19
Nov

Thursday – Gas Preview and Oil Review Plus

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Mea Culpa Watch: Barring a miracle I will have a large number of scuds this expiry. While a few scuds are nearly unavoidable given what I do,  I'm not pleased with November's performance, as I've given back most of my gains for the $10KP II from September and the first part of October over the last 4 weeks. While operating results for the 3Q reporting period were largely better than expected,  a sharp retrenchment in natural gas prices brought about by the release of the August EIA data and a spell of mild weather at the end of the injection season / beginning of  the withdrawal season, led to underperformance for the gassy stocks. This underperformance largely offset gains in my oil and coal positions. I think it is important to learn from ones mistakes. In this case, figuring out what the mistakes were is a little harder (again, given the better than expected results and largely "upped" guidance and lack of excessive valuations going into earnings), my best thought is a failure to be patient in buying dips once the market firmly began to fail to reward positive items for more than 24 hours. The good news is that I maintained a strong cash position. The bad news is that after 3 months I'm only up a little better than 50% from where I started the second $10KP portfolio.  As far as the long term outlook goes, and this is where the ZLT comes into play, I'm not greatly concerned and am considering contributing some cash to positions there before year end. ZLT performance can be seen on the ZLT tab. 

Eco Data Watch:

  • Jobless claims: 505K vs 500K forecast, last week was revised down to 505K as well
     

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Preview
  4. EIA Oil Inventory Review
  5. Stuff We Care About Today - AEZ, Dry Bulk Multiple
  6. Odds & Ends

 

Holdings Watch:

  • $10KP II:
    • $16,600
    • 65% Cash
    • The Current holdings tab is updated.

Yesterday's Trades:

  • WLT – Sold the $70 November calls for $2.05, up 25%. Will reposition soon.
  • HK – At $22, the stock looks cheap to me. Adding (15) $22 November calls (HKKS) for $0.45. More reasoning available on the site. I may add to the common position down here as well.

 

Commodity Watch:

Crude oil closed up $0.44 at $79.58 yesterday, after the EIA released fairly bullish looking numbers (see Oil Inventory Review below). This morning crude is trading off about $0.40.

Natural gas dropped $0.28 (6%) to close at $4.25 yesterday. See CPC forecast next bullet ... weather is cooling but remains too mild to buoy gas amidst renewed analyst pessimism. This morning gas is trading slightly lower.

  • CPC Recovered Their Damaged HDD Files. The Climate Prediction Center also commented that it had inaccuracies in its database and has restated this means this winter's HDD data. The new data is reflected in the numbers below:

 

 

Natural Gas Preview

  • My number: 20 to 30 Bcf ~ warmer weather (92 HDDs) and rapid decline in price could lead to a slightly bigger build.
    • Last Week: 25 Bcf Injection - on degree days of 104.
    • Last Year: 23 Bcf Injection - HDDs were 123 but demand was retreating as well.
    • 5 Year Average: 2 Bcf Injection - Normal HDDs for the week are 127.
    • 10 year Hi: 33 Bcf Injection
    • 10 year Low: 90 Bcf Withdrawal
  • Street Consensus: 19 Bcf.

EIA Oil Inventory Review



CRUDE OIL:  Utilization remains weak, but imports remain weak as well, and stocks are becoming less bloated as a result.

 

 

GASOLINE - Better numbers on demand, but especially low imports really helped the inventory number and that's unlikely to remain that low. Still, stocks here have become considerably less bloated as well.

 

 


 

DISTILLATES: Still a problem for those looking for a near term pop in crude prices. I said months ago that bloated inventories here would act as a governor on crude prices as distillates take a front seat to gasoline in helping to determine crude prices and this appears to be the case.





