Blue Monday

100 thoughts on “Blue Monday”

1. One of the better, simple to look at, hurricane tracking sites:

   http://media.myfoxtampabay.com/myfoxhurricane/

   There are quite a few more on the Weather tab.

2. Not that the markets care today but Empire State index came in pretty solid, first positive reading since April 2008.

   http://www.marketwatch.com/story/new-york-factories-expanding-in-august-2009-08-17

3. Good morning. And welcome back, z! You picked a good week to take some time off…

   TechTrader takes Fridays and Mondays off in August… so, no TT color this morning.

   HeadTrader says he will be looking to see if people buy the weakness today, but he points out that they didn’t do that overnight in the foreign mrkts.

4. Morning Z, BOP.. what are your thoughts on eog, hk, nfx, clr septembers.. 5 weeks for rally?

5. Catalysts to Watch

   · Big catalyst for financials will be the credit card mastertrust #s for Jul (due out Mon Aug 17); also in credit card land – the industry’s new laws go into effect Aug 20. Recall financial stocks rallied on Friday (esp. BAC) in anticipation of a better-than-feared mastertrust update on Monday (a few weeks back at its analyst meeting, AXP signaled to investors that its Jul NCOs had trended better-than-planned).

   · In addition – the Fed’s Senior Loan Officer survey is due to hit early this week (will give updates on how credit standards are pacing and if they became tighter).

   · In CMBS, the next TALF window will close on Aug 20.

   · The Treasury will announce on Thurs Aug 20 the size of its next coupon sales (it will be selling 2s on Tues Aug 25, 5s on Wed Aug 26, 7s on Thurs Aug 27). The NY Fed will unveil its updated Treasury purchase schedule on Aug 19 (this will be the first schedule that adjusts for the Fed’s new slower purchase pace).

   · Earnings: The Jul-Q tech earnings season kicks into high gear – we will get numbers next week from A, ADI, NTAP, HPQ, BRCD, CRM, INTU, and others. Also – we will receive more earnings from retailers (inc. HD, LOW, and TGT) and DE.

   · According to CNBC, investors will also be watching for guidance on the economy from the Fed’s annual huddle in Jackson Hole, Wyo., where Fed Chairman Ben Bernanke gives the keynote address Friday.

   · Economics calendar to watch coming up – we will get the first Fed surveys for Aug (Empire and Philadelphia). The next round of housing #s will hit also (recall the last batch of releases a few weeks ago came in positive) – NAHB is on Mon, housing starts on Tues, existing home sales on Fri. The Eurozone trade balance, BoE meeting minutes, German ZEW and Switzerland Retail Sales will be watched in the rest of the world.

6. Gary – not too concerned about the Septembers in my strikes right now. Easy moves from here to there in all but HK. In the HK I will reposition the Septembers lower soon.

7. BOP – I think the Asian markets are down mid teens last two weeks. Wouldn’t be surprised to see a snapback there. Part of the problem has been a sharp reduction in money flows for investments in China. That can change with a sharp pullback.

8. NG green. Could be Ana fear. Could be just the idea that storms still form and go into the Gulf this time of year. Bill is the biggest of the season but forecast to swirl into the central Atlantic so it shouldn’t be that.

9. re 5, is there a known time for the data to be released?

10. er mastertrust data to be released about credit cards

11. BOP – Saw TPH became unrestricted on HK last week, also SMH came with a buy there. Did either one of them have anything out of the ordinary to say on the name?

    Gaam – No idea, I’ll let you know if I see it scroll across.

12. z — nope. Nothing particularly noteworthy-new on HK. Still wonder why TPH was restricted. Also, sounds like HK employees are still restricted… so, there is clearly something (some news — good or bad or neutral) that the company feels is non-public but material, waiting to come out.

13. Interesting data point from HT —

    from Bespoke….interesting tidbit, when shanghai market is down 3%+ overnight and S&P futes gap down more than 1.5%, the average move on S&P from open to close is +2.07%

14. Thanks BOP.

    Craptastic open. Feeling no sense of urgency to get more long.

