01
Oct

Monday – Welcome To The Fourth Quarter

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Commodities Watch: Lower at least early

  • Crude Oil: Trading off a quarter this morning to around $81.40,
  • Tropics Watch: Karen kaputt, Melissa MIA, BUT something is brewing to the east of the Bahamas which bears watching. One model (NAM) even shows a tropical storm or cat 1 impacting Florida and then crossing due west into the GOMEX and developing into a stronger storm mid week.
  • Winter Weather Watch: Moderate La Nina anticipated this winter which means the models are undecided at present as to whether the weather will be milder or cooler than normal. One thing that does happen more often in La Nina influenced winters in the short periods of very cold weather, which agrees with many of the earlier forecasts calling for more ice this winter than last.
  • Natural Gas: trading flat to down a nickel at just over $6.80 in early trading. Gas to me looks range bound ($6 to $7.50)pending the end of the injection season at month's end in the $6 to $7.50 range.

If you missed the weekend wrap click here.

Voice of Reason Watch: In response to traders and "analysts" who argue the price of oil is justified over $80 due to the YoY deficit:  Tim Evans [Citigroup] and other analysts argue that market fundamentals do not support such high prices. Oil inventories are falling, but that's typical for this time of year, Evans said. Oil inventories are 1.3 percent below year-ago levels, but oil's price is more than $20 a barrel higher, he said. And high oil and gas prices are depressing demand, Evans added. Z Comment: Tim, you are too nice. This is what I said last Thursday: Yes, crude stocks are down to 321 mm barrels vs 325 mm barrels a year ago. Wow…1.3%!!! And WTI was $83.38 for the end of the reporting period last week, up slightly from the $59.79 it was worth as of 9/22/06. Sometimes it's better to say nothing than embarrass yourself [Flynn of Alaron] like that….oh wait, he won't be embarrassed because no one in the mainstream media will call him on it.

My Mixed Message On Crude Prices Watch: I think sentiment will shift back and forth between the thought of fourth quarter tightness (a very real fundamental equation) and periods of profit taking explained by a laundry list of short term price reducing causes including lower demand from refiners suffering from weak crack spreads and lack of tropical activity, both favorites today. I wouldn't expect crude to fall much below $75 anytime soon but higher highs are not out of the question.  

Holdings As Of Friday, September 28, 2007:

open-positions-092807.jpg

Gas Rig Count In Focus: (CHK), (EOG) and others cutting back? Not necessarily. Check out the next graphs. While threats have been made about cutting back, rig counts in big gas drilling states like Texas, Oklahoma, Colorado and Wyoming have shown few signs of slowing while activity is Louisiana has slowed but not significantly.

gas-rigs-092807.jpg

GOM Count Is Diving For The Deck. To be sure storms are part of the explanation for the drop in rigs. But the long term trend is not the domestic GOMEX rig operator's friend. Rates continue to fall and operators, like ESV who have largely been GOMEX centric are looking to send rigs abroad "chasing international dayrates".

gomex-rigs-092807.jpg

Both of the two preceding charts bear watching as they will be price supportive for natural gas if the rig slide takes a more geographically diversified hold in the onshore U.S. 

Stocks We Care About Today Watch: This watch is something of a misnomer since I obviously care about all of the stocks listed on the hold list above and many other but I'm used to typing it and you're used to seeing it and that's how its going to stay.

  • (COP) downgraded to a sell at Deustche Bank. - A sell seems a little harsh given the company's steep discount to its peer group. This may create a buying opportunity. I'll wait to see how badly (to what technical level) it gets hit in pre noon trading and try to find the exact reason for the dg (it could be refining margins, Orinoco talks, the failure to land a Russian oil sand deal last week, perceived lower 2008 capex or just a cranky and impatient analyst).
  • (DRYS) price target raised from $94 to $108  at Cantor which is going to carry some weight given Cantor's stature in commodities trading.