 

Stuff We Care About Today

AEZ Snapshot - Bakken Minnow

  • 70,000 net acres, Williston Basin, Goliath area, Williams County, North Dakota
  • Plan seems to be partner up with someone who give them a 100% carry or nearly 100%
  • I took a pretty harsh whack at the numbers below (both prospectivity of their acreage and potential reserves) as I give credit for wells drilled in a play, and until it is proved up through the drill bit you just don't know. Given the location of the acreage, I would assume that they do better than this but again, got to get that bit turning.
  • On my severe whacking basis, this comes to $4.80 per share. Sensitivities to changes in the average reserve size of the wells encountered and in the $/barrel are listed at the bottom of the table.
  • On this basis, acreage would come to just over $3,000 per acre which isn't unheard of in the play.
  • As they drill wells (someday), expect to see the valuation transition from acreage based, to potential reserves based, and much later to cash flow based.
  • I plan to start watching these guys and NOG a little more closely in the future.

 

Dry Bulk Multiple - Just a table for now, working up my thoughts on the recent sharp rally in rates:

 

FTO - suspending future dividends

  • Well run refiner; sign of the times in the U.S. independent refining segment.
  • The wife happens to own a little of this one but probably not for long.

 

Odds & Ends

Analyst Watch:

  • SM - raised to Buy at Keybanc.
  • ESV - upped to Buy at MKM

Interesting Reading Watch:

90 Responses to “Thursday – Gas Preview and Oil Review Plus”

  1. 1
    BirdsofpreyRcool Says:

    Summary of Today’s Items —

    Today’s Top Stories & Catalysts

    · Stocks worldwide are better for sale this morning; European stocks & US futures move to overnight lows (SP futures take out 1100 level), while Japan’s Topix fell for a 7th day and India dropped >1%. The USD is catching a safety bid with DXY up >0.5%; on the flipside, the euro is seeing some heavy sell pressure vs both the dollar & yen (EUR/JPY cross down >1%). Dollar strength knocking gold down $9.

    · Asian currencies weaken as Brazilian move fans fears that other countries could take action to limit FX; Indonesia c bank says studying not considering capital curbs; India says watching capital inflows, no concern for now; Taiwan issues warning that has eyes on “hot money” The South Korean won was lower late Thursday, as offshore investors reacted skittishly to news that a series of measures aimed at bolstering the stability of the foreign exchange market will be implemented next year. Reuters/DJ

    · China’s yuan forwards dropped, headed for the biggest weekly loss in 11 months, after Chinese officials rejected international calls for the currency to appreciate. Bloomberg

    · Fed’s Plosser says the US$ slide in the last few months isn’t a surprise and reflects the stabilization of global financial markets (DJ). “A lot of the decline of the dollar over the last year has just been reversal of the run-up after the panic,” Plosser told reporters. “Growth has returned and panic has subsided. There is no particular reason why you wouldn’t expect the dollar to go back to where it was before the panic set in.” Plosser’s tone is similar to the Bernanke speech of earlier this week. Fed officials, in speeches over the last few days, don’t sound particularly worried when it comes to the buck. Next week’s FOMC minutes may reveal a larger discussion around the buck took place among Fed officials.

    · Tech Update: BoA/Merrill is downgrading the semis today…call receiving attention in tech sector this morning. Last night, NTAP posted a very strong Oct Q across the board (revs and margins). On the all, mgmt said the Q ended very strong, w/positive linearity. The public sector, along w/Europe, were highlights for the company when it came to sales. Looking into the Jan Q, mgmt issued guidance ahead of the St view but mgmt tempered expectations and said margins wouldn’t be sustained at Oct-Q levels. Elsewhere, Digitimes is reporting that Apple has delayed the launch of a tablet until the second half of ’10. Infineon reported decent earnings and guided for flattish Dec-Q revs. SMTC EPS for the Oct Q came in a bit light of some views; guidance for the Jan Q ex out an extra week calls for revs to fall 5% Q/Q.

