26
Feb

Wrap – Week Ended 2/25/11 (In Progress)

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Holdings Watch - last week's closed options trades: 

    • CHK – Sold the (20) $36 strike March calls for $0.64, up 120%.
    • CHK – Sold the (10 of 20) $34 strike March calls for $1.48, up 111%.

 

Housekeeping Watch:

  • Note that ZLT and ZIM portfolio positions are updated on the ZEB Positions tab and that the month end performance letter for the month of February will go out on Tuesday (See Letter From Z tab at upper left on the site for updated charts on Tuesday). Please also note that options are risky and only a very small portion of our focus. 

 

Nutbag Watch: Libya. Clock very much ticking for M.Q. and it's not likely that it will be the U.N. sanctions that remove him but instead the will of the people. Very ugly.  Attacks on oil infrastructure are going to be increasingly likely and the regime has threatened Hussein style scorched well tactics.

Nutbag Watch: Iraq. Protests spread to Iraq late in the week. Separately, last night we saw an attack on a unit of Iraq's largest refinery (150,000 bopd throughput, or almost 1/3 of the country's entire currently operating refining capacity)  that shut it down.

Articles of Interest This Past Week (or so):

  • BEXP's Strong Quarter - 4Q Results - to get the full effect here you really need to be a subscriber to see the running commentary during the conference call. We continue to own it as one of our largest positions in the Zman Long Term Portfolio.

 

 

29 Responses to “Wrap – Week Ended 2/25/11 (In Progress)”

  1. 1
    David Says:

    Take a look at Debkafile.
    Iraq's largest refinery blown up by Al Qaeda today.
    http://www.debka.com/article/20710/
    Result? Call options?
     
    DJHurd

  2. 2
    zman Says:

    Thanks David. The impact of the Iraqi refinery on physical global volumes won't matter, unless you live there, but it will be another psychological notch for regional tensions. The Saudi protest deal might be a bigger deal for oil prices on Sunday night but I don't expect any kind of disruptions out of Saudi over them, just more $ being given to appease the unemployed masses. 

  3. 3
    Zorgnak Says:

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    The E&P Growth Index and Gas Stock Index project is coming along as time allows. Here’s a first look at where I’m at with it.  It’s going to be a work in progress for a little while but I’m finding some possible edge/value in having information that pertains directly to the groups of stocks we trade every day and the individual stocks within the indices.
    The attached E&P Growth Index chart is made up of 52 E&P stocks that were suggested by the members of the group. If you have comments please let me let me know.
    APA APC AREX ATPG AXAS BBG BEXP CEO CLR CNQ CRZO CXO CXPO DNR DVN EGY EOG EXXI FST GDP GMXR GST HK KOG MHR MMR NBL NFX NOG OAS OXY PBR PETD PWE PXD PXP REXX ROSE RRC SFY SGY SM SSN SU SWN TPLM TRGL USEG VNQ WLL XCO XEC
    Chart   http://img239.imagevenue.com/img.php?image=38974_EPGrowthIndex_122_515lo.jpg
     Chart key
    1.       Upper pane is On Balance Volume( OBV)
    2.       Blue horizontal rectangles on the right edge = the volume at each price.
    3.       Red vertical lines = % of stocks >5 day moving average => 90%
    4.       Green vertical bars = % of stocks < 5 day moving average = <20%
    5.       Red horizontal bars = swing highs.
    Note these studies are preliminary and are only shown to suggest how they may useful in this current bull phase. As I have time to refine and test the parameters in bull/bear and less directional markets I’m sure there will be adjustments.
    I noticed that….
    1. Breakouts led by higher OBV tend to be more successful.
    2.When the % of stocks > 5 Day Moving Average > 90% the index tends to flatten or dip to support.
    3.When the % of stocks <  5 Day Moving Average =< 20% the index tends to find support. My favorite.
     
    I’ll have the Gas Stock Index out next. I currently have 12 stocks in this group. Suggestions for additions are welcome. I’m trying to capture the difference in gas stocks relative to general E&P names, if one exists. So far the evidence shows it does.
    CHK CRK ECA GDP GMXR HK MCF PVA QEP RRC SWN UPL
     
    Comments or suggestions are welcome.

