30
Jun
Sunday to Tuesday Vacation Post
This week is usually one of the slowest of the trading year and so we're on the road, spending a little quality time with the interns through Tuesday. I'll be brief but here will check in from time to time both days. We'll have the Natural Gas Supply (production plus imports) and Demand slide shows in the Wednesday post.
For easy reference with some of the comments on the first half below, we're including the wrap table again in today's post as it contains the 1H13 performance of the index and our portfolios.
A few notable things through the first six months of the year:
WTI is up 5% while Brent is off 8%. Mixed bag of reasons for this:
- Slightly higher than expected production in the States and on a good week, oil producton runs over 7.3 mm bopd which is the average we have been expecting for the entire year.
- Year to date U.S. oil production growth is running up roughly 1.2 mm bopd.
- Note that this is largely offset by a 1.1 mm bopd YoY cumulative decline in imports.
- Demand in the States has been tepid, at least more tepid that we expected, especially on the gasoline consumption front.
- Exports, after posting rapid growth in 2012, have plateaued in the first half of 2013 largely due to the narrower spread between the global basket and Stateside pricing.
- Note the U.S. oil directed rig count has stalled and reversed, even with $90+ oil in the first half. Much of this is attributalbe to rig efficiency. A smaller part of this is due to the major liqiuds rich players getting their leasehold largely HBP'd and domestic E&Ps opting to persue a little more capital discipline in the face of stalled domestic oil prices. Dont' get me wrong, mid $90's WTI and $15 to $20 over that on the Gulf Coast are great prices but the players likely recognize that their stock prices don't differentiate well between 20% or 40% growth rates. Or, put another way, "why grow at 40% if that's the edge of the achievable envelope for you when you don't get credit for it in the market and you run the risk that logistical issues combined with say, some bad weather, means you turn in a 38% performance which is still quite strong in your eyes but a "miss" in the eyes of the market"?
​Natural gas is up 7% YTD, moderating the surge off the April 2012 lows in recent weeks. Higher demand, flattish production and lower imports have all helped with the move but this continues to be a 2 steps forward,1 3/4 steps back type advance. Production is no longer rapidly rising but it refuses to really fall off either in part due to the associated gas production with the liquids rich plays. There's been little help from the Gulf and Louisiana is in full on decline as the Haynesville is dry gas and drilling there has all but dried up. The square States out west are holding up OK, Texas is treading water, while Oklahoma is rising with the Miss Lime and Cana plays. The "Other States" segment isn't rising as quickly as it once did due to countervailing forces within the category but Pennsylvania production from the Marcellus continues to swell and the nutshell is that production continues to refuse to decline depsite the 11 year low in the natural gas directed rig count. We remain constructive on gas prices in the 2H13 period.
Holdings Watch
- Performance through the first half is essentially in line with the performance of the broad indexes in our equity only long term focused portfolios this year. We're about 70% oil, 25% natural gas and 5% either balanced or Service or Other (which includes a tiny coal position). We are slowly adding to our natural gas focused names and constantly adding to and subtracting from our oil names. As we have for the last year, all trades are noted in the comments section and via email and text if desired at the time they occur.
- The Blotter is updated here.
The Week That Was
Enjoy the slow week and again, we'll check in from time to time.
S&P Areas of Interest 6/30 5:00 PM ES 1599
Notes…. Market stalling at the 1606 CHVN after a low volume bounce. Heavy supply from 1606 to 1620.. Expecting retest lower with 1591 CLVN/minor support and 1582 minor CHVN as near acceptance. Major CHVN below at 1541. Breadth trend is negative. Demand volume is negative in all time frames. POMO positive through the end of the month. $USD upside bias and currently mid range above volume pivot with resistance/major breakout level at 85.
Thoughts ……. 1606 is the short term volume pivot. Expecting low volume sloppy trading, with moves higher to stall below 1620 and rejection below 1606 to test to 1591. A break there would open up 1541 as the major downside target. I’m looking for opportunity lower with a move below 1567 (152.27 on the SPY).
