22
Oct

Spooky Monday

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First, The Week That Was.

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In a nutshell, it was a red one but despite the energy slaughter that was to happen Friday note that only the service group, which had just broached record highs, underperformed the broad markets, as it was led down (let down) by one of the more expensive names in the group, SLB. I'd missed the run of late and was avoiding them going into earnings thinking they would really need to blow people's socks off and/or say great things to maintain that multiple. As (SLB) was being pummeled on Friday I took a position in the (HAL) November calls, which were trading lower in sympathy. See (HAL) earnings below.

Technical Opinion Watch: 

  • XOI - good support about 1 to 1.5% lower than current levels. The recent moved failed to achieve record highs but the group remains cheap and valuations probably reflect a long term price close to the mid $50s than the high $80s which is just as well since without the dollar these prices simply are not sustainable. 
  • XNG - support is probable about 4% below current levels. Again, the group is not expensive relative to historic multiples and though 3Q will be a sequential CFPS downer the forward strip at just under $8 is offering ample opportunity for hedging despite "full" storage status. 
  • OIH - Friday was one of the largest single day drubbings this index has seen. Did the fundamental picture shift with SLB's earnings? Was the index wildly overvalued. No and no. But it had had good run

Commodity Watch:

  • Crude Oil. Saudi Arabia says high prices are not related to supply and demand. Translation: don't hold your breath for another production hike to tame high prices. Of course OPEC is probably turning two blind eyes towards any quota violators right now as the weak dollar means that a $90 barrel of oil isn't at all worth what it used to be. This morning crude is trading off $1.40 to $87.20 as profit taking ensues prior to contract expiration today.
    • Democrats say stop filling SPR at these prices. Here's the story. Not that it makes that much of a difference but I do agree with them on this one.
    • EPR Threatens Mexico's Energy Infrastructure. Mexican socialist rebel group EPR says it will step up attacks unless two of its people are released. Mexico says they don't have them.
    • MEND Renews Nigerian Kidnapping Campaign. Not to be left out of the spotlight, MEND was said to be planning fresh attacks and kidnappings in three s. Nigerian states last week and Saturday followed through by kidnapping 7 workers from a supply vessel headed for Shell's EA platform which was shuttered after an attack in early 2006. The facility, which is one of the one's scheduled for restart mid 2008, has been evacuated. 
    • and finally, the PKK said they are ready to attack oil pipelines in Kurdistan if Turkey crosses the border into Iraq.

    • Albertan royalty issue still in limbo. Alberta does not plan to provide details until the end of October but has promised investors  "balance and stability". Sounds like taxes will be going up but not as much as the original panel recommendations.
  • Natural Gas. Trading down $0.10 to $.15 in sympathy with oil at just over $6.90. I'll have the gas tab updated later this morning but suffice to say that I continue to see the much feared 3,500+ storage level as doubtful.

Stocks We Care About Today

  • (HAL): small top and bottom line beats
    • EPS: Reported $0.66 after backing out gains and charges versus expectations of $0.64 (hi of $0.67, low of $0.60).
    • Revenue: reported $3.93B vs $3.87B expected.
    • Strong growth in Eastern hemisphere revenue and op inc which was expected...margins expanded here. As expected, margins in N. America declined slightly despite a sequential bump in revenues.
    • $2.4 B of buyback firepower remains from original plan
    • Quotes from analysts so far this morning:
      • ``From a geographic basis, their international growth was very impressive,'' said Roger Read, an analyst at Natixis Bleichroeder Inc.
      • ``It's a good result,'' said David Rewcastle, an analyst at Argus Research Corp. who rates Halliburton shares at ``buy'' and owns none. ``It's not a stellar, skin-off-the-ball result.''
      • ``Your concern post Schlumberger was that North America is coming unglued,'' Read of Natixis said. ``Clearly, Halliburton's results indicate that's not the case.''
    • Conference call at 10:30 Est.
  • (WFT): reported inline top and a penny beat on bottom line results. I don't follow this one closely but as its one of the global drillers I'll tune into the conference call at 9 Est.
  • (RIG): award a 4 year contract for its semi-sub Polar Pioneer set to start 2010. Terms of the contract were not disclosed but it speaks volumes to the strength of market. Separately, CNOOC just announced its first Chinese semi-sub delivery will be delayed until sometime in 2011 from it's previously scheduled Oct 2010 delivery date. More evidence that shipyards are falling behind due to overwhelming demand.

