Mother’s Day Wrap – Week Ended 05/07/10

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Holdings Watch:

ZCAT (Zman Catalyst portfolio)

  • $8,500
  • 87% Cash
  • Last Week’s Closed Trades:
    • BEXP – Sold (30 of 40) May $20 Calls for $1.20, up 139%, with the stock at $20.40.

ZIM (Zman Inefficient Markets portfolio)

  • $21,300
  • 62% Cash
  • Last Week’s Closed Trades:
    • Sold (30 of 40) May $20 calls for $1.40, up 90%, with the stock at $20.70, 6% today.
    • RRC – Sold the (30) May $52.50 Calls for $0.75, up 87%, with the stock at $50.
    • RRC – Sold the RRC May $50 calls for $1.60, up 74% with the stock at $49.90.


Wrap Comments:

1) and 3) Bad Week for the Markets, Worse Week For Energy.  Energy has been on a tear with many of our most trafficked names hitting 52 week highs along with the S&P's move higher. But Tuesday, with Greece as an excuse, the market pulled back hard and the high beta energy sectors, triggered by a dollar based retrenchment in oil, pulled back harder. Note that essentially what's been up the most was down the most, with little regard paid to hedges or valuation.

Coal stocks were hit the worst and may have been the canary in the coal mine, so to speak, as they edged lower in the preceding week by 6% before plummeting another 12--% this week as measured by the KOL. Looking at the leadership in the group, the individual moves were much worse than that (witness WLT moving $100 to a low below $70 since mid April despite strong numbers and evidence this will continue).

2) Natural Gas Continues To Hug $4. I've been writing that gas will remain range bound in the $3.50 to $4.25 (or close to that level) for awhile now and it has. Spring as been milder than expected resulting in a quicker than normal rebuild in stocks and the EIA's revision to supplies showed less of a drop than many, including myself, expected or find plausible. Nonetheless, gas fails to fall and the short have got to be thinking it is largely played out in the near term. I'm not looking for a big  near term recovery and much of course will depend on Summer weather, both in terms of Lower 48 heat and the tropics but I am thinking that the risk now is to the upside.

10 Responses to “Mother’s Day Wrap – Week Ended 05/07/10”

  1. 1
    zman Says:

    BP may attempt “junk shot”, filling the BOP with flash setting cement.

  2. 2
    VTZ Says:


    Hydrates plugging the structure.

  3. 3
    zman Says:

    V- yeah, now talking about putting rubber and other junk into the BOP to kill the well.

    EU seeking $600 B euro package now for Greece and all the troubled little PIIGS. Dollar coming off pretty hard, oil up $1.20.

  4. 4
    zman Says:

    … and I’m showing equity futures up big:

    S&P up 19
    DJIA up 155
    Naddaq up 33

    not sure those are correct.

  5. 5
    BirdsofpreyRcool Says:

    that’s funny… i was just going to post the same thing. Dow futs up 170? wow. Guess the EU isn’t going to split up just yet.

    “Troubled little PIIGS”… that sounds kinda cute.

    BP Macondo not looking very fixed. Au contraire. UGH.

  6. 6
    VTZ Says:


    No screwing around with bailout plan… new money is free anyways.

  7. 7
    choices Says:

    Thanks for the charts, JB-v0ted. Some alarming charts, not surprising considering the insanity last week-$BPENER confirmed bear, bearish price obj’s very low on P & F’s-I guess the question we have to grapple with in the next couple of weeks, is it over in energyland for awhile. We are due for a bounce, hopefully more than a dead cat bounce.

    I also do not like the look of these charts:


  8. 8
    choices Says:

    VTZ-this is the site I use for checking the premium on PHYS-end of day, and intra-day.


  9. 9
    Jerome Blank Says:

    #29 cargocult, thanks for the vote Friday

    #7 choices, thanks much for the vote…I’m thinking the probabilites are adding up to it’s not over in energy land…what’s interesting is that the big macro picture the $bpnya (last line in the sand) is holding bear alert status, that’s a bullish marker… $bpener is approaching longer term trendline support which most recently has resulted in a bullish reversal, the S&P held its 200 day SMA support Friday and the McClellan is about as oversold as I can recall…this all mounts to increasing odds for a bullish reversal….

  10. 10
    zman Says:

    Thanks JB

    I would not put energy in the “it’s over” category, valuations remain largely inexpensive.

    Markets very much liking the EU plan for now, dollar down 1%, SP fut. up 30, DJIA up 238, oil up $2.08.

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