Friday – No, No, No! Don’t Let The Weekend Come!!!

Last week I had several days where I said, "let's do that again, let's do exactly that." This time I really mean it! We had a great day in a few key names while the broader maker got sacked.  I raised a bit of cash yesterday but remain positioned for further moves as you can see below.
Holdings Watch: Busy Day.


  • (NFX) - Sold the $45s bought on 7/25 for $3.20 at $6.10, a 91% one day gain when the stock was at it's peak just after the conference call. I just couldn't pass the chance to take a near quick double here when the shares had done everything I had expected of them. See Newfield call thoughts below.
  • (NFX) - Later bought the $50s for $1.00 when the stock tanked on the broader market drop. See Shameless Plug Watch next.
  • (NFX) - Finally, sold half of the $50 strikes bought in the preceding line for $1.80 about an hour and half later. Last bid on remaining half: $1.15. This morning no upgrades yet: I'm looking at you Credit Suisse and you Keybanc.

Shameless Plug Watch: (Can I help it if people say the nicest things?)

zman Says: TRADE: NFX $50s for $1. What a gift!

Eric C Says: Z- I hear you on the NFX gift. I picked up the NFX 50’s for $1 at the open and doubled my money. After the drop I picked up the same calls at the same price and it looks like I’ll double my money again before lunch!!! Thanks again. 

zman Says: Eric C - Congrats, just saw your post! you know how to reserve your spot, right? lol.

Eric C Says: Z - Re #59 Yep! Just did it!

Eric C Says: Z- Unbelievable!!! I did not want to be a pig on the NFX 50’s so I got out the second time at 1.35. But now I could not resist a third run and got back in at $1.00 I hate to leave my laptop as I am on vacation but family comes first. This vacation is already paid for as of this morning!!!

Makes all the late night typing worthwhile. Thanks Eric and Have A Great Trip!

Sidebar #2: The Importance of a Hypothesis. Yesterday's volatile action in the market and in Newfield's stock price pre and post conference call are a perfect illustration of the importance of having a hypothesis. The hypothesis supports and directs my actions. The charts help but only to an extent (sometimes when to buy, almost never what to buy). Here's how I thought about the Newfield action yesterday.

A) I've been saying for weeks/months Newfield should have a good quarter. You can read all about it in the last several posts and form months back on the reports tab. In a nutshell they've been doing the things they need to do to unlock value: cut costs, insure repeatable success, maintain swing for the fences potential while peeling away divisions that don't fit a longer reserve life, lower cost structure, or aren't exactly opportunity laden. They've done a good job of maximizing value in the areas no longer deemed to be core just as those assets reach the auction block. They stepped up to the plate in new plays as a leader much like larger, more household name type E&Ps who constantly talk about growing gas production in ads on TV have done in the past. They are diligent in their science and disciplined with their capital....I could go on but this sounds like an ad. Anyway, I like them. I'll work up something from my call notes for the weekend.

B) Hypothesis confirmed. And the quarter had all of the hallmarks I was looking for as I detailed Wednesday night here.

C) The Street seems largely asleep at the wheel as to the potential here. Maybe they're too busy doing deals. Maybe they haven't noticed the shares aren't priced for the growth rate or its probables, or that it has recouped the hit it took in the Gulf of Mexico in 2005 all the while assembling a string of successes in the Deepwater. Maybe they're just used to the old Newfield who did well in S Texas and here and there but had rising costs and a missed earnings number now and again. Who knows what their problem is. The point is they were paying attention to the best call NFX has had in years.

D) Then the market fell apart. Exxon had already reported and disappointed on weak natural gas numbers  (which is more of a problem when you don't really plan to grow volumes) and then mortgage problems came out (again) and the markets sold off hard. This was probably 30 minutes after NFX's conference call. NFX plummeted from up 7+% to flat in a matter of about five minutes.

E) With hypothesis in hand, confirmed by both the press releases and the conference call, I said the firesale is a gift. If I didn't have my hypothesis in hand that minute chart blows me up. I panic, assume some analyst at Churnem Burnem No Learnem has squawked something bad, and sell out. If you don't do the homework and only rely on the minute chart, you would have gotten burned.  We instead made nice gains on the pop from earnings, got an intraday 80% gainer and are left positioned for this morning's follow through with a position that the House paid for.

