13
Mar
Wrap – Week Ended 03/11/11
Comments to be added Sunday afternoon.
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EGY goes Domestic.
March 13th, 2011 at 10:10 amVaalco Energy announced purchase of a small [tiny 640 acre] leasehold in the Granite Wash, and plans to drill a well in immediate future [rig already under contract]. Based on the wording of the news release it would suggest they have an option for additional Granite Wash acreage, subject to the intial well drilling results.
Since the Granite Wash [to date] has been primarily a Tight Gas Sands play with ocassional oil, an entry here would seem to conflict with EGY's stated objective of 'SHOW ME THE OIL'.
Q4 CC midweek should reveal more details. Stock moved up 5% on the announcement.
Vaalco Granite Wash Drilling Plans [Hennepin County]:
March 13th, 2011 at 10:17 amhttp://finance.yahoo.com/news/VAALCO-Energy-Acquires-Lease-prnews-2410080500.html?x=0&.v=1
Crys — pretty BOLD MOVE by Bobby Gerry, eh? 640 acres… just one section. wow. Hope there's more to the story than that….
March 13th, 2011 at 11:02 amTom started a short conversation last Friday regarding the 50 day moving average and it's significance to the S&P. I was going through my emails this weekend and found that Wayne Whaley had a post up on the subject of the 50 moving average phenomena. Wayne was the Market Technicians Association's 2010 Charles H Dow Award winner.
March 13th, 2011 at 1:22 pmHere's Waynes post on Friday after the close (used with permission) .
When the S&P Crosses Below Its 50DMA for the First Time in Over ? Days
I stumbled into yesterday's 50 Day Moving Average study late in the day and I thought that, given its historical significance, it deserves some additional detail today. Recall, I had the market 24-4 one quarter after the S&P closed below its 50DMA for the first time in over a quarter. In the 2011 Bull run, the S&P traded 130 trading days above its 50DMA from Sept 01 until Thursday's (Mar 11) close, the third longest stretch since 1970. I reran the same scan this morning, looking for all periods since 1970 where the S&P traded above its 50DMA for at least 63 days but I also ranked the results by the number of days above the 50DMA. The one overt failure of the 28 cases that met my scan conditions from yesterday occurred after only a 66 day run above the 50DMA in September of 1987 and could have easily been eliminated from the results by tightening the constraints.
S&P Quarterly Performance after a String
Of 63 Days above the 50DMA is Broken
CASE DATE #OFDAYS QTRSP%
1 19960110 257 5.85
2 20070227 149 8.34
3 20110310 130 ?
4 19890925 123 0.93
5 19710517 120 -0.70
6 19830712 116 2.47
7 19800929 106 9.30
8 19720425 100 0.45
9 20030801 96 7.20
10 19980526 88 -0.90
11 19791009 87 2.27
12 19821215 84 11.93
13 19990209 79 10.60
14 19860515 77 5.43
15 19970815 76 3.06
16 19760409 74 4.61
17 20091028 74 4.02
18 19750722 72 -0.81
19 20040310 72 1.44
20 19870413 70 7.71
21 19910429 70 2.54
22 19961216 70 10.01
23 19800305 69 1.48
24 19860122 69 19.13
25 20050823 68 3.94
26 19870904 66 -29.30
27 19750404 64 16.67
28 19970319 63 14.28
29 20060203 63 3.47
If I were looking for a headline grabber, I could have dropped the bottom four cases and proclaimed "In the 24 occasions since 1970, when the S&P traded below its 50DMA for the first time in over 67 days, the S&P never suffered a subsequent 1% quarterly loss."
Above the 50DMA after One Day Below
The S&P (1304.28) spent only one day below its 50DMA (1301.81). Of the 28 previous cases that met our Scan 1 conditions above, five of those cases saw the S&P trade back above the 50DMA on the second day. Those five cases are listed below.
Scan 1 Cases After S&P Trades Above 50DMA on the Second Day
#OFDAYS FORWARD S&P PERFORMANCE
CASE DATE BELOWMA 1WK 1MT 3MTS 6MTS
1 19800930 106 4.42 0.66 7.87 7.03
2 19910430 70 0.52 3.09 3.02 4.69
3 19961217 70 3.44 6.90 9.60 23.19
4 19990210 79 1.12 5.17 9.54 4.73
5 20091029 74 0.05 2.38 0.73 13.19
AVG%CHG= 1.91 3.64 6.12 10.56
These five cases are great examples of Springboard or Bear Trap Trades, where the S&P trades below key support, runs the breakout stops and then receives a positive push as the Shorts scramble to cover the reversal of the breakout.
http://www.tradersnarrative.com/wayne-whaley-wins-2010-charles-h-dow-award-for-planes-trains-automobiles-4030.html
If you're interested more of this type of quantitative analysis you can sign up for his mailing list at
http://visitor.r20.constantcontact.com/manage/optin/ea?v=001Uea-ywoMgTDJ6QTUIRFl-g%3D%3D
Comments regarding a question on Friday and some notes regarding items in wrap table will be included in the Monday post.
March 13th, 2011 at 4:59 pmBHP awarded 2nd Gomex Permiit to resume work at deepwater Shenzi project
March 13th, 2011 at 8:08 pmhttp://www.upstreamonline.com/live/article248394.ece