Glossary http://www.futurestrader71.com/?page_id=1280
1620.25 CHVN/Heavy Supply/Previous breakdown point
1606 Minor/CHVN/Supply/Short term volume pivot.
1591 CLVN /Previous breakout point.
1577-82 Minor CHVN
1564 Minor CLVN/Support
1541 Major CHVN/Acceptance
1520 Major CLVN/support
SP500 Futures
http://www.charthub.com/charts/2013/06/30/es_master_1306301645
$USD
http://www.charthub.com/charts/2013/06/30/dxy_master_1306301658
June 30th, 2013 at 7:14 pmXLE Sector trend line and CLVN support around 76. Demand volume/breadth negative at the moment.
http://www.charthub.com/charts/2013/07/01/stock_master390_1306301716
FCG Gas ETF support at 15.25
http://www.charthub.com/charts/2013/07/01/stock_master390_1306301724
June 30th, 2013 at 7:24 pmZorg, you say heavy supply until 1620. On your master charts I see an LVA from 1610-20 on a variety of composites. How do you determine the "heavy supply" ?
July 1st, 2013 at 8:05 amMorning Externals:
BDI at 1179
Brent/WTI at 5.5
TYX at 3.53
July 1st, 2013 at 8:13 amROSE…..ROSE has been a good trader off range lows.Last 50 Trades, 74% winners 3.29 profit factor. Setup would be complete with a close below 41.
http://www.charthub.com/charts/2013/07/01/stock_master390_1307010613
July 1st, 2013 at 8:18 am#3 Mark….I see and agree that there is a LVN between 1606 and 1620 and for day trading purposes I'd expect either rejection at around 1614 or a quick pass through to 1620. For longer term traders or EOD traders I think reversals could come anytime below 1620 where the supply is thickest with initial supply at 1606 rejecting price last Friday. Thanks for pointing that out.
http://www.charthub.com/charts/2013/07/01/es_master_1307010619
July 1st, 2013 at 8:28 amre #6 Gap open now thru 1614 CLVN ..appears 1620 is the upside target..a close above that level would be a big shock to those who bailed on last week's sell off
http://www.charthub.com/charts/2013/07/01/es_intraday_1307010655
July 1st, 2013 at 8:56 amVolume moderate in energy stocks with 35 of 80 above average for time of day…advancers 64 of 80
July 1st, 2013 at 9:07 amBloomberg TV @BloombergTV56s
BREAKING: U.S. June ISM manufacturing index rises to 50.9 from 49.0
July 1st, 2013 at 9:08 amWhile I hate that Z is away, i am looking forward to another "Z vacation rally."
July 1st, 2013 at 9:15 amS&P futs back to 1620 CHVN..important pivot going forward…
http://www.charthub.com/charts/2013/07/01/es_master_1307010719
July 1st, 2013 at 9:20 amCopper trading up 3% from its lows.
July 1st, 2013 at 9:28 amAnyone see Morgan Stanley downgrade VLO to Underweight? A little odd after a large move down from the highs
July 1st, 2013 at 9:38 amZorg.
agree on ROSE. stock has been pretty volatilie between 41 and 49. has been a better trading stock than a holding stock
July 1st, 2013 at 9:41 amFSLR through the volume pivot
http://www.charthub.com/charts/2013/07/01/stock_master390_1307010748
July 1st, 2013 at 9:49 am#14 yep…been a laggard that rips and dips…..
July 1st, 2013 at 9:50 am*EGYPT MILITARY ISSUES 48-HOUR ULTIMATUM TO FIND SOLUTION
July 1st, 2013 at 9:52 amLot's of pretty charts today… a couple of stocks that conitnue to show breakouts
CRZO
http://www.charthub.com/charts/2013/07/01/stock_master390_1307010758
REXX
http://www.charthub.com/charts/2013/07/01/stock_master390_1307010759
July 1st, 2013 at 10:01 amIWM and XOP both up 1.75% so far.
July 1st, 2013 at 10:11 amKOG showing breakout potential above 9.25…works to 10
http://www.charthub.com/charts/2013/07/01/stock_master390_1307010821
July 1st, 2013 at 10:22 amPQ Priced a senior note $200mm 10% '17. Yes leverage but still only 4x ebitda. Will develop Woodford in JV with NEE. Street should raise numbers. $5/sh is doable.
July 1st, 2013 at 10:23 amOne negative is that natgas is down, trying to find a bottom in the late shoulder season sell-off due to cooler temps. Perhaps the heat wave out west will bring a bottom soon. Natgas stocks, for the most part are holding in. FCG is basing just above lows. Due to associated gas from liquids production and prolific high-margin Marcellus production, overall natgas production is steady—as Z has pointed out. So demand is the controller of pricing now, which is coal-switching and weather dependent.