CALLS Continued:

  • (HAL) Bought the August $35s for $1.90 late in the day when the DJIA was down 365 points. Last bid $2.25. Still own the $37.50s which went from a 30% gain to 30% underwater during the course of the day. Would I add more at these levels? You betcha but I'll wait and see how the broader market looks before I leap.
  • (VLO) Bought the August $70s for $1.80. Last bid $2.30. Yes, I do mean CALLS here. This is the best and cheapest of refiners and at 7.0x 2007 estimated earnings and 8.3x 2008 I'm happy to chance a flight to quality as people reshuffle their (remaining) 2007 refinery profits but stay in with some refining exposure. The news that (SUN) wants to increase it's capacity last night and would consider a JV may spell a little rebound for the group. Will I add more today on this opener? Ask me in comments but it depends on the broader market aand how the FBR downgrade of the group affects them (see Analyst Watch below). (VLO) hasn't been this cheap in quite some time and as my regular readers know I prefer to wade back into possible reversals and not jump in looking for a V-shaped recovery...in most cases the second part of the V snaps off leaving you bewildered wondering why you bought back in so soon. If RBOB decides to break lower this bet will come off the table faster than Cramer can scream sell, sell, sell but it will be the first refiner that I own for the longer term and not just a trade when things settle down a bit.



  • (TSO) Sold the August $55s for 5.90, a 97% gain since 7/20.
  • (FTO) Sold the August $40s for $3.20, a 121% gain since their purchase on 6/27/07 and a 64% gain on the ones bought yesterday.  I had given the first ones up for dead a while back and refused to double down until the group started moving my way. The massive sell off gave me a nice gift here. I still hold the August $50s; cost $2.90 from back on 7/12/07, last bid $11.10.
  • (NBR) Sold the $32.50s bought on 7/13/07 for $1.60 in preparation for their conference call. Closed out for $2.70 with a 69% gain.

Open and Closed Positions have been updated and can be seen here.
Stocks We Care About Today:

  • (NFX) signs deal with CNOOC (CEO) for exploration in the South China Sea. Seven year license for exploration on Block 22/27.
  • (BHI) meets reduced estimates at $1.09, adds an additional $1 B to its remaining $1.26 B buyback plan.  CC at 8:30 est.
  • (CVX) - earnings today, no report yet.
  • (PTR) - Buffet peals back stake from

Natural Gas Report Summary: RECORD GAS IN STORAGE: Yawn, No one cares. Actually we got another reclassification from base to working gas; this time 7 Bcf was reclassified so perhaps when you back out that 7 Bcf from the 71 Bcf pull reported you get 64 Bcf which is line with the 65 Bcf traders and analysts were guesstimating and ta-da,  everyone's a winner!  I was at 80 Bcf if you're keeping score. See all the numbers and storage graphs here.

Gas couldn't have cared less about the number or the hitting a new storage record. August natural gas closed up just under 2 cents at  $5.943.

In the next few weeks gas prices may not be so complacent as storage goes up against a string of easy comps from a year ago. (19 Bcf, -12 Bcf, 37 Bcf) as last year we were experiencing what's known as summer at this time. In fact, the Edison Electric Institute, EEI, reports generation is off 8.7% relative to year ago levels which were then a record.


Tropics Watch: Seems like a good time to throw this in. Four waves, nothing real promising.

Odds & Ends

Analyst Watch: FBR cuts the refiners to market perform (better late than never!); looks like the downgrade includes (FTO), (HOC), (SUN), (TSO), (VLO).  (COG) raised to outperform at FBR.

Stranded gas to be used for oil production. National Energy Technology Lab, NETL, figures 28 mm barrels of oil in the US could be produced utilizing stranded gas for distributed power generation at marginal wells.  As of April the U.S. was producing 5.2 million bopd and using NETL's figures this could add a very significant 1.5% to domestic production. Stripper well fans rejoice! There's probably a play here in a few smaller public companies of the single-digit midget variety but I'm loath to post their names. I'll look into some real names among the majors and E&Ps this weekend for fun.

Cantarell Production Slips Again. Production fell to 1.57 mmbopd in June from 1.579 in  May. Note to Mexican Congress: Better open for gringo investment soon Señors.

92 Responses to “Friday – No, No, No! Don’t Let The Weekend Come!!!”

  1. 1
    ndog Says:

    tso dropping again. took my puts off to early…

  2. 2
    zman Says:

    ndog – FBR cut the sector this morning. As VLO and TSO have gotten relatively cheaper I think they don’t have as far to fall. Still TSO like to go tap on $45 at some point soon before getting a bigger bounce than it did from $50.

