07
Oct
Wrap – Week Ended 10/07/11
... in progress ...
This entry was posted on Friday, October 7th, 2011 at 6:03 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Zman's Energy Brain ~ oil, gas, stocks, etc… is is proudly powered by Wordpress
Navigation Theme by GPS Gazette
I generally think of HAL/SLB as kicking off oil service earnings season and MMR kicking off the E&P season. But little RBN reported on Thursday (fluids handling) … according to Global Hunter RBN gave no sign of slowing demand from their E&P customers.
I expect the same indications of no slowdown from HAL when they report on the 17th
October 8th, 2011 at 8:29 amRail Car Loadings~ STILL PEAKING
http://www.bloomberg.com/news/2011-10-07/rail-cargo-starts-to-peak-as-buffett-sees-no-recession-freight.html
October 8th, 2011 at 9:03 amComments on trucking activity from JD
“Truck tonnage has grown 22
October 8th, 2011 at 9:11 amconsecutive months, year over year, and in the past 40 years the U.S.
economy has not had a recession without truck tonnage first going negative
and which would typically lead a recession by 9-12 months. I saw today
where a truck leasing company’s tonnage miles were up 5% in September, and
one truck company alone has sold 250,000 tractors versus 150,000 last year.”
Saudi Production for the last 4 months:
~June 9.8 mmbopd
~July 9.6 mmbopd
~August 9.8 mmbopd
~September 9.39 mmbopd
http://www.bloomberg.com/news/2011-10-08/saudi-arabia-produced-9-39-million-barrels-a-day-naimi-says-1-.html
October 8th, 2011 at 9:13 amre 4 – yeah, starting to see the production melt back post Libya and the tone of the language change in Saudi comments to one that sounds a lot more like cuts are on the way. Not headline cuts, but trimming back.
October 8th, 2011 at 9:26 amS&P Futs… As Z said Friday was “much ado about nothing”, and it ended in the middle of nowhere.
Notes to myself…
Friday was a narrow range (NR10) reversal day on higher volume than the previous two up days, closing a few points under the 1157.50 Major Acceptance area and Friday’s VPOC. Market honored support and resistance well after both positive and negative news events during the day.
Breadth turned over in the intra-day time frames after becoming mildly overbought at the close Thursday.
Best case for the bulls is for the market to consolidate above 1144 before moving higher. If the SPY advances and closes above 118.35 early next week the range will be stretched once again to levels with much more risk than reward in the short term.
Bearish case is that the market has more work to do on the downside and will, at a minimum, revisit the major acceptance area below at 1052. Heavy short covering fuel was spent this week bringing the market back to the midpoint in the 9 week range and to a probable 3rd lower high since 8/31. On the daily and weekly time frames Demand and Ease of Movement do not support higher prices.
To my eye.. At this point, the risk of losing money out weighs the risk of losing an opportunity to add to existing positions.
http://www.charthub.com/images/2011/10/08/ES_Composite
/// Notes..
October 8th, 2011 at 10:53 amE&P Stocks..Bounce took Zman E&P index stocks to short term overbought on Thursday in a down trending market. At a minimum, not a place to chase. I’ve trimmed back my longs and hedged with one energy short (MUR) on Thursday and another (SD) late Friday.
///
Attached is a chart of the NHNL (New Highs/New Lows)indicator I use to track the E&P stocks in the Zman index. I use the Index 50day MA to give some trend context to the interpretation of the NHNL OB/OS information.
As of Thursday E&P Index NHNL Ratio => .98 & ZmanIndex < Down sloping 50 Day MA = Caution, trimming trades, hedging. If anyone finds it to be useful I'll post the NHNL data as we reach extremes in the future.
http://i1223.photobucket.com/albums/dd503/zorgnak/ZmanNHNL-1.jpg
Has anybody got any thoughts whether or not WTI will decouple from its inverse correlation to the dollar?
October 8th, 2011 at 12:48 pmZorg: If you still have any interest in NE, they did release their fleet report. Give it a B-. I assume you are out if you played for a bounce.
October 8th, 2011 at 1:56 pm#8 Thanks for the thought Tom..I did buy it that morning and I am out of it now.
October 8th, 2011 at 2:23 pmZorg- used USO as a short vehicle vs long EOG.
October 8th, 2011 at 5:55 pm#10 Thank you..I will take a look at that idea
October 8th, 2011 at 7:33 pmInvestors yanked more than $87 b from US stock mutual funds over the past 4 months, the worst flight from stocks since ’08
October 9th, 2011 at 9:19 amSunday Reading
October 9th, 2011 at 9:27 amJosh Brown
http://www.thereformedbroker.com/2011/10/09/this-is-why-they-hate-you-and-want-you-to-die/?utm_source=dlvr.it&utm_medium=twitter
#10…Eld..how do you weight the pair..equal or beta or?