    · FHA lending “the next subprime” according to TOL’s Bob Toll; “Yesterday’s subprime is today’s FHA,” Toll said today at a New York conference for builders sponsored by UBS AG. “It’s a definite train wreck and the flag will go up in the next couple of months: Bail us out. Give us more money.” Bloomberg

    · Insurers have a lot of cash but few attractive places for it says the WSJ; life insurers have poured money into the corp bond market, helping to drive yields down. “insurers are finding it harder to put money to work, according to data and interviews with insurance executives and analysts”. Any slowdown in the purchases of bonds by insurers could slow the market’s recovery. WSJ

    · “US banks thirsty for more capital” according to Reuters. The article was written following the Reuters Financial Summit. “Hundreds of banks are likely to raise capital in the coming months”….US banks have already raised $52.9B this year. Sandler O’Neil, which has raised capital for 40 banks this year, is closely monitoring 300 banks that it needs could also need to raise capital. Reuters

    · Gold: physical demand dropping amid higher prices; investment flows keeping prices elevated. Gold demand fell 34 percent in the third quarter as high prices weighed on investment flows and led to a slump in jewelry buying. “For most of last year, the buying was very physical…Now), it seems to be more financial market-driven, by some of those other less visible instruments — derivatives, futures, over-the-counter transactions.” Reuters

    · Retail earnings recap: Theme in retail earnings continues to be better Q3 results and disappointing Q4 guidance. Both PETM, GYMB and HOTT all traded lower after the close while LTD moved higher as Q4 guidance range bracketed the St. and was above market expectations. On Restaurant side, JACK sold-off after the close after sales for the Q were weaker (although eps beat) and guidance was well below the street (and recently lowered JPM estimates).

    · Sen Reid unveils his health care bill officially; the CBO releases its “scoring” information Wed after the close. The Senate needs 60 votes to proceed to a floor debate on the legislation – Sen Reid could call a vote later this week, perhaps on Sat if not sooner. The CBO estimated the Senate measure would reduce the federal budget deficit by $130 billion over the next decade, and additional amounts over the second 10 years of the program – this was a boost for the Reid bill. Sen Dems expressed increasing optimism that they will gather enough votes to get the necessary 60 votes. The total legislation is expected to cost $848B, below the $1.05T price tag on the House bill passed earlier this month. WSJ

  2. 2
    tomdavis12 Says:

    Z: Trading new UNL slight bullish for NG?

  3. 3
    BirdsofpreyRcool Says:

    TechTrader out with a 60/40 SHORT call for the best odds of a day trade working.

    HeadTrader says he is “playing today by ear.” But he would buy in front of 1100 with a tight stop.

    Not too much “good news” on the eco- and political- and interntional-front… so, get ready for a downer today, it looks. (To which HT says “marvelous grasp of the obvious.”)

  4. 4
    zman Says:

    Thanks BOP, any HT or TT comments?

    On the Consensus gas number for the week, I think the Street is a bit too aggressive (low) after having seen the CPC’s new HDD estimates, maybe intentionally so as they have all gotten bearish again and coming with a low number that then fails only reinforces how smart they are.

  5. 5
    zman Says:

    Anyone notice the yo-yo pattern in the dollar these days. Seems like it is up one day and down the next with the bias still to the downside.

    Leading indicators at 10 am EST, forecast 0.4%

    Philly Fed at 10 am EST, forecast 14 vs 11.5 last month.

  6. 6
    bill Says:

    >Fight climate change with free condoms

    thanks for the laugh

    Abolish all humans and climate change wont matter

  7. 7
    bill Says:

    Why doesnt the us have export terminals for ng/lng? Does the US have at least 1 export facility?

    Import terminals are springing up all over the country

  8. 8
    zman Says:

    Bill – yep, it’s in Alaska, sends a little gas to Japan each month.

    Many of the import terminals are applying for export licenses with FERC right now.

