22
Aug

Dollar Rebound Friday

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We Will Bury You Watch: Yesterday's spike in oil was attributed by the financial press to a falling dollar as the U.S.S.R. Russia expressed its extreme displeasure with the U.S.' intention to install an anti-ballistic missile battery in Poland, about 100 miles from the Russian border. The idea that the cold war may be heating up dropping the dollar is somewhat short sighted. The U.S. is one of the top three arms exporters in the world and equipping foreigners for a war that never gets off the drawing board may be just what the doctor ordered for the trade deficit. Note to Vladimir Putin, Poland is now thought to contain quite a bit more natural gas than previously estimated if you believe the reports put out by (FXEN)---.

Sentiment Watch: Improved to "cautiously optimistic" as the commodities and the Energy groups find traction. For the first time in 6 weeks I'm not altogether happy to see the weekend.

Tropics Watch: Fay still trying to find direction.

In Today's Post:

  1. Holdings Watch - yesterday was pretty busy
  2. Commodity Watch - Rebounding oil and the Natural Gas Storage Review
  3. Stuff We Care About Today - PBR
  4. Odds & Ends

Holdings Watch: The Holdings Wiki and ZEB Performance Tabs have been updated.

  • HK - Exited the rest of the HK $30 Calls for $4.70, up 52%. I will reposition back into these on a pullback and still hold positions in the $35 and $40 September calls.  I'm not normally so "tradey" but this market/sector is still on pretty thin ice and gains are meant to be taken while they last.

 

  • (HAL) - Exited the HAL $45 September Calls for $2.28, up 43% as I just have not been impressed with the recovery here versus the other names. Call me impatient but I think the name is suffering from a little bit of fear related to its higher exposure to North American natural gas drilling a perceived slow down in capital spending that many see an endangering 2H08 earnings. While I see some capital budget belt tightening in the near term I don't think that HAL deserves the restricted multiple and that such tightening will likely be very modest and short lived. But the stock has not been performing and I'd rather come at it lower after we get the inevitably coming sector red day instead of just riding it out.

 

  • CHK - added the $52.50 September Calls (CHKIX) for $1.60. (CHK) is trading at ---x 2009 estimated CFPS and has not participated in the rally to the degree the other large cap exploration and production companies have despite a hedge position which once some deemed overly conservative and which now seems enviable.

 

  • SWN - added the $40 September SWN Calls (SWNIH) for $1.90 and later doubled down for $1.80. This is a play on a quick but modest bounce in natural gas prices (see more on that in the natural gas section below).  This started out as a short term trade and while I think management and operational performance have been excellent, I generally don't like to let trade ideas morph from their original intent (ie, go from day trade to short to medium term hold) and so I will punt if natural gas does not cooperate muey pronto.

 

  • FRO - entered the $50 September FRO Puts (FROUJ) for $1.50 after listening to the 2Q conference call and coming away less than enthusiastic about the tanker market in the second half of the year.Jefferies was non-plussed as well as they trimmed their price target from $60 to $56 this morning and maintained their Hold rating.


Commodity Watch

Crude Oil closed up a whopping $5.62 at $121.18 in the first day of trading for the October contract as the front month. Rumors of the death of crude have been greatly exaggerated. This morning crude is giving back a third of yesterday's gains with a rebound in the dollar

  • Dollar Watch: The Dollar index ended off 1.1% yesterday, offsetting much of the recent breakout gains of the last week. Normal I'd say charts fill gaps and the dollar index has a big one another 1% below current levels.

Natural gas breathed a sigh of relief after the EIA released a bigger than expected gas storage number since the number could have been much worse. Gas closed up $0.17 at $8.25 after trading flat in the strong crude price environment up to the moment the storage number was released. Gas appears to be putting in a near term bottom but I am not expecting much of a rally (not much above $9 anyway) given the strongly perceived fundamental headwinds pervasive in the market at present.

The EIA Gas Storage Picture Show:

ZComment: Despite the bigger build, we still appear on track to enter the heating season with 3.3 to 3.4 Tcf in storage which is a pretty neutral number unless we get a cold winter and then its pretty bearish. The upper end of this level of storage will mean that blasts of cold will need to be sustained in the northeast for periods of longer than a couple of days at a time to sustain rallies in the commodity this winter and that price spikes will like only occur with very cold, extended periods.

Stuff We Care About Today:

PBR Bricks Volume Guidance. They said they will likely miss 2008 guidance due to poor field performance. Here are the numbers.

  • Expect 2008 volumes 1.9 mm boepd vs prior guidance of 1.95 mm boepd,
  • 2008 guidance had already been lower from an earlier estimate of 2 mm boepd,
  • This means they now expect down YoY volumes as 2007 came in at 1.918 mm boepd
  • This is their 4th straight year to miss guidance
  • Pre-Salt won't have a significant impact for years so here we have another big producer with at least near term production difficulties. Brazil can at least temporarily be added to the growing list of Non-OPEC's having difficulties maintaining current rates (Russia, U.S., Norway, the U.K. and Indonesia (seeking suspension from the Cartel).

 

Odds & Ends

Analyst Watch: FRO target trimmed at Jefferies, Merrill takes RRC to buy, cuts COG to neutral.

GMXR Takeover Contest: Pick the company that takes out (GMXR) by year end 2008 and win a free quarter's subscription to the site. Offer valid only to current subscribers. Offer invalid to employees and officers of the acquiring entity. Here's the current list:

 

 

123 Responses to “Dollar Rebound Friday”

  1. 1
    Sambone Says:

    8:02 am EST

    Crude Lower, Dollar Provides Direction

    By Nick Heath
    Of DOW JONES NEWSWIRES

    LONDON — Crude oil futures edged lower in London Friday, the market taking its cue from moves in the U.S. dollar as it recouped some strength after Thursday’s sharp falls.

    Market participants were also wary that Thursday’s more-than-$6 advance in crude prices may have been excessive, driven by a wave of short-covering and technical drivers, rather than a burst of fresh bullish sentiment on the back of deteriorating geopolitical conditions.

    “We had a stunning rally yesterday in most commodity complexes, with sizable gains in energy,” said Edward Meir, analyst at MF Global in New York. “The spike in energy brings up the question of whether this latest move is a dead cat bounce, (and a large one at that), or the start of something more meaningful.”

    At 1140 GMT, the front-month October Brent contract on London’s ICE futures exchange was down $1.14 at $119.02 a barrel.

    The front-month October light, sweet, crude contract on the New York Mercantile Exchange was trading $1.13 lower at $120.05 a barrel.

    The ICE’s gasoil contract for September delivery was down $13.25 at $1,056.25 a metric ton, while Nymex gasoline for September delivery was down 266 points at 301.86 cents a gallon.