    Re 13. Yeah, with my comment in 7 above I was thinking the U.S. generally does the wagging and not the other way around.

15. gaamblor — don’t know when that master trust data is going to be released… will watch for it for you. But, no time given…

16. It’s hard to imagine you can restrict employees without a leak. When companies give stock as bonuses, there is a restriction when you can excercise.

17. Nicky, are we in a correctine action or top?

18. ram — re HK restriction… i’ll bet there are very very few people internally who actually know why the restriction is in place. It could turn out to be nothing more than a change in their auditor… but, it’s deemed to be “material and non-public” by HK’s mngnt.

19. Single digit midgets traveling together and worse than the rest of the group.

    KOG, WRES, GST, PQ all down 7 to 10+%

20. Just looked over the crack data from last week. Nothing to write home about. Still, I think the broad market probably puts on a rally later this week so I am looking to exit my August VLO puts.

21. ZTRADE:

    VLO – Sold out of the August $17 puts, VLBTM for $0.26, down 40% with the stock at $17.20. Refining margins remain depressed but the stocks continue to hold their own fairly well, perhaps due to the potential for storm related disruptions this time of year.

22. FSLR – Heard about a Baron’s snub over the weekend. Those guys are often late to the story and often wrong once they get there.

    This is the Jefferies response this morning:

    Analysts at Jefferies & Co. on Monday reiterated their buy rating and disputed a weekend Barron’s article spotlighting aggressive accounting behind First Solar’s earnings updates.

    The Barron’s article said the S&P 500 component’s latest results reflected “deteriorating cash flow.”

    Jefferies analysts said the article “made several allegations about First Solar that we believe to be poorly supported by the facts.”

    Analysts said First Solar remains the “best positioned solar name due to its lowest cost structure” and that the company will likely offer 50% to 100% better margins than its peers.

23. Down Days are good for something… sold those BJS August puts. Actually made a little bit on them, so happy.

24. Hear ya BOP – would rather see them at the beginning of the week anyway.

    See Toll Brothers say people are more interested in buying homes again, less concerned about price. How anyone can believe a word out of those guys is beyond me.

    CLR filled that gap on its chart. Selling has just gotten out of hand there.

25. Toll Brothers… the only thing you can believe there is insider transactions. And the Bros sold in March/April … no buying yet.

    The CFO there is a pretty good guy. But, don’t trust the Bros.

26. ZTRADE:

    CLR – Added (10) August $35 Calls (CLRHG) for $0.35 with the stock down 9% today ($32.95 now) on 2.7% down oil and a weak market. This will be a quick one and is obviously a bit higher risk as the options have less than 5 days of life left in them. I continue to hold September calls here.

27. Kind of interesting article on California housing. Slower decline in housing prices but higher foreclosures, unemployment.

    http://www.marketwatch.com/story/no-light-at-end-of-california-real-estate-tunnel-2009-08-17

28. Possible solution. Have the government buy the homes, employ people putting solar all over them and resell at the same price as they bought, with no markup for the panels. Kills 3 or 4 birds with one plan. And since we don’t care about ballooning debt now, “we’ll worry about deficits later” I don’t see the downside, lol.

29. Bidding a little more of the CLR $35s so if you have some you want to dispose of here I am.

30. #28 — ha ha.

    How about we just have a moritorium for a while on using the words “solution” and “government” in the same sentence.

    It would be a nice vacation.

31. BOP – any post annual meeting thoughts on KOG?

32. Good shot of Bill

    http://weather.myfoxtampabay.com/maps/WTVT/custom/storms/bill_enhanced_satellite.html

    Ana now thought to disintegrate later today or tomorrow. Bill still expected to bend North.