  9. 9
    elijahwc Says:

    Pritchard Capital Partners, LLC – Contact: Gail Nickelson – 703-891-6080BuyCimarex Energy Co. (XEC-$47.92) – Latest two wells using acid wash and varied completion techniques look very good. One resulted in one 8 MMcfpd IP rates (well above prior type curve after 10 days) with rate still building. If sustainable wells could produce in excess of 1 Bcf net during the first year. Has a strategic position in one of the most economically robust gas shale plays in the U.S., the Anadarko Woodford Cana play in Oklahoma. XEC estimates that its 94,000 net acres (half of its acreage held by production with average NRI at approximately 80%). Devon Energy Corp. (DVN-$71.66) said Monday it plans to sell $4.5-$7.5 billion in assets to focus on its premier North American shale development plays like Cana, a major endorsement of the quality of the asset in our view. XEC estimates 2-3 Tcf net estimated potential using 400-500 net locations (160-acre spacing) and 6.0+ Bcf wells. Increasing EURs to 8 Bcf could potentially add another Tcf in potential, and downspacing to 80-acres could increase potential even further. DVN plans to double its 2009 drilling in 2010 with 80 wells, ramp the rig count from 10 to 18 by 2014, and exit 2014 at 400 MMcfe/d. XEC 3Q09 production of 31 MMcfe/d was up 181% year-over-year, and growth should continue with the rig count rising from three currently to 4-6 in 2010. ‘Buy’ rating.

  10. 10
    bill Says:

    when a hub has negative flow volume , what does that mean? withdrawals??

    http://intelligencepress.com/features/bentek/location.emb?id=23

  11. 11
    zman Says:

    NFX will be active in Cana too, expecting well results in 2010.

  12. 12
    bill Says:

    interestingly, most hubs cash prices are trading at a premium to hhub

    http://intelligencepress.com/features/bentek/

  13. 13
    BirdsofpreyRcool Says:

    Good day to take a step back, get a cup of coffee, and read X-Asset Class Strategist’s latest observations on stocks and the credit market (hint: credit strong, stocks scared, strong credit means higher stocks eventually) —

    http://www.capmarkets.com/ViewFile.asp?ID1=321541&ID2=343007565&ssid=2&directory=11608&bm=0&filename=Despite_Four_Poundings_From_The_Rusty_Hammer_The_Rusty_Nail_Does_Not_Want_To_Go_Down_11-19-09.pdf

  14. 14
    zman Says:

    Bill – It has to do with a reversal of the amount of gas nominated (reserved) on the system, so shippers deciding to ship less gas.

  15. 15
    zman Says:

    Oil held up well pre market, then sliced $79 and is looking at $78, very little support between whole dollar figures on days like today. Sea of red on the stocks, valuations don’t matter on these days, just tossing commodity (and apparently a lot of other sectors) out the window.

  16. 16
    zman Says:

    Saw CRT’s comment on gas and agree with it for the most part re gas numbers:

    > 25 Bcf = bearish,
    < 5 Bcf = bullish

  17. 17
    zman Says:

    Leading indicators and Philly Fed in at the top of the hour.

  18. 18
    BirdsofpreyRcool Says:

    I gotta say… unless they have called off Winter this year, HK sure looks attractive here. Risk is that we get two more weeks of bearish nat gas numbers, but at some point, traders are going to have to pull on beanies and mittens, while they are standing on the train platform.

  19. 19
    zman Says:

    Thanks Tom, just saw your 2 above, is that a 12 month strip fund?

  20. 20
    BirdsofpreyRcool Says:

    Leading indicators a tad weaker than expected at 0.3% vs 0.4% expd

    Philly Fed stronger at 16.7 vs 12.2 expd

    Mortgage Delinquencies at all-time high of 9.64%.

  21. 21
    zman Says:

    Philly Fed 16.7, ahead of 14 expected.

    Leading indicators 0.3%, just under 0.4% forecast.

    Market looks unimpressed.

    BOP – agree, this week and next still small injections. Bulk of winter obviously still to come but it always smacks the gas market when injection season lasts too long.

  22. 22
    zman Says:

    Gas number in 30 minutes.