    The markets were likely to continue monitoring the greenback as the key directional input for crude and other commodity prices analysts said Friday.

    “Ten days ago, the Baku-Tbilisi-Ceyhan pipeline was on fire, bombs were falling on Georgia, U.S. (crude) stocks were reported lower than expected but the price of oil was moving down,” Olivier Jakob, managing director of Swiss consultancy Petromatrix said. Despite repairs to the BTC pipeline, the subsiding of conflict in Georgia and this week’s increase in U.S. crude stocks, crude prices had moved higher Thursday, he said. “The difference between then and now is of course the directional move of the Dollar Index and asset allocation linked to it.”

    Both crude and currency markets will be tuning into comments from Federal Reserve chairman Ben Bernanke Friday — due to speak on financial stability at the Kansas City Fed symposium 1400 GMT — for clues on the dollar and crude’s direction.

    The focus of recent geopolitical concerns, market participants continued to eye tensions between Russia, neighboring Georgia and North Atlantic Treaty Organization countries Friday. However, further signs of a de-escalation in the conflict between Russia and Georgia — home to a series of pipelines that can ferry more than 1 million barrels of crude oil westwards from the Caspian daily — continued to emerge Friday as Russian forces said they had started withdrawing from Georgia, although they insisted they will keep hundreds of troops inside a buffer zone in the neighboring republic.

    A burgeoning net-short futures position held by noncommercial investors may have contributed to the size of Thursday’s snap back higher, analysts said Friday. Crude prices had this week struggled to extend their move lower since sliding from their record highs and many investors decided to book profits Thursday, with a weakening dollar providing an additional incentive to close out.

    “A short-covering rally that began three sessions ago, thanks to some dollar weakness, has since morphed into a rout,” said Stephen Schork, editor of The Schork Report.

    Following the sharp climb Friday, the oil price stands at something of a crossroads, with the market waiting to see whether the push higher extends or runs out of support. Absent any geopolitical developments, a bleak outlook for the global economy could yet put further pressure on demand for crude, and on prices, some said.

    “In the longer term I think we’re going to test $100 at some point — we could see another wave down after this reprieve, said Serge Laureau, commodities strategist at Saxo Bank in Copenhagen. “The economics are not good in the U.S., not good in the U.K., which is stalling for the first time since 1992. The global picture is not good.”

    Lending color to a picture of slowing global economic growth, the U.K.’s Office for National Statistics reported Friday that the U.K. economy stagnated in the second quarter of this year. It grew 1.4%, coming in below economists’ forecasts of a 1.6% increase and marking the lowest rate of growth since the fourth quarter of 1992.

    —By Nick Heath; Dow Jones Newswires

  2. 2
    Sambone Says:

    Oil’s Steep Rebound Fuels Expectations Rally May Have Resumed

    By GREGORY MEYER
    Of DOW JONES NEWSWIRES

    NEW YORK — Investors are lighting a fire under oil again.

    Oil futures charged up $5.62, or 4.9%, to $121.18 a barrel in New York Thursday, marking their first close above $120 since Aug. 7 and completing three straight days of gains, the longest such streak since mid-July.

    The weakening dollar, as well as worsening relations between the U.S. and Russia, the world’s No. 2 oil exporter, were cited as factors behind the gains. But observers said longer-term factors have made the crude oil market ripe for a rebound after a correction that many view as exaggerated.

    While high prices and an anemic economy have curbed U.S. oil demand, the pace of decline has “stabilized,” said Costanza Jacazio, an oil analyst at Barclays Capital.

    From its July 3 settlement peak of $145.29 to Monday’s recent low of $112.87, an avalanche of selling on a stronger dollar and flagging oil demand has dragged crude down more than $32. The move prompted talk of an end to the blistering oil rally and speculation that funds that had profited from crude’s ascent were retreating from the market. Longtime oil bull Goldman Sachs last week identified a price floor of $105 a barrel.

    In the past two weeks, oil futures skidded near but never descended below $110 a barrel, a key technical level last touched in mid-April. Now, analysts wonder if this week’s low will instead hold firm as a new bottom. “It’s telling me the long-term up trend is still intact,” said Tom Bentz, a broker and analyst a with BNP Commodity Derivatives in New York.

    Oil’s gains, fueled by the euro hitting a one-week high against the dollar of $1.4904, helped buoy a larger rally in commodities, with the Reuters/Jefferies CRB Index rising 3.7%.

    Though concerns about the state of U.S. demand remain very much in play, many observers argue that there’s ample justification for prices at current levels in wake of the recent selloff. Demand in China, the Middle East and other emerging economies is projected to keep growing — potentially strengthening in China after the Olympic Games — netting out to 800,000 barrels a day in new world oil consumption this year, according to the International Energy Agency.

    A recent IEA oil market report forecasts fresh supply flowing from producers that don’t belong to OPEC will total about 455,000 barrels a day this year and notes “the almost total absence” of the usual seasonal gains in rich-country oil stockpiles in the past quarter.

    “Stocks are very low, demand is holding up and non-OPEC supplies remain very disappointing,” Jacazio said. “In this type of environment, the scale of the move down in prices was really looking overdone.”

    Rally Could Be Fleeting
    The Energy Information Administrations estimates crude prices will average $126 a barrel in the quarter ending Sept. 30, while many Wall Street firms see oil averaging more than $125 a barrel over the same period.

    To be sure, earlier rallies in crude have been followed by stunning declines; a four day rally in mid-July preceded weeks of losses and this climb may prove just as fleeting. Some see today’s prices as unsustainable. Lehman Brothers earlier this month said prices “have peaked for the next few years,” barring supply disruptions, as demand feels pressure and new barrels of oil from Saudi Arabia enter the market. The bank still projects oil will average $130 this quarter.

    Oil’s slide in July and much of August came as large speculators such as hedge funds trimmed bets on higher futures prices, with such so-called “non-commercial” players taking a net bearish position since late July, according to Commodity Futures Trading Commission data. Bentz said the latest rally was accentuated as some sellers were forced to cover their bets as prices rose.

    There are potential factors on the horizon that could fuel the rise. The Organization of Petroleum Exporting Countries next policy meeting is less than three weeks away and oil watchers have already begun to speculate whether the cartel might try to defend triple-digit prices and cut output — even “cut very hard,” as Barclays Capital said in a note.

    Thanks to new production pledged by Saudi Arabia, OPEC pumped 32.6 million barrels a day in July, 235,800 barrels a day more than the prior month, the producer group has reported. The OPEC Secretariat warned in its monthly oil market report of the “potential for a sharp build in crude oil inventories’ given that current OPEC output is “well above the expected demand.”