July 1st, 2013 at 10:23 am# 22..trying a long Nat Gas / short Oil trade here….
http://www.charthub.com/charts/2013/07/01/stock_master390_1307010828
http://www.charthub.com/charts/2013/07/01/stock_master390_1307010829
July 1st, 2013 at 10:29 amtok -PQ ok for individ investors? have cusip? thks!
July 1st, 2013 at 10:34 amCiti has met with RRC. Buy with $95 PT. One stock you must own if you think you will see $4.50 NG.
July 1st, 2013 at 10:36 amJPMorgan best ideas for second half. CNX, CLR, GLOG, NOV, OXY, TSO
July 1st, 2013 at 10:39 am24 Don't have access to info. Not at work.
July 1st, 2013 at 10:40 amMS – Met with Fredrickson Group. Still expecting strong demand in UDW. Pushing companies that improve uptime & offshore recovery. CAM, FTI, SLB, OII
July 1st, 2013 at 10:45 amS&P Futs….pecking away at 1620 CHVN….intra-day support at 1615.50…Two secenarios ….was looking for sellers here at 1620..a break and hold above 1620 would change my mind. A break below 1615.50 opens up a test back to 1606.
http://www.charthub.com/charts/2013/07/01/es_intraday_1307010842
July 1st, 2013 at 10:45 amInteractive Brokers has cusip 716748AB4 and 144a so not tradeable for individuals
July 1st, 2013 at 10:47 amMCEP mean reversion trade posted a few days ago completes at 23.
http://www.charthub.com/charts/2013/07/01/stock_master390_1307010848
July 1st, 2013 at 10:50 amUS House has voted to expand offshore drilling. We have been here before Macondo. States mentioned Virginia, So Carolina, Southern Calif.. Still very early with this. Why would this gov't want 6 figure paying jobs if it is not carbon free.
July 1st, 2013 at 10:50 amRE 25: Agree on RRC. I think we will see $4.50 natgas in the next year or so. Buying natgas stocks now in anticipation of that, while it could be early if cold weather persists, makes too much sense to me. Several names will do very well in that scenario. In addition to RRC, I like EQT, COG, SWN, WPX, REXX and CHK. I am long each of those now. For income I like EVEP with a 9% yield and upside from the Utica. Many gassy becoming liquids-focused names will also do well in a rising natgas environment, but oil will have more influence on them and the hot money will likely go for the 'pure' natgas plays that have more leverage to the rising natgas price.
July 1st, 2013 at 10:50 amROSE near resistance at 43.50…volume gap above to 45.50
http://www.charthub.com/charts/2013/07/01/stock_master_65_1307010851
July 1st, 2013 at 10:52 amRe PQ10%-17 I should add that they are virtually identical to an outstanding publicly traded PQ 10%-17 issue.
July 1st, 2013 at 10:55 amRRC did a study this morning on this one. Over the past two years a 10 day range low has been a successful swing trade with 76% winners 3.94 profit factor. If you think it's going to 95 then a 10 day range low would be a gift going fwd.. 75.52 would be the current setup…atm. I'll be watching for it.
http://www.charthub.com/charts/2013/07/01/stock_master_65_1307010857
July 1st, 2013 at 10:59 amRE 23: Smart, gutsy trade. I don't trade the commodities themselves, but that one looks juicy. I tend to stick with the equities that produce the commodity, so I am long and getting longer in natgas names–consistent with your trade. Considering trimming some oil-weighted names soon as well. Thanks for your trade info Zorg.
July 1st, 2013 at 10:59 amOT sort of
"People who receive frequent news updates on their investments earn lower returns than those who get no news." – Paul Andreassen
July 1st, 2013 at 11:14 amRe pullback mean reversion trade setups that I post….for example when I say that the RRC trade setup would be 75.52 that's just the mechanical level used for quantifiying the performance and risk/reward metrics….market context may suggest waiting or jumping the gun….today I took ROSE before the mechanical level for example…
July 1st, 2013 at 11:19 amRE 38: Don't know the truth value of that statement, but if people trade more frequently from more frequent news updates, and they are not good traders (most are not), then there might be something to it.
July 1st, 2013 at 11:21 amRe 39: Thanks for pointing out ROSE earlier. I waited until the opening gap and the Friday afternoon trading gap were filled around 10 am this morning, then I bought some ROSE. Perhaps early, but I like the name and the stock is down from the high 40s. Lower risk entry, IMO.