33. More statistical info from HT… wonder if any of this stuff takes into consideration the “August Trading” effect, tho…

    “The S&P was earlier indicated to gap lower by more than -2%, the first time we’d seen a gap down that large since March 30th. When the S&P futures have opened -1.5% or lower on a Monday, then they managed to close higher than the open only 40% of the time (8 out of 20 occurrences), with an average return of -1.6%. When Friday was also down, then Monday’s win rate dropped to 36%, so obviously there weren’t a lot of times we saw an immediate rebound.

    However, buying the close on Monday and holding through Wednesday’s close led to 75% winning trades anytime Monday gapped down -1.5% or more, and of those 11 times that Friday also closed negatively, then buying Monday’s close and holding for two days led to 91% winners with an average return of +3.6%.”

34. KOG — low-down on KOG’s annual mtg was “no new news” was handed out. But, someone must have liked the smile on Lynn’s face…

    They have the results from well #5 now and are completing #6. When 5 and 6 are completed, KOG will put out an operational update. Could come just before the end of August. But, no “hints” at the AGM, from what I heard (TeddyBear Cam was not at the mtg).

35. BOP – Would it be greedy to hope for a down open Tuesday & buy that instead?

    Also, re. the China thing (#13): how much of that data goes back to when China didn’t really affect anything?

36. Dman — that technical data doesn’t care about fundamentals, at all. So, you can say “it’s different now” (because it is), but human nature hasn’t changed. The one question i do have, tho, is does any of this stuff work in August? Because, very few senior traders work in August. So, does TA and historical stats really help during the Dog Days?

    If the mrkt drops into close today, i’ll probably buy something for the Wed bounce. Just FYI.

37. Both AXP and C have reported their Trust data… both had better July write-down results than June, fwiw.

38. KOG — Wellington bought into KOG in a big way, during the 2nd quarter. They now own 8.8mm shares, 8.4% of the company. I would guess that Wellington was one of the institutionals who participated in the direct placement. From my experience with them, when Wellington buys in micro-cap energy land, they plan to be long-term holders.

39. LNG last week: 1.1 Bcfgpd. Where is the massive wave of LNG that came on line and was expected reach U.S. shores this past Spring? It is mid August. And we are up 0.1 Bcfgpd to last year’s low numbers but well off normal levels of as much as 3 Bcfgpd seen in 2007.

40. BOP = hear there, Wellington are smart energy guys.

    ZTRADE:

    HK – Added (9 – part fill) August $22 calls (HKHS) for $0.40 with the stock at $21.50. Risky. I continue to hold $23 and $24 strikes here and am in some September calls as well.

41. Afternoon all. Welcome back Z – hope you had a great vacation.

    My preferred count for the broader market is that we are in C of B down which when complete will lead to the final push up for 2C.
    Sure its possible that the top is in but cycles make me think we have another move up into the middle to end of September once this correction is done. There is a minor cycle bottoming today. Support is here at 982 and then more important support at 967, 950. I think 950 will hold the downside, maybe 967 and then we see the final push to the 1055 SPX area.

    If I am wrong and the top is in then likely the first wave down is complete or close to completion and we will see a 3 wave correction to the upside.

42. Thanks Nicky – Terranova on CNBS saying energy will lead the way higher. Can’t say I disagree looking at the valuations now vs historic ranges and the prospects for more upside than downside in things like natural gas. However, the fact that he says it makes me want to punt for the short term. Florida was great, watched very little TV and even less CNBS.

43. Re 41 – again, thanks for those levels.

44. Z, Nicky, what your views on NG as support levels-I know, the $64k question but it does not seem to be finding any meaningful support down here. $3 is looming large.

    BTW, welcome back, Z.

45. Choices – I don’t see much in the way of technical support for natural gas here. Chart is trading over thin air. I think if we slice into the $2s it will be both sharply lower and brief and the close that day may well be sharply back over $3.

    This week’s storage report will appear to be more important than it actually is for natural gas prices. We are full, we’re getting more full, 5 Bcf one side or the other of the estimates is not going to matter at all.