For QUARRYMAN - Walter Industries (WLT)

  • Coal & Natural Gas: Accounts for just north of 4/5ths of the company's operating income comes
  • primarily metallurgical and coking coal, sent to Europe & S America. (weak dollar a positive here)
  • reserves - 18 to 20 year supply at current rates
  • growth- 50% growth seen in Met coal production next 2 years; prices here top $100/MT, unlike steam coal due to global steel demand
  • Recenty acquired a small low sulfur steam coal operation.
  • Natural gas: deal with El Paso, growing conventional and gob (mine) gas production profiles, nice hedges north of $8/Mcf.
  • Homebuilding and home financing account for the remainder
  • No sub-prime slime: 96% of financing business is fixed rate, no "black box" deals, mostly no-recourse portfolio
  • Building is contract only, no land position, no spec building, cheap homes $50 to 150K which I understand isn't hurting as much as the jumbo backed stuff right now but I'm really out of my depth on this stuff.
  • They may punt this unit and go with just being a natural resources company which would probably be a multiple expanding event although there is apparently clock ticking for a divestiture.

General Stuff:

  • Balance Sheet: Lot of debt. At least that's what I thought at first glance before I threw out the $1.8 B in mortgaged backed securities on the balance sheet. Strip that out and the remaining interest is easily in hand with annual EBITDA running north or $200 million.
  • Earnings Growth Projections: $1.84 '07; $2.60 '08; $4.15 '09. It's not widely followed with only 5 analysts but 4 strong buys and 1 hold stacks up pretty well against the coal industry where the buy to hold rating ratio is closer to one for most companies and the homebuilders which is generally worse as you can imagine.
  • Options: yep and there is some odd activity in the January 50 CALLs; I say odd since the stock is $27. That would be a record premium in a takeout so it's probably safe to write options all day long against a stock position here. Just a thought.

Cheap against the big name coals which is odd because bigger cap stalwart names in a cyclical industry are generally cheaper than the smaller capitalization and capacity players.

wlt-093007.jpg

Bottom Line: Cheap and Interesting.

  • Cheap can be a mistake, like, "it's cheap because they build houses and make mortgage loans and we all know how bad those industries are right now." If that's the reason it's so cheap then people need to take a closer look at the kind of building and lending the company is into.
  • From a historical perspective the stock appears to trade with the coals and not the homebuilders, just at a substantial multiple deficit.
  • No doubt it also gets the "conglomerate discount" applied to any multi-industried player that doesn't fit neatly into a box. The Street really hates those as it makes their analysts work overtime; in this case only 5 analysts follow it and I'd bet they are all coal guys who grown at the thought of model home sales and interest rates.
  • On the coal side, the majority of coal they produce is at the head of a rather long term fundamental wave of demand, and I believe it is a much stronger market, in likelihood of commodity price appreciation, than coal used for generating electricity. I need to do more work (and I plan to on the coal sector anyway) before diving in whole-heartedly but that won't stop me from dipping a toe on the long side in the near future.

Odds & End

Analyst Watch: COP from hold to sell at Deutsche Bank. Cantor also boosted their PT on bulk shipper (EXM) from $52 to $68. 

 

Storm Cat Watch (SCU) - borrowing base returned to $35 million after their banker reviewed their Powder River Basin mid year reserve report. The banker, JP Morgan, also relaxed the debt covenant through March 2008. SCU also announced  that they've drilled 2 of 3 wells planned for the Fayetteville Shale for 2007 and plan to have test rates to talking about during 4Q. 

 

103 Responses to “Monday – Welcome To The Fourth Quarter”

  1. 1
    Sambone Says:

    7:40 am EST

    Crude Down As Profits Booked, High Not Out Of Sights

    By David Elliott
    Of DOW JONES NEWSWIRES

    LONDON — Crude oil futures eased lower in London Monday morning as investors continued to book profits following the previous session’s late selloff.

    Traders said the failure to breach all-time highs late last week has dented sentiment from a technical perspective but, while further losses are likely short term, the weak dollar and tight fundamental outlook will underpin prices.

    “We could definitely see a bit more liquidation but there’s plenty of reason why we’re up at these levels and they haven’t gone away,” a trader in London said.

    At 1118 GMT, the front-month November Brent contract on London’s ICE futures exchange was down 32 cents at $78.85 a barrel.

    The front-month November contract on the New York Mercantile Exchange was trading $0.23 lower at $81.43 a barrel.

    ICE’s gasoil contract for October delivery was down $17.50 at $695.00 a metric ton, while Nymex RBOB gasoline for November delivery was down 111 points at 203.00 cents a gallon.

    The fundamental outlook is the main reason both Brent and WTI are trading just shy of all-time highs, especially as crude supply is expected to tighten further in the coming weeks as production facilities in the United Arab Emirates enter a planned maintenance period.

    This, along with robust demand, is helping to bolster the short-term outlook and backs the recommendation of using any dips in the oil price as a buying opportunity, said Rob Laughlin, senior broker of MF Global.

