13
Aug

Wrap – Week Ended 08/12/11

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The week ahead promises to be volatile but we should settle down a bit from last week's U.S. debt downgrade and end-of-the-world-as-Europe-know's-it style of trading trading. In energy land, the Enercom conference should provide additional opportunities for catalysts in our group.

In the Monday post look for the expanded version of the Bakken Players Update, 2Q11 edition.

On Tuesday, look for the "Quarter That Was" Wrap

On Wednesday look for an updated Catalyst List.

Have a good weekend.

39 Responses to “Wrap – Week Ended 08/12/11”

  1. 1
    Zorgnak Says:

    just noodling around..
    Bakken Stock Index – Point and Figure Chart
    I don’t know much about Point and Figure but the area directly above is where the index broke down in 2008 and again this month.I wouldn’t be surprised to see at least some back and fill in the stocks as the energy sector looked exhausted on the intra-day charts.
    I’m not sure whether Z mentioned this or not but among the Bakken stocks I noticed that WLL has the highest correlation to the price of oil over the past year.
    http://i1223.photobucket.com/albums/dd503/zorgnak/BakkenX0.jpg

    As an unrelated side note REXX, (not in the Bakken Index) is the least correlated stock that I track to all other E&P stocks as well to price of oil …maybe explains why it’s been hard to trade with TA.

  2. 2
    Zorgnak Says:

    Advancing Volume this week in the E&P stocks was only exceeded by the start of the 10/16/08 short term rally. fwiw after that rally, E&P stocks made three lower lows before finding a long term low.

  3. 3
    brodway Says:

    very volatile week. up and down over a thousand points. once again proves that this is a traders market and not an investors market. its probably been over 10 years since the buy and hold strategy had any benefit to equity owners.

    the nice thing about the US oil companies concentrated in the Bakken is that its a long term story and holding through the dips and buying more during sell offs could prove to be very profitable when looking ahead.

    one thing i noticed among all the stocks discussed on this board is that the 2-3 year charts are still positive even with this selloff. most of these companies are making newer highs and higher lows on the long term chart. this in my belief, should continue when we get our heads out of the sand.

  4. 4
    brodway Says:

    since Zman has not mentioned either CRR or CLB since the sell off began, i was wondering if these still represent sound investments. i just noticed in my account that CRR really did not take as big a hit in % terms as some of the others. comments welcome.

  5. 5
    mimster90 Says:

    OT: any thoughts on RSO? I just noticed that are up to 18% divvy. I seem to re3call XACS #2 mentioned them.

  6. 6
    Roy Engehausen Says:

    RSO pays a 25 cent dividend per quarter. Income per share last quarter was 13 cents.

  7. 7
    Zorgnak Says:

    Short Term S&P Futures Areas of Interest To my eye the key short term levels to watch on Monday will be the composite volume areas at 1186.25 and 1171.75. Both areas were tested on Friday as the market exhausted into sideways trading. The bulls and bears both see flags and these levels may resolve who’s guessed right. Above 1186.75 is a wide relatively low volume area that lends itself to a rally back to the 1236 area over time. Much below below 1171.75 would have me more cautious. Below 1150 I’d start to look for a retest of recent lows.

    1236 Resistance, CLVN
    1186.25 Resistance, Gap closed at 1186.50
    1171.75 Support, CLVN, Fed Reflex high 1175.20
    1150 Support, CLVN
    1137-42 Acceptance, CHVN, MCHVN
    1111 Support, CLVN
    1096 Support , CLVN, Fed Reflex Low

    VPOC=Session Volume Point of Control/Acceptance
    CLVN =Composite Low Volume Node/ Rejection CHVN= Composite High Volume Node/Acceptance and Congestion
    Big Picture
    http://www.charthub.com/images/2011/08/14/ES_Composite_2

  8. 8
    choices Says:

    Thanks, Zorg

  9. 9
    zman Says:

    Re 4 – Not much change in thinking on either one after 2Q, will have comments in the Tuesday quarter. Just have not been adding new names until the market backdrop settles, especially since those are two names that can travel 10% to 15% in a day in a volatile market without blinking with no one asking, “what’s up with that”. CRR maybe be seeing some price push back on pricing no with possibly more to come later this year, as E&P’s look to cut costs any way they can and still have good fracs. Seeing more comments about making due with white sand instead of ceramics in some plays and operators opening their own sand mines. CLB – not seeing any indication of slow except re their comments in Russia. Still thinking they get nabbed sooner rather than later by SLB or HAL or BHI or even WFT.

