Tuesday – Fed Day – Oh What A Difference A Day Seems To Make

Posted on by zman

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Ok, on to the post... 

The Fed is widely anticipated to slash the discount rate by a full 1% this afternoon. Prognostication range from:

  • 50 bips which would fill out the original 75 bps anticipated as recently as last Thursday (and which would be very disappointing unless the Fed statement has more thoughtfully worded commentary than its usual 5 minute re-write)
  • up to the equivalent of a financial tac nuke at 1.25 basis points (what a signal that would be!). I very much doubt we see the high end of that range. Market action likely to be sloppy all day long but we may get a boost from Asian and European market strength overnight.

Commodities Watch:

  • Crude Oil: The April contract (expiring Wednesday) fell $4.53 to $105.68 yesterday as profit taking set in early in the session and accelerated as the day wore on. The theory goes that despite a weaker dollar, speculators were selling whatever was up to handle margin calls on the Financials and whatever else they had that was down. Once oil was off $4+, the story shift to fear over the economy. It was probably a bit of both and I'm not looking for a sudden collapse in oil prices. This morning oil is trading up just over $2 as the dollar once again plummets pre Fed.
  • OPEC Production Up In February. According to Platts:
    • Feb total OPEC (includes Iraq) production was 32.33 million, up 80,000 bopd from January figures.
    • OPEC 12 production (excludes Iraq) was 260,000 bopd over quota.
    • The increase in total OPEC production came entirely from Iraq which produced 2.4 mm bopd in February which is in line with pre war levels (first time since March 2003 Iraq has produced this much).
    • Iraq was producing 2.6 to 2.8 million bopd back in 2001 and with time may get back to higher levels seen in the  late 1980s (they are not part of the OPEC quota system at present).
  • Heating Oil Watch: Heating oil dealers are about to ask the DOE to release volumes from the Northeast Heating Oil Reserve. Dealers need the volumes to meet demand as "many" consumers living on a fixed income in the northeast have been late in paying their record heating bills this Winter.

  

  • Natural Gas fell $0.77 (8%), closing at $9.10. I think the critical levels here are yesterday's low ($9.06), then $9 even, then $8.78.  Natural gas is trading up $0.24 this morning as it marks the move in oil. In comments last Friday I wrote:
  • IF NG cracks $10 this will be the worst daily perf in a month for the UNG…could have a cascade effect. Currently gas down .16 at 10.06 (a little more % than oil is down. UNG has been pretty much nothing but up since 39 on Feb 7, now at 49, off 1 today.
  • I’ve seen gas move in several big increments after moves like the one we’ve had, corrective movements where you can get 20 to 50 cents per day.

I also said yesterday that an expected bounce in the morning could lure me into April (UNG) puts, so far, so good.

Chart of UNG vs April Natural Gas (NG/J8): Easy Come, Easy Go.

gas-vs-ung.jpg

 

  • Imports: Natural gas imports continue to run about 2 Bcfgpd light of year ago levels. The deficiency comes completely from the LNG side as Canadian volumes were actually 0.3 Bcfgpd higher than in the year ago period. 

gas-monthly-imports-031708.jpgclick to expand.

 

Crack Spread Update - Normally on Tuesday's I show the regional cracks here and those can still be seen over on the Refiners and Cracks page here (not pretty!). After several questions about whether or not its time to bottom fish the group yesterday in comments I thought I'd try to show a little different perspective about why I'm not jumping back in yet. Many analysts have gone with the seasonal flow, upgrading the group and even I dipped a toe in (VLO) a few weeks back to test the waters (a toe which has since been rent from my foot). Otherwise I have steadfastly avoided this "cheap for a reason" group. True, I could have shorted the group and made piles of cash but the refiners have a weird habit of trending with oil without regard for products pricing (margins) which they have only very recent deviated from. Sometimes the best trade you make is the one you don't.

