ITZ suggests going long WTI Crude Oil here via Proshares Ultra DJ-AIG Crude Oil ETF (UCO) under $52. Currently trading $51.50. Chart Set STOP @ $50 Oil to say the least is moving on minute by minute news events, Libya, Bahrain, Japan. Current chart indicates taking a long position, most likely we'll see oil trend over $100 a barrel, currently futures show oil just above that level. Link
ITZ STOCK CHARTZ is suggesting adding Southern Copper Corp. SCCO to the Itz Pix Portfolio under $40. Most attention in the copper sector has been on Freeport McMoran FCX, while SCCO has performed relatively in check with the market leader, but has a 6% yield versus the 2.15% of FCX. Itz now believes that the copper sector will benefit from a rebuild of Japan as well as global demand. Commodities have been knocked down in recent days and the downside risks here are small as compared to the upside potential. BUY UNDER $40
Itz Pix was stopped out of the Proshares Ultra Short DJ-AIG Crude Oil ETF (SCO) this morning @ $48. WTI Oil was up on geopolitical concerns as there was increased violence in Bahrain. Worry that it will spill over into Saudi Arabia. Itz entered SCO on March 10th @ $43.60 exits @ $48 for a $4.40 profit or +10% in 5 days.
On Thursday ITZ suggested re-entering The Proshares Ultra Short DJ-AIG Crude Oil ETF (SCO) @ $43.60. ITZ has been calling for a pullback in crude, 1st support $97 level, the top of the uptrend channel since June 2010. We should see the $93 break out level, which was resistance, now support tested. With Japan in the short term looking @ a backup of crude oil supplies, since their refineries are off line, as well as more supply most likely coming as Qaddafi retakes oil fields from rebels in Libya. That said, eventually Japan will turn to diesel as well as coal for powering their elecricity needs in leiu of the downed nuclear plants. For now ITZ is looking for the SCO to test the $52 level, and has suggested a trailing stop. Below are several charts and a video clip from tonight's Mad Money. CLICK to see past blog posts for upto the minute alerts follow ITZ STOCK CHARTZ on Twitter
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RAISE STOP TO $48 From here on out suggest holders of SCO use a trailing STOP on positions (eg $1). For now oil is selling off on expected lower demand from Japan and a stronger dollar. However, ITZ sees a reversal coming soon as, and eventually that Japan will need diesel fuel for its electrical needs and we may see further uprising and unrest in Middle East. Stay tuned...
Suggest those that entered the Proshares Ultrashort DJ-AIG Crude Oil ETF (SCO) to raise the STOP to $47. ITZ is targeting $50 nearterm, currently trading $48.75. >>CHART
This past week turned out to be more than anyone could expect, major earthquakes and tsunamis, unrest in the Middle East, falling consumer sentiment, plunging oil prices and the impending FOMC meeting...still the markets remained resilient! First and foremost, the devastation to Japan was and remains unbelievable...our prayers and thoughts go out to that nation. There's no doubt that the economic disruption will be felt globally, Japan is the 3rd largest economy after the U.S. & China. There's already talk of Japan's repatriation, which will place pressure on Canada. read
Back in the Middle East- The Saudi Day of Rage turned out to be a non-event and nobody showed up at either rally point in Riyadh except for riot-clad policemen. Prince Alwaleed bin Talal al Saud, nephew to the king and chairman of Kingdom Holding, said it should be renamed from Day of Rage to Day of Allegiance since no protestors in Riyadh was seen to be a vote of confidence for the king's recent $35 billion stimulus program.(see Friday's blog for Prince's CNBC video)
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In Libya, Muammar Qaddafi’s better-equipped forces drove back rebel fighters as the Arab League urged the United Nations to impose a no-fly zone over Libya to stop the violence. read
Thus, several factors contributed to the pullback in oi's price this week. With the diminishing protest in Saudi Arabia and the expected drop in demand by Japan. With five refineries shutdown, some for an extended period to make repairs, the demand for oil for Japan is going to drop sharply. Japan is the third largest importer of crude in the world at 4.4 million barrels per day. Also, expect some further selling as a possibility of a No-Fly Zone over Libya happening soon. Friday, Itz also posted the Commitment of Traders weekly NYMEX crude oil numbers. The specs are at the larget long position in years, should they hit the sell switch, WTI could drop hard...back into the lower end of the channel in the chart below. ITZ issued a BUY on Proshares UltraShort DJ-AIG Crude Oil @ $43.60.
This coming week will be pivotal, as the FOMC votes...the expectations for a statement change are rampant and if the Fed is NOT going to change the statement negatively I believe they need to make a positive change to rally the markets. Will we see an extended QE2 or a possible QE3? Stay tuned!
ITZ VIDEOS OF THE WEEK
A look at how a no-fly zone will impact oil prices, with John Kilduff, Again Capital partner.
Mark Fisher, MBF Clearing Corporation CEO, discusses whether oil's rise on Mideast tensions is now over, as well as the impact of rising demand in China. The NYMEX trader reveals how he is playing oil now.
Assessing Japan's earthquake's impact on oil, which has fallen under $100/barrel, with John Kilduff, Again Capital, and Daniel Dicker, independent oil trader.
WTI Crude Oil has pulled back trading around $100 per barrel this morning. Several factors weighing on oil globally, first the devasting earthquake to Japan, which is the 3rd largest importer of oil. Also the Day of Rage and geopolitcal events in that region. As I type President Obama is to speak on the energy situation. Proshares SCO was suggested yesterday morning @ $43.60, it is currently trading at $46.36 up 6.3%. The suggested STOP of $41 is now being raised to $45.
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