July 1st, 2013 at 11:26 amNatgas is now green and for those interested in EVEP, it just filled a gap left from Thursday. Now bouncing to fill an upside gap from earlier today. Amazing how that gap-filling TA works.
July 1st, 2013 at 11:31 am#41….best wishes for both of us….I don't mind bailing if it doesn't act the way I expect it to…my basis is at 42.68..which is also the short term volume pivot for the stock
July 1st, 2013 at 11:32 am#43 ROSE
http://www.charthub.com/charts/2013/07/01/stock_master_12_1307010931
July 1st, 2013 at 11:32 am#40 I tend to be swayed by the last thing I hear…so I try to limit my media input to as close to zero as I can…
Now real informations is a different
July 1st, 2013 at 11:34 amOT Re #45 Media…along the same lines
http://www.thereformedbroker.com/2013/06/27/why-behavior-is-half-the-battle/
July 1st, 2013 at 11:35 amRE 43: Started buying ROSE at 42.55. Added more later to get a solid core position. My avg basis is 42.71. We'll see how this goes. I'm not afraid to blow out of trades if my timing looks off as well. Feeling ok on this one as a decent entry for a long-term hold. I'll likely be more patient here.
July 1st, 2013 at 11:50 amWPX Another good pullback trader though with a much shorter history…since 10/24/2012, 6 of 7 trades off 10 day range lows as winners with 3.17 profit factor. Last setup at 18.94 on 6/28….yet to bounce.Defined support marked on chart
http://www.charthub.com/charts/2013/07/01/stock_master390_1307011000
July 1st, 2013 at 12:02 pmCIE +5.76% today. I don't see any news today. But this article has some good data. http://seekingalpha.com/article/1506972-cobalt-international-energy-high-impact-campaigns-and-near-term-catalysts?source=yahoo
July 1st, 2013 at 12:23 pmEOG-Jeff raises PT to $174 from $160, currently up >3% today:
I have some options but wish I had more-seems that it is the leader in execution
http://www.streetinsider.com/Analyst+Comments/Jefferies+Boosts+Price+Target+on+EOG+Resources+%28EOG%29/8463832.html?si_client=intbro
July 1st, 2013 at 12:31 pmRobry at 72
July 1st, 2013 at 12:41 pmRE 48: WPX is one I want to add to. Waiting for it to fill the gap just below 18.50, but it doesn't want to so far. The low point of the pull-back is 18.57. There is also another gap lower at 17.50 that beckons if things deteriorate. This is a cheap natgas stock with promising natgas wells and Bakken oil exposure. Bought some under 19 but want more lower after gap fills.
July 1st, 2013 at 12:55 pm49 CIE was added to best buys @ MS this morning. There will be 3-4 high impact well results by year end
July 1st, 2013 at 1:03 pmI see JPM downgraded VLO, HFC, MPC to underweight….a bit late with that I'd say…the only one I follow really is HFC and I just added a little to my position
July 1st, 2013 at 1:23 pmStopped out of ROSE at breakeven…
July 1st, 2013 at 1:30 pmS&P futs…got the run to 1620…..sellers came out as expected…so far holding above 1606 CHVN….a close below 1606 wouldn't be helpful…
http://www.charthub.com/charts/2013/07/01/es_master_1307011138
July 1st, 2013 at 1:39 pmRE 55: ROSE–staying with it for now as it probes Friday's lows. Bought more at 42.42. Thinking longer term.
July 1st, 2013 at 1:41 pmAndy — new PQ bonds are 144a. The SEC is "protecting" us poor slobs from being able to buy them ourselves.
July 1st, 2013 at 1:45 pm#57…I'll be back…..waiting to see how the market handles this spot between ES 1606 and1620 with a bear flag on all the major sectors before I get married to anything new
July 1st, 2013 at 1:56 pmS&P Futs back to the 1607 CHVN….opening gap and volume gap below
http://www.charthub.com/charts/2013/07/01/es_master_1307011240
July 1st, 2013 at 2:41 pm#58 BOP I believe that the primary reasons for doing 144A Deals is that they get a less intense review by the SEC thus allowing for a quicker turnaround and the issuer can use projections which aren't allowed in a normal underwriting. In any case, the 144A paper usually becomes registered as soon as fresh financials are filed. As mentioned above #35, there is n outstanding public issue of PQ bonds with an identical description.