October 9th, 2011 at 9:51 am#13-article nailed it-thanks, zorg-I guess I should not get started but a lot of the fairly wealthy or very wealthy/powerful (eg Bloomberg) still do not get it.
October 9th, 2011 at 10:51 amHFT-we shall see how far they go-the boyz will prob show up with their checkbooks:
http://www.nytimes.com/2011/10/09/business/clamping-down-on-rapid-trades-in-stock-market.html?_r=1&hp
October 9th, 2011 at 11:24 amMerkel Watch:
Says France, Germany read to recapitalize banks.
October 9th, 2011 at 11:42 am#16-more likely, the coin of realm for the regulators would prob be a job on Wall Street.
#17-thanks, z, did she give any numbers-lowest number for Europe in general which I’ve seen is 2TRILLION euros w/estimates going up to 4 Tril
October 9th, 2011 at 11:51 amChoices – no, just have a headline so far. A trillion here, a trillion there …
October 9th, 2011 at 11:53 ama form of my own beta.
For the last 3 weeks it is running about for each share of EOG long, I have been shorting 4 shares of USO. Going back a few months ago it has been 1 to 3.
I like being short USO because I know it will underperform crude and I am pretty confident that EOG will have a more direct correlation.
I do use this technique on a more short term trading basis.
It definitely helps me sleep at night.
October 9th, 2011 at 12:41 pm#20..alrighty..thank you
October 9th, 2011 at 12:42 pmDeMark on the Markets
October 9th, 2011 at 1:28 pmhttp://www.bloomberg.com/video/77024934/
Z – re TPLM – is the production you are expecting coming from the de-risked area of the Bakken?
October 9th, 2011 at 2:21 pmZorg, I saw the video on #22-dated late afternoon 5 Oct-I’m assuming no SPX increase of 3.8% so “maybe” no large immediate decline-however, I do need to come up w/hedging plan-I know I do not want to go into fetal position again as the last couples of weeks or so-maybe El’s idea is possible-I gather everyone is pretty much down on ETF’s such as DUG, SDS, etc.
October 9th, 2011 at 2:40 pmre 23 – yes, all Williams and McKensie county, ND. The highest WI% well, the Stewart well, is essentially an offset well to a big one OAS reported back in 2009.
October 9th, 2011 at 4:12 pm#24 I’ve been following the DeMark stuff for a few years now and I’ve found it to be useful as a warning of POSSIBLE price exhaustion and reversal. I wouldn’t bet the farm on it one way or another in isolation. I’ve seen it fail enough times but I do use it as just one piece of the puzzle. Can’t recommend a hedging idea.
October 9th, 2011 at 4:32 pmI’m not very good at it. I usually end up better off using cash.
RT
October 9th, 2011 at 4:39 pmGoldman Sachs says crude oil inventories outside of the U.S. have been drawn down to their lowest level in nearly a decade
I don’t have a link for this one…zorg
re 27 – and it happens at a time when OPEC is at decade high production levels. This is what I’ve been talking about since late last year … demand in rising in non-traditional big demand areas.
GS also cut their price forecasts today, bowing to the price charts I’d say or “marking them to market”
Note the prices they went to here:
trimmed its 2012 Brent price estimate to $120 a barrel from $130 and cut its forecast for U.S. light crude, also known as WTI, to $109 from $123.50.
Not exactly bearish levels
October 9th, 2011 at 4:45 pmChina’s Sinopec International Petroleum Exploration and Production Corp. said Sunday that it has agreed to buy Canadian oil and gas company Daylight Energy Ltd. for about $2.2 billion Canadian ($2.1 billion U.S.).
http://finance.yahoo.com/news/Sinopec-agrees-to-buy-apf-3687638034.html?x=0
October 9th, 2011 at 6:38 pmre 29 – thanks.
October 9th, 2011 at 6:43 pmre 25- So other than TPLM being a small cap. It sure looks very attractive at this point.
Choices- my work suggests that on a relative basis EOG is cheap to USO. Doesn’t mean that tomorrow or the next day it gets a lot cheaper. I just think that when the market turns the cos. will move faster than USO.
October 9th, 2011 at 7:31 pmSSN on the tape with a non-event press release. Spirit of America to be in the first zone by the end of the week.
October 9th, 2011 at 7:40 pmContest – not sure who is left – EOG ?
October 9th, 2011 at 9:09 pmEOG is yours for the taking
October 9th, 2011 at 9:11 pmProb OT-saw a note that the Italians want to drug-test traders for cocaine use because they think that may be responsible for some of the volatility
October 10th, 2011 at 10:19 amZorg – thanks.
Off topic thirty, grabbing lunch, back in a bit, keep it green.
October 10th, 2011 at 10:56 am[…] $38.67 — $38.30. It would take strong downward pressure to push it that low, obviously. Today's resistance zone is between is between $40.67 and $40.83. There is selling at the $40.60-61 l…level into the $40.47 range. The second support zone is between $38.67 — $38.30. It would take […]
April 14th, 2012 at 7:36 pm