Earnings This Week

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You can always refer to the 3Q Calendar Tab for a list of the usual suspects' reporting dates and estimates.

 

Holdings Watch: Current Holdings:

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Odds & Ends

Analyst Watch: FBR increases its price target on outperform rated (SLB) from $118 to $124. CIBC upgrades its PT on (JASO) from $44 to $61.

ACI Conference Call Points from Friday's Call: In a nutshell, higher coal prices are on the way as global demand steps up and domestic inventories fall.

  • Supply/Demand Picture: YTD coal consumption rose relative to the first nine months of 2006 due to more normal weather. Concurrently, production fell leading to a tightening in coal stocks. Imports are nearly flat while exports continue to rapidly expand.
  • Regulatory challenged in Central Appalachia remain restrictive to coal production growth and Arch commented that this will become pronounced in 2008.
  • Coal demanded for export continues to rise as China transitions from an exporter to a net importer this year. This was the major reason we recently started monitoring the dry bulk shippers. Arch is seeing not only increased opportunities to export to Asia but Europe as well.

98 Responses to “Spooky Monday”

  1. 1
    Sambone Says:

    4:38 am EST

    Crude Down More Than $1 On Equity Market Falls

    By Nick Heath
    Of DOW JONES NEWSWIRES

    LONDON — Crude oil prices fell more than a dollar in early trade in London Monday, as steep falls in equity markets renewed concerns over global economic health.

    Both the ICE December Brent and November light, sweet crude contracts extended the decline seen Friday as the markets took the lead of a selloff in global bourses, despite the emergence of a number of supportive geopolitical issues over the weekend.

    “I think what happened to equities on Friday is a strong risk factor — volatility has come back to equities,” said Olivier Jakob of Petromatrix.

    “We had majority supportive factors emerging during the weekend — MEND kidnapping in Nigeria, PKK attacks in Turkey and the main nuclear negotiator for Iran resigning. Although these are supportive (for crude), fears of global economic health are emerging.”

    At 0828 GMT, the front-month December Brent contract on London’s ICE futures exchange was down $0.98 at $82.81 a barrel.

    The front-month November contract on the New York Mercantile Exchange was trading $0.92 lower at $87.68 a barrel.

    The ICE’s gasoil contract for November delivery was down $7.50 at $723.50 a metric ton, while Nymex gasoline for November delivery was down 225 points at 214.62 cents a gallon.

    —By Nick Heath; Dow Jones Newswires

  2. 2
    scoop006 Says:

    Z- Good morning and welcome home: Any thoughts on DRYS today

  3. 3
    Sambone Says:

    9:11 am EST

    Nymex Crude Drops On Fears of Economic Slowdown

    DOW JONES NEWSWIRES
    From Market Talk:
    Nymex crude oil futures fall as traders fear a slowdown in the economy, indicated by a fall in the US stock market, says Phil Flynn, senior market analyst at Alaron Trading Corp. “If the economy slows, the demand for oil will be less, which may take some buying pressure out of the market,” he says. If the stock market rebounds, oil prices may “pop back up,” he says. Futures could go up to $88.50 before closing, he predicts. Nymex crude -$1.50 at $87.10. (elizabeth.landau@dowjones.com)

    [Dow Jones] Nymex crude is lower in early morning trade as traders react to a weak stock market and sell ahead of today’s Nov contract expiration. The Dow Jones Industrial Average fell 366.94 points Fri. Nymex crude -$1.66 at $87.44/bbl. (elizabeth.landau@dowjones.com)

  4. 4
    Sambone Says:

    Looks like the Crowd is exiting energy today

  5. 5
    irished Says:

    Except for HAL rebounding, sure looks like storm clouds

  6. 6
    rammastr Says:

    DRYS is coming back with market.

  7. 7
    zman Says:

    Energy and a lot more…

    HAL showing green for now

    DRYS – I’m waiting longer to get long again. It’s not like it’s expensive and they don’t report for another two weeks.

    This is setting up buying ops in names like OII, CAM FTI…

    Oil move looks like expiration related

    COP moved unjustified; it and VLO getting tempting but as they shovel bathwater I’ll sit for a bit.

    Big hits on very little volume. HK is a complete give me a break

    Some bottom fishing taking place, RIG trying on a little green with DO.