    But he warned that longer-term demand could be pared by the current high prices.

    “For the bears, the only solace is that these (high) prices will bite into demand and will heighten inflationary fears across the globe,” he said. “So trade with care and observe the headlines but this rally is not finished yet.”

    Another factor that continues to grab the market’s attention is the risk to U.S. and Mexican oil production posed by the ongoing Atlantic hurricane season.

    A number of weather disurbances are being tracked by the National Hurricane Center but there’s little risk to Gulf of Mexico oil facilities at present.

    Tropical Storm Melissa has been downgraded to a Tropical Depression and is expected to continue dissipating during the next 24 hours from its position west of the Cape Verde Islands. Tropical Storm Karen is weakening in the mid-Atlantic while a disturbance over the western Atlantic, Bahama Islands and southern Florida remains far from development.

    Some traders blamed this easing hurricane risk on the market’s retracement from the highs.

    Doug Leggate, an analyst at Citigroup in New York, said deteriorating concerns over Atlantic storms and waning support from refining margins and financial speculators leaves crude prices looking vulnerable.

    This latter factor is highlighted by Friday’s Commitment of Traders report for Nymex WTI which showed large speculators had reduced their net long position by 13,778 contracts.

    The approach of the refinery maintenance period may also weigh heavy on crude prices.

    “In the short term, heavy refinery maintenance in the U.S., affecting crude distillation units in the Mid-west and Gulf Coast opens the possibility for oil to back up in storage at Cushing, the delivery point of Nymex WTI,” warned Harry Tchilinguirian, senior analyst at BNP Paribas in London. “Allied with seasonally weaker gasoline demand and fading threats of hurricanes, downward pressure on the prompt price can mount.”

    —By David Elliott; Dow Jones Newswires

  2. 2
    QUARRYMAN Says:

    Thanks for the analysis, Z.

    I take that as positive. I don’t want to write any naked calls, so I need to decide if I want to own the equity.

    But, I’m liking what I hear you say.

    I’m thinking your seeing a Disney and the 4 energy analysts are seeing a Brennan!

    Good luck this week.

    “Safety Pays”

  3. 3
    Sambone Says:

    Weather – Watching storm off keys. Could get very interesting. Upper level low that seems to already have somewhat of a spin.
    http://www.ssd.noaa.gov/goes/east/gmex/loop-rb.html
    Karen and Melissa = DOA

  4. 4
    zman Says:

    refiners moving a little better today with down oil after an initial sell off

    DRYS – all time high

    BTU – I find it funny that the guys who poked me with a stick five minutes after going long late Friday are still sleeping in when the stock is busy getting “un-raped” this am. You guys have got to get off the minute charts

    Sambone – I watched a video report on that last night on Accuweather, last night they were thinking it hits Florida’s east coast as a TS or Cat 1 and crosses into the Gulf very quickly.

  5. 5
    drdavis124 Says:

    My weekend DD (research) 1-Gold short term over-bought. 2-NG still in funk.
    3-My 4th Qtr sector pick is Agriculture-Grains: my 1st buy in Agr. was DBA options on Fri. Grains make the biggest move this Qtr. CAT, DE,MON making new highs scare me. Request Ag stock pics from this learned group.

    4-Coal: Btu seems to be best pic. The shortage is in “METAURGICAL COAL” which Chine is starting to import. WLT has MET COAL However, the other businesses are hard to understand..

    Phil

  6. 6
    Sambone Says:

    Z – True, but we’ll see.

  7. 7
    Sambone Says:

    9:55 am EST

    Nymex Crude Slips After No New Records Last Week

    By MATT CHAMBERS
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures were lower early Monday as traders locked in more profits after recent gains and mulled the significance of crude’s inability to make a new record last week.

    Crude prices rose as high as $83.76 a barrel Friday, just 14 cents shy of the record $83.90 hit Sept. 20., before finishing the session negative. Some traders who focus on chart patterns to predict price moves see the inability of crude to break to a new high as a sign prices may not rally any higher in the near term.

    “Some are pointing to the failed rally and near double-top as signs that a technical correction could be on the cards,” which has led to some profit-taking, said Addison Armstrong, an analyst at TFS Energy Futures in Stamford, Conn.

    The front-month November light, sweet crude contract on the New York Mercantile Exchange was recently down 73 cents, or 0.9%, at $80.93 a barrel. Brent crude on the ICE futures exchange fell $1.02 to $78.15 a barrel.