    Lehman Brothers contends it’s unlikely however, that OPEC would slash output before the U.S. presidential election in November. You can’t say no one saw it coming.

    —By Gregory Meyer, Dow Jones Newswires

  3. 3
    zman Says:

    The inevitable red day. People seem to think Ben’s speech will prop the dollar.

  4. 4
    isleworth Says:

    Z – re GMXR – I’ll take that micro-cap company XOM 😉

  5. 5
    tater Says:

    Not around yesterday. Let me know if anybody wants to see a chart of something. I can probably add it over the weekend. Lots of charts, should be something for everybody. Link below

    WTIC USO UNG XLE XOP XES OIH SPY $USD $GOLD GLD CCJ RIG SLB XOM NOV HAL NBR OII WFT UNT CHK HK XTO NFX PQ CLR KOG SM WLL BEXP GMXR

    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2933882

    (for you gold bugs, not too excited about GLD)

  6. 6
    VTZ Says:

    Thanks tater, now I have something to do if it’s slow at work. I Appreciate the gold freebies too.

  7. 7
    zman Says:

    Me too Tater! How do I vote for you?

  8. 8
    tater Says:

    No biggy on the voting. It is down at the right hand corner of the link. I was trying to get a feel for whether anybody has a need for something like this. Seems everybody just wants to look at gold. Thanks though.

  9. 9
    zman Says:

    Tater – would you be so good as to add FRO and SWN.

    VTZ – I will get back to you over the weekend with questions on your piece.

    Stocks are red across the board but lloks like a little fishing going on

  10. 10
    zman Says:

    Thanks Isle, got you down for it, always good to know someone reads to the end of the post.

    Sam – got any new thoughts on Fay?

  11. 11
    zman Says:

    Fay track: This keeps getting adjusted south
    http://www.accuweather.com/news-story.asp?partner=accuweather&traveler=0&article=0

  12. 12
    Sambone Says:

    Fay – Will linger over Florida for a bit more, then move west, and then north. I don’t see it going into the GOM.

    The one I’m watching is 94L. Not much shear, warm water, heading into moisture.
    New 95L right behind it, but don’t see it doing much.

    Check out this model. 94L could be a monster.

    http://moe.met.fsu.edu/cgi-bin/cmctc2.cgi?time=2008082200&field=Sea+Level+Pressure&hour=Animation

    click “FWD” on right to get the loop.

  13. 13
    zman Says:

    Thanks San, 94 L being mentioned as being watched by traders but your track show it a possible east coast event, no rigs there yet, lol.

  14. 14
    Popeye Says:

    Tater you put a lot of effort into those charts. Very impressive and appreciated.

  15. 15
    Bleemus Says:

    PDC Pioneer Drilling CFO Schuldt Resigns (17.94 -0.53)

    Co announces that its CFO Joyce Schuldt has resigned from the Company, effective August 28. In addition, co’s Director Robert Bunch has resigned from the Company’s Board of Directors, effective immediately. William D. Hibbetts has been appointed interim Chief Financial Officer. Hibbetts previously served as Pioneer’s Chief Financial Officer from December 2003 until July 2007, when he was reassigned to the position of Senior Vice President and Controller for the Drilling Services Division.

  16. 16
    kyleandy Says:

    enter me re GMXR w/ EOG. that makes at least 2 of us that read all the way down!!!

  17. 17
    Popeye Says:

    “This year appears set to be the coolest globally this century.

    Data from the UK Met Office shows that temperatures in the first half of the year have been more than 0.1 Celsius cooler than any year since 2000.

    The principal reason is La Nina, part of the natural cycle that also includes El Nino, which cools the globe.

    Even so, 2008 is set to be about the 10th warmest year since 1850, and Met Office scientists say temperatures will rise again as La Nina conditions ease.”

    http://news.bbc.co.uk/2/hi/science/nature/7574603.stm

  18. 18
    john11 Says:

    I’ll take a flyer on RRC for GMXR.

  19. 19
    zman Says:

    Got you guys there. Not saying they are the first deal out of the gate but they are still screaming cheap, even after the run it has had its not off that much today. Gotta think a Major will pick off something bigger and shaley soon. I’d like to see COP for CHK …they’ve taken on that kind of deal before with the Burlington Resources buy and I think, in hindsight, it worked out very well for them.

  20. 20
    zman Says:

    Got a note that a broker thinks HAL will begin to disproportionately outperform. I have no doubt about that but I’d like to know what will cause the shift in thing. Stock just tried to go green here.

  21. 21
    Sambone Says:

    By Andrew Langley
    Of DOW JONES NEWSWIRES

    MOSCOW (Dow Jones)–As oil markets price in a further downturn in
    already-frosty relations between Russia and the West, analysts see little
    danger to energy supplies from the world’s second-biggest producer.
    Crude futures rose sharply Thursday, with light, sweet crude for October
    delivery settling $5.62 higher at $121.18 a barrel in New York and Brent
    tacking on $5.80 to reach $120.16.
    While the move came against a softer U.S. dollar, geopolitical tensions were
    also in focus following Russia’s military intervention in neighboring Georgia
    and the friction with many Western nations over Moscow’s conduct.
    Indeed, as the rhetoric has heated up – the U.S.’ decision to install a
    missile-defense system in Poland prompted Moscow to promise a response that
    “would go beyond diplomacy” – some traders speculated that supplies of oil and
    natural gas to the West may be in danger.
    They also suggest that Russia – supplier of nearly a quarter of Europe’s gas –
    may seek more of an influence in other former Soviet nations that act as
    transit states for energy deliveries to that region.
    Most observers agree the Georgia issue will damage relations between Russia
    and the West, at least in the medium term. But they believe talk of supply cuts
    is unfounded, highlighting Moscow’s efforts to position itself as a dependable,
    long-term energy supplier to the West and its wider strategic goal of
    integration into the global economy.
    “Anyone who bought for that reason will certainly be disappointed as the
    chances of Russia using oil in this way are absolutely zero,” said Chris
    Weafer, chief strategist at Moscow-based investment bank UralSib.
    He cites Russia’s desire to stand on an equal footing with other members of
    the Group of Eight leading nations, join the World Trade Organization and
    diversify its energy sector inside Europe’s borders, all of which would fail if
    Moscow were to use its energy reserves as a weapon in its wrangling with the
    West.
    “Russia is developing economic ties with the West by using energy as a barter,
    not a threat,” Weafer added.
    Others said fallout from the Georgia conflict could affect energy prices in
    the coming months should a resurgent Moscow turn its attentions to Ukraine’s
    southern region of Crimea, host to Russia’s Black Sea naval fleet and – like
    South Ossetia – home to a majority population of ethnic Russians.
    Ukraine remains a key transit state for Russian energy supplies to the
    European Union, with delivery disruptions in recent years underlining just how
    reliant the bloc is on Russian oil and gas. Kyiv also depends on natural gas
    sales from its neighbor for domestic use.
    “The tensions between the two countries will likely be felt in talks on
    natural gas pricing for 2009,” analysts at Eurasia Group said in a note.
    But in the meantime analysts see the biggest influence on oil prices coming
    from the U.S. currency, which generally moves in the opposite direction to
    crude, whose contracts are priced in dollars.
    “Ten days ago, the Baku-Tbilisi-Ceyhan pipeline (between Azerbaijan and
    Turkey) was on fire, bombs were falling on Georgia and U.S. (crude) stocks were
    reported lower than expected, but the price of oil was moving down,” said
    Olivier Jakob, managing director of Swiss consultancy Petromatrix.
    “The difference between then and now is, of course, the directional move of
    the dollar index and asset allocation linked to it,” he added.