  8. 8
    O.W. Says:

    market ticking higher.. RIG doesn’t care

  9. 9
    O.W. Says:

    probably we’ll see sellers short into this rally soon

  10. 10
    drdavis124 Says:

    Everything I own-long or short is in the RED

  11. 11
    zman Says:

    ZTRADE:

    OII $75 NOV CALLS for $2.75

    VLO $67.50 CALLS for $2.65

  12. 12
    Sambone Says:

    9:39 am EST

    Nymex Crude Down On Stock Market, Expiration

    By Elizabeth Landau
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures were lower on Monday as a fall in the stock market led to concerns about an economic slowdown. Traders also sold ahead of Monday’s front-month contract expiration.

    The front-month November light, sweet crude contract on the New York Mercantile Exchange was recently down $1.26, or 1.4%, at $87.34 a barrel. Light, sweet crude for December delivery, which will become the front month contract Tuesday, was recently down $1.23, or 1.4%, at $85.72 a barrel. December Brent crude on the ICE futures exchange was down $1.11 at $82.68 a barrel.

    Front-month November reformulated gasoline blendstock, or RBOB, fell 3.69 cents, or 1.7%, to $2.1318 a gallon. November heating oil fell 2.52 cents, or 1.1%, to $2.3054 a gallon.

    Monday’s fall in futures marks another respite from a series of record highs hit last week, which culminated in a record intraday high of $90.07 early Friday before easing down to a close of $88.60 a barrel. Prices are still up 11% over the past two weeks.

    Declines in the stock market on Friday sent signals of an economic slowdown, said Phil Flynn, senior market analyst for Alaron Trading Corp. in Chicago. The Dow Jones Industrial Average fell 366.94 points Friday.

    “If the economy slows, the demand for oil will be less, which may take some buying pressure out of the market,” he said.

    If the stock market rallies later Monday, oil futures could also rebound, he said.

    The target price for the November contract, which expires today, may be $88.50, he said. The December contract, which becomes the front-month contract on Tuesday, may hit $86.50, he said.

    While tensions between Turkey and Iraq had been helping push crude prices to record levels last week, news of Kurdish attacks on Turkish soldiers over the weekend failed to support futures prices at the same high levels.

    Kurdish guerrillas ambushed a Turkish military unit near Turkey’s border with Iraq on Sunday, killing 12 people. The attack came four days after Turkey’s Parliament authorized a potential military strike against bases of the Kurdistan Workers’ Party, or PKK, in northern Iraq. The PKK has been fighting the Turkish government since 1984.

    Futures also failed to rise on the news that a prominent militant group called MEND in Nigeria said it was responsible for kidnapping three foreign oil workers from an offshore vessel operated by Royal Dutch Shell PLC (RDSB.LN) over the weekend.

    The weak dollar, another factor that had been supporting futures through a blockbuster week last week, also was not enough to keep futures prices at record levels. The euro rose to a new record of $1.4348 Monday morning.

    Some analysts say the crude market has been overvalued, and that prices have not been backed up by basic supply and demand considerations.

    “We are continuing to view the dramatic price pop of the past one-and-a-half weeks as much overcooked and out of synch with underlying fundamentals,” Jim Ritterbusch, president of trading advisory firm Ritterbusch & Associates in Galena, Ill., said in a note.

    Ritterbusch anticipates strong near-term support at $82.50 to $83 for the December contract “to possibly set the stage for a run toward the $90 mark,” he said. Above $90 would be difficult, short of a major supply disruption in the Middle East, he said.

    —By Elizabeth Landau, Dow Jones Newswires

  13. 13
    zman Says:

    Well, at they are liking the HAL today. Dr D that one should be right up your alley.

    Hopefully I’m not the only one who went long Friday as SLB was getting clocked. Call starts in 10 min.

    WFT apparently said good things but I did not get to listen. Will try to find a transcript.

    SFY doing very well in all of this …still moving on the prospect of punting their kiwi assets.

    Go VLO

  14. 14
    O.W. Says:

    DJ OIL FUTURES: Crude Dn On Report Kurd Grp To Call Ceasefire

  15. 15
    zman Says:

    Thanks OW

    SUxs trade green now.

    SLB down 15% in two days.

    HAL CC notes:

    eliminating redundancies for cost eff and gets divisions to work better together.

    starting off with a lot of talk about e hemisphere: continues to remain very positive.

    N. America: rev up 6%, op inc up 5% seq., maintained good volumes and its coming from increased volume, more than offset pricing declines. Still seeing declines but they see pressure pumping declines of less than 5% between Jul1 and Dec 31. That’s good news.

    more in a second…

  16. 16
    zman Says:

    Seeing some potential for pricing declines in 2008 – see 4Q for pricing strategy. That may not be good. Activity is expected to be up with horizontal rig count U.S. – see some downside risk if nat gas prices decline significantly. In Canada not looking for a recovery yet.

