Wrap – Week Ended 7/29/11

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7  Months Down ...

  1. Thanks D.C. For So Much Fun In The Markets This Past Week. While it was a trying week in the broader markets due to the ongoing political soap opera we noted several times in the last few weeks that the energy sector continues to behave as if an underlying bid is in place.  After three months of under-performance that shouldn't be too surprising as fundamentals in almost all names in the growth oriented ZLT continue to improve (production is growing, prices are fairly stable and cost creep seems to have slowed). Note that this bid was in place prior to the  BHP for HK deal with buyers stepping in to rapidly reverse market inspired selling and some unfortunate shorts left standing when their music stopped (NOG, KOG). Note that the E&P and Oil Service sectors, our two primary areas of focus, outperformed on a relative basis vs the "Big Oil" of the XOI and the broad markets, a pattern that you'll notice from the table below has been in place all year. The XOI has difficulty growing organically and refining cracks will come off their historically high levels and the Majors and independent refiners are already discounting this contraction.
  2. No Help From The Latest Supply Figures. See Monday's post which will contain the monthly supply slide show for details.  Not surprisingly the non-commercials (speculators) remain quite short.
  3. Inventories Remain Price Supportive But Not Overly So:
    1. Natural Gas:  Inventories remain below year ago and five year average due to cold weather last year. More important for prices at present will be the aforementioned but elusive rollover in supply. We should get evidence of some slippage in key areas later this year as the impact of a liquids rich shift in the rig count takes firmer hold.
    2. U.S. crude and products: Down from last years levels due to:
      1. lower imports of crude partially offset by lower refinery throughput. Cushing remains elevated due to increased supply into OK with bottlenecks between the tanks and would be buyers, helping to depress WTI prices.
      2. lower production of light products but partially offset by lower demand, especially on the distillate side.
  4. How Are We Doing? July was an improvement over the second quarter but that's not much of a hurdle to leap over.
    • YTD Results from the stock only portfolios
      • S&P500: + 2.8%
      • XLE :  +11.9%
      • ZLT A (taxable portfolio)   +43%, (+109% since inception 7/1/2008)
      • ZLT B (tax deferred portfolio)   +34%, (+705% since inception 9/1/2008)
      • ZLT C (the ESA accounts)   +19%

24 Responses to “Wrap – Week Ended 7/29/11”

  1. 1
    choices Says:

    Light weekend reading:

    Interesting article-notes that the hysterical talk in DC is simply that=hysteria/fear mongering;default occurs only if interest on debt ($29 bil for August) is not paid-makes you wonder if the “rating agencies”-heh are in the pocket of the chicken littles; interest can easily be paid-see second article to decide if politicians s/b paid-heh




  2. 2
    zman Says:

    Apple I device and Blackberry users, can you make a test comment now, we have new editing software installed.

  3. 3
    Justin Says:


  4. 4
    crysball Says:

    IPAD Test

  5. 5
    DaveH Says:

    OT – This is way off topic but very interesting and since it is Sunday I will post it. Discusses how BioPharma R&D is being moved from Europe and the U.S. to the Far East countries. Since that is one of the last industries in which the U.S. is dominant, the change could have a big effect on investments in U.S. equities. http://www.spacedoc.com/rise_global_r_and_d_biopharma

  6. 6
    DaveH Says:

    OT Re: Cigrx – I hesitate to post this as it is written by a medical doctor to advertise the newsletter he publishes and states that smoking can be beneficial. All the evidence I have seen indicates that may be true in some cases but overall is an incorrect decision. But the cases where it is beneficial could point the significant value for Cigrx so I think it is worth knowing.

    A quote from the ad is:
    “Researchers looked at data on 11,388 senior Australian men who were tracked for roughly a decade, and found that the heaviest smokers — those who had been puffing away for 48 years or more — were up to 51 percent less likely to need a total joint replacement than men who had never smoked. ”

    The full ad is at https://skydrive.live.com/?cid=96f6b11a1b871f63&sc=documents&uc=1&id=96F6B11A1B871F63%21102#

  7. 7
    DaveH Says:

    Re: 6 To get the study I referenced, click on the link in post 6, then scroll down to “smoking_study.htm” and click on that.

