now what will be the catalyst is another question?

*Note from Sept 2010 to May 2011 $SPX gained 30%. From Oct 2011 to April 2012 +32%. Now from December 2012 we need to see $SPX 1755 for +30%  the index would need to rise 88 points from today's close. Also to get a 15%+  the 200ma would be at 1500.

Can WTI Crude Oil Reach $102 By Memorial Day?

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Follow-up to this mornings post on WTI Crude Oil.

Watch $GASO chart now through Memorial Day LINK

Click on charts to expand images

Crude Oil's Next Move

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WTI Crude Oil is selling off, ITZ has 2 charts today an 8-hour with an Inverted Head & Shoulders pattern. We're seeing a throwback to the neckline as well as testing support on an ascending channel. A break above $97 could see a Measured Move to $102. However if the IH&S is negated we could see further selling, possibly to $89/$90 testing the support level on the Daily as well as weekly Pennant. Itz is currently in cash on the Proshares UCO & SCO trade. Looking to hear what Chairman Bernanke has to say & the U.S. Dollar's move. Follow on Twitter

WTI Crude Oil Sells Off: UCO

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WTI Crude Oil is selling off this week, API reported 5 million-barrel rise in crude supply LINK

EIA reported  a build of 6.7 million bbl  LINK

$GASO $UCO weekly chart seems to be making a similar bottom to that of last year May/June period Chart

One could trade $SCO here shorting crude, but be nimble. ITZ is looking to re-enter $UCO very soon.

click on chart to expand image