  3. 3
    codydog Says:

    just wondering here how many busted trades and how big the unreconciled trade list is at major brokers this am…not seeing the usual flood of econ/mkt comments rolling into my email

  4. 4
    ndog Says:

    appreciate it zman. just found your site off a recommendation after I bought and sold the puts. would have made a bit more if I had been reading your advise earlier. i’m tracking you now though 🙂

  5. 5
    zman Says:

    CVX with BIG BEAT:

    $2.52 vs 2.32 Consensus.
    Revenue of $56B vs expectation of $50.

  6. 6
    zman Says:

    ndog – Welcome aboard and glad you like the site! No advise here, just telling yall what I’m doing and thinking. 🙂

  7. 7
    zman Says:

    Morning Cody – don’t know but it’s got to be extensive.

    So the logic for downgrading the refiners on a Friday week’s after I said things looked bad is what again FBR?

    I’m still in puts on FTO but I have calls on VLO which has gotten a little more attractive (and may get more attractive today if you get me). The pendulum always swings to far and like I said I’m not looking for a V-shaped recovery in the group but a gradual stabilization of the leadership.

  8. 8
    codydog Says:

    BHI says they will have good second half

  9. 9
    Brian08 Says:

    Z–I’ve beaten a dead horse on saying that I really liked your thesis on the “valuation gap” between the large and small refiners…I’ve paired my positions significantly and just have some FTO 40s and WNR 50s…My question for this is, “is enough enough?”…I mean these guys have just taken a brutal beating this week, it’s got to be only a matter of time before all the sellers are exhausted!

  10. 10
    codydog Says:

    from a valuation standpoint with the falling 10yr, most quant models have to be screaming..buy, buy, buy..look at yesterdays buying from 3pm to mabe 3.30, it was huge

  11. 11
    Sambone Says:

    Crude Traders Jittery, Recall 2006 Slide From Record Levels


    NEW YORK — Crude oil futures traders are getting jittery.

    The last two trading sessions on the New York Mercantile Exchange have seen more than $2 a barrel between each session’s highs and lows, as well as strong changes in direction during the day on factors that were initially shrugged off.

    The reason market participants cite: The fact that crude oil is approaching its record high of $78.40 a barrel, which it hit in July last year. A year ago, the only other time crude has traded at current levels, the fall-out among those betting on further price rises wasn’t pretty.

    “Anyone who bought in at this price last year got absolutely slaughtered,” said Walter Zimmerman, vice president of United Energy in Jersey City, N.J. “The market is remembering what happened a year ago” when prices crashed in early August as a severe hurricane season that was predicted failed to emerge.

    The jitters in the market were evident Thursday when crude futures on the New York Mercantile Exchange hit a new 11-month intraday high of $77.24 a barrel before plunging in the middle of the day, aided by a stock market slide, to close below $75 a barrel. On Wednesday, prices ran up to just shy of an 11-month settlement high to post their biggest one-day gain since May, after dipping earlier on U.S. inventory data.

    The market’s move on Thursday has been attributed to the stock market and Wednesday’s rally to a report showing a big drawdown in stockpiles at a key U.S. storage hub. But on each occasion, the crude oil market showed a much delayed reaction, perhaps underscoring uncertainty over the fundamental forces behind oil prices.

    Most analysts say the bulk of the trading is positioning as crude prepares to challenge records and key psychological and technical trading levels.

    “Once prices get to $77.50, the market needs to make a decision over its immediate future,” said Peter Beutel, president of trading advisory firm Cameron Hanover. “If we get much above $77.50 the old high of $78.40 will act as a magnet,” he said.

    Hedge Fund Factor
    Adding to concerns of a slide is a near-record number of long positions, or bets that prices will rise, from hedge funds and other speculators.

    While that might seem a positive factor, to cancel the bet or lock in profits, traders need to take a short position, essentially a bet that prices are likely to fall. Many analysts are concerned that once selling starts, the funds will cancel bets quickly, exacerbating the decline. The ability of the crude market to fall from its lofty levels was shown early last August, when prices fell $20 a barrel, or 25%, from near-record levels in a little more than a month.

    Speculators with long bets “need a hurricane or some other supply problem” to keep prices going higher, Zimmerman said. “If that doesn’t happen, there is the potential for a reversal” as traders sell to close out long positions, he said.