    BOP re 18. Hear ya. Am going to reload longer soon + more common.

  23. 23
    tomdavis12 Says:

    Z: UNL a 12 month NG fund.

  24. 24
    zman Says:

    Tom – thanks, I recall hearing something about one starting up. Will certainly be less volatile than UNG. I would think lower cost as well.

  25. 25
    zman Says:

    SD green. And on good sized volume for this time of day.

  26. 26
    zman Says:

    NG flat at $4.25 pre number

    Injection: 20 Bcf. Ok, not great.

  27. 27
    zman Says:

    After the sharp recent decline, we could see a bit of a bounce on this.

  28. 28
    West Says:

    Thx Eli for #9

  29. 29
    bloodystupidjohnson Says:

    Z – missed it, what was your take yesterday on FST — from a stock point of view not an option point of view.

  30. 30
    zman Says:

    BSJ – nutshell on FST

    Still getting to know the name again after a long hiatus but all positive thoughts there at this point. Stock is jump up and down cheap on forward cash flow (just under 3x 2010 CFPS and I think those CF estimates will be coming up, not down). No guidance for 2010 at last check but potential for big wells is high in the Haynesville and in the Granite Wash.

    Am about to look through new presentation there.

  31. 31
    zman Says:

    Nicky – got levels?

  32. 32
    zman Says:

    BSJ – one last thing on FST, debt level is high but coming down. If we go back into a period like last Fall where credit seizes up, these guys and guys like PXD will be amongst the more picked on names. This is another reason why I don’t get the harder whipping post action that HK is taking as they improved their balance sheet after taking it on the chin last cycle for debt load.

    NG up 2 cents now.

  33. 33
    zman Says:

    Oil down $2.30 and tracking the broad market.

  34. 34
    Jerome Blank Says:

    HK gave up support this morning, its now on a P&F sell signal…also worried about AEZ…if you look at the traditional daily chart, there is a samll gap lower on the open which occured after a daily “shooting star”, yesterday, this is bearish…I’ve seen this setup many times, it’s a high probability setup for more downside, I’m going to try and buy further down, I’ll keep you posted…

  35. 35
    bloodystupidjohnson Says:

    I think stocks like HK and SWN are currently trading stocks. When the “hot money” want some sort of energy exposure these are the stocks they buy. I don’t think the current movement in HK has anything to do with its fundies. It’s hot money moving in or out.
    It has nothing to do with the IV, or the quality of the company.

  36. 36
    zman Says:

    BSJ – we’re back to being related again.

  37. 37
    choices Says:

    Fairly impressed with how SD and EXXI are holding up here-gassy stks, HK, CHK, SWN continue to get pounded, altho SWN not as weak as the other two.

  38. 38
    zman Says:

    NG up 6 cents.

    I hear ya choices.

  39. 39
    bloodystupidjohnson Says:

    Z, I tell you another stock that has been a hot money stock and that is WLT. WLT know longer trades on its fundies, but on other stuff.

  40. 40
    zman Says:

    At some point, my guess is soon but not soon enough for November expiry, the market will take a look at the recent damage done in the NG space and decide enough is enough.

  41. 41
    zman Says:

    BSJ – Agreed it was/is a hot money favorite. Re WLT – I’m out right now (as of yesterday) but will be back again soon. It’s going to grow volumes for next 3 years and it’s not yet expensive at these levels.

    EPS:
    2009 2.67
    2010 6.40
    2011 8.39

    SEA, the drybulk ETF, off 3% today.

  42. 42
    bloodystupidjohnson Says:

    I am approaching my one year anniversary in WLT common. Over that year it has changed from a coking coal stock to a Investors Business Daily stock and the mo mo crowd. Another stock that is has also transformed is WLL. In July, you couldn’t give that stock away, now all the hot money use it as an oil/dollar/bakkan proxy.