July 1st, 2013 at 2:45 pmMark — #61… completely agree with your comments (except the "projections" part… insitutional investors who have not signed a Confidentiality Agreement are not privy to financial info that all other investors get). I do "understand" why 144a exists (as I used to be a 144a buyer of HY bonds myself). Just sayin' it ain't right. Point being that the SEC has made it so painful and time-consuming to get a bond registered that companies go the 144a route, with a plan to register within 6-9 months. This results in the pool of potential bond investors to be smaller, pushing up rates for the borrowing entity, and keeping out individual investors. By the time the bond is registered (sometimes almost a year later), individual investors can buy the bond… but the price is much higher at that point (all else equal).
So what is the SEC really "protecting" the individual investor from? Not much. But it is generating a lot of work (and fees) at the SEC. Guess it keeps those lawyers from being ambulance chasers… 'bout all the good i can think of.
July 1st, 2013 at 3:19 pmBrent/WTI near parity happening faster than many thought:
http://www.bloomberg.com/news/2013-07-01/brent-wti-oil-spread-shrinks-to-5-for-first-time-in-2-1-2-years.html
July 1st, 2013 at 3:21 pmSector and Group Cumulative Volume Charts…..Lower chart is cumulative advancing – declining volume with the rate of change of the cumulative volume.
XLE
http://i1223.photobucket.com/albums/dd503/zorgnak/XLECVI_zpsd513d8b8.png
E&P Stocks
http://i1223.photobucket.com/albums/dd503/zorgnak/EampPStocks_zps21c3cf29.png
Nat Gas Stocks
http://i1223.photobucket.com/albums/dd503/zorgnak/ZLTGas_zps78b3e51f.png
July 1st, 2013 at 6:48 pmRefiners
http://i1223.photobucket.com/albums/dd503/zorgnak/ZLTRefiners_zps614c8d92.png
July 1st, 2013 at 6:49 pm#65-zorg, do you see any refiners at or near support worthy of watching-I guess with the parity approaching of Brent/WTI, the refiners are not currently not all that attractive.
Thanks.
July 1st, 2013 at 6:53 pm#66-sorry, no hurry at all-will take a closer look at #65.
July 1st, 2013 at 6:56 pmBakken Stocks ..where the money is going. I need suggestions/additons/deletions to make this custom index representative of Bakken centric oil companies. Stocks in the index shown are CLR EOX KOG NOG OAS TPLM
http://i1223.photobucket.com/albums/dd503/zorgnak/BakkenCVI_zpsec291ead.png
July 1st, 2013 at 6:56 pm#66 re refiners..Choices…Seems like easier pickings in other places
HFC has support coming up…marked on chart but as you can see demand volume and ease of movement are straight down with heavy down volume today so that support looks suspect until proven for me…
http://www.charthub.com/charts/2013/07/01/stock_master390_1307011659
VLO coming into support shown on chart but same smell as above
http://www.charthub.com/charts/2013/07/02/stock_master390_1307011702
TSO
http://www.charthub.com/charts/2013/07/02/stock_master390_1307011706
July 1st, 2013 at 7:07 pmThanks much, zorg; agree on easier pickings.
July 1st, 2013 at 9:14 pmFrom FT alphaville
http://ftalphaville.ft.com/2013/07/02/1553432/the-oil-markets-are-a-flux/
July 2nd, 2013 at 7:26 amS&P Areas of Interest 7/2 8:30 PM ES 1610
Notes…. Mkt rejected 1620 CHVN. Trading between 1607.25 CHVN and 1620 CHVN/Heavy supply. Volume gap below 1607.25. Weak demand volume. Breadth trend flat. Pomo supportive through the end of July. $USD upside bias supportive. Risk sectors relative strength.
Thoughts ……. Expecting choppy/sloppy low volume trading until the market clears the 1607.25-1620 area one way or another. Heavy supply at 1620 limits upside until taken out. Respecting volume gap risk below 1607.25. 1607.25 is the short term volume pivot.