    Also recall that last summer, approaching storms that looked somewhat promising as disruptive events go sent gas lower, not higher. That same effect appears to be in play today. At some point soon, when one of the storms angles into the Gulf we will see quite a bit of short covering.

46. Interesting action in KOG, shrugged off a pretty sharp pullback from earlier. Seems like there is some new player(s) with appetite here. Pretty good volume for the name today as well.

47. Here is cramer’s two cents-http://us.rd.yahoo.com/finance/external/tsmpe/SIG=128ikei3n/*http%3A//www.thestreet.com/p/_yahoo/rmoney/jimcramerblog/10578779.html?cm_ven=YAHOO&cm_cat=PREMIUM&cm_ite=003190

48. Choices – my own view on nat gas is that are VERY close to a significant low. There is long term uptrend line that comes in around 3.00 which would be perfect (mainly because Z would not have to eat his hat) as it would give us a lower low for wave v. If lower numbers are needed then 2.7 should do it. This will be a major low imo that will not be retested for many years. I agree with Z that most likely we will see a brief spike down and back up.

49. Florida? Nice beaches in Florida?

50. KOG — update from the TeddyBear Cam!

    No suprprise, but well #5 was a good completion… comparable to their other wells. Working on completing #6. We should hear about these wells around the end of August (give or take a few days). It takes KOG a few more days than I thought, to get the well results, as mngmt doesn’t like to give out the IP until they get the flow-back cleaned up. Very professional.

    So, anyone buy those $1.07 KOG shares that traded today?

51. Ram – yep, very nice, torked the back a bit body surfing but well worth it. Deserted beaches too I might add. I’m told its more the area than something to do with the economy. Quite the opposite of a Socal beach (crowded) or a Galveston “beach” (spotted with little tar balls).

    Thanks for the update BOP.

52. Just fyi, those Galveston tar balls do NOT come from offshore drilling… it’s the bilge wash from tankers, bypassing Galveston and heading up the Houston Ship Channel.

    History question: Galveston was the largest port in the Gulf of Mexico until “what” happened…

53. That’s a great book BOP, Isaac’s Storm. Trivia question. What town was lucky enough to lose the meterologist to Galveston who then bricked his call on the storm?

54. GT – can you summarize? I don’t subscribe to his service.

55. z — That IS a great book… but, it’s not the Hurricane of 1900 that did in the Port of Galveston.

    New Orleans?

56. Builder’s confidence goes to 18, expected 19, up from 17 last reading:

    http://www.marketwatch.com/story/builders-confidence-inches-higher-in-august-2009-08-17

57. BOP – are you saying the creation of New Orleans did in Galveston? I was under the impression that wiping the island pretty much clean and putting it under 20 feet of water for awhile was a problem for further development there.

58. Or is New Orleans the answer to my question? In that case, nope, but good guess.

59. No… wondering if Isaac came over from New Orleans… but, i seem to recall it was some place like St Louis, or New York, or something.

    The Hurricane of 1900 — surprisingly — was not what did in the Port of Galveston… Galveston shipped something close to 80% of the cotton exported in the early 1900s. The local politicians got greedy… raised the Port Taxes. So, Houston saw it’s opportunity and dredged the Ship Channel. Then, after gambling was shut down, Galveston became a ghost town. It didn’t see a revival until George Mitchell started buying up real estate in the early 1980s.

    Anyway, politicial hubris (“Houston would NEVER build a channel deep enough to bypass our Island”) plus excessive taxation (“Ships have no alternative, and the cotton trade is owned by Rich Men”), drove Galveston to the brink of extinction.

    Kinda interesting, eh?

60. CLR well off its lows. I think their lack of hedges is more than offsetting recent positive drilling news with the name. On these fear of double dip down days it use of a small to medium sized rolling hedge position would probably help smooth the over reactions in the stock.

