Wrap – Week Ended 10/07/11

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37 Responses to “Wrap – Week Ended 10/07/11”

  1. 1
    zman Says:

    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

  2. 2
    crysball Says:

    Rail Car Loadings~ STILL PEAKING


  3. 3
    zman Says:

    Comments on trucking activity from JD

    “Truck tonnage has grown 22
    consecutive 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.”

  4. 4
    crysball Says:

    Saudi Production for the last 4 months:
    ~June 9.8 mmbopd
    ~July 9.6 mmbopd
    ~August 9.8 mmbopd
    ~September 9.39 mmbopd


  5. 5
    zman Says:

    re 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.

  6. 6
    Zorgnak Says:

    S&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.

    /// Notes..
    E&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.

  7. 7
    elduque Says:

    Has anybody got any thoughts whether or not WTI will decouple from its inverse correlation to the dollar?

  8. 8
    tomdavis12 Says:

    Zorg: 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.

  9. 9
    Zorgnak Says:

    #8 Thanks for the thought Tom..I did buy it that morning and I am out of it now.

  10. 10
    elduque Says:

    Zorg- used USO as a short vehicle vs long EOG.

  11. 11
    Zorgnak Says:

    #10 Thank you..I will take a look at that idea

  12. 12
    Zorgnak Says:

    Investors yanked more than $87 b from US stock mutual funds over the past 4 months, the worst flight from stocks since ’08

  13. 13
    Zorgnak Says:

    Sunday Reading
    Josh Brown

  14. 14
    Zorgnak Says:

    #10…Eld..how do you weight the pair..equal or beta or?

  15. 15
    choices Says:

    #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.

  16. 16
    choices Says:

    HFT-we shall see how far they go-the boyz will prob show up with their checkbooks:


  17. 17
    zman Says:

    Merkel Watch:

    Says France, Germany read to recapitalize banks.

  18. 18
    choices Says:

    #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

  19. 19
    zman Says:

    Choices – no, just have a headline so far. A trillion here, a trillion there …

  20. 20
    elduque Says:

    a 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.

  21. 21
    Zorgnak Says:

    #20..alrighty..thank you

  22. 22
    Zorgnak Says:

    DeMark on the Markets

  23. 23
    elduque Says:

    Z – re TPLM – is the production you are expecting coming from the de-risked area of the Bakken?

  24. 24
    choices Says:

    Zorg, 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.

  25. 25
    zman Says:

    re 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.

  26. 26
    Zorgnak Says:

    #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.
    I’m not very good at it. I usually end up better off using cash.

  27. 27
    Zorgnak Says:

    Goldman 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

  28. 28
    zman Says:

    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

  29. 29
    mimster90 Says:

    China’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.).


  30. 30
    zman Says:

    re 29 – thanks.

  31. 31
    elduque Says:

    re 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.

  32. 32
    zman Says:

    SSN on the tape with a non-event press release. Spirit of America to be in the first zone by the end of the week.

  33. 33
    PackMan Says:

    Contest – not sure who is left – EOG ?

  34. 34
    zman Says:

    EOG is yours for the taking

  35. 35
    choices Says:

    Prob 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

  36. 36
    zman Says:

    Zorg – thanks.

    Off topic thirty, grabbing lunch, back in a bit, keep it green.

  37. 37
    Short USO, Day 2 | Wall Street Stocks Says:

    […] $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 […]

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