    -By Andrew Langley, Dow Jones Newswires (Nicholas Heath in London contributed to this report.)

    Dow Jones Newswires
    08-22-08 1040ET

  22. 22
    Sambone Says:

    Oil Corrects After 3-Day Rally

    By Brian Baskin
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures dialed back some of the recent rally Friday, as the dollar strengthened against the euro.

    Light, sweet crude for October delivery traded $1.86, or 1.5%, lower at $119.32 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded $1.79 lower at $118.37 a barrel.

    Futures are still trading 7% above the lows hit last week, after rising to a 17-day intraday high of $122.04 a barrel Thursday. Much of Thursday’s rally came as the dollar weakened sharply against the euro. The oil market often takes cues from exchange rates in the absence of news that directly affects supply or demand. Crude priced in dollars also becomes relatively cheaper to buyers using other currencies, making oil an attractive buy when the U.S. currency falters.

    On Friday, the dollar recovered most of what it lost against the euro the day before, and oil began to slide as a result. The euro recently traded at $1.4828.

    Traders also noted that Russia appeared to be complying with a ceasefire signed with Georgia last week, withdrawing more troops Friday. The war earlier this month failed to move the market, but the worsening of relations between the U.S. and Russia that ensued has sent oil prices higher.

    U.S. and European officials continue to trade barbs with their Russian counterparts, which should be enough to keep oil prices from again approaching $110 a barrel, said Tony Rosado, a broker with GA Global Markets.

    “We would need total calmness, no threatening words being spoken to come back off to the numbers” seen last week, Rosado said.

    Analysts said the market is also due for a reality check. After falling 22% since mid-July, crude futures slowed declines last week, and rallied over the last few days. The change in market sentiment came despite no shift in the weakening world oil demand picture.

    “The dead cat bounce theory has more credibility…based on our belief that yesterday’s move was way overdone,” said Edward Meir, with MF Global.

    Front-month September reformulated gasoline blendstock, or RBOB, recently traded down 5.75 cents, or 1.9%, at $2.9877 a gallon. September heating oil traded 5.06 cents, or 1.5%, lower at $3.2500 a gallon.

    —By Brian Baskin, Dow Jones Newswires

  23. 23
    zman Says:

    Text of Ben’s speech at Jackson Hole today:

    (warning, get an extra cup of joe in ya before proceeding)

    http://www.marketwatch.com/news/story/text-bernanke-speech/story.aspx?guid=%7BC4127F6E%2DA02F%2D42FE%2D88E6%2D8C0A88BD7EB7%7D

  24. 24
    Bleemus Says:

    Halliburton: RBC believes HAL could outperform the oil service group driven by solid international growth and limited exposure to spot market U.S. drilling activity; fundamentals look better than stock suggests (45.17 )

  25. 25
    Sambone Says:

    Time – “Is it possible that oil prices are rigged? You bet.”

    http://www.time.com/time/business/article/0,8599,1834888,00.html

  26. 26
    Nicky Says:

    Morning all. Oil has support at 117…needs to hold on a closing basis I would say.

  27. 27
    Sambone Says:

    #23 – From a blog, which I agree with.

    “When you write a speech and you reference yourself in 50% of the footnotes, are you learning anything or just reiterating the fact that you don’t have an f’ing clue?”

  28. 28
    Jason Says:

    I’ll take NFX for GXMR.

  29. 29
    reefguy Says:

    GMX goes to PVA

  30. 30
    zman Says:

    Jason – that’s a pretty good thought. I only like SWN a little better for them myself. I think it will be a non major as they are too small to give any leverage to a large company.

  31. 31
    Nicky Says:

    115.80 most certainly needs to hold…

  32. 32
    ram Says:

    I’ll take CVX to consume GMXR.

  33. 33
    tater Says:

    Thanks Popeye. FRO and SWN added on last page of link. Not too excited about FRO, but that’s what makes a market.

    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2933882&cmd=show%5Bs149259360%5D&disp=O

  34. 34
    tater Says:

    Thanks for #27 Sambone, that is funny!

  35. 35
    Nicky Says:

    Gold made it back to almost the 850 level which had been so key on the downside (December contract anyway). Its key now whether we see this correction play out as a 3 wave move which I would expect. Same with oil – ie a pullback which we are getting and then another leg up…it would be extremely bearish if both just rolled over here…

  36. 36
    bill Says:

    hurricanes re 12

    how about 70 L in 5 days even bigger

  37. 37
    bill Says:

    HK GOES TO CHK

  38. 38
    zman Says:

    Thanks Tater, I took puts on FRO yesterday.

  39. 39
    Eagle Says:

    Z – Longshot at best, but COG takes GMXR in a consolidator play.

  40. 40
    zman Says:

    sorry Bill, Bleemus has CHK

  41. 41
    zman Says:

    Eagle – good thought, I used to follow those guys in a former life. Good company, management a little shuffled since then though.

  42. 42
    teomax Says:

    Zman, just took look on FXEN yahoo message board and there seems to be a lot of people concerned about management touting.
    It looks like a great stock to buy, if proven to be true, but I am not that sure.
    Whats your take on them?

  43. 43
    gbennett Says:

    GMXR gets swallowed by APA

  44. 44
    zman Says:

    FXEN – a few years ago they had the idea of shooting seismic in Poland to tap undiscovered gas reserves. The polish national gas company would drive down the highway with a rig a certain distance from the last well, drive off the highway a certain distance and punch a well. FX thought maybe looking at seismic before you drill might be smart. They made some gas but not a lot that I am aware of, just could never get it off the ground and I certainly would not touch it without taking a fresh look. Management was hungry which is good but over promised and under delivered and I never actually got beyond the modeling stage on them.

  45. 45
    zman Says:

    I’d think PXD might be in the running for GMXR too, need something to get attention to the fact that they are way undervalued to booked reserves, let alone potential.