  43. 43
    zman Says:

    They did the same to BEXP last year before it got over leveraged and oil fell. The keys to them sticking with the names is 1) commodity not falling 2) stock able to keep drilling, not capital constrained, 3) catalytic news releases, 4) stock remaining cheap on forward basis even as it advances. This is easier for oil than gas weighted companies right now as gas prices are still tenuous where as oil is seen as something that will grudgingly advance over the next couple years. I think natural gas does too but my camp there is more lonely (again after a recent surge in optimism that has even more recently faded). Anyway, BEXP and CLR would be more mo-mo ish if they didn’t already trade at rich multiples. WLL is still cheapish and is turning in big wells at Sanish and has other things on its plate now. Guys like Navalier can chomp on that kind of thing whenever oil perks up so it makes sense that its a mo-mo darling.

  44. 44
    zman Says:

    S&P in danger of edging away from the abyss.

  45. 45
    ram Says:

    So, it is possible to deduce that if a stock does not react to good news, the momentum money is not behind you. Therefore, the risk could be higher for short term trades. Besides the obviious appreciation, are there other means of detecting a money flow change to an individual stock or group?

  46. 46
    tomdavis12 Says:

    Z: FIDO has been a seller of HK. Will try to give more color. On the other side a mutual fund IGNAX with whom I have a great deal of respect for his management skills has HK as his second largest position. Will try to get a list of why he is so bullish.

  47. 47
    bloodystupidjohnson Says:

    Being cheap on a c/f basis is the hook that brings them in.

  48. 48
    zman Says:

    Tom – thanks on the Fido, could they be pulling back from gassy E&P in general.

    As to the other guy, I think we’ve beaten the positives on the story to death for now.

    BSJ – right, and there’s cheap and cheap for a reason. And expensive and expensive for a reason as well. I look at that measure to keep me out of trouble (as in this is the most expensive XYZ has ever been after this run) but being cheap is not my sole reason to buy; management, prospects, production profile, reserves, operating costs, balance sheet, hedges all play into the thinking.

  49. 49
    zman Says:

    One of you technical guys have a resource or link to share on 45?

  50. 50
    zman Says:

    Ram – I’m pretty old school on that kind of thing and I look at OBV.

    I’m sure there is a newer, better tool for detecting momentum shifts.

  51. 51
    bloodystupidjohnson Says:

    Being a value investor, one of the biggest questions you have to ask yourself, is this thing cheap because it is bad or cheap because Mr Market is stupid.

  52. 52
    ram Says:

    Sorry, OBV?

  53. 53
    bloodystupidjohnson Says:

    On balance volume

  54. 54
    ram Says:

    Thanks bsj.

  55. 55
    zman Says:

    OBV:

    http://www.investopedia.com/terms/o/onbalancevolume.asp

  56. 56
    zman Says:

    re 51 – right, cheap or cheap for a reason.

  57. 57
    zman Says:

    NG up 8 cents, seems washed out.

  58. 58
    zman Says:

    Thanks for asking Ram.

  59. 59
    bloodystupidjohnson Says:

    Of course in my mutual fund days, I use to work for a man who loved to buy bad companies when they reached their point of “maximum pessimism”.

  60. 60
    tomdavis12 Says:

    Z: Fido has been leaning on the stock for some time. Will try to find out when they are done. They normally do not care about price.

  61. 61
    zman Says:

    NG up a dime.

    Thanks Tom. Used to deal with them and agree. Heavy handed on entry (especially when completing a position) and on exit.

  62. 62
    bloodystupidjohnson Says:

    Z – concerning FST. I would love to buy the common, but it would have to get at least 3 points cheaper for me to have a big enough margin of safety to even consider it. I doubt if it will see the 14’s again, but you never know.

  63. 63
    BirdsofpreyRcool Says:

    HK — just looking at historical patterns, I would say that if HK looks like it is going to close near it’s opening price today, then it’s worth buying near the close. That indicator has worked pretty well, for the last year. If HK looks to close lower than where it opened this morning, the selling is not done and it may continue to decline tomorrow. So, watch the last half hour… could be a good indicator.