    Latin America: look for 20% growth in 2008 led by new work from Pemex.

  17. 17
    Popeye Says:

    Turk troops missing in ambush. This can’t be good. http://www.abcnews.go.com/International/wireStory?id=3759025

  18. 18
    zman Says:

    4Q – benefit from better tax rate due to the increased int’l exposure.

    Stock is backing off gains on “potential pricing declines in 2008” comment.

    Energy stocks watching the Dow, not oil today.Pretty negative tick right now.

    HAL 2008 Guidance: $1.5 to 1.7B capex

    Saudi is very happy with their continuous monitoring work

  19. 19
    Sambone Says:

    10:40 am EST

    Nymex Crude Down On Kurdish Ceasefire

    DOW JONES NEWSWIRES

    [Dow Jones] Nymex crude oil futures continue sliding in part due to reports that Kurdish rebels in Iraq will announce a ceasefire, says Tony Rosado of IAG Energy Brokers in Ft. Lauderdale, Fla. The market is “drifting lower, still susceptible to go lower” because it had been supported by a “premium on the back of this Turkish-Kurdish situation,” he says. Even with a ceasefire, tensions between Turkey and Kurdish rebels in northern could flare up next week, he says. The market is headed towards $85 for expiration of the Nov contract, he says. Nov crude -$1.87 at $86.73/bbl after hitting a low of $86.17. (elizabeth.landau@dowjones.com)

  20. 20
    BigJim Says:

    Zman:

    What do you think about Diamomd Offshore(DO) going into earnings on Thursday. Is this a buying op.

  21. 21
    O.W. Says:

    RIG killing me.. painful…

  22. 22
    TTupp Says:

    hopefully VLO notices he strong support of where it sits now… thinking about taking an initial pos. like uncle Z

  23. 23
    zman Says:

    BJ – it’s pricier than my fav in the group and I’m not happy with the price action in any of these right now. The CROWD is simply hating energy right now. Service is getting especially hosed.

  24. 24
    zman Says:

    RIG making little sense here. Sell off looks technical as it accelerated once it crossed 110. O.W. – did you scale or swing for the fence?

    HAL – going negative over that price comment. Once you are red, it seems you are dead.

  25. 25
    O.W. Says:

    I’m actually averaged in at 4.9 , about 8% lower than you.. not very helpful right now though, Z. I scaled in so it’s a double my normal size on a position. I was a believer a week ago.

  26. 26
    O.W. Says:

    seems stupid to let go right now.. I’ll probably be getting the lowest tick before a little bounce.. However, it seems very unlikely that with the November calls we’ll ever get in the black again… Guess I’ll be scaling out on bounces

  27. 27
    zman Says:

    O.W. – Re RIG: the stock was 118 3 days ago and the only things that have changed for them have been positive. This is why I scale into positions. I’m waiting for the slide to stop before taking on my third and probably final piece. Between now and expiration they will have a chance to talk about the long term fundamental yada, yada of the story on the earnings call plus those earnings should not stink. I’m not saying you should hold it…as I don’t do that…but I’m holding mine and plan to add.

  28. 28
    aitrader Says:

    SUxs just crossed the $100 line.

  29. 29
    O.W. Says:

    Z, thanks for explanation. When you say you scale in ,are you talking about the average downs/ups, that you alert us too? or do you mean that even when you mention a trade once only for a certain stock you scale in on that also?

  30. 30
    Denise Says:

    Good morning all-Z what price do you think a driller like GW-might be a buy?-back to 04/05 prices.
    Also on a more positive note the technician I follow says we should be oversold in both index’s by mid week-bounce likely

  31. 31
    aitrader Says:

    Suncor Energy Tgt Cut To C$104 From C$119 By Scotia >SU

    Oct 22, 2007 08:38:35 (ET)

    Dow Jones Newswires

  32. 32
    zman Says:

    OW: when I say scale in I mean I have a level of funds in mind for a position. It could be 10K or 30K. When I go in I take a third to a quarter of the ultimate desired position. I tell about the initial, the scale ins and the exits. Also, it sucks to lose money. I hate to lose money. But unlike Gordon G, it generally does not ruin my day because not one of my trades is going to kill me. I try to view each trade as the first trade in the next 1,000 trades I’ll do (I over use that statement but it’s my mantra). This is options and they’re great when they go up and during a market pullback like the one we’re in, they can get completely get wiped out.