  46. 46
    zman Says:

    Tater – is that link of yours a permanent one? Can I link to it for the blogroll at upper right?

  47. 47
    zman Says:

    Liking how service stocks have come well off the lows despite oil still down $3. Message starting to get out there that it is ok to fish in this extremely cheap group that doesn’t know a CDO from a hole in the ground.

  48. 48
    Nicky Says:

    Broader market – cycles are pointing to a high which could be in as early as today or stretch into the early part of next week. From there we should see weakness into later in the month.

    I am still looking for a low by the middle of September which should lead to a tradeable rally into election time.

    It appears to me that the low we make in mid September may hold above the July lows – possibly 11100 area on the Dow and 1235 on SPX. I would then expect to see us rally to the 12000 Dow area or above and 1325 on SPX by November. This would then give us a completed ABC correction for for the indices.

    There is an alternative count which calls for a very steep decline in a iii of iii starting from whatever highs we make in the near term time zone. Its not my preferred count due to the position of the cycles.

    Just for reference volume is lighter on this move up today which is generally more bearish than bullish.

  49. 49
    zman Says:

    Thanks for the counts Nicky, nice call on the bounce in crude yesterday.

    More tropical troubles:

    http://www.accuweather.com/news-story.asp?partner=accuweather&traveler=0&article=2

    Oil service names starting to turn positive, SLB, RIG, NOV about to.

    Interesting to see HK $40 calls bid higher on big volume today with the stock off 2%.

    May go ahead and take a little GMXR position.

  50. 50
    rseidman Says:

    Interesting article when you have time:
    Analyst Says ‘Peak Oil Is Already Here’
    Written by Eli Neusner
    Friday, 22 August 2008 11:43
    Jeffrey Brown is an independent petroleum geologist and analyst, who also manages an exploration program in West Texas. He has a major interest in the subject of “Peak Oil” and has used mathematical models to project a very grim future for the world’s oil supply. We caught up with Jeffrey at his office outside Dallas.

    Eli Neusner, reporter, HardAssetsInvestor.com (Neusner/HAI): You’ve published some controversial research in the past. What is the gist of your analysis?

    Jeffrey Brown, petroleum geologist (Brown): The basic thrust of my research is that the world has already arrived at Peak Oil – which is a condition in which the worldwide supply of oil cannot keep up with demand. We have used proven mathematical models to show that the top five net oil-exporting countries – which are Saudi Arabia, Russia, Norway, Iran and the United Arab Emirates, and which account for one-half of current world net oil exports – are showing an ongoing decline in net oil exports, continuing a trend that began in 2006. To give you an idea of where we’re headed, Mexico – another former top producer – will see its oil exports hit zero in 2010.

    Neusner/HAI: How can you be so sure?

    Brown: Because of the models and because we’ve seen it all before. Our mathematical model shows that once oil production in an oil-exporting country starts declining, the resulting decline in net oil exports can be quite rapid, and the oil exporter tends to show an accelerating net export decline rate. It’s irreversible. The top five oil-exporting countries will approach zero net oil exports around 2030, going from peak exports to zero in about 25 years.

    Many large producing regions have shown production patterns that are consistent with the models. The lower 48 peaked in 1970. Texas peaked in 1972. Alaskan oil production slowed the U.S. oil decline, but U.S. oil production never equaled its 1970 peak. Today, Prudhoe Bay, the largest American oil field, is now at about one-fifth of its peak production and declining rapidly. Did we stop finding oil in Texas or in the rest of the lower 48? No. However, it is impossible to replace old, very large oil fields, with a collection of the much smaller fields, such as those we’ve been finding in Texas since 1972.

    Neusner/HAI: Are there other examples of regions that have experienced peak oil production?

    Brown: Yes; just take a look at what happened in the North Sea oil fields, where, despite using the best technology and with no restrictions on drilling, production has been falling steadily since peaking in 1999 at 52% of total recoverable reserves. North Sea oil production is now about one-fourth below its peak. As a result, the United Kingdom, which was a net oil exporter in 1999, exporting more than 1 million barrels a day, is now a net importer.

    Neusner/HAI: But don’t the oil fields of the top five exporters have enough supply to last us for decades? Aren’t they continually finding new oil fields?

    Brown: Unfortunately, whatever new fields come on-line are only incremental improvements in the level of supply. Russia’s big fields are in decline and their new fields aren’t coming on-line fast enough. Russia peaked in the 1980s, then it rebounded and now it’s resuming its production decline. Saudi Arabia showed an uptick this year, but it’s still below its 2005 rate of production. There was a big find in Brazil recently, which some say has the potential for 600 billion barrels of oil. But even that will take 7-10 years to come on-line and it will only postpone Peak Oil by a few years. Brazil is still a net importer, and whatever new oil it finds will go to supporting its domestic economy.

    Neusner/HAI: What does it all mean for net importers like the U.S., and what can we do about it?

    Brown: Oil is basically a horse race between declining demand and declining production, and right now declining production is winning. Declining net oil exports will inevitably result in continued rapid increases in the price of oil. As we all know, the price of oil doubled between May 2007 and June 2008. Over that same period, the average monthly price increase was 6%. Oil’s taken a breather over the past couple of months, but last September and October, oil kicked up 10% per month, and we expect the same this year.

    In terms of what we can do, we’ll have to decrease our dependence on oil and reduce our overall energy consumption. I know I’m not the first person to advocate that, but I’m afraid it’s going to take large-scale measures, including writing off a big swath of our investment in suburbia. That’s a lifestyle that we can no longer support, with its dependence on inexpensive and abundant fossil fuels. We’ll have to reduce our dependence on the automobile and increase our investment in electrified transportation, such as electric light rail, streetcars, commuter rail and subways. We’re going to have to return to the way we used to live: in dense, urban housing along electrified mass transit lines. This, combined with a crash wind and solar power program, as well as a big push for more localized food production, will help us make the transition to our inevitable future without oil.

  51. 51
    Alhambra Says:

    -for GMXR: EP
    Nice work Tater and Nicky, always appreciate your thoughts. And, oh yeah, of course you too Z…

  52. 52
    ddaley Says:

    For what it is worth, the dollar, .DXY, just pulled back from resistence @76.75, (range low is 76),and USO has moved up to its resistence at 95.8

  53. 53
    zman Says:

    Thanks A – gotcha down EP.

    RS – I’m a fan of “peak oil at a price” and not “peak oil as in today, now, I’ve discovered the end of the hydrocarbon consuming world” because it just about never is. What he says is true but it always hurts your case when you point to a black box (mathematical models) and say, “because that thing, which you can’t understand, said so”. He may or may not be right on Saudi. I think at higher prices he will be wrong that this, right now, is the current peak. Over the long term, I think we do augment oil with other fuels as we are slowly moving down that path now. But higher prices will unlock more oil in old fields (high recovery factors) and in new but as of yet uneconomic plays like in Colorado.