    The weakening of a tropical storm in the Atlantic Ocean and the lack of any serious storm damage to Gulf of Mexico oil production during the month of September is also weighing on prices.

    Tropical Storm Melissa was downgraded to a tropical depression and is expected to continue weakening during the next 24 hours from its position west of the Cape Verde Islands. Tropical Storm Karen is weakening in the mid-Atlantic, while a disturbance over the western Atlantic, Bahama Islands and southern Florida remains far from development, according to the National Hurricane Center.

    Front-month November reformulated gasoline blendstock, or RBOB, fell 2.31 cents, or 1.1%, to $2.018 a gallon. November heating oil fell 2.71 cents, or 1.2%, to $2.1985 a gallon.

    —By Matt Chambers, Dow Jones Newswires

  8. 8
    zman Says:

    Sambone – what about the upper level low to the south of the southern GOMEX boundary, any chance it feeds the low coming from the east across Florida?

    Dr D – big need is definately met coal, on WLT their other business is pretty small, especially on the bottom line and the risk seems well in hand.

    Oil down almost a buck, time for the flippers to run out to find a camera.

    HO getting whacked

    DNE breaking out on light volume. Interesting small cap gas producer with a big production profile. This is one I’ve worked up a piece on but need to fill in a few more pieces of the puzzle before I publish. Had been waiting on 3Q but may accelerate.

  9. 9
    Sambone Says:

    Z – Could get interesting. I’ll watch it today and then tommorow we’ll see.

  10. 10
    zman Says:

    Not a lot of follow through in the oil selling today so far. Could set up for a big bounce.

    We came within a hair’s breadth of Nicky’s support level from Friday of $80.50 at 80.59 minutes ago and bounced to over 81.

    NG traders eyeing the storm potential like a rebel views an unprotected pipeline. NG over $7, up 0.16.

  11. 11
    Sambone Says:

    DrD – Saw this article, you may want to read.

    http://www.marketwatch.com/News/Story/Story.aspx?guid={0FD8B048-7A50-4298-A84D-DDDF16DC65B0}

  12. 12
    Sambone Says:

    Off subject – Karl Fisch is Director of Technology at Apapahoe High School in Littleton, Colorado. He has a BS in Mathematics Education from Northwestern and a M.A. from University of Phoenix.

  13. 13
    calvino Says:

    mmmmmorning, u aren’t implying that i was sleeping while btu was floating upward on a mercury particle cloud? i was long btu at one stage of my life as well. now i’m just glad that some of the destruction visited upon fcel has been undone – though still well underwater. If you want to see another end of quarter, book cooking trades, check acpw charts at close last thurs and fri – guaranteed for a chuckle.

  14. 14
    zman Says:

    COP – DB’s downgrade is based on 1) valuation and 2) trading statement concerns which could raise concerns over 4Q. If anybody has access to Deutsche Bank research I’d love to read about that one. How cheap does COP need to be (already cheapest of group) and a sell rating?

    Cal – I wasn’t thinking of you when I wrote that. Glad to hear FCEL isn’t tot.

  15. 15
    calvino Says:

    i was looking at dne a couple of weeks ago, would want to be long that as soon as ng goes northward. them and bpg, which you talked about couple of mos ago.

  16. 16
    zman Says:

    Cal – that would be today then, look at November NG, up 2o cents to 7.08.

    yep, in minnow land those two are very interesting.I’d like to see a full quarter of integrated operations at DNE for costs before I act which will be 3Q but I like management.

  17. 17
    zman Says:

    RIG / GSF announce stockholders meeting date of Nov 9 for approving the merger.

  18. 18
    calvino Says:

    News from bizzaro land: the crosslisted txe – nyse shares are now backward, or upside down. A week ago at parity i did not know which one to click, now I click the wrong one!

  19. 19
    drdavis124 Says:

    Bought chkag Jan 04 @35 paid 2.85 That 04/08 @35 buyer is back. 4615 traded today.
    My GMN put is up 3X should I cover? Thinking of putting CROX. P/E’S CROX-47 GRMN-35

  20. 20
    drdavis124 Says:

    RE #19 GARMIN

  21. 21
    zman Says:

    Garmin – know what they, not the slightest clue re the stock, maybe someone on the board.