    From what I can tell about this pullback, cheap was down less until about an hour ago and then they just started punting everything. Now it looks like some funds are sniffing around for bargains.

    Just an FYI, given me another dollar lower on Oil and COP and I’ll add to my COP position. I should have pulled that one off the table last week as a double but my end of week got a little disrupted.

  33. 33
    zman Says:

    Denise – I have little love for that company. You might try to catch a falling knife at five but their margins will collapse as a commodity driller in an area where drilling plans are very uncertain and highly dependent on gas prices. Options I wouldn’t touch. The stock might be worth a buy and hold around $4 to $5 for a long term position. I just can’t see that they can comment positively on earnings visibility this conf call.

    Also: this is the earnings trend:
    2006: .94
    2007: .81E
    2008: .67E
    looks like poor pricing trends to me. but I could be wrong as I look at the US onshore drillers as somewhat radioactive right now. If you don’t have pricing power and activity may decline and you lack the ability to cut costs…why bother?

  34. 34
    Nicky Says:

    Good morning all –

    interesting today is that despite bullish news for energy (Nigeria, Turkey etc) wti continues its sell off. Is this because of the risks now perceived to be to the american economy or because this was a speculative bubble that was never really rallying on the aforementioned geopolitical risks anyway?

    The following is quite an interesting article:

    http://www.321energy.com/editorials/hamilton/hamilton102007.html

    CNBC have dragged every man and his dog onto CNBC this morning to try and revitalise $100 oil (including flip flop Kilduff who is adament this is going way higher). But when sentiment changes boy it doesn’t change anywhere quicker than the oil market.

  35. 35
    Nicky Says:

    For some TA –

    Broader markets because this affects all those oil stocks followed on here:

    It looks to me as if the market is going to test the August lows before this is all said and done. The drop this morning enabled a more bullish wave count to be negated. I suspect we will chop about and then see a further leg down. Cycles are showing weakness through to the first week in November. At which point a decent rally should start.

  36. 36
    zman Says:

    Thanks AI – SU still performing better relative to the group than you’d think with oil taking a hit. If you can call $86.80 oil much of a hit. Dec crude is at 85.44 now so they have to start talking about defending 85 soon.

    Nicky – so you’d expect an ugly week. Great.

  37. 37
    Nicky Says:

    Nat gas – the move off last weeks high is looking increasingly impulsive and looks to be in the early stages of (iii) down. Still need to see 6.745 go….

  38. 38
    Nicky Says:

    Z – think it will be choppy and expect a short term bounce. SPX may try and get back to 1520…

  39. 39
    Sambone Says:

    11:12 am EST

    Crude Down; Kurd Group May Call Ceasefire

    By Elizabeth Landau
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures fell under $87 Monday morning, pressured by reports that a Kurdish rebel group that has been attacking Turkish forces will call a ceasefire and by concerns over falling global equities.

    The front-month November light, sweet crude contract on the New York Mercantile Exchange was recently down $1.95, or 2.2%, at $86.65 a barrel, after falling as low as $86.17. December crude, which will become the front month contract Tuesday, was recently down $1.51, or 1.7%, at $85.44 a barrel. Brent crude on the ICE futures exchange was down $1.31 at $82.48 a barrel.

    Kurdish rebels from the Kurdistan Workers’ Party, known by its Kurdish acronym PKK, will announce a ceasefire Monday, Iraqi president Jalal Talabani told reporters, according to his office. Tensions between Turkey and the group escalated last week as Turkey’s Parliament authorized a potential military strike against PKK bases in northern Iraq. The PKK has been fighting the Turkish government since 1984.

    The market is “drifting lower, still susceptible to go lower” because it had been supported by a “premium on the back of this Turkish-Kurdish situation,” said Tony Rosado of IAG Energy Brokers in Ft. Lauderdale, Fla.

    Crude prices had been hitting new records last week amid concerns about fighting between Turkey and Kurdish rebels in northern Iraq.

    Kurdish guerrillas ambushed a Turkish military unit near Turkey’s border with Iraq on Sunday, killing 12 people.

    “Certainly a ceasefire maybe relaxes some of that nervousness we’ve had in the market about the potential for disruptions from Iraq,” said Tom Bentz, director and senior analyst at BNP Paribas Commodity Futures

    Declines in the U.S. stock market Friday, and falls in other markets earlier Monday sent signals of an economic slowdown, said Phil Flynn, senior market analyst for Alaron Trading Corp. in Chicago. The Dow Jones Industrial Average fell 366.94 points Friday. It was recently at 13,431, down 91 points.