Summer RBOB Cracks Have Fallen Out of Bed In The Last Couple of Weeks. This is the result of bloated gasoline inventories which kept gas' feet to the ground with respect to oil.

  • You knew it was bad but the divergence between the two has become extreme with gasoline pulling back much more sharply on yesterday's $4+ drop in oil.
  • Summer Cracks Are Low... Last Spring, the out or Summer month cracks were between 2 and 4x current levels.
  • ...And Falling. They were trending up not down and gasoline stocks would eventually reach a 10 year low (last September). We are at a 15 year high on inventories now so the refiners are being set up for a successive difficult comps. 

 

crack-spread-summer-months-031708.jpg

Cheap For A Reason. So is the group close to a bottom? Maybe, but estimates have further to fall.

refiner-multiple-031708.jpg

Goldman Sachs, An Axe In The Refining Sector, Seems To Agree With Me In Comments From Their Upgrade of (COP) Yesterday.  "While we think Conoco's stock is very inexpensive and its risk/reward favorable, our upgrade of Conoco is a much about avoiding near-term earnings risk with our pure-play refiners ... Goldman analysts said in a note to clients. Goldman also cited dynamics of the refining business, with the cost of gasoline not keeping up with the cost of crude oil ~ Marketwatch.

Stocks We Care About Today:

(OII) Makes A Small Acquisition; Should Be Minor Boost To Earnings.  

Oil Sands Watch: Canadian Oil Sand Trust cut its 1Q08 forecast from 320,000 bopd to 265,000 bopd, due to production problems in the first two months of the year. Partners here include (COP), (NXY), and (MUR) but I wouldn't expect the reduced forecast to be particularly significant to any of them. 

(DVN) - getting interested in a play on their Chuck prospect, currently drilling the lower tertiary trend of the deepwater GOMex if the stock continues to come under more pressure. Will keep you posted.  

Holdings Watch:

CALLS - Adding some April Exposure

  • APA - April $120 Calls taken for $4.30
  • COP - April $80 Calls taken for $2.02.
  • APC - April $65 Calls taken for $2.20
  • EOG - March $120 Calls taken for $2.70 (when the stock was off $7).

PUTS - Collapse of natural gas revitalizes UNG put positions. We began shorting UNG (the natural gas ETF) back in mid February and added more contracts as recently as early March and it has been nothing but pain and suffering until last Friday when the bloom came of the gassy rose. Yesterday, the weak market for crude sent gas 

  • UNG $46 - out at $1.75, up 21%.
  • UNG $47 - out at $2.70, up 170%. Last Friday in comments I said I was standing pat on holding these but the fall in NG was better than I could have hoped for.

 

 

 

Odds & Ends

Analyst Watch: Stiffel ups (OIS) and (HP) to buy, Citi takes (TK) and (GMR) from hold to buy and (OSG) from sell to buy, (MRO ) cut to hold at BMO (Citi cut MRO yesterday over rising concerns on the E&P side), Lehman takes up price targets on several E&Ps to at or just above where the stocks are already trading as they mark-to-market their oil and gas price decks for the group.

MMS Will hold GOMEX Lease Sales 206 & 224 (eastern Gulf) Today.  

 

 

94 thoughts on “Tuesday – Fed Day – Oh What A Difference A Day Seems To Make”

  1. 8:15 am EST

    Crude Up More Than $2 As Market Eyes Fed

    By Nick Heath
    Of DOW JONES NEWSWIRES

    LONDON — Crude oil futures rose more than $2 in London on expectations that the U.S. Federal Reserve will unveil another cut in interest rates, adding fresh downwards pressure to the U.S. dollar and boosting investor interest in crude oil.

    A brighter start across European stock markets Tuesday also soothed some of the market fears that had contributed to Monday’s sharp sell-off in crude futures, but the focus remained largely trained on the plight of the dollar ahead of the Fed’s 1815 GMT rate decision.