  54. 54
    zman Says:

    Interesting…highest I see in the Haynesville Players list.

    http://shortsqueeze.com/?symbol=gmxr&submit=Short+Quote%99

  55. 55
    Dman Says:

    Z – couple questions on COP for CHK or XYZ for CHK.

    1. care to guess where Aubrey’s line in the sand would be on price?

    2. why haven’t the majors done this already? What’s keeping them?

  56. 56
    VTZ Says:

    1 is the answer for 2 I think.

  57. 57
    Sambone Says:

    Off subject – How much money can Uncle Sam borrow?

    http://biz.yahoo.com/rb/080822/autos_bailout.html?.v=2

  58. 58
    zman Says:

    Dman –

    1) probably around $100
    2) They’ve been drilling out of the country for years for oil, less restrictive unless someone steals your project. I think there is also only so much they can tackle given their size and available geo-talent.

    NG just got crushed back below $8 as oil took a dive.

  59. 59
    Dman Says:

    V – yeah, that did occur to me & is reassuring, frankly. No need to sell cheap. NG being knocked down here for some reason.

  60. 60
    bill Says:

    ng is taking a beating

    it cant be fay disapating can it??

  61. 61
    Fred Says:

    Sam – #57 sneaky way to unload their heritage or legacy costs.

  62. 62
    zman Says:

    Size in HK September $35 and $40 calls. Over 15,000 contracts in the $35s today.

    NG to new lows on the contract…expect to see curtailment announcements next week.

  63. 63
    Dman Says:

    Z -#58

    1) that’s what I wanted to hear!
    2) yep, someone stealing your megaproject can ruin your whole day

  64. 64
    zman Says:

    The breakdown occurred precisely on the hour but the next advisory on Fay is not due until 2 EST so don’t think so. Looks like somebody just decided to drop it and oil.

  65. 65
    zman Says:

    KOG down 14% on the completion of their equity deal. Holding the common here is like an option the Bakken play with no expiration. They raised enough cash to get a few horizontal wells drilled.

  66. 66
    Sambone Says:

    * Oil falls as the U.S. dollar recovers
    * OPEC output rising in August – Petrologistics
    * U.S. Labor Day holiday travel expected to fall 0.9 pct
    (Updates prices, details throughout, changes dateline from
    LONDON)
    NEW YORK, Aug 22 (Reuters) – Oil prices fell more than $3
    on Friday in a commodities-wide pullback driven by a rebound in
    the U.S. dollar.
    The declines in the oil market were further encouraged by
    two separate reports Friday showing an uptick in OPEC crude oil
    output and an expected decline in U.S. travel over the Sept. 1
    Labor Day holiday weekend.
    “Crude and products futures are retreating sharply on
    moderate volume after yesterday’s rally, as a rebounding dollar
    and a round of profit-taking are stalling the return of bullish
    momentum,” Addison Armstrong, an analyst at Tradition Energy,
    said in a research note.
    U.S. crude fell $3.07 to $118.11 a barrel at 1630
    GMT, after surging nearly 5 percent in the previous session.
    London Brent crude fell $2.99 to $117.17 a barrel.
    Oil and other commodities lost traction Friday as the
    dollar fought back from the previous day’s sharp correction
    versus a basket of major currencies.
    A weak dollar can raise commodities prices by boosting the
    purchasing power of buyers using other currencies, while a
    stronger dollar tends to have the opposite effect, analysts
    have said.
    Prices were also weighed down Friday by evidence of rising
    supplies of crude oil from the Organization of Petroleum
    Exporting Countries. Industry consultant Petrologistics said on
    Friday OPEC oil output was expected to rise in August by
    450,000 barrels per day to 32.95 million bpd.
    Adding to selling pressure, the U.S. auto and travel group
    AAA said that Labor Day holiday travel was expected to fall
    this year by the largest amount in at least eight years as
    consumers struggle with higher gasoline prices and airfares.
    Oil prices are down sharply from their peaks above $147 a
    barrel in mid-July amid concern high energy costs are taking a
    toll on global fuel demand.
    Friday’s losses came after a big climb in prices earlier in
    the week that was supported by rising tension between the
    United States and Russia, the world’s second biggest oil
    producer.
    Russia said on Thursday it would respond with more than
    just a diplomatic protest to a U.S. deal with Poland to station
    parts of a U.S. missile defense shield on Polish soil.
    (Reporting by Richard Valdmanis; Additional reporting by Bate
    Felix, Santosh Menon in London and Felicia Loo in Singapore;
    Editing by Walter Bagley)

    Fri Aug 22 17:04:19 2008 -GMT-

  67. 67
    zman Says:

    CRR and CLB continue to hold up well. CRR (the ceramic proppant guys) is about to make a new 2 year high.

  68. 68
    zman Says:

    ZTRADE: HK Added to the September $35 call position for $2.15. Over 17,000 contracts have traded today which is not normal. The stock is off 4% with the group and the option prices are not collapsing accordingly suggesting something is afoot. I planned to add back to my position in the name on a red day as per comments yesterday and today is a pretty red day indeed.

  69. 69
    Nicky Says:

    Just listening to Joe Terranova on CNBC Fast Money saying he is long the front of the crude curve expecting the 116 – 117 level to hold as this would just be a normal retracement of yesterdays rally. He then thinks we go to 130.

    I agree with him about the retracement level which is why the earlier figure I gave of 115.80 is so important to hold.

    I am not so sure about the 130 level however.

  70. 70
    Nicky Says:

    Nat gas – the rally yesterday had looked far from convincing and the ending pattern for the low was also less than satisfactory and somewhat contrived.
    I had either 7.8 area or somewhere between 7.360 and 7.5 level for a low…
    Is nat gas telling us that oil may roll over too I wonder as I hadn’t like the ending pattern for that either!
    Metals holding up pretty well I think considering the rally in the $, that said they hadn’t staged much of a bounce after the huge falls…

  71. 71
    ddaley Says:

    Nicky,
    If I can add to that. The FM coments also went on to speak of a decoupling of most previous couplings. XLE -XLF, DXY -USO, etc. If I got it right, the dollar is likly to continiue rallying and oil move up at least short term.

  72. 72
    zman Says:

    The end of duracel?

    http://news.yahoo.com/s/afp/20080821/ts_afp/usitinternetenergychipcompanyintel

  73. 73
    BeWater Says:

    Great, ratchet up the power of emag radiation in my home. Just what I want. I’ve worked around high power RF generators, and I swear you can feel yourself going sterile just standing around them.