    The net number of long positions, which fell from a record last week, is being underpinned by a rush of speculative money into oil prices.

    “The fund money is out there, and it’s available, there’s a lot of speculative capital sitting on the sidelines,” said Jim Ritterbusch, president of trading advisory firm Ritterbusch & Associates in Galena, Ill. “Institutions are looking for places to put money” and a lot of it is ending up in the energy sector.

    Ritterbusch said as well as making crude cheaper to people with other currencies, the weak dollar is also helping funds move in to oil.

    “A lot of them have (trading) models that when driven by a weaker dollar” encourage buying in commodities, he said. The weaker dollar is also prompting some funds to transfer investment from currency to commodities, he added.

    —By Matt Chambers, Dow Jones Newswires;

  12. 12
    zman Says:

    Brian – #1 when in doubt sell half. In the case of the little one, no, I don’t think it’s enough of a beating yet although WNR scares because of their ability to defy gravity on a whim. I think people thing there are higher numbers yet ahead there for 08 due to the GI merger and possible synergies. Is it really worth 14x 08 at this point, eh… Like you, I raised a lot of cash from these guys and I expect a bounce soon. But I don’t think it’s the bottom. Anyway, a good time to take profits.

    Part of the thesis here is the valuation, part is the fact that RBOB is going to fall through $2 and fall disproportionately more than oil. That distillates have held up too well as well and that won’t last either given inventories there. So the second half of the thesis is, crack spreads have come down but they will continue to come down and that the analysts, emboldened by recent cracks will start to worry and bring in their back half 07 and even their 08 numbers. I’m starting to see chinks in the 08s, a penny here and there being taken back off.

  13. 13
    zman Says:

    Thanks Sambone,

    …and I’d add that you’ll probably see dollar strengthening in the future as we head towards an election year. Not positive for oil.

  14. 14
    codydog Says:

    z–cvx doesnt seem to have moved yet – thinking of taking some aug 90 calls

  15. 15
    zman Says:

    Cody – me too, a little pricey as of yesterday’s close, will watch.

    BHI – sounds a little defensive on Q&A to me. Not too bad but a little.

    APA target jumps at Lehman. XOM target shaved a buck.

    CRR – carbo ceramics target upped as well. That’s a propant (artificial sand used for fraccing) company I used to talk about more often but they got pricey. No trade just thinking about revisiting the story.

  16. 16
    zman Says:

    CVX up over $1 pre market, that $2.52 is not clean, includes gain from Dynegy sale.

  17. 17
    zman Says:

    NFX up, VLO up, FTO flat, HAL lagging a bit but the buyback should kick in soon if the market doesn’t fall out of bed.

  18. 18
    zman Says:

    Cody – server looks good, dunno.

    HAL = charge of the light brigade.

    NFX – up 2%

  19. 19
    zman Says:

    Setting stops on NFX on the remaining $50s as they climb. No reason to give it back if the market pukes on us.

  20. 20
    zman Says:

    If anyone is having trouble staying connected to my site please let me know at zmanalpha@gmail.com. Thanks.

  21. 21
    zman Says:

    And I got stopped out on the NFX $50s @ $1.70.

    Will reposition later.

  22. 22
    ndog Says:

    zman – any idea how much the Dynegy gain is worth in the option?

  23. 23
    zman Says:

    ndog: re CVX. They would have earned $2.37 w/o the gain, not the $2.52 they reported. Still a nice top and bottom line beat with consensus down at $2.37. I’m not play but may listen to the call @ 11 est.

  24. 24
    ifaben Says:

    z- any thoughts on clr, the recent Continental Resources ipo? Local people see the management as disciplined and canny, given the influx of capital is this a growth story that can overcome jitters in the commodity. What’s your near term view of BJS?

  25. 25
    codydog Says:

    z–cvx…looks like they tried to shake out the big buyer from yesterday afternoon…obv holding up pretty well, so far

  26. 26
    zman Says:


    Re CLR This what I wrote the day after the IPO.

    Continental Resources (CLR): Large and In Charge. This is a totally different animal than yesterday’s look at Pin. Here’s the ten minute look on this as it’s very late and I need to post.