    “I still think that, despite the volatility yesterday, the money coming in on the back of hedging against the dollar and inflation is going to continue for a while,” said Mike Wittner, head of global oil market research at Societe Generale in London. “I think it’s too soon to say “this is it.'”

    At 1208 GMT, the front-month May Brent contract on London’s ICE futures exchange was up $2.15 at $103.90 a barrel.

    The front-month April light, sweet, crude contract on the New York Mercantile Exchange was trading $2.09 higher at $107.77 a barrel.

    The ICE’s gasoil contract for April delivery was up $18 at $975.50 a metric ton, while Nymex gasoline for April delivery was up 523 points at 255.65 cents a gallon.

    —By Nick Heath; Dow Jones Newswires

  2. Sam – Hilarious. Yesterday crude falls $4 and the DJ stories bring out oil bear after oil bear saying this is it, fundamentals don’t support this level. This morning it rebounds a bit and they have a guy saying that its to early to say “this is it”. The analysts would make the worst kind of basketball fans.

  3. Z- The Central GOMEX lease sale bid opening is actually tomorrow. All bids have to be filed by 10:00 AM CDT today.

  7. Good morning –
    Z-thank you for the refiners update/charts-think I will heed/respect your opinion

    My T/A wiz is back and did not like the fact we had a 30 minute panic-we are very oversold ect… but she does not see a lasting rally

    Did anyone watch FastMoney and see the change of opinion Gartman had on commodities?

    Also my Voodoo man posted this am he thinks oils, metals, and cyclicals are vulnerable.
    Says if we hold 1303 thinks we can go to 1320 and possibly move to 1350. If the 50 dma is captured he thinks it signals a 10% move in April to the 200 dma in the S&P.

  8. EXM beats 4Q with 1.71 vs 1.45 expected…stock called higher which probably won’t rescue my QMAR calls but we shall see if I can eke something out of them.

  9. OII – strong Oil service and small deal helping to make the beginnings of a bottom break out in this stock.

  11. Morning Denise,

    Thanks for the Barton B article, I’m a big trader vic guy but BB is ranks pretty high with me too. His friend makes some very good points re the market for a bull case but I still thing there is more bad news on the horizon regarding inflation and the consumer.

  12. 9:36 am EST

    Nymex Crude Rises On Expected Fed Rate Cut

    By Brian Baskin
    Of DOW JONES NEWSWIRES

    HOUSTON — Crude oil futures are trading higher as the market anticipates what could be a substantial interest rate cut by the Federal Reserve.

    Light, sweet crude for April delivery traded $1.53, or 1.4%, higher at $107.21 a barrel on the New York Mercantile Exchange. The April crude contract expires on Wednesday. Brent crude on the ICE futures exchange traded $1.59 higher at $103.34.

    Futures are trading higher after settling more than $4 lower Monday, in the biggest single-day percentage decline since August. The market was rattled by uncertainty in the financial sector after J.P. Morgan Chase & Co.’s (JPM) proposed buyout of Bear Stearns Cos. (BSC) at a low valuation, but has since returned to trading off of the weak dollar. Oil has only rebounded halfway from Monday’s losses, however.

    “A little profit-taking was probably well overdue, that’s why (prices) haven’t recovered all the gains,” said Mike Zarembski, senior commodities analyst at brokerage optionsXpress Inc. in Chicago.

    The dollar lost ground against the euro overnight, but was rising against both the euro and the yen Tuesday morning. Goldman Sachs Group Inc. (GS) reported stronger-than-expected first-quarter earnings, providing some hope that the worst of the credit turmoil is isolated to Bear Stearns.

    But the Federal Reserve is expected to cut its base interest rate, potentially by as much as a full basis point, with an announcement expected around 2:15 p.m. EDT. A rate cut would be taken as a sign that the dollar will continue to weaken, which traders have recently taken as a cue to bid oil prices higher.