  64. 64
    BirdsofpreyRcool Says:

    Just to put a data point on it, HK opened at 21.53 this morning.

  65. 65
    zman Says:

    BOP – good point.

  66. 66
    ram Says:

    Thanks for the link Zman.

  67. 67
    jiveyjr Says:

    Ram there are a plethora of technical indicators and books…if you want any recommendations on books Jerome would be a good source. Like Z, I’m old school but I will tell you this about accum./dist. Sometimes it is just as basic as counting the up and down volume bars and assessing their regular magnitude over the last 10-20 days or so….they teach that at the IBD advanced seminars…not a very advanced concept…lots of thing are simple yet hard

  68. 68
    jiveyjr Says:

    in 67, I said assessing regular magnitude…I meant to say relative magnitude…

  69. 69
    Nicky Says:

    Afternoon all.

    20 day cycle topped on cue. I must be going soft but I am not feeling super bearish here. I think the downside into the 26/27th November holds the 1070 area on the SPX. For me to turn bearish we would have to take out 1029.
    Also this is OPEX week so we could just as easily finish tomorrow back above 1100 so again I am a bit more wary of this move than I may have been.
    From the bullish point of view any more above 1098 would imply that we have just seen 4C complete to the downside and we were heading to new highs.
    Support below is at 1085 and 1080.

  70. 70
    zman Says:

    Good point Jivey

    Thanks much for the levels Nicky

    NG down a penny, just couldn’t hold the gains.

  71. 71
    zman Says:

    Oily names doing slightly better than gassy names. Service getting bashed again which makes some degree of sense since it has outperformed for so much of the year and estimates are likely to only bottom 2H next year for the big cap service names and maybe 2011 for some of the more commoditized services. Service probably still does Ok in 2010 as there is a deceleration of falling prices going on now.

  72. 72
    jiveyjr Says:

    not to compete with Nicky or Jerome but Jerome doesn’t appear to be around.

    I’m watching this on the SP…it appears the PF sell gets triggered at a print of 1030.

    I’m also tracking an up channel on the SP I started tracing from the first July pullback…we are now pulling back from the top of the channel and will encounter a channel break to the downside below 1050 or thereabouts

  73. 73
    zman Says:

    Thanks Jivey – can always use the extra technical color. Just making my list of the overly beaten down, names for next week’s action most likely as I see little point in playing tomorrow other than punting one of two things that are not toast. Market may be close to its high but some stocks are off 30% or more in the last 3 weeks here, pretty nutty.

  74. 74
    jiveyjr Says:

    I see my PF sell signal coincides to where Nicky gets bearish at 1029…so I feel okay here with the SP and am ready for weekend football

  75. 75
    ram Says:

    Thanks J.

  76. 76
    BirdsofpreyRcool Says:

    More evidence that “smart money” is issuing debt to — presumably — either invest in equities or to leverage their returns. The new credit cycle is in just getting started. Historically, stocks don’t believe it for a year or two…

    Oaktree Sells $250 Million of Bonds in First Public Debt Issue
    2009-11-19 17:39:46.719 GMT

    By Pierre Paulden and Gabrielle Coppola
    Nov. 19 (Bloomberg) — Oaktree Capital Management LLC, the investment firm with $67.4 billion in assets, sold $250 million of 10-year notes in its first public debt offering.
    The 6.75 percent bonds priced to yield 360 basis points more than similar-maturity U.S. Treasuries, according to data compiled by Bloomberg. They are expected to be rated A- by Standard & Poor’s, the data show. Bank of America Merrill Lynch led the offering for the Los Angeles-based asset manager. A basis point is 0.01 percentage point.
    Oaktree, formed in 1995 by seven former executives from Trust Co. of the West, has added more than $16 billion in assets in the past two years amid the worst credit crisis since the Great Depression. The firm specializes in high-yield, high-risk loans and bonds and distressed debt that rallied this year as the economy has recovered.
    The investment firm is issuing the corporate debt after raising $945.6 million in a private, over-the-counter equity offering in April 2007, according to a Nov. 16 Fitch Ratings report. Oaktree used $701.2 million of the proceeds to pay principals and employees and $244.4 million for corporate purposes, Fitch said.
    High-yield, high-risk debt is rated below Baa3 by Moody’s Investors Service and BBB- by S&P.
    Leveraged loans have gained a record 46 percent this year after losing an unprecedented 28 percent in 2008, according to the S&P/LSTA U.S. Leveraged Loan 100 Index.