61. 59 – Ahhh soooooo. This is how I accumulate stories for cocktail parties. Thanks much!

62. jc says. Natural Gas stocks are vunerable:
    will we the us. take advantage of declines or squander it and back alt energy.
    Will washington see the light and back ng as a bridge to future. Takes pres. to make a stand.
    Saying demand is so low that producers could go thru the floor.
    Believes without gov support swn, apa apc,chk,xto etc. more selling to come.
    marginal players go bell up.
    Shorts could attack e&p’s with options exp friday or oih.
    Only thing stocks have in them is some are growth investments and people do not think the fuel can go lower. He says could go to $2.
    Essentially without a speech from Obama group highly vunerable.

63. Thanks GT – JC likes to make rash statements. He also likes to watch charts and get on the short side when they are down and long when they are up. Don’t see much new there.

64. BOP — 33 … just gambling !

65. And I don’t see the President taking on natural gas as a transportation fuel in the near term as he has plenty on his plate and has ignored obvious chances to promote it in the last 6 months. Guess I just don’t see a catalyst for him to speak about it.

66. And the #1 reson BO does not back NG ??? no union workers.

67. I do not think he has to adopt ng as transportation fuel. After watching the clean energy summit on pc and seeing reaction in clne I think both bills will pass in late october and this could be the catalyst we need.

68. Wyo = LOL

    I too think the NGA passes but I would have liked to see more incentives for non-fleet vehicles. If you have seen something promoting consumer NG powered vehicles that can put a lot of vehicles on the road, please let me know.

69. Wyo — File under LMAO… this morning’s WSJ had a comment by Fiat (remember them? Ombama bailed out Chrysler so that Fiat could buy in and save UAW jobs)… anyway, apparently Fiat wants to build their first Fiat in…. you guessed it… MEXICO!!

    No UAW in Mexico. The Italians ain’t stupid.

70. PackMan — #64. You’re precisely correct. Playing the odds is just gambling. But, that is what day traders do, if they really admit it to themselves.

71. Funny How?

    Must be 18 to open link:

    http://tinyurl.com/qnc8cz

72. Last 30 minutes going to be interesting. At least compared to the last 3 hours. Wow. Should have stayed on vacation a bit longer. Little news, Dow stuck down 165. Stocks slightly off lows but barely trading now.

73. July Master Trust Update

    · AXP – Results show continued sequential improvement. NCOs tick down for 2nd straight month to 9.2% from 9.9% in June and 10.0% in May. Importantly 30 day+ delinquencies also tick lower to 4.2% from 4.4% in June and 4.7% in July.

    · C – Delinquencies hold flattish while NCOs come in lower. 30+ day delinquencies tick up 2bps to 5.51% but NCOs come in lower to 10.03% from 10.51% in June.

    · BAC – July delinquencies continue to deteriorate sequentially but positively, NCOs hold flattish. NCOs fall to 13.82% from 13.86% in June; 30+ day delinquencies increase to 7.58% from 7.33%.

    · DFS – NCOs actually fall while delinquencies hold flattish. NCOs fall to 8.43% in July from 8.75% in June; 30+ day delinquencies increased to 5.28% from 5.27%.

    · COF – July NCO & 30+day delinquencies show sequential m/m uptick w/larger increases in Auto Finance unit than US Card & Int’l. July U.S. Card NCOs tick up to 9.83% from 9.73%; 30+ day Delinquencies rate also ticks higher to 4.83% from 4.77% in June; July Auto Finance NCOs rise to 4.26% from 3.89%; 30+ day Delinquencies rate rises to 9.22% from 8.89% in June; July Int’l NCO rise to 9.76% from 9.26%; 30+ day Delinquencies rate flattish at 6.68% (from 6.69% in June).

    · ADS – NCOs and delinquencies move higher. NCOs up to 9.7% from 9.4%; 30+day delinquencies +22bps to 6.23%.