    “Dollar weakness has re-taken the pole position in driving commodities higher after yesterday’s brief but dramatic turn lower,” wrote Addison Armstrong, an analyst at TFS Energy Futures in Stamford, Conn.

    After the Fed decision, the market will next turn to Wednesday’s release of U.S. oil and product inventory data by the Department of Energy. The average analyst forecast shows a 2 million barrel build in oil stocks, as well as a 100,000 barrel increase in gasoline inventories and a 1.4 million barrel decrease in distillate stocks.

    Front-month April reformulated gasoline blendstock, or RBOB, recently traded down 34 points, or 0.1%, at $2.5008 a gallon. April heating oil traded 3.34 cents, or 1.1%, higher at $3.1018 a gallon.

    —By Brian Baskin, Dow Jones Newswires

  15. yona – have you seen a consensus gas # yet? I was thinking we’ll see a 50 to 60 Bcf withdrawal on Thursday.

  16. Z/Sambone What is the rational for Bear Stearns trading $4.+ over the offer. Is the market saying another offer is possible?

  17. Scoop – just a guess, traders must think there is a lot more asset value there than $2. I’d expect it to be up over $2 with the rally in JPM shares which seems to have gotten a sweetheart deal but I don’t think they have an exact handle on the liabilities involved here yet. $4 though seems a bit much (given that JPM hasn’t rallied THAT much) and I really doubt someone fights them for it.

  23. EVEP – can’t find a reason for the weakness to continue like this with gas prices where they are and a 10%+ yield. Waiting for it to bottom some and will likely buy for my kid’s account unless I turn up a problem. So far, just don’t see it. Maybe its their hedge position but I wouldn’t think so.

  24. Dmh-Correct-the Gann-wheel of time ect… is beyond my limited abilities but I used to follow him on Cramers site and it is a little uncanny how things play out. He is a subscription newsletter

    Also Z was referring to the Barton Bigg’s hedge hog book this am-if anyone has not read it well worth their time
    one of my all time favorites!
    If anyone would like the email-let me know will send -sknitch@earthlink.net

  25. Hi Z,

    looking at the charts of NFX, HK, APA, APC, EOG, they have all just completed a huge up cycle on the MACD, which has now turned negative. This is usually a sell signal, which I would feel obliged to honour if that was the only information at hand. OTOH, we know that analysts will have to up the numbers on this group to reflect the higher prevailing strip prices.

    Taking the above points together raises the question: could the recent run up have already priced in the new commodity prices? I gather from previous comments that you still view them as undervalued, which would seem to answer the Q.

    But with NG seeming to have turned down, would not this suggest at least a trading dip in the stocks?

    Simply eyeballing the charts does suggest that the group needs a rest. The MACD situation needn’t be resolved by a selloff: a “pause that refreshes” scenario could obtain easily enough.

    Interested in your thoughts on the above ramblings.

  26. Z and DMH-for some unknown reason( by me at least) I had been noticing on my Reuters feed EVEP was on the short restricted list(no shares) not today-but the last few weeks-off and on
    the price/chart is agreeing-leads me to believe something wrong?

  27. dmh and Denise Re EVEP

    Here’s a thought on EVEP regarding the underperformance. First realize that MLPs are the REITS of the E&P world and I don’t actively track them but these charts of their peers all look the same:

    EVEP Peers: LGCY, BBEP CEP, LINE, ATN (down and to the right).