Glossary http://www.futurestrader71.com/?page_id=1280
1620.25 CHVN/Heavy Supply/Previous breakdown point
1607.25 Minor/CHVN/Short term volume pivot.
1591 CLVN /Previous breakout point.
1577-82 Minor CHVN
1564 Minor CLVN/Support
1541 Major CHVN/Acceptance
1520 Major CLVN/support
SP500 Futures
http://www.charthub.com/charts/2013/07/02/es_master_1307020509
$USD
http://www.charthub.com/charts/2013/07/02/dxy_master_1307020535
July 2nd, 2013 at 7:40 amCrude Oil Futs Major acceptance lower at 95
http://www.charthub.com/charts/2013/07/02/crude_oil_multi_period_1307020541
July 2nd, 2013 at 7:47 amre 73…add resistance at 99 CLVN…
http://www.charthub.com/charts/2013/07/02/crude_oil_multi_period_1307020548
July 2nd, 2013 at 7:48 amNat Gas Futs Major long term acceptance higher at 3.71. Quarterly CHVN at 4.03 with defined resistance at 3.98
http://www.charthub.com/charts/2013/07/02/ng_master_1307020551
July 2nd, 2013 at 7:53 amLINE
http://www.bloomberg.com/news/2013-07-02/linn-falls-after-disclosing-sec-probe-of-berry-purchase.html?cmpid=yhoo
and various negative broker comments today
July 2nd, 2013 at 7:57 amTuesday morning:
BDI unch at 1170
Brent/WTI continues to narrow: 4.6
TYX- treasury yields moving lower; now at 3.478
Enjoy the day:
July 2nd, 2013 at 7:57 amLINE falls on informal SEC inquiry
http://www.bloomberg.com/news/2013-07-02/linn-falls-after-disclosing-sec-probe-of-berry-purchase.html?cmpid=yhoo
July 2nd, 2013 at 7:59 amre: 68
Zorg.
i would probably add WLL to the list of the stocks you mention above. although Zman is of the opinion that it is a slower grower than others in the area, i do believe their assets are quite valuable and remains a take out candidate.
July 2nd, 2013 at 8:13 am#62 BOP thanks for the response. Slightly OT but the best protection the SEC provides with 144A restrictions, is perhaps keeping individual investors from excessive markups by unscrupulous brokers and market makers.
July 2nd, 2013 at 8:15 am#79..thanks I missed that one…will put it in
July 2nd, 2013 at 8:19 amLinn Co. downgraded to neutral by JPM.
July 2nd, 2013 at 8:20 amBakken Stocks(corrected)…only energy sub-group that I track that is still showing positive money flow during this recent correction…Bodes well going fwd imo
http://i1223.photobucket.com/albums/dd503/zorgnak/Bakken_zps6c110841.png
July 2nd, 2013 at 8:30 amre: 83
Zorg.
that has been the trend for several weeks now. the thing is some belive that since gold is no longer considered a safe haven some are moving into oil as an alternative safe haven asset.
July 2nd, 2013 at 8:40 amis anyone buying LINE/LNCO at these prices or is there too much risk given the news flow today?
July 2nd, 2013 at 8:42 amROSE back in at 43.03…..
July 2nd, 2013 at 8:44 amKOG trying to work out of long term congestion
http://www.charthub.com/charts/2013/07/02/stock_master390_1307020648
July 2nd, 2013 at 8:50 amS&P Futs…..moving on little volume..note thin profile today compared to yesterday's…a break above 1620 or below 1607.25 would be significant
http://www.charthub.com/charts/2013/07/02/es_intraday_1307020653
July 2nd, 2013 at 8:55 amfor preferred people:
Vanguard Natural Resources, LLC (VNR) (the “Company”) today announced that the NASDAQ Global Select Market (“NASDAQ”) has informed the Company that its 7.875% Series A Cumulative Redeemable Perpetual Preferred Units representing preferred equity interests in the Company will commence trading on the NASDAQ beginning today, July 2, 2013 under the ticker symbol VNRAP.
July 2nd, 2013 at 8:56 amBOP/EXXI- worst performing stock has been EXXI, your thoughts, as long as they are positive, are welcome.
July 2nd, 2013 at 8:57 amRe: 85 I sold some LINE Oct $21 Puts for $1.15. That would have me buying LINE at $19.85 in Oct. if it is below $21 then. If it is above $21 I keep the $1.15. $19.85 seems like a bargain price even with the SEC news. Time will tell.
July 2nd, 2013 at 9:02 amRE 87: ROSE gap today came after the open–a bit unusual. Bought more today–avg 42.80. That gap beckons, though, so I am holding powder until it gets filled. I own some if it runs away and doesn't pull back–it is a very good value here. But I like it even better at 42.50 on the gap fill. Will wait for it.
July 2nd, 2013 at 9:04 amRe: 66 NTI is a refiner to consider. It doesn't have a technical chart support but at the present price it is yielding about 20.8% so that should provide some price support.
