14
Jul
Wrap – Week Ended 7/13/12 (In Progress)
Comments to be added ...
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July 15th, 2012 at 9:07 amS&P 500 Futures Weekly Notes/Thoughts
Last week the S&P futures closed at 1353 vs the prior week at 1352.50. Nothing has changed. Market continues to “Yo-Yo” through the 1341 CLVN, between major acceptance below at 1309 and the continuing attempt to build acceptance at the 1351 CHVN. 1341 has been a banana peel area with prices rejecting though in either direction on large moves/gaps. Up sessions have been on low volume. Short term demand volume is whipping up and down intra-day, day to day, flat longer term. Market rejected major acceptance at 1309 as too low again last week. Seeing a few short term green shoots but the balance of evidence I look at suggests I’m not missing the beginning of a big move up by being cautious. Little clarity. Watching what I have and not adding.
CLVN=Low Volume Rejection Zone – CHVN= High Volume Price Acceptance and Congestion Zone
1375 Congestion begins to increase.
1362-75 CLVN, Low volume transition zone. Could see another pop and drop move here
1350-58 CHVN, Minor resistance 1357
1354 Resistance, CLVN, Friday close at 1353
1341 Key rejection area . Break lower works to 1321.
1321 CLVN, Support
1309 Major Long and Intermediate CHVN
"Last week the S&P futures closed at 1353 vs the prior week at 1352.50. Nothing has changed"
July 15th, 2012 at 10:32 amMy account value is lower this week then it was the week before. Tells me the bulls are not as strong as the bears and there is continued deterioration in equities which has not broken the trend. The move up on Friday, once again, was lacking conviction and vigor as you would expect in a market that has reversed psychology. Just not sensing this yet.
#2. My point was much ado about nothing..All risk and no reward maybe another way to frame it.
July 15th, 2012 at 1:20 pmI guess it depended on which group/sector/stocks you're concentrated in. If you were in financials or defensive sectors such as utilities, healthcare and consumer staples it was a pretty good week. Materials and technology did poorly. Small cap energy lost money on balance last week in absolute terms as well as relative to the SP500, Crude Oil and Big Cap Energy Large cap energy squeaked out a gain for the week. I see some fledgling up ticks in sector, currency and stock/bond ratios but they're all just counter trend blips at the moment. So far the effect of higher crude oil and natural gas prices has effected only a select number of small cap stocks. In the Bakken stocks for example KOG and OAS were up 4% for the week an NOG ended down 6%. In the E&P stocks I track the weekly % change ran from +5% to – 16% with 27 of 85 breaking even or better for the week.
Re: 1, 2 I think that the fact the market moved sideways during the first week of quarterly earnings release was an optimistic sign. Too often when the quarterly earnings start being announced investors shout OMG and head for the exits. The sideways move doesn't guarantee the future will be upward but I don't see it as being bad.
July 15th, 2012 at 2:29 pmRe: 1 If you look at the last 22 market days (approx one month) things look better. If you take the % change over that period and calculate the compound annualized % rate of change for various indices, it varies from 19% for QQQ to 78% for the Russell 2000. For a basket of E&P stocks I track, mainly ZLT names, it has been +16% so they are a little behind the indices but still moving upwards. The big winner is a basket of 21 MLP stocks I track which is +121%. It seems people are flocking to the dividend stocks.
July 15th, 2012 at 3:04 pmMaybe the flatness of the last week indicates the market is starting to roll over or maybe one just needs to look at a longer period to see the forest rather than the trees. Time will tell.
re: 4
July 15th, 2012 at 3:07 pmDave, i think the sell first and see later strategy has already been effectuated…seems we are in the see later period now and if earnings are neutral to slightly positive the fear factor will start to dissipate and confidence (or sanity) will begin to restore in the markets. in the interim what is awkward (unless you have a very long time horizon) is that there seems to be absolutely no reward for being long or right. everything has pretty much sold off or been demolished since April when in reality things are better then they were last year when prices were for the most part at similar levels.
there is a clear hate for risk and equities now. but just like Greece, which everyone has suddenly stopped talking about, and the current account which used to be the focal point of all economic news which no one talks about (cares) anymore, the pessimism will eventually start to fade and the trend will start to turn.
re: 3
July 15th, 2012 at 3:12 pmZorg..yes selected sectors and selected stocks were up. but just like OAS and KOG moved up TPLM that had broken through 6 on the upside and only recovered half of the loss, didn't fare as well. now i realize that looking at one stock at a time is not in any way meaningful, my account which is 50% in energy, 30% in technology and 20% in misc., has been soggy. i remain hopeful, however, that energy has bottomed out or at least won't revisit new lows. (may retest them if things start to drop again)
#4 agreed…. Could go either way and or both. Ability to rally back above 1341 and reject the major acceptance below (1309) was impressive. There are some green shoots out there Not buying. Not selling. Watching from the cheap seats….I don't seeing it go far as long as utilities,soap, toilet paper and medicare are the leading sectors…
July 15th, 2012 at 3:13 pmand Zorg, by the way i added to my NOG position on Friday. i'm going to keep buying as long as the prices don't make sense. i think tech and energy both are very much oversold and a lot of companies are throwing off a lot of cash and just get no respect.
July 15th, 2012 at 3:16 pm#9 best wishes..as always…
July 15th, 2012 at 3:32 pmThe ZLT and ZLT C are updated on the positions tab
http://zmansenergybrain.com/subscriber-data/holdings-wiki/
The Blotter is updated
http://zmansenergybrain.com/subscriber-data/zeb-zlt-blotter/
July 15th, 2012 at 5:44 pmS&P Futs off a point early
Oil at $87.25 on renewed Iran babble
http://www.cx-portal.com/wti/oil_en.html
July 15th, 2012 at 5:45 pmre: 9
July 15th, 2012 at 8:12 pmits the only game in town. i'm not convinced buying a 10 year note and yielding 1.5% is the way to go. unless you believe that inflation is really tamed at under 2% a year, which any human that goes shopping these days knows is not true, its a terrible return on capital. of course investing in equities could mean no return OF capital, but that's the risk one must be willing to take.
re: 12
July 15th, 2012 at 8:15 pmZman.
you know Iran can't sit around quietly for much longer. they need to stir up some controversy so they could sell their oil to the "middle man" for a few more dollars. things just cost more these days. its the darn truth.
re 14 – Too true. They started up the Strait closure chatter again this weekend
July 15th, 2012 at 8:39 pmCLB drop continues, rest of moves in space look like low volume noise to me.
July 16th, 2012 at 9:16 amItalyinvestor – hearing anything new from the Ohio Utica?
July 16th, 2012 at 9:40 amREXX up 6.5%. Move appears technical, don't see Utica specific news today.
July 16th, 2012 at 9:58 am