    The MLP basically exists to payout as much cash flow as possible so the way to grow is to issue additional units (shares) to buy more assets. In the case of EVEP, the assets they buy are larged PDP reserves (proved developed producing meaning you know where it is and its just a matter of getting the last possible hydro carbon molecule out of the ground) – theirs to date have been something like 80% PDP (meaning little apparent upside on the properties) which has allowed them to buy on the cheap but also means that to grow you must keep buying assets. The cost of the properties that have been buying appears to be trending up and while they are certainly economic at current gas prices, people will want more to sell them big chunks of reserves which gets back to their ability to grow. So on the one hand rising prices are good in the sense that it increased cash flow which can be distributed to shareholders but on the other hand, it chokes off deal flow (seller’s market). Stable gas prices are better for them than the rapidly rising market we’ve been in. That’s one theory for all of them under performing and I think in truth part of the reason they are down. But there’s something else I’m missing … not for the stock but for the group. Hedging I mentioned earlier but their volumes hedged and prices are excellent. Will noodle on it some more.

    Dman – good ? be with that in a moment

  28. Re #25 – I agree with the a “pause that refreshes” scenario. Great phrase.

    I have never professed to be more than an amateur chart reader (got my start reading the blue and green O’Neil weekly books for a fund manager) but the APC and EOG charts for instance say very different things to me.

    I used mark the EOG type as a post breakout flag with gap where declining volumes would send it shooting one way or the other (I prefer up but you’ll notice I’m in March’s for a quick bounce off the low end of the flag) very soon. The news there was very good, I don’t believe its expensive and I do believe the stock needs some time to digest the jump before moving higher.

    Yesterday kind of messed up the chart on APC but I took a chance on that chart trusting the story to catch it up for me by next month’s expiry.

    HK – should have well news out in the next 10 to 14 days…stock moving well news.

    NFx looks like a long term base breakout in the making…its volatility has been surprising to me of late and I’ll sell the March calls soon and wait for a lower entry.

    This part applies to the whole group: on a historic basis, using oil and gas prices well below the current strips, the stocks are no where near expensive (as a whole). I don’t think they suffer much if oil remains above $100 and gas holds $8 (which I expect it to).

  30. The energy stocks seem to be somewhat restrained for the S&P to be up 2.8%. Too much negative views from “experts” holding them back?

  31. Morning Ram – hard to say, opinions at the big brokerages going both directions today. XOI and XNG in line with Dow perf and a little better than oil, even to NG. OIH outperforming everything.

  32. Z,

    one point I forgot to mention is that the MACD I referred to is on the daily chart.

    On the *weekly* charts, the MACD suggests the stocks are early in an upswing, but obviously timing trades on a “give or take a few weeks” basis is a different proposition.

    I have to admit, when I first encountered charting I thought it was amateurish gobbledegook (or “voodoo” as some might call it). I still have sympathy for that view, but find that alarmingly often it seems to be useful. Even if only because so many people use it.

    You mentioned OII earlier: the weekly MACD looks ready to swing up after a prolonged down phase. Looking at FTI through the same prism suggests a strong breakout is imminent & it certainly has been jiggy of late (albeit in both directions).

  33. Dman – right, fundamentals what to buy chart when to buy.

    I wasn’t making light of chartists or their techniques, I was just suggesting that I am a primitive when it comes to charting. I take a very basic approach to it. Support/resistance, bolly bands and a couple of simple moving averages are all I generally care about or understand. I have one of those CMT bibles around here somewhere but don’t have the attention span for that kind of thing (again, not a slight) to get through it.

  34. Z and Denise:

    re: EVEP etc.

    Pipelines have been hammered recently, see TPP and EPD, conservative MLPs. Per Cramer they have been subjected to heavy hedge fund selling, possibly the same applies to EVEP etc?
    Although hard to imagine hedge funds buying slow moving (usually, not now!)stocks for yield.

  35. dmh – wow that TPP is ugly. Cramer could be onto something on hedgies banging out of these things but I’m with you, hard to believe they’d be in them in the first place. Could also be value mutual funds liquidating to meet distributions. Saw a story the other day that growth has been outperforming so maybe the value guys are seeing some redemptions.

  37. Re 36 – Since that’s a high probability, do you take advantage of premiums prior to the pinning action? An example would be the NFX 55’s.