  22. 22
    zman Says:

    CHK – several officers exercising options, not selling a share

  23. 23
    Nicky Says:

    Morning all – Distillates support at 21692.

  24. 24
    Nicky Says:

    WTI – support at 80.50 and 79.58.

  25. 25
    Nicky Says:

    WTI – 20 dma is at 78.55 and 10 dma is at 8090.

  26. 26
    Nicky Says:

    RBOB is sitting right on support at its 20 dma at 201.36. Next support is 19732.

  27. 27
    Nicky Says:

    Nat gas has resistance at 7.120 and 7.255

  28. 28
    zman Says:

    Morning Nicky – thanks for the levels

    I’ve read a little more about the DB downgrade of COP and I’m starting to think he is smoking dope. Reasons are valuation and exposure to refining. Their valuation is much cheaper and they earn more than their peers per barrel of refined product. It doesn’t deserve a sell. Plus they’ve got a massive buyback in place. I may do a quick trade on this one soon.

  29. 29
    QUARRYMAN Says:

    Z.

    Are you still holding the NFX Oct 50s?

    My position bounced into the green earlier but I don’t have an order in.

    … looking for a good reason to hold it.

    Q.

  30. 30
    zman Says:

    Never been in the Oct 50s

    I plan to be in something NFX, other than the stock I own now, on the call side prior to earnings on 10/25

  31. 31
    QUARRYMAN Says:

    PBR.

    Pretty impressive today. Nearing annual high. Lots of momentum.

    Pabst Blue Ribbon, Professional Bull Riders, PetroBrasilia… all good for a short term rush.

    “Safety Pays”

  32. 32
    irished Says:

    good morning all. first time on this site but have been following z master zman for a while.
    still in vlo oct.? mine is down 50+percent

  33. 33
    zman Says:

    IE – welcome. yes.

  34. 34
    zman Says:

    COP recovering nicely…unfortunately I pulled no trigger there yet, it may bounce lower once it comes to even on the day.

  35. 35
    drdavis124 Says:

    Z Thanks for the info.

    BT CROX puts CQJMH 01/08 $40 @$1.25

    Phil

  36. 36
    zman Says:

    TRADE: Out CHK $35 October Calls for $1.40, up 56%; like I said when I entered it last Thursday, this was meant to be a quick trade. Still holding the October $32.50 and Jan $37.50 Calls.

  37. 37
    zman Says:

    Irish – RE VLO: you can read about my thoughts on them and the refiners in last week’s posts, see Thursday and Friday especially. The crack spread story is a bit overblown in the media and analysts are making a big deal out of it as well saying things like “razor thin” but the decline from 2Q to 3Q only looks big because 2Q levels were so elevated.

    I’m not adding to the $70s for now and will decide whether to punt or not this week.

    Products weak again today: HO getting creamed for double the drop of crude. I don’t expect that to continue as refinery maintenance picks up in this week’s report. We’re setting up for a rally from lower levels on data Wednesday in both HO and RBOB but this rally will probably come from lower than current levels, unless something fires up in the GOMEX

  38. 38
    zman Says:

    CL breaking 80.50

  39. 39
    rammastr Says:

    colgate-palmolive?

  40. 40
    zman Says:

    Crude light

  41. 41
    zman Says:

    cl/x7 is the November contract, now down 1.25 at 80.40 and falling fast

  42. 42
    QUARRYMAN Says:

    Hey, look at the QUARRY guys go:

    VMC breaking through 90 !!

  43. 43
    zman Says:

    Q – any drivers you see for the move today?

  44. 44
    zman Says:

    Ram – did you ever buy DRYS?

  45. 45
    rammastr Says:

    No I never got an entry point.

  46. 46
    rammastr Says:

    I did happen to get the VLO’s though.

  47. 47
    zman Says:

    oil through 80, down 2.2%, products still outpacing down about 2.6% HO and RBOB.

    Thanks RAM. Did you get the OII, APA, CHK or just my loser list.

  48. 48
    QUARRYMAN Says:

    Just value, and a recent spike technically.

    Remember, we quarry guys lead the construction market.

    You get a building permit, then your highway entrance permit, the NEXT thing you need is stone for the entrance, then foundations, etc.

    We’re the first supplier on the job and first to leave. So crushed stone is an early indicator of residential construction activity.

    I’m thinking the market has already discounted and looked beyond the subprime hiccup and the value buyers [like me] are shopping super quality cos. with strong consistent cash flow and a REAL business (no vapor ware here)

    IMHO

    Q.