    * Enid, Oklahoma based E&P focused on the Rockies and Mid-Continent with a small amount of Gulf Coast reserves, founded in 1967.
    * Both management and science are seasoned and deep.
    * Technically proficient in horizontal drilling, enhanced recovery
    * They operate 95% of their reserves.
    * Reserves: 118 MMBoe, 86% Rockies and 83% Oil. Nearly all reserve adds in the last five years have been through the drillbit. This is a low exploration risk, resource play. While the preponderance of reserves are in the Rockies the company has substantial positions in several unconventional plays including the Woodford Shale.
    * Just over half of their current production comes from the prolific and vast CedarHills Anticline. Horizontal development with high pressure air and some water injection with very good results. Well density is low so there is potential to downspace the acreage.
    * They’re attempting to produce the Lewis Shale in both conventional sand and siltstone intervals but also unconventional in the shale itself. Results to date have been encouraging.
    * Production: 26.5 Mboepd 4Q06, 28 1Q07. Production visibility is good for strong growth through at least 2009.
    * R/P of 13 years which is likely to fall a bit
    * They’ve managed to shrink per unit LOE in linear fasion from 2004 to 2006. Unreal.
    * Fairly massive Rockies and Mid-Continent undeveloped leasehold.
    * Balance sheet is clean, and following this offering they’re probably a little under leveraged.
    * At $14.35 and with 168 million shares outstanding after the deal CNR is firmly planted in E&P midcap territory. Valued at a little over 5x trailing cash flow this seems very reasonable unless I’m missing something.
    * The CEO retains 71% of the company.

    Obviously I need to delve a little deeper but I’ll be dipping a toe in the stock today. By the way, thanks to ED who reminded me they had gone public.

    They’ve come in lately and will likely have another good quarter. The addition of hedges a month or so ago made the story even stronger. I like it here.

  27. 27
    zman Says:

    Re BJS – I still have my puts. I wasn’t impressed by the quarter or call but it may get a bounce with the OIH.

  28. 28
    zman Says:

    More CLR: from mid July.

    * (CLR) On Wednesday (July 11) I was asked to give a target on Continental Resources. Here was my response in comments Wednesday night:

    If they hit the mid point of their guidance I’d say they’ll do $2.25 to $2.50 CFPS as long as commodity prices hold up (I went with a pretty conservative realized oil price of $60 for the year which they may beat with those hedges and higher production as the year goes by). You could easily put a 7.5x on that CFPS which gives you roughly $18 to $20. The multiple could be higher given their growth rate, tight control of op ex, and those nice new hedges but why push things, eh?

    CLR closed at $18.15, up 14% on the week.

  29. 29
    codydog Says:

    any crude comments?

    (and i dont mean about my writing style!)

  30. 30
    zman Says:

    Crude: I agree with Nicky’s trader friend comments from yesterday afternoon. This all appears pretty odd to me. Today reporters are saying crude fell yesterday because the market did. When you don’t know…make something up. I do know that the market is getting more severely backwardated.

  31. 31
    Sambone Says:

    Nymex Crude Touches $76; DJIA Gains

    Dow Jones Newswires
    From Market Talk:
    [Dow Jones] Nymex crude rises above $76/bbl after successfully bursting through $75.50, a level that has previously offered a lot of resistance. Sep crude +$1.11 at $76.06/bbl. Strong 2Q US GDP and a small boost in the Dow Jones Industrial Average after a slide Thursday. (matt.chambers@dowjones.com)

    Reported Earlier:
    NEW YORK — Crude oil futures rose Friday, clawing back some ground lost last session, after the U.S., the world’s biggest energy user, said second quarter economic growth was at its highest in more than a year.

    Oil prices slumped Wednesday on concern a big slide in U.S. equities could be a signal U.S. demand will slow, and traders said stock movement could again affect prices. U.S. growth of 3.4% was the most since the first quarter of 2006 and gave some confidence demand for oil is healthy.

    The front-month September light, sweet crude contract on the New York Mercantile Exchange was up 64 cents, or 0.9%, at $75.59 a barrel. Brent crude on the ICE futures exchange rose 48 cents to $75.66 a barrel.

    “People are definitely keeping an eye on what the Dow Jones Industrial Average is doing,” said Peter Donovan, vice president at brokerage Vantage Trading on the Nymex floor. “The bias so far seems a little bullish, but if we get a sell-off in equities again it will confirm some people’s concerns” about threats to U.S. demand.

    Front-month August reformulated gasoline blendstock, or RBOB, rose $1.08, or 0.5%, to $2.0867 a gallon. August heating oil rose 52 points, or 0.7%, to $2.0408 a gallon.