  38. Z,

    re #33. I didn’t take your comments as making light of anything, perhaps because I wouldn’t call myself a chartist (I just dabble) but also because I *was* making light of it. I mean there definitely is an air of voodoo about it all, but also some underlying sense in tracking psycholgy and money flow.

    One reason that I think it is useful right now is that the quarterly information events are just too infrequent to keep Mr Market interested. I vote for monthly reports! Er, weekly, anyone? Hourly?

  39. Ram – not a bad thought. I actually need to sell those, had a gain there, now a loss, but still holding out hope. I guess you have to be right on the fed’s move in an hour as well.

  40. Z-that thought occured to me-have checked large holders-Blackstone-Lehman(not sure where it lies)it does not take much to move it. Staying long

  42. I’m not saying it’s fire and forget on EVEP but it does have good management, a yield over 10% which seems likely to stay around this level for at least a year without further acquisitions. Smokes the tbill as long as the common doesn’t gutter out.

  44. Bloomberg shows Street expecting drawdown in gasoline stocks in 18 weeks. It’s got gas up 3.3% vs oil’s 2% move and is causing a DCB in the independent refining group.

  45. Z-the first number is his short term trading- second number intermediate term
    He is always cautious booking his profits and usually early
    Sounded like he put a lot of $ to work early yesterday.

  49. CLB is in strange company today. The only other service names on my screen showing marginal percentage gains are ALY and NBR.

  50. 1320 still the level to make on S&P. EOG should play catchup if people like the Fed number and statement. If not, it will all be red.

  55. Just found the Lehman price target upgrade details. They raised oil to 87.50 from 80 for 2008 and for nat gas to 8 from 7.25 for both 08 and 09.

    given where oil has been so far this year it will need to get below 90 and stay there soon to make that oil number happen

    the analyst largely brought up his targets to current market prices…one of them being EOG which went from 114 to 127. he obviously wasn’t as impressed by the analyst meeting as I or much of the Street was. What’s odd is he’s got it at overweight so it had already outstripped his price target and his new one doesn’t really constitute enough of a spread between 121 and 127 to rate a buy in most people’s books.

    D – can you introduce UOP to Mr K?

  57. re 56…if you go to the bottom of the piece he spells out the technical case of an intermediate market bottom.

  59. The DUG would almost certainly do well if the Fed disappoints. I figure if they go light, something like 50bps, that strengthens the dollar which sends oil down with nat gas following (holding more UNG puts but not for this reason exactly) . The market might actually take a smaller cut as everything is not so bad as they thought…or it might just sell way off. Which gets you back to the DUG.

  60. UOP- Mr K is usually right-I find him extraordinariley helpful with my trading-
    He is a short Hedge Fd Mgr-
    Kind of like that old E. F. Hutton commercial “When Mr K talks people listen”

  63. Ram- Bought SPY 129 Mar puts for 0.90 earlier today…will probably jettison one way or the other before mkt close.

  66. language not very friendly…

    more uncertain about inflation

    economy under considerable stress, outlook weakened further.

    I’m a little surprised we’re still up 200 points, maybe they like something in there.

  72. Thanks dmh…guess I’m still not finding the short oil play that I’m looking for.

  73. K – how about MRO…people downgrading it based on valuation (it is always one of the expensive ones, it has a downstream segment, and Citi indicated they may miss on the E&P side as well). Just a thought.

  74. well Bernanke did it again, throwing too much money out there which will go again int commodities and nothing useful,
    the world out there will be interpreting this accordingly:
    makes the Fed look impotent and the economy look unsalvagable and can lead to another round of massive withdrawls and a run on another bank.

    oil, not surprisingly goes up again.

  78. Tell you one thing, a lot of IV just came out of the stocks with the Fed release. Premiums no where near as good as this morning on the March options despite the stocks being higher than they were. Option bids not budging on several names.

    Just a heads up, the market is closed Friday.