  77. 77
    Jerome Blank Says:

    RE: #72, Hi jiveyjr, just got back, I appreciate your insight and comments…by the way, BEXP is really at an interesting technical point…the traditional daily chart shows a relatively rare, perfectly formed ascending “wedge”, that upsloping wedge is textbook…there is a difference of opinion on this,but many technicians consider this formation bearish, almost like an upsloping tree branch that gets too heavy at the ends and breaks off…what’s even more exciting is that the wedge holds support at $9.50 to about $10 which is also major P&F support, BEXP goes on a sell signal from hear on a print of $9, longer term holders should consider holding until this level is breached, the wedge might look like it is broken on a traditional chart before $9 is hit, but I think the stock holds up until at least the print of $9…

  78. 78
    jiveyjr Says:

    thx Jerome…glad you’re back. Not near the technician others, like you and Nicky, in here are

  79. 79
    zman Says:

    NG back up 8 cents at the close of Nymex. Go figure.

    Red paint drying off lows but definitely drying. Grabbing a late lunch.

  80. 80
    Nicky Says:

    Jivey – imo sometimes the simplest of channels make the most sense and when trying to trade the bigger picture rather than intraday they are the ones to watch. Which is why I don’t think the upside is any real danger until your 1030 goes.

  81. 81
    jiveyjr Says:

    if the pullback in this SP channel works out timing wise like the three others the pullback would be over the first couple of days of Dec., which I think coincides roughly to remarks you’ve made too Nicky

    everyone goes about it a bit diff. I am fascinated with the Elliot stuff but can’t put it together myself

  82. 82
    isleworth Says:

    looks like Fido might be done with HK selling…..lifting a bit

  83. 83
    zman Says:

    Just about where I left things. Thanks for the index TA talk, much appreciated.

  84. 84
    zman Says:

    Went by the PO Box at lunch,

    got your letter Tom, thanks.

    got your CD APBD, thanks, will listen with the kiddos.

  85. 85
    Jerome Blank Says:

    RE: #63, BOP had great observations regarding HK…interesting that HK started to find support at the 9/3/09 low, which if it holds, would be a potential double bottom…nonetheless HK still needs to prove itself, the $21 print sent it back on a P&F sell signal, also breaking long term P&F support which was well defended, additionally, we now have the 200 SMA as a ceiling now, rather than a floor, at about $22.50 which is a favorite selling point, ie: wait and sell the rally back at resistance, so if HK can form a decent “hammer” here into the close there may be a good short term trade back to resistance at the 200 SMA, but longer term we need to see a 3 box reversal, which from here is a print of $24

  86. 86
    PackMan Says:

    HK recovering from its smackdown a bit.

    not so, SD.

  87. 87
    zman Says:

    Beerthirty

  88. 88
    zman Says:

    Pack – its like a random shooting gallery today. Tomorrow, no eco data, so I’d guess they pick a direction in the morning and melt that way with little happening after the first hour or two.

  89. 89
    tomdavis12 Says:

    Z: HK outperformed the XOP index today for the first time in three weeks along with UPL & SWN

  90. 90
    bloodystupidjohnson Says:

    For you SD fans, I see that a director bought 10,000 at 10.12 on 11/17/09

    From http://www.insider-monitor.com

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