    “If the economy slows, the demand for oil will be less, which may take some buying pressure out of the market,” he said.

    If the stock market rallies later Monday, oil futures could also rebound, he said.

    Traders are watching the situation between Turkey and Iraq partly because they are concerned about the fate of a crude oil pipeline, which runs from Iraq to the Turkish port of Ceyhan. This pipeline is operating normally, a senior official with Iraq’s State Oil Marketing Organization said Monday, and confirmed that crude is flowing at a rate of 3,000 cubic meters an hour.

    Futures are headed down towards $85, Rosado said, and said that’s the price target for November expiration.

    Front-month November reformulated gasoline blendstock, or RBOB, fell 4.85 cents, or 2.2%, to $2.1202 a gallon. November heating oil fell 2.91 cents, or 1.3%, to $2.3015 a gallon.

    —By Elizabeth Landau

  40. 40
    aitrader Says:

    I ran a weekly oil chart from November 2005 and it looks to me like oil has jumped upwards in sets of three then correct sharply to below the 200 dma. In 2005 the correction started in Nov, 2006 in Sept, and hasn’t yet hit in 2007. I’m curious if anyone else sees the triple upleg followed by 200 dma correction pattern? ( http://stockcharts.com/h-sc/ui – weekly CL and 200 dma overlay).

    I read the article Nicky posted over the weekend and like the Relativity tool. Interesting stuff!

  41. 41
    Nicky Says:

    WTI(Dec) – took out the (iv) low of 85.72 which is indicating a top of some magnitude may be in.

    Again a cycle high is due this week.

    Support at 85.10 and 84.70.

  42. 42
    Nicky Says:

    aitrader – your work is suggesting the same as Adam Hamilton article above – if the correction is going to play out as a C wave then 65 or lower is very likely.

  43. 43
    Nicky Says:

    Broader market is playing out either as a triangle (in which case this should finish towards 13150) or a flat (in which case it will be closer to the August lows).

  44. 44
    rammastr Says:

    ZMAN – In the past, have energy related stocks risen against severe drops in the commodity? This is in regards to #34.

  45. 45
    zman Says:

    Ram – in general they track on a day to day basis. When you look at a longer term chart the moves are less reflected in the stocks to the up and down side. Take a look at a comparison of USO to XOI for the second half of las year … energy stocks too a pause while really came in hard. When oil started to dig back out of its hole, the stocks began another leg up and were hitting new highs well before oil was.

  46. 46
    zman Says:

    Ram – I should add that if you believe oil is going to the mid $60s in the near term than you would want to get short some high multiple service and oil stocks. The most liquid names would be SLB and XOM although a move of that magnitude would knock expensive and cheap alike for a loop over the short time frame.

    TSO up…could be the buyout rumor resurfacing, could be that its cheap. Wonder if it drags VLO up.

  47. 47
    rammastr Says:

    ZMAN – Remember, I am new to the energy arena. It is only from the posting in item 34 that I am asking about the effect in the drop in oil.

  48. 48
    O.W. Says:

    we need RIG to close above 110 to pare off some of the technical damage.

  49. 49
    drdavis124 Says:

    Bought CHKAR $1.80 Jan $37.50
    Bought CHKKR $0.90 Nov.$37.50

    Chk is rarely discussed.
    my comparitive charts show that CHK has out performed over the last 2 months almost all of the popular stocks on this board. HAL RIG VLO COP

  50. 50
    O.W. Says:

    drdavis, are you Phil from PSW?

  51. 51
    zman Says:

    Ram – I got ya. Ask away.

    OW – agreed.

  52. 52
    zman Says:

    Dr D – where do you think CHK is rarely discussed…surely not here?!

    OW – no, he’s not the same guy.

  53. 53
    zman Says:

    ALJ and FTO also look interesting down here.

    SFY – kick, kick, kick

  54. 54
    zman Says:

    heating oil flat to up on the winter months (Nov to April) with crude down about 1.3% on the front month and much less on the out months.

    Nov Crude: down $1.18
    Dec -.52
    Jan -.35
    Feb -.20
    Mar -.14
    Apr: flat

  55. 55
    zman Says:

    SLB selling looks exhaustive to me. $15+ in two days is probably enough. I’ll wait til we get close to the close but I’m planning on trading a little long today.