  74. 74
    mahout Says:

    Dman,

    “The line in the sand” for Aubrey has interested me for some time. I am a long time holder of CHK. If you don’t mind I would like to comment.

    First of all I expect CHK to be selling for a good chunk higher than it is now by the time a bid is made for it. Uncertainties concerning the coming election, government policies and lack of stability in crude prices (not NG prices so much, I expect them to be OK) may be cause for a pause in the acquirer’s trigger pulling.

    Secondly, CHK would be quite a prize for any acquirer. It would have to go at a very healthy premium.

    Thirdly, CHK is Aubrey’s “baby”! It will be very difficult for him to let it go. He will try hard to hang on to it by asking for a heavy price.

    Therefore, I think Z’s estimate of around $100 is pretty good for a first offer. I am biased but I do think it’s worth $150 on the long view. But he won’t get that much. An initial bid will not be the final bid and it may attract competing buyers once it’s in play. Bottom line, I expect it might be taken at $115.

  75. 75
    zman Says:

    BeWater – so maybe a short of those vasectomy clinics.

    Nicky – crude not looking to hold 117 or 115.80.

  76. 76
    ddaley Says:

    What is the possible implications of this HK move. 35’s are now at 23,150?

  77. 77
    zman Says:

    DD – rumor of takeout I would guess although I have not heard as much. My $40 calls are bid UP on the day with the stock off 5%. Note volumes are very low in the common of CHK and HK and the rest today. Monday’s aren’t called Merger Monday for nothing and everyone is looking for a deal, looks like people think it is HK. The stocks can’t escape the pull of oil, now down $6 into the close of NYMEX but options activity is often more indicative of a deal than the common. I would imagine they have a heat seeker alert going at Najarians shop right now on HK.

  78. 78
    zman Says:

    And with all that said in 77 I should add that the odds are there won’t be a deal. If there is look for massive pops in everything from SWN to GMXR to GDP…kind of depends on the buyer as to moves in the larger cap names like CHK.

  79. 79
    ddaley Says:

    Thanks, Z.

  80. 80
    zman Says:

    DD – no problem, gives one something to ponder over the weekend.

  81. 81
    Nicky Says:

    Z – many technicians would have been following the same levels as him – once they didn’t hold then watch out below. That is an absolutely huge move down it goes without saying.

  82. 82
    Sambone Says:

    DJ OIL FUTURES:Crude Heads For Largest 1-Day Dlr Drop Since 1991

  83. 83
    Nicky Says:

    Dman – I thought their comments a little odd on the decoupling to be honest.
    If the energy markets can make lower lows from here and nat gas has so far only tested that low, then it points to the fact that in fact what we saw yesterday was ivC completing and we are now in v down and still have ii up to come. Yesterdays rally simply did not take up enough time for a wave ii imo.
    The wave count has been really tough the last few days. Yesterday I wanted to believe we were still in iv but it was such a huge rally it really tested my resolve and it started to look like ii was underway. Some may argue this is b of an abc up but pattern doesnt look right to me for that and I would have to favor lower lows first.

  84. 84
    Nicky Says:

    I should add that ii is either going to be ii or B but either way will be a good rally.

  85. 85
    1520sbroad Says:

    76,77 – wow. someone is putting in a big bet. the one day chart looks like it is someone leaking in. Several trades of 2k + contracts. the 40s have done 4k+ in volume too.

  86. 86
    1520sbroad Says:

    does anyone see unusual put volume anywhere in the mid major space – DVN, CHK, APC, APA?

  87. 87
    zman Says:

    CHK has the biggest volume on puts at the 47.50 level of all the LC ep’s but it’s not that big.

  88. 88
    1520sbroad Says:

    xto sept 50 puts have a little bump in volume today. all i can find.

    xto for hk?? not likely but something is up with those hk calls.

  89. 89
    zman Says:

    1520 – can’t say I mind, my 40 calls are bid up 25% on the day with the stock down 4%. Stock starting to lift a bit.

  90. 90
    1520sbroad Says:

    that is najarian and co bumping those 40s.

    i wouldn’t mind either. we’ll see.

  91. 91
    Sambone Says:

    NEW YORK (Dow Jones)–Crude oil futures nearly erased a week of gains in a
    single trading session as the strengthening dollar prompted a steep decline.
    Light, sweet crude for October delivery settled $6.59, or 5.4%, lower at
    $114.59 a barrel on the New York Mercantile Exchange. Brent crude on the ICE
    futures exchange traded $6.35 lower at $113.81 a barrel.
    The plunge was the largest in dollar terms since Jan. 17, 1991, when oil fell
    $10.56. After rising nearly $10 over the course of the week, oil prices now
    rest less than $1 above the Aug. 15 settlement.
    Traders blamed early losses on the strengthening dollar and Russia’s pullout
    from Georgia, but few were willing to peg the entire move on either factor.
    Technical forces, including a relatively small number of trades and the
    breaching of several closely watched price levels, may have added to the
    declines.
    “Thin volume on the way up, thin volume on the way down,” said Tony Rosado, a
    broker with GA Global Markets.
    The dollar strengthened against the euro Friday, a move that can prompt
    investors to sell oil priced in the U.S. currency. Big swings in one market
    often lead to similarly dramatic shifts in the other, as large investors
    attempt to balance the two in their portfolio.
    Futures also shed some of the “risk premium” built up this week, as traders
    had gambled that tensions would escalate between the U.S. and Russia over the
    latter’s occupation of Georgia. Russia had talked earlier in the week of a “new
    arms race” with Europe and the U.S. over the placement of a U.S. missile
    defense system in Poland. But the country appeared to make progress withdrawing
    its forces from Georgia, after signing a ceasefire last week.
    Oil’s declines on Russia and the dollar were accelerated as many investors use
    “stops” at certain price levels, which result in automatic selling.
    “Once it gets rolling you sart triggering stops and things like that,” helping
    to accelerate the decline, said Tom Bentz, a broker and analyst with BNP
    Paribas. “After yesterday’s rally most people expected the market to perform
    better today, and it just isn’t happening.”
    Front-month September reformulated gasoline blendstock, or RBOB, settled 17.66
    cents, or 5.8%, lower at $2.8686 a gallon. September heating oil settled at
    $3.1311, down 16.95 cents, or 5.1%.

    -By Brian Baskin, Dow Jones Newswires
    Dow Jones Newswires
    08-22-08 1507ET

  92. 92
    rkbos Says:

    Anybody here ever heard of Dan Rice, nat. resource fund mgr ?

  93. 93
    Dman Says:

    #72:

    quote:
    “It turns out the human body is not affected by magnetic fields; it is affected by elective fields. So what we are doing is transmitting energy using the magnetic field not the electric field.”