    “SAFETY PAYS”

  49. 49
    Nicky Says:

    Next really solid level of support for distillates is 21500.

  50. 50
    QUARRYMAN Says:

    Oh yeah, Z.

    I freelanced the NFX trade and am dumping it.

    I’ve a 62% gain on my DRYS trade. Trigger finger is getting itchy, but they got a favorable upgrade.

    My Oct 90 VMC is up 21% and has mo.

    I’m still velow the black on one major position but, one can only think positive. 🙂

  51. 51
    Nicky Says:

    Then 21000 area and then 20500.

  52. 52
    rammastr Says:

    RIG, VLO, BTU

  53. 53
    Nicky Says:

    RBOB got down to support and bounced.

  54. 54
    Nicky Says:

    RBOB has solid support in the 19500 region.

  55. 55
    zman Says:

    RIG and VLO were big winners for me in September as you can see from the perf page on the weekend. RIG October was doing great until Friday and it can recover in a heartbeat. VLO is more iffy and if I add there or enter TSO it will be lower strike.

    BTU is less than a day old and it’s a November option. What is your point in being here? To cast stones?

  56. 56
    zman Says:

    From the 11:30 EST NHC report:

    AN UPPER-LEVEL LOW…A DECAYING FRONTAL BOUNDARY…AND A WEAK
    SURFACE LOW OVER THE NORTHWESTERN BAHAMAS ARE PRODUCING SQUALLY
    WEATHER OVER PORTIONS OF SOUTH FLORIDA…THE BAHAMAS…AND THE
    ADJACENT WATERS OF THE WESTERN ATLANTIC. SOME SLOW DEVELOPMENT…
    PERHAPS OF A SUBTROPICAL NATURE…IS POSSIBLE DURING THE NEXT
    COUPLE OF DAYS AS THIS SYSTEM MOVES SLOWLY WESTWARD OR
    WEST-SOUTHWESTWARD.

  57. 57
    fraser921 Says:

    stay with drys if you can, imho at least thru earnings

    i nibbled at vlo and rbob at 1.98

  58. 58
    zman Says:

    Chinese Oils: PTR, CEO, SNP up another 2 to 2.5%, despite down oil. At some point there comes a time to short these suckers but not yet I think.

    Bill re DRYS – I plan on being there earnings unless it’s spiked much more by then… but given the volatility and the fact that I’m not yet comfortable with fully understanding what kind of $ is in these stocks I’ll be quick to capture profits and re enter on red days.

    What do you think of EXM, and GNK? Cantor seems to think a lot of EXM despite the higher valuation given the bigger % boost in PT this morning. Also, the move on EGLE is impressive.

    VLO – thinking to add the 67.50s on Wednesday

    Thinking reaction in TSO is overdone and may add soon on call side as well as RBOB is holding

    Q – PBR – Ibovespa up every day doesn’t hurt either!

  59. 59
    BigJim Says:

    Hey Z:

    I was busy at the end of last week. Did see you added TLM. Hoping it works soon.
    Hope everyone had a good weekend.

  60. 60
    QUARRYMAN Says:

    Sorry Z.

    Re #58. I didn’t get the “LBOVESPA”

    BTW, when is the DRYS earnings date?

  61. 61
    Alhambra Says:

    Hello all; First post. GLNG just went ballistic; TGP flat (as it should since it’s over priced and TK’s dummy corp).
    Z, what do you think about LNG shippers?

  62. 62
    zman Says:

    also QMAR to the bulk shippers front of the line, with bigg 2009 estimates. Operate only the big ships, Panamax and Capsize, cheap on 2009 and hasn’t really moved that much yet —

    BigJim – I went with April since it’s hard to play a buyout with options unless you know the timing.

    Q – Ibovespa is the brazilian stock exchange…it does nothing but go up!

    DRYS next Q: Nov 13

  63. 63
    rammastr Says:

    ZMAN – Point in being here?

  64. 64
    zman Says:

    A – welcome to the site!

    LNG shippers – long term I like them a lot as they will benefit from China’s plans to suck all of the stranded gas from points near and far to its shores. I haven’t looked at them in a little bit as they seemed pricey…will have to look into again…had been thinking to do a little more work on the oil tankers first as they’ve been crocked.

