Category: INO.com Contributors

Bullish Momentum Continues For Futures

Posted on by Mike Seery

S&P 500 Futures

The S&P 500 in the March futures contract is currently trading at 3332 after settling last Friday in Chicago at 3325 continuing its bullish momentum to the upside despite fears of the Coronavirus spreading affecting global growth.

The S&P 500 is trading higher for the 3rd consecutive session, hitting another all-time high this week, and if you are long a futures contract place the stop loss under the 2 week low which now stands at 3260. The chart structure will improve next week, therefore, lowering risk as this gravy train continues to the upside as earnings have been very solid.

I see absolutely no reason to try to pick a top and get short this market. If you have been following any of my previous blogs, you understand that I think 2020 will be a good year for the stock market as January is off to an excellent start, up about 4%.

The S&P 500 is trading far above its 20 and 100-day moving average as this is one of the strongest trends to the upside. That is why trading with the path of least resistance is the most successful way to trade over time as picking tops or bottoms is extremely difficult and fruitless, in my opinion.

TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE

Platinum Futures

Platinum futures in the April contract are ending the week on a positive note up $10 at 1,017 after settling last Friday at 1,024 in New York down slightly for the trading week still consolidating the recent run-up that we have experienced over the previous couple of months. Continue reading "Bullish Momentum Continues For Futures" →

The Market Says AMC Is Worthless - I Disagree

Posted on by Noah Kiedrowski

The market has rendered AMC Entertainment (AMC) a worthless company. The stock has nosedived from a 52-week high of $17 to $6.50 per share, resulting in a 62% reduction in market capitalization. Even worse, AMC was $33 per share in 2017 resulting in a multi-year meltdown of 80%. The catastrophic stock collapse has occurred in the backdrop of record numbers at the domestic and worldwide box office. There’s a paradoxical disconnect between the record multi-year box office stretch and AMC’s stock price.

AMC recently posted a strong quarter and has diversified its revenue stream by rolling out its own loyalty program that now has over 900,000 members to evolve a large segment of its business mix towards a subscription-based model to smooth out box office revenue fluctuations. This will allow durable and more predictable revenue streams in the backdrop of changing box office dynamics. AMC recently posted a record third-quarter attendance in the U.S. and international markets along with strong Q3 numbers. At current levels, the stock sports a hefty dividend yield of ~11% due to the decimated stock price.

Streaming threats from the likes of Netflix (NFLX), excessive debt load, bleak 2020 movie slate while being one of the most heavily shorted stocks (~60% of the float being sold short) has decimated the shares of AMC. I feel that AMC has significant upside considering its depressed valuation, improving financials, upcoming deleveraging, and creative initiatives to drive revenue growth.

Record Q3 2019 Numbers

First, AMC has been firing on all segments of its business on improving fundamentals across the entire enterprise over the previous quarter. For Q3 2019, AMC beat on the top line revenue with $1.32 billion, beating estimates by $10 million and missing on the bottom line with -$0.53 EPS, missing by $0.10 per share. Revenue grew by 7.8% and a record third-quarter attendance in each of its U.S. and international markets. Continue reading "The Market Says AMC Is Worthless - I Disagree" →

Crude Oil To Chemicals Transition And Aramco's Plans

Posted on by Robert Boslego

Crude oil and Petrochemicals are the building blocks that are essential to making the goods that make modern life possible — from paints to plastics, space suits to solar panels, medicines to mobile phones. All of these things start with just six basic petrochemicals — ethylene, propylene, butylenes, benzene, toluene, xylenes — that are combined with other chemicals and transformed into other materials that make products better.

Petrochemicals do things like:

  • Make your phone water-resistant
  • Keep food fresher longer
  • Make your carpets stain resistant
  • Help tires repair themselves
  • Keep first-responders safe with fire-retardant clothing
  • Extend lives with cutting-edge medical technologies

Source: American Fuel & Petrochemical Manufacturers (AFPM)

According to a recent study, "Wells, Wires and Wheels… EROCI and the Tough Road Ahead for Oil," published by BNP Paribas Asset Management, the author, Mark Lewis, writes: Continue reading "Crude Oil To Chemicals Transition And Aramco's Plans" →

QE or Not QE: The Consequences Are The Same

Posted on by George Yacik

It may look, swim and quack like one, but Federal Reserve Chair Jerome Powell insists that the Fed’s recent reinflation of its balance sheet past the $4 trillion mark isn’t quantitative easing. Oh no, he says, just because the Fed’s portfolio recently rebounded to $4.175 trillion at the middle of January, up from a six-year low of $3.76 trillion since the beginning of September, doesn’t mean that the Fed is back to its old QE ways, which had pushed the Fed’s balance sheet to a steady $4.5 trillion between 2014 and 2018 when it started to shrink.

But QE by any other name is still QE.

At least one voting member of the Fed’s monetary policy committee has expressed some concern about the recent boost in the Fed’s balance sheet – more than $400 billion in just the past four months.

“The Fed balance sheet is not free and growing the balance sheet has costs,” Robert Kaplan, the president of the Dallas Fed, told reporters at a recent Economic Club of New York event, according to the Wall Street Journal. “Many market participants believe that growth in the Fed balance sheet is supportive of higher valuations and risk assets. [That’s Fed-speak for a bubble]. I’m sympathetic to that concern.”

For the past 12 years, ever since the financial crisis in 2008, the Fed has swollen the size of its balance sheet – its holdings of U.S. Treasury and government-insured mortgage-backed securities – from less than $1 trillion to more than four times that. Its first burst of bond-buying took place in 2008, during the depths of the meltdown when its portfolio more than doubled in less than a year. It then gradually increased to more than $3 trillion over the next five years, at which time QE took it to $4.5 trillion, where it held steady until 2018, when the Fed started to allow its holdings to run off as they matured, until its recent policy U-turn.

And what was the direct result of all that buying? Continue reading "QE or Not QE: The Consequences Are The Same" →

Gold Hits Second Target

Posted on by Aibek Burabayev

On the 6th of January, gold had hit the second target of $1577 that I showed you last June when we measured the depth of gold bugs love. I will update the big chart for you below to show why this second target is crucial. By the way, this target was the most favored then as you can see in the graph of ballots below.

gold poll

It’s a real miracle that we witnessed the Santa Claus Rally again this year. I updated the short-term chart for gold right ahead of Christmas as I thought the correction would extend itself to delay the rally for a later period. The invalidation point for the bearish scenario was set at $1516 as the price moved almost $100 above that point for someone’s benefit.

gold poll

Most of you voted for the immediate rally as you didn’t expect another drop, and you were amazingly right, again!

I think it’s time to check big charts to adjust our short-term navigation plans. Continue reading "Gold Hits Second Target" →