    The DJIA fell 2.3% Thursday, underlined by worse-than-expected new home sales data and fears about credit markets seizing up. Crude prices, which had hit a fresh 11-month intraday high of $77.24 a barrel early in the day, turned sharply to finish below $75. The DJIA was recently little changed.

    Nymex crude prices are up about 20% in the past two months, rising on forecasts for a coming supply crunch, concerns about Nigerian production and as a flood of speculative money has poured back in to the market. Traders say the market is looking to challenge their record close of $77.03 a barrel and intraday high of $78.40 a barrel set in July 2006.

    —By Matt Chambers, Dow Jones

  32. 32
    ndog Says:

    any thoughts on nfx with crude ramping?

  33. 33
    Sambone Says:

    Here’s one to watch in the next week or so. Shear is high, so it needs to get about 1000 miles from Africa where the shear is lower. See the spin
    We’ll see

  34. 34
    Sambone Says:

    Another link

  35. 35
    Art Says:

    Z,With the initial production from the Independence Hub and the eventual 1 Bcf/d, an increase of 10% from the GOM, how in the world can the price of NG rally? Just wondering. Thanks, Art

  36. 36
    scoop006 Says:


  37. 37
    zman Says:

    Art, saw your comment. Yes, it can be we need heat. So far no heat and in the face of that it’ll be a stock pickers E&P market.

    NFX: I got stopped out this morning but you ‘ve got to like the action relative to the group today. 25 analysts follow the company and from what I can see on briefing.com not one of them changed a rating or boosted a price target. I used to cover these guys on the sell-side and that floors me that COG catches an upgrade (not that they aren’t a good company) but they have some issues with eastern gas prices that have tumbled of late and no way did they put on this good a quarter or layout guidance like this. Of course, COG is only up a percent and they were upgraded so maybe the first call notes on NFX, which I can’t see were flowery.

  38. 38
    zman Says:

    let me see:
    pulse: check
    coffee breath: check
    yup alive. whatcha thinkin?

  39. 39
    scoop006 Says:

    Had not seen a post from you for 37 minutes. Was looking for some NFX comments. #37 surficed.

  40. 40
    zman Says:

    Scoop – just watching the impact of the broader market on the stocks. Anybody got any thoughts on the dow, s&p.

    NFX still resisting the pull of gravity. it was just that good a quarter.

    KWK up on the formalization of the IPO of their gas gather company in the Barnett Shale. It’s like the MLP thing, monetize an asset that’s not real sexy, get paid for it and win a prize for your stock.

    WNR finally looking lower after that big stupid pop up this morning.

    FTO continue to be a crowd pleaser on the downside.

    Considering adding a little more VLO here long but the broad market…it just looks kind of sick.

  41. 41
    zman Says:

    FBR cut it’s price target on NBR from $39 to $37. With the stock at $30. So it’s going to do well but less well than you thought before the call so you’re still saying buy it but it’s, well, less of a buy.

  42. 42
    Brian08 Says:

    Anybody see a trade for the FTO AUG 40 PUTS at $7.60? I know my brokerage account sometimes gets screwy and prints incorrect day hi/low trades…

  43. 43
    Art Says:

    Z, did your site go down for about an hour?

  44. 44
    scoop006 Says:

    Brian AUG 40 $3.70 Aug $45. $8.00

  45. 45
    zman Says:

    I see the $45 printed $8

    Art – server intermittant but not down for any length of time that I know of. Can’t wait for Sept 1. This site becomes a backup at that point.

  46. 46
    zman Says:

    Watching NFX and VLO for an entry. Broad market broad market broad market…….

  47. 47
    Sambone Says:

    DOW-My TA guy tells me that if some type of a rally comes in towards the close, then Monday is going to be a bloodbath. Expecting another Thursday today. Watch the action at 3:30.

  48. 48
    Brian08 Says:

    Z thanks for the thoughts this week…I got stopped outta all my NFXs this morning which I’m glad happened because my position got way too bloated after the market gave us THREE gifts yesterday in that one!!!

    Have a good weekend all…

  49. 49
    zman Says:

    Thanks Sambone…that’s helpful. Itchy trigger finger on some calls just got less itchy.

    Brian – you’re welcome. Go party with some girls from Smith and tell them to come by the site. lol.

  50. 50
    zman Says:

    NFX cracking back – if it goes negative I’m in again.

  51. 51
    Sambone Says:

    Got stopped out of BHP and COP so far today. They are all breaking down. This is 06 all over again.