  65. 65
    Sambone Says:

    1:06 pm EST

    Nymex Crude Slides Lower On Chart Trading, Dollar

    By Matt Chambers
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures fell to near $80 a barrel Monday, dropping for the second straight session as traders questioned crude’s ability to make new highs. A slightly stronger dollar and lack of storm threats to Gulf of Mexico production also weighed on prices.

    Crude prices rose as high as $83.76 a barrel Friday, just 14 cents shy of the intraday record $83.90 hit Sept. 20, before finishing the session negative. Some traders who focus on chart patterns to predict price moves see the inability of crude to break to a new record as a sign prices may not go much higher in the near term.

    The dollar pared losses and was slightly higher against the euro after earlier falling to a new record low. The falling dollar has been supportive of dollar-denominated crude oil because it gives more purchasing power to traders using other currencies.

    The front-month November light, sweet crude contract on the New York Mercantile Exchange was recently down $1.60, or 2%, at $80.06 a barrel after falling as low as $79.67. Brent crude on the ICE futures exchange fell $1.90 to $77.27 a barrel.

    The stronger dollar is providing “a good portion” of the drag on crude prices, said Tony Rosado of IAG Energy Brokers in Fort Lauderdale, Fla.

    “Anyone who bought crude above $81 is probably getting out” to cut losses, he said.

    The weakening of a tropical storm in the Atlantic Ocean and the lack of any serious storm damage to Gulf of Mexico oil production during the month of September is also weighing on prices.

    Tropical Storm Melissa was downgraded to a tropical depression and is expected to continue weakening during the next 24 hours from its position west of the Cape Verde Islands. Tropical Storm Karen is weakening in the mid-Atlantic, while a disturbance over the western Atlantic, Bahama Islands and southern Florida remains far from development, according to the National Hurricane Center.

    Technical traders are suggesting prices could have further to fall.

    “Some are pointing to the failed rally and near double-top as signs that a technical correction could be on the cards,” said Addison Armstrong, an analyst at TFS Energy Futures in Stamford, Conn.

    Front-month November reformulated gasoline blendstock, or RBOB, fell 5.81 cents, or 2.9%, to $1.983 a gallon. November heating oil fell 5.44 cents, or 2.4%, to $2.1712 a gallon.

    —By Matt Chambers, Dow Jones Newswires

  66. 66
    scoop006 Says:

    ANYONE HERE FOLLOW FIRST SOLAR AND HAVE AN OPIONION ON IT. IT’S HAD A TREMENDOUS RUN IN THE LAST 2 WEEKS. IS IT JUSTIFIED AND CAN IT HOLD $125? THANK YOU

  67. 67
    calvino Says:

    noone heard the chicoms announced another LNG port this weekend?

  68. 68
    zman Says:

    Cal – did they, they announce so many these days. As it is here, the bottleneck won’t be on the regassification but on the liquifaction side.

  69. 69
    calvino Says:

    first solar is not like other stocks, because it does not adhere to the modern laws of physics. i remember some people shorting rimm last summer. then i remember some people shorting appl and goog. i myself try no to participate in strange alien trading worlds.

  70. 70
    Sambone Says:

    Scoop – FSLR kinda reminds me of YHOO in 1999. I would put a stop under it.

  71. 71
    scoop006 Says:

    CAL THANKS, GREAT SENSE OF HUMOR

  72. 72
    zman Says:

    Oil’s loss on the day now passing that of HO…bottoming cracks?!

  73. 73
    Denise Says:

    for all you Booyah lovers-Cramer on RIG today-thinks it will tack on 40 points after the gsf merger and the downgrade on COP is wrong on-“oil clearly going to $100”

  74. 74
    calvino Says:

    I was trying to find the announcement, but yes, they are building a huge plant, just announced.

  75. 75
    zman Says:

    Denise – holy cow, I agree on both.

  76. 76
    calvino Says:

    Oh oh, I better not say any more Jimmie the Magic Talking Baboon jokes, he is helping COP..

  77. 77
    calvino Says:

    Here’s the Chicom’s new LNG plant

    http://www.wten.com/Global/story.asp?S=7135853&nav=menu30_16_1

  78. 78
    calvino Says:

    Harvest getting a spanking – on the crack spreads..?
    FCEl been hanging around 4.5% to the upside, about where I averaged in give or take a few cents. I gave back 2/3 of the position, mightily glad I didn’t have to give them a coule of pounds of flesh on fri. i want to thank my mom, the deity i worship, and the margin clerk for giving me the opportunity.