  10. 10
    Zorgnak Says:

    #7 These are only very short term levels.
    From my perch I’ll use higher levels to unload trading positions and get ready for a possible retest later.
    http://pragcap.com/percent-buy-index-deeply-oversold
    http://pragcap.com/3-smart-bears

    From Wayne Whately. Wayne won the Charles Dow award for his research into breadth analysis.
    Used With Permission. YOu can be added to his nightly comments by request using the email below.
    A 26% Breadth Study

    Wayne Whaley wayne@witterlester.com Aug 14, 2011 11:00amC

    We mentioned last week, the recent selloff, culminating on August 8, contained the 6th worse (16.69%) monthly price decline since 1950. Let’s take a look today at the story Breadth shared with us during that same one month period of time. In many of my studies, I use a trailing 21 days to replicate months since that is the average number of trading days in a calendar month. The percent of issues advancing (ADT21) over the previous month, as of the current August 8 bottom, was 33.96% and culminated with a capitulation day which was the first day in my 40 year S&P database with no advances. The below Table, shows the forward S&P performance since 1970, after cases where an ADT21 of less than 40 occurred on the same Date as an ADT1 of less than 7 (35 advances). The results show that in all 12 cases the S&P was higher 12 months later. I have also included three additional columns which document the Date of the eventual Low made during that first year after the signal, which supports my thesis of a promised retest at some point in the third quarter.

    S&P PERFORMANCE AFTER AN ADT21 < 40 AND ADT1 < 07.0

    ADTN= 100 * SUMADV/(SUMADV+SUMDEC) OVER N DAYS

    SP EVENTUAL LOW

    DATE EVENT ADT21 ADT1 12MT% DATE #DAYS SP%

    1 19740708 NIXON RESIGNS 35.16 6.15 15.17 19741003 62 -23.20

    2 19781026 OIL IMBARGO 39.21 7.05 4.73 19781114 13 -3.69

    3 19791019 IRAN HOSTAGE 39.66 3.56 29.45 19800327 110 begin_of_the_skype_highlighting 19800327 110 end_of_the_skype_highlighting -3.33

    4 19800317 SILVER CRISIS 32.68 6.74 30.96 19800327 8 -3.95

    5 19871019 BLACK MONDAY 38.38 0.40 23.19 19871204 33 -0.41

    6 19880815 DROUGHT 39.04 6.97 33.25 19880822 5 -0.66

    7 19900816 GULF WAR 38.15 5.31 16.00 19901011 39 -11.11

    8 19970411 ASIAN CURRNCY 39.47 3.27 50.57 19970411 0 0.00

    9 19980804 RUSSIAN DEBT 39.62 6.30 21.75 19980831 19 -10.69

    10 20081007 US BANK CRSIS 39.85 3.61 6.16 20090309 104 -32.09

    11 20090302 US BNK CRS-2 39.51 1.40 59.57 20090309 5 -3.47

    12 20100520 FLASH CRASH 39.43 0.60 24.42 20100702 30 -4.57

    13 20110805 CREDIT DWNGRD 33.96 0.00 ?

    #UP-DN = 12- 0

    AVG%CHG= 26.27

    MED%CHG= 23.80

    S&P Tape Data Courtesy Ned Davis Research Inc.

    The S&P traded and closed lower at some point in 11 of the 12 cases, with the one exception being the Asian currency crisis in 1997. There is a case that can be made that the retest failure for the April 11 1997 Low occurred because that day was, in itself, a retest of the candidate Low set six days prior, also resembled a capitulation day with the exception the monthly decline had not met this study's 'Breadth' specifications.

    Market Quantitative Analysis is not a Science and is occasionally only obvious in hindsight, but market forecasting can't be easy or else the Zero Sum aspects of trading would not work. That is, the market has to fool a certain segment of traders, so that there are profits for the remaining participants. And everyone I know who has been involved in trading for more than a decade, has taken some turns on both sides of the ZeroSum ledger.

    Potential Rally Targets

    From my perspective, there are four logical resistance levels for the reflex recovery.

    1. The initial reflex rally day's High of 1172.59 or
    2. 50% Retracement of Selloff 1236.06 or
    3. Old Support/Resistance Levels of 1250 or
    4. The 200DMA = 1285

  11. 11
    zman Says:

    REXX – still defying the group moves.

  12. 12
    zman Says:

    re 10 – Got a link to that?

  13. 13
    Bob Says:

    Hi Z…ECT results were out Friday, followed by a CC after the market closed. They are ahead of schedule, and expect all drilling to be complete by year end 2011. The original schedule was about 15 months later. Pipeline constraints will hold back full production of all wells until mid 2012. The production last quarter was 2.5 BCF, 36% above target. The distribution was $0.631, while the target distribution from the IPO was $0.564. I believe the target distribution was based upon the strip at the time of the IPO, but NG prices have significantly underformed the early 2010 strip. The distribution schedule in the IPO shows 2013 as the year of maximum distribution, but it seems like that may now be 2012? Also, going forward wouldn’t you expect the total distribution to be significantly less than planned? Producing 36% now more than planned into weak NG pricing, taking away from “possibly” higher NG pricing in the future. From the 10Q the avereage price received in 2nd qtr 2011 was $4.66, with 35.5% hedged. (In the cc I heard $5.30 with hedges compared to target of $6.15)

    Anyway just looking for some thoughts on distributions going forward. The next several years are included in the 10Q, and match the IPO figures. Thanks!