July 2nd, 2013 at 9:05 amBCEI Holding above defined support….
http://www.charthub.com/charts/2013/07/02/stock_master_65_1307020708
July 2nd, 2013 at 9:09 am#92 thanks….I bought a smidgeon.. Also bought BCEI here at 35.71 to open a position.
July 2nd, 2013 at 9:13 amAAPL is building a new solar farm with Buffet's new subsidiary for a data center in NV. All AAPL US facilities are powered by renewables, and 75% worldwide are so powered. Their goal is to have all worldwide power needs met with renewables, as avialability allows. Meanwhile, solar stocks continue to march higher.
July 2nd, 2013 at 9:15 amXOP on trend line below resistance…
http://www.charthub.com/charts/2013/07/02/stock_master390_1307020716
July 2nd, 2013 at 9:17 ambop — u have an opinion on PQ bonds. and its ok to be negative
July 2nd, 2013 at 9:29 amCrude Oil at resistance 99CLVN….
http://www.charthub.com/charts/2013/07/02/crude_oil_multi_period_1307020735
July 2nd, 2013 at 9:35 amKRE: Regional banks etf starting to go parabolic on heavy volume, outperforming all financials and most other sectors. Good for the economy.
July 2nd, 2013 at 9:36 amNat Gas…coming off swing lows with long term acceptance at 3.71…would expect it to slow there
http://www.charthub.com/charts/2013/07/02/ng_master_1307020736
July 2nd, 2013 at 9:37 amRE 102: Natgas stalwart names responding well to the natgas bounce.
July 2nd, 2013 at 9:47 amNat Gas stocks getting demand volume today….these two at areas of interest
WPX at defined support
http://www.charthub.com/charts/2013/07/02/stock_master390_1307020746
SWN Testing resistance
http://www.charthub.com/charts/2013/07/02/stock_master390_1307020747
July 2nd, 2013 at 9:48 amThese two continue to break higher with volume in gear
CRZO
http://www.charthub.com/charts/2013/07/02/stock_master390_1307020748
REXX
http://www.charthub.com/charts/2013/07/02/stock_master390_1307020749
July 2nd, 2013 at 9:49 amCOG Volume in gear for more
http://www.charthub.com/charts/2013/07/02/stock_master390_1307020750
July 2nd, 2013 at 9:51 amI was out last week…EXXI just looks like a broken chart with a lot of resistance around 26…anyone aware of anything on this one other than the same old stuff about some tough luck drilling, some unanticipated infrastructure delays etc.
July 2nd, 2013 at 10:07 amEXXI — hearing that there were 2 dry holes drilled offsetting LaFrog. But there are 2 to 4 horizontals currently in progress in two field that should be nice and oilly.
Schiller… first, he could do no wrong. Now, he can do no right. That said, lots of insider buying down here. And since 6/30/13 is EXXI's fiscal year end, I would expect EXXI to post an operational update some time before YE results are officially reported. Hope to see (good) news about the 2-4 horizontals. They are being drilled in old fields, where there is oil. Just need to see how much. That said, the EXXI ride for 2013 has been terrible. And it's been my 2nd largest position, behind KOG (which hasn't done much this year either). Thank you, RMD, for SYRG. And EOX has helped too. Otherwise, I would have to pull out the old paddle and whack myself upside the head a few times… and trust me, that HURTS.
July 2nd, 2013 at 10:14 amS&P Futs..drive to yesterday's VPOC at 1618 with supply at the 1620 CHVN…Will be interesting to see if 1620 becomes the magnet now otherwise watch a break below 1614 for a reversal back to 1607.25..Breadth, volume, cumulative tick, bid/ask delta all positive atm
http://www.charthub.com/charts/2013/07/02/es_intraday_1307020813
July 2nd, 2013 at 10:16 amJust some musing: Natgas and renewable stocks are in the spotlight now due to gov't environmental policy and rising demand. Coal is hated but still comprises a significant (but shrinking) portion of the US power market and a very significant (and still growing) portion of the global power market. ACI and ANR are both down 93% in value in the last 5 years. BTU and CNX less so, but still are very depressed. As these companies retool and reorganize for efficient, profitable lower-volume output one can make a case for owning these stocks. Coal is likely to stay as a significant contributor to the global power markets for the forseeable future. As natgas prices rise, coal–after adjusting for added costs due to pollution curbing factors–is likely to bounce back.