  56. 56
    Nicky Says:

    Products look very bullish. Looks like we may have higher highs ahead for the complex before it tops out.

  57. 57
    drdavis124 Says:

    I missspoke: This is a trading board I have seen little CHK trading talk.

    I smell a CHK Blowout report 11/7 considering the financial moves made recently.

  58. 58
    drdavis124 Says:

    O.W. I am Phil from THE “getting old & losing it UPSTAIRS, Never Never Land

    Phil

  59. 59
    zman Says:

    Dr. D …..ohhhhhh, yeah you’re right, I’m used to nobody listening to me on it but you can only beat a rallying horse so often. Great long term chart there plus all the great fundamentals.

    Big volume in refiner calls today, VLO, TSO, WNR, FTO. TSO is acting awfully good on a day like today.

    speaking of trading…look at the daily charts on ESV and NBR now.

  60. 60
    zman Says:

    OW – don’t let him fool you. He’s one of the few of you I’ve spoken with on the phone and he’s been around the block several times (and I mean that in a good way).

  61. 61
    scoop006 Says:

    Z- SLB NOV. 95P’s 10,000+ contracts

  62. 62
    zman Says:

    Thanks Scoop – I’d say surely those are going to expire worthless but they’re treating the stock like it’s business is shriveling. I’m still mulling taking some Nov $100 calls before the close.

  63. 63
    drdavis124 Says:

    Now I feel better. Been doing DD on WNR. Are there any thoughts out there on “WNR”???? Over the years I have done well with stocks NOBOBY knows or likes.Re: xto, unt hoc 6 years ago.

    Phil

  64. 64
    rammastr Says:

    ZMAN – Are you saying the caustic info that created the bleeding in SLB is overblown?

  65. 65
    zman Says:

    Dr D. Why are the estimates a year and two years from now so low for WNR?

    It keeps them as the priciest in the group as you can see on the cracks and refiners tab. We did well shorting them this summer and I’m warming up to the idea of getting long now that they’ve fallen from a 19 fwd Pe to around 12. Why do you like them?

  66. 66
    zman Says:

    I think so, several analysts think so as they reiterated buys this morning and some took up their price targets. Doesn’t mean I want to step in front of a train. But the market has a way of almost always swinging the pendulum completely through the side of the clock and embedding it into the stairs before reversing and that where we appear to be now. I thought it was price before earnings and I stayed away saying they’d need to really impress the street to hold the multiple…but this is a bit silly.

  67. 67
    zman Says:

    market rolling over, that’ll hit energy in the brain pan

  68. 68
    drdavis124 Says:

    Z; Fidelity’s Trading program WATCH LIST has a ton tracking catagories.

    WNR has to lowest 6.6 on my ENERGY WATCH LIST

  69. 69
    rammastr Says:

    ZMAN – Thank you. I think I will fish around for the 100’s around 2.25 or so.

  70. 70
    drdavis124 Says:

    wnr LOWEST p.e. 6.6

  71. 71
    zman Says:

    DR D, how’s the 6.6 calculated? I’m familiar with Fidelity’s black box.

    RAM – I’d go small and make them come to you on a day like this. If you miss it, so what?!

  72. 72
    Sambone Says:

    Phil

    http://www.321energy.com/reports/flynn/current.html

  73. 73
    drdavis124 Says:

    GREEN ON WATCH SCREEN— CEO ENB HAL TSE 2:45

  74. 74
    scoop006 Says:

    rammaster- if you want to trade SLB, why don’t you submit an offer at the bid price of $2.10; I am confident it will be filled. Good Luck

  75. 75
    rammastr Says:

    Thanks guys.

  76. 76
    zman Says:

    Dr D. – Ok, pe 6.6 …on a trailing basis

    But look at the actuals and estimates for them with their multiples:
    2006A $3.11…11.2x
    2007E $4.72…7.3x
    2008E $3.39…10.2x

    vs VLO
    2006A $8.31…8.2x
    2007E $8.59…7.9x
    2008E $8.30…8.2x

    At this point of the year 2007 numbers are pretty much rear view mirror meaningless and analysts will key their recommendations off 2008 and 2009 numbers. That being said, both stocks are cheap to fairly valued by historic standards on the forward multiple. Go into 2009 and WNR’s numbers fall to $1.99…it’s not a typo and I don’t under stand why they fall off a cliff…maybe a bad number in the databases but it’s there and that gives them a 17+x ’09 number vs 7.4 for VLO based on the expectation that ’09 EPS climbs to $9.17 as they get some expansions and margin improving projects completed next year.