  4. 4
    Zorgnak Says:

     Gas Stock Index  Notes…Low volume approach to  resistance . OBV falling, Advancing Volume 53 million vs 80 million at previous swing high. 5SMA % > 90% currently 83%. Upside possible but limited in the short term unless volume expands significantly.

    http://img103.imagevenue.com/img.php?image=49509_GasStockIndex_122_1130lo.jpg
    Chart key
    1.       Upper pane is On Balance Volume( OBV) /Currently Falling
    2.       Blue horizontal rectangles on the right edge = the volume at each price. Still In congestion. Long term resistance at 33(Not shown on chart)
    3.       Red vertical lines = % of stocks >5 day moving average => 90%  Currently 83% One more day of upside would do it.
    4.       Green vertical bars = % of stocks < 5 day moving average = <20%
    5.       Red horizontal bars = swing highs. Approaching Resistance/Previous High on lower volume and fewer stocks above 5SMA  At 33

    I noticed that….
    1. Breakouts led by higher OBV tend to be more successful.
    2.When the % of stocks > 5 Day Moving Average > 90% the index tends to flatten or dip to support.
    3.When the % of stocks <  5 Day Moving Average =< 20% the index tends to find support. My favorite.
     
     
    http://img103.imagevenue.com/img.php?image=49509_GasStockIndex_122_1130lo.jpg

  5. 5
    Zorgnak Says:

    E&P Growth Index
    Bullish Percent Index
    http://img265.imagevenue.com/img.php?image=52181_EPGrowthIndexBP_122_171lo.jpg
     

  6. 6
    dij Says:

    Zorg;
    Re: 5, I have some trouble reading the bullish percentage.  If at the top, it is ready for a fall, as I remember. Is that right?  Indeed, it is already drooping.
     
    Thanks

  7. 7
    Zorgnak Says:

    re 6
    dij
    Take the BPI chart as an example only at this point. The box and reversal settings may not be the correct ones. Zorg doesn't use PNF at all and barely knows the basics. Perhaps JB or someone else may be able to suggest how to set it up properly or say whether it has any value at all for this group of stocks.
    Best, Zorg
     

     

  8. 8
    Zorgnak Says:

    As oil prices rise, the global transition back to coal accelerates.
    Today's prices for a million BTU | brent oil: $19.33 | wti oil: $16.94 | natgas: $3.80 | capp coal: $3.10 | prb coal $0.80
    2010 USA energy consumption rebounds, YTD vs 2009,  | Oil +1.421% | NatGas +4.543% | Coal +6.049% |
    Gregor McDonald

  9. 9
    dij Says:

    Zorg, Thanks for #7.

  10. 10
    1520sbroad Says:

    Front page New York Times article today on fracking – obviously they are watching the Marcellus closely due to regional interest.  You can't miss it at http://www.nytimes.com – right in the middle of the page at the moment.  The caption to the picture on the site is a little off — that isn't Philadelphia in the picture… some of the reader comments to the article are interesting.  Clearly these folks saw Gasland.  www.nytimes.com
     
    All that said i think there is some traction for the clean frac group – particularly in the Marcellus if for no other reason that the large population centers nearby and the amount of public scrutiny that is going to be leveled against the oil and gas industry.

  11. 11
    choices Says:

    http://www.nytimes.com/2011/02/27/business/27kroll.html?pagewanted=3&_r=1&hp
    More credit rating agencies-the money is good-not sure about the quality of the product:  Meredith Whitney, Kroll, etc-cannot be any worse than the two enablers, S & P, Moody's.  Fitch seemed to be just slightly a cut above.