74. re 73 – that looks pretty decent. While the direction of the charge offs is positive on the whole, any idea what level of NCOs is considered normal?

75. Crude running up a bit into the close of Nymex and dragging NG with it. Stocks sort of taking notice. Note that oil, which fell $3 on Friday did not benefit from the end of day rally in the broads and is today, not outperforming the equity indexes as a result.

76. z — i don’t know what “normal” NCOs are… maybe someone else does. But, it would have to be a number under 5, probably around 3, I would think.

77. BOP – thanks, just curious, kind of what I was thinking. Interesting also to see the delinquencies just sitting there. I would expect them to be extending right now with the savings rate.

78. To follow on… you don’t want to see a bank with zero net charge offs… that means they aren’t lending aggressively enough. So, “zero” is not the goal… but, something under 5 would tell us that a lot of stuff is already water under the bridge. Obviously, not there yet.

79. Finally, a storm named after me.
    apbd

80. AP – your storm is going to play heck … with a lot of fish.

81. #59 and the high rates leading to the ship channel began in the 1870’s well be fore the storm…

    also, I haven’t seen a tar ball in Galveston in years.. back in late 70’s, you couldn’t take two steps without stepping one

82. Gary – I was thinking 80s, haven’t been on the beach there in awhile.

    Market stuck in neutral. Crude continues to rise slowly in the AH.

83. i read they had a bunch of tar balls from unkown source recently down south..

    Commodore Morgan pre-empted everything and built his own channel across Morgan point in 1876… at a cost of $90,000 .. the feds reimbursed his family when they opened the Houston Ship Channel..

    Not sure there is a “Morgan Street” downtown anywhere lol

84. vacation time again?

85. In spite of the big down numbers… it was a pretty boring day. HeadTrader had to hit himself over the head a couple of times today… just to stay awake. So, maybe it’s vacation time for lots and lots of folks…

86. Garyinhou — thanks for the Commodore Morgan information. And you’re right, don’t think there is a Morgan Street… at least, not on the East End.

87. BOP – I like the ship channel and port.. ours and Galv’s… Houston had wanted it.. and the Great Storm created a nice “that’s why” angle… Galveston folks thought we were delerious and would never dredge it..

88. Morgan St is east of Montrose in older part of Houston.

89. Gary — i like ’em too. Both of them.

    Spent several formative years, living in Galveston. Learned to appreciate air conditioning and riding horses on the beach.

    Can you still ride horses on the beach? But I’ll bet they don’t let you drive cars there anymore.

90. And a city of 335 persons, LOL

91. there was a small area out on east end.. not sure if they still operate…. got to go to surfside or matagorda to drive on beach

92. whoops.. west end…

93. I googled it… still can ride horses on beach at 8 mile road… $25… cash only

94. Gary — that is cool! 8 mile is where we used to ride. Nice to see some things don’t change.

95. http://tinyurl.com/oqr2os

    About BP not Joe Pesci

96. opec compliance:

    Interesting article

    http://download.hellenicshippingnews.com/pdf/weberweekly/WeberWeekly33.pdf

97. 70 dollar oil seems to be the number for opec producers to cheat

    http://www.reuters.com/article/marketsNews/idAFN1737938920090817?rpc=44

98. 4 reasons to retrofit to NG vehicles

    Currently a retrofit cost about $12,500 and the nearest place I can have it done is Dallas. I could buy a home compressor to hook into my gas line from Fuelmaker of Canada…

    1) Detroit makes lower cost kits, local dealers do the retrofit – Gives Detroit something to do, drives business to dealers

    2) Decreases reliance on imported oil – NG equivalents are about $1.80 gasoline gal equivalent

    3) Sops up domestic production of our most available resource and makes more jobs domestically.

    4) Reduces emissions

    Will it be done? Nah, entirely too logical.

    JR

99. 62… yeah, throw a speech at em !
    speeches make stocks go up … LOL

100. https://www.cnginterstate.com/orders/new

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