  8. 8
    zman Says:

    re 3,4 – thanks much

  9. 9
    Zorgnak Says:

    Homework notes..
    ROSE Pulled back to well defined support area.%R range extension buy.
    BEXP Regained support area
    SWN Closing low volume area to well defined support. %R range extension buy.
    AREX Pull back and held support last three days.
    KOG High tight congestion. Unfazed by market drop
    OAS Support near.%R range extension buy.
    OXY Back to support and range low, 200sma.%R rnage extension buy.
    XLE Big Cap Energy loses support level, falls back into congesion. %R range extension buy.
    OIH Pull back to support. ST&LT Demand intact.
    HAL Pull back to minor support at 53.25. 51.50 next support
    IO Pull back to support at 9.60. resistance at 11. Large Low Volume area above 11
    ESV Tightening weekly and daily range. Minor support 51.60 Major support under 51. Demand positive in all time frames. Closed on highs Friday. Above avg vol 3 days
    EXXI Pull back to 32.50 support. Low volume area to 31.70. Slack demand.
    NOG Bounced off of key support at 21 area.Close above support at 21.75
    OII 42.10 Near support, low volume gap to 41
    GMXR Tested and bounced off support late in Friday’s session
    CHK 33.10 near support, 31.50 major
    MMR Trading below acceptance at minor support 16.50. Demand turning down all time frames.
    NFX Trading below recent and longer term acceptance and a ton of noise. At minor CLVN support.Demand weak in all time frames.65 range low
    CRZO Bounce off acceptance and range extension low. Held 50SMA

  10. 10
    Zorgnak Says:


  11. 11
    crysball Says:

    Invest-91L @ 100 percent. …..will become Emily later today.

    ? Is GOM or Atlantic

  12. 12
    zman Says:

    Zorg – wow, that’s a lotta stuff. The system auto blocks ones with more than 4 links so shoot me an email to make sure I despam them.

    Crys – I think that’s Gulf bound, haven’t seen a track yet.

  13. 13
    Zorgnak Says:

    #12 rodger

  14. 14
    zman Says:

    S&P fut moving up 17 at futures open.

  15. 15
    Zorgnak Says:

    S&P Futures jumped back to the magnet at 1307.25. The night is young.

    1319 Resistance
    1310.25 Resistance
    1307.25 Acceptance
    1300 Support
    1292.75 Support

  16. 16
    zman Says:

    Boehner said no deal yet after everyone started saying there may be a deal and the fut fell 5

  17. 17
    Paul in Kansas City Says:

    Z and crew; anyone have any thoughts regarding EOG which reports this week on August 5th. The writeups have been very helpful Z. I had sold my Oct deep call position fo risk control and have some limit orders for MOnday; it appears no sell-off looming but it is still early! The chaos aside the big picture is promising; as a side note i have been using the deep call positions as stock replacement.

  18. 18
    zman Says:

    Hey Paul, walking through the calendar now, EOG at end of week, will post what I have for them when I get to it, probably later tonight, if not then it will be in the morning post.

  19. 19
    Paul in Kansas City Says:

    Steve; I always appreciate your efforts on these; an incredible timesaver plus I can read the call transcripts and presentations much faster and and more thorough.

  20. 20
    Paul in Kansas City Says:

    Enerplus ERF also reports Friday; i’s worth a look due to it’s cash distribution policies

  21. 21
    Zorgnak Says:

    Crude Back above Friday’s failed support.

  22. 22
    PackMan Says:

    #6 — maybe because they die of lung cancer before their joints give out !

  23. 23
    choices Says:

    saw an article on Bloomberg recommending a reverse TARP from Wall Street to US Govt-heh-yes,sure, that will happen-I need the same thing author is smoking.

  24. 24
    Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » Monday Morning – Welcome To August … D-Day Says:

    […] Comments choices on Wrap – Week Ended 7/29/11PackMan on Wrap – Week Ended 7/29/11Zorgnak on Wrap – Week Ended 7/29/11Paul in Kansas […]

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