  52. 52
    zman Says:

    Sambone – yup, keeping powder dry for bargains.

  53. 53
    codydog Says:

    kinda ironic that if Iran announces some dove-ish actions, that they can tank the oih etc and take the s&p with it

  54. 54
    zman Says:

    options makers ripping the spreads wide open.

  55. 55
    zman Says:

    Bidding some NFX 50s at $1.30 – very risky given market.

  56. 56
    zman Says:

    Re Iran…man those guys are just out to get us!

    Bidding some more VLO…

  57. 57
    codydog Says:

    OIH same lows as yesteray but obv is about 1mm higher…shorts looking for stops?

  58. 58
    zman Says:

    So much for that FBR upgrade of COG. The stock is down now. I told em to lift their NFX numbers but they just don’t listen. 😉

  59. 59
    zman Says:

    NFX – scratch that bidding $1.15

  60. 60
    codydog Says:

    z–any thoughts into the afternoon?

  61. 61
    Sambone Says:

    Z – I have stops on 1/2 my positions. Once Sept/Oct/Nov come around, I’ll go back in. Check your charts on COP, etc. from last summer. COP went from 70 to 55. The reason I’m not selling all is because something around the world MIGHT happen so I still want a postion. My long term is still the same, $100 per barrel between now and 2010.

  62. 62
    zman Says:

    Well, oil is up a buck with the market down sharply again. Yesterday, reporters attributed the fall in oil to the fall in the market. That’s a stretch. If the Dow / broader indexes rally, NFX will rally hardest. I just missed them on the last dip again and they went from up a dime to up $0.80 in a heart beat. Otherwise, just thinking plays next week on earnings and am position long as such in CHK, OII for the calls, EOG as a trade but also for the conf call as they could have really good volume news out. Not buying more than I’ve got now b/c of the market in general and I’ve got until mid to late to late next week on those names. Also, HK going to be a big focus for me the following week, earning 8/7 but for now it’ll get caught in negative gas sentiment. Which amazingly has not reared its head but should given the easy comps graph in the post and the lack of heat to counter it. More thoughts in a bit on RBOB / oil the refiners, tropics etc….

  63. 63
    zman Says:

    COP fell with gas and amaranth. Could be same pattern this year.

    Late last September, CHK shut in 6% of its gas production as gas prices hit $4. I don’t expect a decline of similar magnitude from current levels so I would expect COP to get hit as hard …but you never know.

  64. 64
    codydog Says:

    careful on oil shorts fellas, from debka-

    Tehran and the Russian Rosoboronexport arms group are about to sign a mammoth arms deal for the sale to Tehran of 250 Su-30MKM warplanes and 20 IL-78 MKI fuel tankers. DEBKAfile’s military sources report Iran has stipulated delivery of the first aircraft before the end of 2007.

    The transaction, Russia’s largest arms deal in 30 years, will endow Iran with a long-range aerial assault capability. There is no decision in Jerusalem about asking Paris to withhold its consent to a deal which would substantially upgrade the long-range air assault capabilities of the Islamic Republic. However, President Nicolas Sarkozy is in mid-momentum of a diplomatic drive in the Arab and Muslim world and unlikely to be receptive to an Israeli approach. The only chance of aborting the Russian sale would be to route the approach through Washington.

  65. 65
    Sambone Says:

    Nymex Crude Holds $76,Eyes New 11-Mo Closing High

    Dow Jones Newswires
    From Market Talk:
    [Dow Jones] Nymex crude holds above $76, despite another down day for US equities. Aug crude +$1.17 at $76.12/bbl. A close at this high would be the highest for a front-month contract since Aug 2006. Prices are being supported as strong US GDP number eases concerns about demand slipping in the US, the world’s biggest energy consumer.(matt.chambers@dowjones.com)

  66. 66
    Lije Says:

    As goes the DOW so goes VLO… or that is what it looks like. Z – you were asking about the broader mkts earlier. I don’t know if you follow anyone at Minyanville or not, but two of their guys think their is support for the SPX at 1460 and are calling for a small rebound right now. One of them is Bennet Sedacca who is the uber bear and the other is Kevin Depew.

  67. 67
    scoop006 Says:

    Z-Noticed your discussions re COP.Today
    Cramer established a new position in it for his trust. I’m sure he will promote COP on tonights program.