    10Q:

    http://biz.yahoo.com/e/110812/ect10-q.html

    CC:

    http://biz.yahoo.com/cc/3/125033.html

  14. 14
    zman Says:

    Bob – no problem, will have a look but am not actively following the name. I continue to hold LINE as my only true yield name… hitting on all cylinders and very well hedged to the downside with a smaller ceiling position allowing for upside potential should prices rise.

  15. 15
    zman Says:

    NOG production per share graph is off the pure up and to the right variety. Thank you NOG for failing … to dilute me.

  16. 16
    zman Says:

    NOG – Production per share chart up and to the right:

    1Q09 0.8 BOE/000 shs
    2Q09 1.5
    3Q09 2.4
    4Q09 3.1
    1Q10 2.8
    2Q10 3.4
    3Q10 4.0
    4Q10 5.5
    1Q11 5.7
    2Q11 6.5

  17. 17
    Zorgnak Says:

    RE#12 sorry I don’t..he sends out an emailed comments..

  18. 18
    Zorgnak Says:

    XLE…closed last Monday’s gap. Traded sidways above LVN at 66.25. Multiple minor resistance areas gradually clearing above to Major CLVN and gap at around 72.50

    72.50 Major CLVN, Resistance
    66.25 CLVN, Support
    61 CLVN, Swing Low
    http://www.charthub.com/images/2011/08/14/Stock_Composite_2

  19. 19
    Zorgnak Says:

    Crude
    Enormous volatility increase after 8/03 created margin calls/forced selling that seems to have dried up. Since that time volume buying pressure has gradually increased as prices have moved up the levels. Near support at 84.75. Resistance at 87.25. There is a panic low volume gap from 87.25 to 89.75 and price may move quickly through to this area if/when it gets there
    95 Major CHVN
    92.75 CLVN, Far Resistance
    87.25-89.75 Wide low volume area
    87.25 CLVN, Resistance
    84.75 CLVN, Support
    http://www.charthub.com/images/2011/08/14/Crude_Composite_4

  20. 20
    Zorgnak Says:

    Make that
    may move quickly through this area if/when it gets there

  21. 21
    zman Says:

    SSN spud the first Niobrara well tonight, presents tomorrow at Enercom

  22. 22
    Zorgnak Says:

    S&P riding a strong bid to 1186.25 resistance and Monday’s high 1186.75

  23. 23
    Zorgnak Says:

    sheesh..Friday’s high..

  24. 24
    zman Says:

    Zorg – that was a looonnnggg week, thanks.

  25. 25
    zman Says:

    Futs up

    DJIA up 65
    SPX up 8.6

    After Japan GDP comes in less weak than expected.

  26. 26
    Zorgnak Says:

    that was a PTSD inducing type of week

  27. 27
    andy Says:

    roy e – re 6 they answered question from leon cooperman re dividend on cc. transcript avail on seeking alpha

  28. 28
    zman Says:

    Busy schedule at Enercom tomorrow:

    http://theoilandgasconference.com/presenter_schedule.shtml

    MMR and EXXI presenting on the same day, probably too early for anything on Lafitte or BBE but maybe some mud log comments out of MMR.

  29. 29
    brodway Says:

    Zorg.

    i agree that we may get to the 1230-1250 area on S&P before retesting the lows of S&P 1100. this has certainly proven to be a traders market.

  30. 30
    brodway Says:

    thanks for the notes on CRR and CLB Zman.

  31. 31
    Zorgnak Says:

    OXY
    Stop below Friday’s low? 1st Target 92
    http://www.charthub.com/images/2011/08/14/Stock_Composite_6

  32. 32
    Zorgnak Says:

    OT
    FXY Dead cat bounce into resistance and a mountain of overhead.
    http://www.charthub.com/images/2011/08/14/Stock_Composite_7

  33. 33
    Zorgnak Says:

    BTU
    Stalled bounce below multiple layers of resistance and unable to break above acceptance yet….
    http://www.charthub.com/images/2011/08/14/Stock_Composite_9

  34. 34
    Justin Says:

    Z-

    Have you bounced that against some off some of the other Bakken names?

  35. 35
    Zorgnak Says:

    #32 was FCX..going to bed now…..

  36. 36
    zman Says:

    Justin – yes, graphs of it over time in tomorrow’s post, nobody has the up and to the right pattern like NOG now does. Going to get steeper as they exit the year as they begin to take on a little leverage in lieu of selling shares with the stock down here.

  37. 37
    Justin Says:

    http://m.yahoo.com/w/news_america/analysis-recession-could-tip-u-oil-permanent-decline-164942616.html?back=%2Fbusiness%2F%3Fpage%3D3&amp;.ts=1313408094&.intl=us&.lang=en

  38. 38
    Zorgnak Says:

    S&P futures banging on resistance area all night long….1186.50
    http://www.charthub.com/images/2011/08/15/ES_Intraday_2

  39. 39
    zman Says:

    The Monday post is up.

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