    Um, huh?

    1. Magnetic fields do affect biological systems. Not as straightforwardly: you don’t get a “magnetic shock”. But magnetic fields induce currents in the body and there are more subtle effects, not well understood.

    2. Maxwells Equations say that if you have a fluctuating magnetic field, you get a fluctuating electric field as well.

    I think I’ll stick with a battery instead of living in Intel’s magnetosphere.

    But I do like this quote:

    “Previous wireless power systems consisted basically of firing lightning bolts from sending to receiving units.”

    OK, so it’s a slight improvement on that. I guess.

  94. 94
    zman Says:

    I’ve done some work for Dan in the past, very smart guy.

  95. 95
    sane Says:

    #72

    I saw some cool possible applications of that technology. The one that most interested me was in cars where the resonance generator was embedded in the street and the car was constantly charged by it.

    Dman,

    Magnetic effects, yeah I have to agree with you. When I was back in college I watched a couple of guys levitate small insects in a 12T magnetic field and wondered what the ramifications are of magnetizing atoms in the body that are not normally magnetic. Especially on a longer lived organism such as a human.

  96. 96
    Dman Says:

    Z – If the likes of NFX or SWN were to aquire something, as mentioned earlier, how would you expect the stocks to react & how long would the “digestion process” be for their stock?

  97. 97
    zman Says:

    RKBOS – 94 was for you, why do you ask?

    Dman – impossible to say without seeing the deal. Most likely negative at first but it depends on what they pay for it and what it is.

    HK options moving right on up. The $40 September calls are up 50% on the bid today with the stock still off 2%. Wow.

  98. 98
    jsaun14 Says:

    Is it too late to find an entry point or will the HK’s collapse Monday morning if there is news? Would some Oct’s be interesting?

  99. 99
    jsaun14 Says:

    #98 – that was supposed to be “no news.”

  100. 100
    zman Says:

    JS – if the open for the group is ok on Monday I would think that the $35s will be ok w/o a deal. The $40s likely sink back some. I think the stock is unlikely to go but will hold on to my common and 40s and 35s just in case. If it does go, the mad money trade is in the 45s and 50s as it will carry a heck of a premium, probably 50% so there’s your leverage. Octobers of course safer.

  101. 101
    Sambone Says:

    Z – Bad news! I understand that most excellent actress “Denise Richards” show “It’s complicated” is going to be cancelled. Wow, I Tivo’d them all to keep forever and will really miss her!

  102. 102
    reefguy Says:

    sidebar- denise richards….

  103. 103
    Sambone Says:

    NEW YORK, Aug 22 (Reuters) – Noncommercial, or speculative,
    investment funds on the New York Mercantile Exchange increased
    their net short natural gas futures exposure to a record high
    for a fourth straight week, the Commodity Futures Trading
    Commission said in a report on Friday.
    For the week ended Aug. 19, the report showed funds added
    17,907 contracts to their net short positions, increasing the
    total to a record 147,136 contracts and eclipsing the previous
    high of 129,229 contracts set the previous week.
    Noncommercial speculative traders increased their total
    short futures exposure by 2,609 contracts to 348,339, while
    they sliced 15,298 longs, decreasing total length to 201,203.
    The largest net long futures only position ever held by
    funds was 55,495 in August 1999.
    For the week ended Aug. 19, total natural gas futures open
    interest, or the number of longs or shorts outstanding, fell
    14,856 contracts to 907,257.
    (Reporting by Joe Silha)

    Fri Aug 22 19:51:10 2008 -GMT

  104. 104
    Dman Says:

    HAL chart looking nice here

  105. 105
    jsaun14 Says:

    Z- Does the recent secondary add skepticism to rumors of a deal?

    Sam – try to “Keep Up w/ the Kardashians.”

  106. 106
    zman Says:

    I have starship troopers on Blu Ray

    Sambone – thanks for that last.

    Gas rig count up another 8 …no reaction to gas so far.

  107. 107
    Sambone Says:

    J – Another FINE show. I just love Denise Richards though.

    Tini time

  108. 108
    zman Says:

    JS – not really, you get the cash when you buy it so I’d think no issue there.

  109. 109
    zman Says:

    IneedaBeerThirty!

  110. 110
    ddaley Says:

    HK stopping at today’s pivot @33.5

  111. 111
    Bleemus Says:

    If HK did get taken out by another player what do you think the bid would be?

  112. 112
    Dman Says:

    Broad market up on oil fall, if we believe the wire services (yeah right). But *yesterday*, oil was up big & broad market OK with that. Hmmm.

  113. 113
    zman Says:

    Bleemus: minimum $50 bid and that deal would not get done. Probably $60-65 and they are gone.

  114. 114
    Bleemus Says:

    oops, missed your earlier post, disregard my last one!

    Tini time!

  115. 115
    Bleemus Says:

    Thanks Z. Good weekend to all!

  116. 116
    rkbos Says:

    Z – re HK: I heard that he has a position in it

  117. 117
    zman Says:

    Re Dan Rice:

    http://query.nytimes.com/gst/fullpage.html?res=9F0CE4DA143BF936A15757C0A965958260

    I did some work for him on natural gas demand 6 or 7 years ago. Very well thought of guy, has 2.16 mm shares of HK at last check, but that’s off 1.4 mm shares during the 2Q…guess he saw the pullback coming.

  118. 118
    bill Says:

    hk was down today 43 cents today but it s sept 35 option was up 40 cents on 27,000 contracts

    can anyone explain why an out of money call goes up when the stock goes down?

  119. 119
    zman Says:

    Bill – the only thing that does that is demand for the option itself which was inspired by takeout rumors. The common equity volume was thinnish until late along with the rest of the group as many Wall Street types are on vacation. But the option demand was pretty strong and I had trouble splitting the bid/ask on the $35s I added this afternoon. The only time I see this is when there is a pretty strong rumor of takeout. Does it happen, dunno, but that’s what drove those options. The September $40 calls ended the day up 56% on the bid with the stock down. Fun, fun, fun.

  120. 120
    bill Says:

    seems like you already noticed it

    it would be just my luck if they were taken out i just hedged all my long shares with shorting the calls so yep a takeover is in order

  121. 121
    bill Says:

    ive never seen this before in any stock

    thanks for the answer

  122. 122
    zman Says:

    Bill – options guys are usually wrong but in this case, that is a big pot full o options so I thought I’d stick it out.

  123. 123
    bill Says:

    the model shows a huricane next week off bahamas

    http://moe.met.fsu.edu/cgi-bin/cmctc2.cgi?time=2008082200&field=Sea+Level+Pressure&hour=Animation

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