  68. 68
    zman Says:

    Lije – thanks I don’t actively follow those guys and I appreciate the input! Not much of a bear if he considers this little hiccup to be enough of a correction to flip him, eh?

    Scoop – many thanks.

    NFX – just missed it for the 3rd time, man it’s poppy.

  69. 69
    codydog Says:

    z–are you buying NFX?

  70. 70
    zman Says:

    looking at HAL again.
    VLO ran on up, ditto NFX
    also looking OII calls.

  71. 71
    zman Says:

    Cody – been trying all day. Spreads are wide due to market volatility and a maker who’s tired of getting picked off. Missed three big dips so far bidding too low.

  72. 72
    jimbo Says:

    Thanks for a reminder. Just purchased CLR…it’s been on my radar. Lowest PEG in the Russell 1000

  73. 73
    zman Says:

    Took more of the HAL $35s for $1.80

  74. 74
    Big H Says:

    Hello Everybody!

    I been a Vacationer, yes flopping around Maine USA in flip flops! and its been great, just got back last night, and things look ugly, today the dow looks like it wants to go south another day, no surprise, same for the s&p and company, no shock!

    whats up with kwk? its up?

  75. 75
    zman Says:

    Welcome back H. KWK see post #40

    My server company says the lag is not their fault but one of their partners’ fault. During a routine router firmware upgrade, Cogent Communications managed to install some “bad code” as they stated, and have been working on remedying the situation since 10AM CST. They are still working on patching all of the infected hardware, so some customers might notice minor latency. Whatever.

  76. 76
    zman Says:

    Took a little SWN long, yes up a buck, with earnings on Tuesday and the steep sell off it’s had over the last 2 weeks.

  77. 77
    codydog Says:

    any thoughts why NG is ticking higher?

  78. 78
    zman Says:

    most likely its short covering inspired by the tropics Sambone mentioned earlier in posts #33/#34

    VLO positive.
    HAL down but moving higher
    OII ditto,
    SWN with a quick snap back b/c I BOUGHT some. May add a little more here.

  79. 79
    zman Says:

    Took NFX September $50 calls.

  80. 80
    zman Says:

    After that brief dip HAL, VLO, NFX all recovering.

    SWN off to new HOD after falling all the way from up $1.20 to $0.20

  81. 81
    zman Says:

    Anybody, home? If not I’ll post an annoying Public Service Announcement in a minute. 😎

  82. 82
    scoop006 Says:

    Z As a master teacher of the game do you concur with post # 47

  83. 83
    codydog Says:

    nice settlement in crude/uso etc

  84. 84
    zman Says:

    Scoop – that’s usually the way.

    Crude = unreal. They’re just going for the record so the headlines can read record crude. I don’t see any fundamental reason for the rally.

  85. 85
    codydog Says:

    z–unless I’m a complete dope (which can be likely) my guess is there is geopolitical news out there or a developemnt that has not been revealed to us.

    Its an odd close,

  86. 86
    codydog Says:

    esp with solar plays popping so late in the day

  87. 87
    zman Says:

    back after while, have a great weekend!

  88. 88
    jonnynav Says:

    You see SWN positive?

  89. 89
    Big H Says:

    I think oil is up cause the GDP number and all the bullish ….jabbering over the past few weeks, i.e. …..EIA saying demand will rise while supply will remain tight and the like!

    However stocks are down cause pure mix of emotion and a huge run…which is being met by a lot of worrying that a lot of the run may have been based on speculation of buyouts, and hence news of late on credit , may be causing the selling, and the disconnect….o yea….maybe its just old news oil being where it is by now, and more pressing business is at hand…! ! ( hell if theirs no bad weather soon oy o boy) that two… I like the more pressing business at hand and same old news better now-

  90. 90
    zman Says:

    Johnynav – don’t know if they surprise of course but the should be on track with last quarter’s prod guidance which they raises, I’m doing some more work on them this weekend and will let you know what I think Monday. They announce 7/31 with the cc the following morning. Stock’s taken a heck of a beating but like I said, I’ve got some more work to do.

    Big H – the oil traders are just shooting for the record. OPEC’s more conciliatory attitude is far more important thatn EIA’s retread of IEA’s “you’ve got to ship more oil.” OPEC is right when the say “it’s the refinery capacity stupid”

  91. 91
    El Diablo Says:

    I would like to make a private suggestion for your new website. Please send me an email so we can discuss it offline.

  92. 92
    zman Says:

    El D – email sent

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