  79. 79
    zman Says:

    TRADE TSO NOVEMBER $47.50 CALLS – entry at 2.60, may add a little more today. Just seems overdone to me with the stock trading below 7.6x 08. This stock was $51 plus on 9/24 and the estimate is actually up a touch since then.

  80. 80
    zman Says:

    By the way, the previous trade may double or go to 0 within minutes….as can happen with all options.

  81. 81
    rseidman Says:

    Z:
    I take it you meant Nov on the TSO?

  82. 82
    zman Says:

    Yes – will edit that comment, thanks.

  83. 83
    TTupp Says:

    Z- re#4 lol, that was meee

  84. 84
    TTupp Says:

    im the rapist 😉

  85. 85
    TTupp Says:

    i didnt know you still had dryss….. did you only sell half last wek?

  86. 86
    zman Says:

    Wow, look at the Cramer effect on RIG

    Tupp – I wouldn’t brag about that! lol

  87. 87
    Sambone Says:

    Tupp – Don’t poke the bear!
    Off subject – “The Dow hitting 14,000 strikes me like the passengers on the fantail of the Titanic looking at each other and saying “It can’t be that cold, now can it?” All of the cheerful talk(and numbers) in the world does not counter atmospheric physics and geology”.

  88. 88
    zman Says:

    yes. still have half DRYS

  89. 89
    zman Says:

    probably not for long though.

  90. 90
    zman Says:

    Sambone – 87 – first hearty laugh of the week re Titantic and this market! ROFLMAO

    …but are you calling me a bear?

    VLO – thinking about breaking positive.

  91. 91
    calvino Says:

    fcel up almost 6%, holy cow! maybe those hedge boys were driving their shorts down to mark to market on the quarter. would love to know who plays games like that with other people’s money and charges them 2 + 20! won’t happen though, cause the sec can’t get them to open their books.. though they tried.

  92. 92
    QUARRYMAN Says:

    Thanks Cramer! Just goes to show its all RIGged.

    … HMMM: should I dump this one, now it’s green, or will it continue to grow more verdant under the benevolent MADMONEY gaze?

  93. 93
    zman Says:

    QMAR – breaking out, very attractive.

    RIG – Cramer is just latching onto what many, smarter people than himself have told him. One broker took their target here to I think 154 last week and the 2009 combined estimates are > $18 per share. Almost half the 2009 number is already under contract. Very strong fundies, very cheap stock

  94. 94
    Sambone Says:

    Z – No, I’m not calling you bearish. It’s just a saying I use that if you have a grouchy old man, and you go and mess with him, he’ll eat you. So don’t poke grouchy, BUT, you get poked, you bite. See last week on BTU. LOL

  95. 95
    zman Says:

    Sambone – I figured that’s what you were saying but couldn’t believe it as I’m the sunniest of personalities.

  96. 96
    Sambone Says:

    Said that wrong, let’s try again;
    and you go and mess with him, he’ll eat you. So don’t poke the bear, BUT when you get poked/messed with, you bite. See last week on BTU, LOL.
    That’s better.

  97. 97
    Sambone Says:

    Sunniest? – See “Super Nova”. LOL
    http://en.wikipedia.org/wiki/Supernova

  98. 98
    Denise Says:

    Anyone have any opinions on BZP?

  99. 99
    zman Says:

    Denise – I don’t like where they operate: Peru and especially Ecuador. You can have a great discovery one month and then oops, the government owns it and all your equipment. I can look at from a pure E&P standpoint and get back to you overnight if you like but from a geopolitical risk standpoint I will be staying away. Also, what’s up with a company that has BZP as their ticker and BPZ as their stock name?

  100. 100
    zman Says:

    Out for a bit. Held DRYS through the close despite my better judgement. Maybe we get a pop in the morning and I can gun out of it close to $100.

  101. 101
    Denise Says:

    Maybe the CEO’s dyslexic. They gave a presentation at a oil and gas conference today said they would have 4000 barrels from there Corvinna(sp?) field by Dec and 8000 in 2008. Large short position in the stock also

  102. 102
    fraser921 Says:

    drys up over 5 today

    anaylst finnly raised their numbers today but there is no press release on it.

    I predicted that they would have to do this sooner or later.

    anyways , if you go on yahoo msg board you can follow the chat.

    Drys has 99 % of 2008 available for spot.

    I like exm but not at these prices. Still love drys

  103. 103
    coco Says:

    nbl- getting added to the S&P 500.

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