  79. 2:30 PM EST

    Nymex Crude Rises On Expected Fed Rate Cut

    By Brian Baskin
    Of DOW JONES NEWSWIRES

    HOUSTON — Crude oil futures are trading higher as the market anticipates what could be a substantial interest rate cut by the Federal Reserve.

    Light, sweet crude for April delivery traded $1.53, or 1.4%, higher at $107.21 a barrel on the New York Mercantile Exchange. The April crude contract expires on Wednesday. Brent crude on the ICE futures exchange traded $1.59 higher at $103.34.

    Futures are trading higher after settling more than $4 lower Monday, in the biggest single-day percentage decline since August. The market was rattled by uncertainty in the financial sector after J.P. Morgan Chase & Co.’s (JPM) proposed buyout of Bear Stearns Cos. (BSC) at a low valuation, but has since returned to trading off of the weak dollar. Oil has only rebounded halfway from Monday’s losses, however.

    “A little profit-taking was probably well overdue, that’s why (prices) haven’t recovered all the gains,” said Mike Zarembski, senior commodities analyst at brokerage optionsXpress Inc. in Chicago.

    The dollar lost ground against the euro overnight, but was rising against both the euro and the yen Tuesday morning. Goldman Sachs Group Inc. (GS) reported stronger-than-expected first-quarter earnings, providing some hope that the worst of the credit turmoil is isolated to Bear Stearns.

    But the Federal Reserve is expected to cut its base interest rate, potentially by as much as a full basis point, with an announcement expected around 2:15 p.m. EDT. A rate cut would be taken as a sign that the dollar will continue to weaken, which traders have recently taken as a cue to bid oil prices higher.

    “Dollar weakness has re-taken the pole position in driving commodities higher after yesterday’s brief but dramatic turn lower,” wrote Addison Armstrong, an analyst at TFS Energy Futures in Stamford, Conn.

    After the Fed decision, the market will next turn to Wednesday’s release of U.S. oil and product inventory data by the Department of Energy. The average analyst forecast shows a 2 million barrel build in oil stocks, as well as a 100,000 barrel increase in gasoline inventories and a 1.4 million barrel decrease in distillate stocks.

    Front-month April reformulated gasoline blendstock, or RBOB, recently traded down 34 points, or 0.1%, at $2.5008 a gallon. April heating oil traded 3.34 cents, or 1.1%, higher at $3.1018 a gallon.

    —By Brian Baskin, Dow Jones Newswires

  81. ram – agreed, tomorrow morning some pretty good moves in price, maybe follow through on this move and then paint drying action through Thursday. Unless another bank falls apart.

  84. wow…nice “what me worry rally?” into the close. S&P took out key resistance at 1320 and didn’t look back.

  87. Not a good day to be holding financial puts. Why didn’ someone tell me when profits drop 50-60% from quarter to quarter the investment banks rally?
    apbd

  88. A – tough day to be short those for sure but I bet Sam is still in the SKF, as much as I would be there will be several more shoes to drop in the space.

  89. Denise – just caught the beginning of the cramer comedy hour. He added 3 more reasons we’re at a bottom and the logic was very sound. Was that a publicly available link?

  91. for dmh on Wed: (Z too)

    Re-read the Seeking Alpha article and got the most value from a reader comment…(disclosure…this copied over from SeekingAlpha article on 3/17…by George Spritzer, its very informative and trustworthy.)

    “The ex-date is the 26th of March. Which means that in order to get the distribution on 4/4 we need the first trigger day (close over 111)to be before March 24th.
    Also we’re in May futures now so oil has to rise 2.50 before Monday 3/24 and stay there for three days.”

    So, what does the Board think are the probabilities of this happening? It looks pretty risky to me (and I got long DCR today).
    The penalty of hitting the distribution limit is that DCR trades at an outrageous premium to the NAV you and I’d get from the trust dissolving. I’m re-thinking…puts on USO may be better. cheers- K

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