  12. 12
    Zorgnak Says:

    Any additions/deletions to the  the Bakken and Haynesville names?
    /Bakken/
    BEXP CLR COG CXO EOG HES KOG NFX PVA SM THE WLL
    /Haynesville/
    APC CHK COG CRK CWEI DVN EAC EOG FST GDP GMXR HK PQ PVA SD SM XCO
     

  13. 13
    redjack Says:

    Zork..ECA in the Haynesville
     

  14. 14
    zman Says:

    Interesting stuff Zorg
    Full Bakken list:
    AXAS, BEXP, BSCI CLR CRED CXO EOG GEOI ICPAX
    KOG NFX NOG OAS ROSE SDCJF SM SSN TPLM VYOG WLL
    I'd probably remove AXAS BSCI CRED ICPAX SDCJF SSN from that. 

  15. 15
    zman Says:

    Eagle Ford List

    APC CHK CXPO EOG GDP HK MHR NFX PXD PXP SFY ROSE SM and then a whole host of little dudes who are just getting started like GST, LEI, GEOI

  16. 16
    zman Says:

    Crude up $1.15 at $99 in Sunday night trading. 

  17. 17
    zman Says:

     

    Listening to the BEXP Q&A now, will have annotated comments in the Monday post, good stuff so far and the stock liked it post call on Friday. Will be an interesting year as they are looking at a number of horizons above the Three Forks and Bakken now …. so good acreage gets better. 

  18. 18
    Zorgnak Says:

    14
    Just so I'm clear the Bakken list would be…BEXP CLR CXO EOG GEOI KOG NFX NOG OAS ROSE SM TPLM VYOG WLL ?

  19. 19
    zman Says:

    re 18 – maybe drop TPLM for now too. They are just getting started, it just depends on how inclusive you want to be. NOG, VYOG and TPLM are all non-operated now. TPLM plans to add acreage fast and operate in the future so maybe you keep them in, just depends on what you are trying to represent. CRED has a few acres, is thin, and moves like crazy on single well results so I'd say leave them out. GMXR has quite a few acres now, just not drilling until late this year. 

  20. 20
    Zorgnak Says:

    19
    Thanks Z

     

  21. 21
    ram Says:

    CL@99.62 with 10,700 contracts. Did some other shoe drop?

  22. 22
    zman Says:

    re 21 – see 1 above. First protests in Saudi, now Oman as well. 

  23. 23
    David Says:

    This is not exactly insightful, but I noticed that the BAKKEN players are going to open green.
     
    DJHurd

  24. 24
    choices Says:

    http://www.shtfplan.com/
    web site designed to help one sleep at night-e. g. gold confiscation (Feb 18), faber (22 Feb), Celente (25 Feb)-heh-I guess the gloom talk will become the fodder if not already of talk shows, blogs, etc-note to self:  need to keep a steady hand and head, plan, and don't run off half cocked.

  25. 25
    zman Says:

    Oscar for documentary goes to "Inside Job" about Wall Street… at least it wasn't GasLand. 

  26. 26
    blackgold39 Says:

    re 15 – w/ over 1.5MM acres under lease, you get all comers in the EFS

  27. 27
    RMD Says:

    In NZ for another week.  Loving it. I should stay away more;  last week was very OK even with the early week swan dive.  Someday energy stocks will correct 'cause they got too high, but new highs argue that it is not now.
    CRED's new Letter to Shareholders has nothing new, does distinguish itself with 4-5 typos (or at least that's what I found on their website).   That about fits with their shareholder relations program as I now understand it. Posting on Seeking Alpha on CRED is uninformed imho.
    Cheerio.

  28. 28
    West Says:

    #18….Zorg appreciate the great chart work…CXO is selling their Bakken acreage and will probably close transaction in March. They will be a pure Permian Basin play after the close… Is there any way to refresh your charts after they are posted? Thanks again.

  29. 29
    Zorgnak Says:

    28
    West, Thanks for the kinds words.
    The charts I post are snap shots that I upload to the web pages you're accessing. They cannot be refreshed but I'm happy to post updated charts on request as time allows during the day.I get a lot out of this site and I I'd like to continue to give some back where I can.
    The only way I know to  have the ability to construct  the type of real time Volume Profile charts that I post would be to subscribe to  Investor/RT Pro and have access to data feeds that are accurate with actual real-time (not snapshot data)  down to the tick.
    There are some less expensive software and data feed options that might work for you . The trade off would be less precision and more workload.

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