  77. 77
    rammastr Says:

    Scoop – I screwed up and looked away on DRYS first thing. I was looking at the 125’s for 5. I wonder if DRYS will give people another buying opty?

  78. 78
    zman Says:

    Ram – this is the long awaited pullback. I’m looking to go long more stuff soon but I’m not sure where the bottom is. I think what you are seeing is less of a fear of a recession or other such conjecturing and more of a fear of losing one’s rather quickly acquired profits (like since the September expiration). So the fits and starts are waves of people who have $20 buts of profit in a stock who don’t care if they get out at 96 or 94 vs a list of people like me who were overly patient, waiting on that pullback and are now tip toeing back in.

    My list is APA, APC, NFX, possibly EOG, PQ, more HK, more VLO, more BTU etc most of which are pretty cheap.

  79. 79
    zman Says:

    Ram, re DRYS – daily.

    definitely should have added more COP to the list and CHK if gets a little cheap prior to the report date. I may also add the 110 Rigs.

  80. 80
    drdavis124 Says:

    SLB Has caught my attention IT fell almost 12% mOASTLY profit taking. These stocks usually rebound.

    Chk Ain’t gitten no lower (double negative.

    Phil

  81. 81
    scoop006 Says:

    rammaster- Re your # 69 post that SLB call option is at $2.

  82. 82
    rammastr Says:

    Scoop – I see and I am still hovering over the execute button. Thanks.

  83. 83
    TTupp Says:

    Z- hes DDT 🙂

  84. 84
    zman Says:

    T – you short it?

  85. 85
    TTupp Says:

    thats HES ticker, if the 12mo strip reverses

  86. 86
    zman Says:

    strong action refiners…

    Re HES – I’ve not been keeping up with their exploration successes of late. earlier this year they had a very hot hand.

    I like MUR a little better for the short as a comp to HES…man its had a run.

  87. 87
    zman Says:

    VLO trying to go green. TSO heading for buck up territory. 😎

  88. 88
    TTupp Says:

    nah, initiated VLO calls at the LOD and are alredy up nicely tho.

    you can trade this thing with just a stochastic momentum indicator like ive been saying all along. free money and ridiculously liquid– my buys get filled at the bid usually lol

    just the trade, and my typical DRYS DT…i closed at 2:30. trading far OTM calls, these frickers are super expensive closer to money.

    Nicky- sorry about your brits gear box’s problems in Brasil yesterday 🙂 , but what a come back!

  89. 89
    zman Says:

    T – nice re the VLO. I’ve been waiting days to get back in it. Today’s early drop was just too good to be true, especially since products weren’t sucking wind like crude.

    my other trade on the day OII is sucking wind but the stock is also holding support. I’ll wait a few days and take down some more.

  90. 90
    drdavis124 Says:

    SLB DOWN 14.7% IN 5 DAYS.
    You might get bloody ketching tht knife.

    Wait for some uptic volume,& then you have company.

  91. 91
    Nicky Says:

    T-Tupp – it ain’t over! McClaren may appeal because of the temperature of the fuel in the BMW and Williams cars.

  92. 92
    zman Says:

    Dr D – agreed. I’m happy holding my cheaper HAL instead of the SLB for now but there will come a time to play….but not today.

    Go TSO!

  93. 93
    drdavis124 Says:

    VLO Bought 01/08 $80 @$1.25 ZPYAP

  94. 94
    Popeye Says:

    Nicky, Alonso does not want to hear that but I do.

  95. 95
    scoop006 Says:

    Z Any thoughts on XOM prior to earnings

  96. 96
    Nicky Says:

    Popeye – LOL! I don’t mean to sound like a bad sport but is that how Ferrari really wanted to win? Massa letting Raikonnen through? Massa as good as admitted it in the post race interview. And that was the second race he had done the same thing. So I guess if they want to win by any means the Championship is theirs but if its down to pure racing then McClaren should be the winners of both constructors and driver.

    Popeye – you would think the only place left for Alonso was Ferrari but they have resigned Massa this weekend (no doubt so he played their game yesterday!).

    Not a good weekend for the Brits as we lost the World Cup Final of the rugby to South Africa too!

  97. 97
    O.W. Says:

    mostly everyone seems to be bearish on XOM thinking it’s a sure (& big) earnings miss this time around.. maybe that would work counter-productively?

  98. 98
    mimster90 Says:

    When is it time to short PTR?

    Mimster90

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