July 2nd, 2013 at 10:21 amthx BOP….hadn't noticed the insider buys…I have pretty patient money…too old to sweat things much…my performance has dropped off a lot…was much easier to buy 'em in any sector in 2009 than it is now….
July 2nd, 2013 at 10:27 amThanks BOP- have been day trading the stock at these levels. Make a little, give a little. Eventually will catch a pop.
July 2nd, 2013 at 10:27 amre EXXI- there is something to be said for the Australian way of handling info. If there was really dry holes, it would be nice to have them confirmed rather than rumor, etc.
July 2nd, 2013 at 10:57 amelduque — #112… given that the Oil Patch is a porous place, it would be nice to inform us all about what is going on. Guess EXXI is trying to act like a Big Boy and not report wells on an individual basis. That said, information is leaky, for sure.
July 2nd, 2013 at 11:16 amLast Thurs WLL completed a small balance sheet clean-up by converting their remaining converts ( WLLprA ) into commom. Stock has been on a tear ever since.
July 2nd, 2013 at 11:21 amQuestion above re refiners – acting as expected, letting them come in to me in front of 2Q13 reporting season which is generally earlier than the E&Ps' season. I still have no exposure. We played with VLO calls last 2 quarters with success. I say the weaker in front of earnings the better. Look for them to address MLP timeline on the 2Q call.
EXXI – thanks BOP, I don't see it quite that harshly, for every 3 to 4 good wells he's had a troubling one, either gassy or dry, the dry hole comment rumors were around last week and both of those wells named were onshore (transition zone) gas wells. If you are going to drill a dry hole (which as I wrote to Tom last week happens in non resource play names) then I would much rather it be a gas well than an oil well prospect. I think the bar is set really low here and that it stabilizes with good news going forward. The name is cheap and they are headed back to the land of free cash flow in late calendar 2013/early calendar 2014 as per the new plan and meanwhile they are buying back shares.
LINE – as per comments a couple of weeks back I am not bottom fishing the name but am waiting for it to settle down. Today's "news" isn't really news in the sense that we already knew the SEC was looking into the situation … it may further delay the proxy if it is indeed more indepth but it's not a cancellation of the BRY deal by any means. Could that happen? Sure. Will it happen? Don't know, it's a new way of buying a C Corp so we will see how the SEC wants to deal with that as it's precedent setting.
Zorg – re Bakkens – it depends on what you want it for and how you weight such an index. CLR trades more with oil than the group, it's a much bigger name than most. And it's not a pure play but it is the biggest acreage holder in the Bakken so I would not leave it out. WLL is a must include, don't really care about the growth rate if just talking about the Bakkens, Lots of names are non pure plays in the Basin but I think you have it covered. SSN is almost pure Bakken now, ESTE is as well but they are weird ones so you might include or not as you like. Then you have a bunch of guys like QEP and NFX and HK that have significant Bakken operations but are not close to pure plays.
Otherwise, pleased with how things are sitting in the portfolio. NG due a bounce although the weather isn't quite cooperating yet.
We'll have a regular Wednesday post out tomorrow.
July 2nd, 2013 at 11:27 amre 114 – I'm not ready to go into the name yet, Postle was a big deal for them with no real reaction. There may be an activity acceleration there in the offing. Stock perf up 9% over the last few days, CLR up 7%, OAS up 6%. Much of this is just overdone oil.
July 2nd, 2013 at 11:30 amEXXI – on the tape with a production platform (WD93) shut in after 2.27 gallon oil spill. Yeah, gallons. Not a big deal, may take a little time to repair a leaking crude line from the platform but know they will be on it fast.
July 2nd, 2013 at 11:35 amSSN rising on volume, no news. Other than the occassionally Aussie reporting rules non news operations update I would expect no material news from these guys until August. See last week's posts for further comments.
July 2nd, 2013 at 11:37 amHarvard study out claiming US crude production in 5 years (2017) is likely to be 10.5 million bpd and total liquids production is likely to be close to 16 million bpd. Texas will likely re-emerge as a top world oil producer with around 4 million bpd of crude expected. The top 3 shales (Bakken/TFS, EFS and Permian Basin) should combine to produce 4.7 million bpd of crude alone in 2017. It describes other shale plays as less certain so it doesn't give much credit to them (just 400,000 bpd of crude in 2017 combined for all other shales beyond the big 3). It does acknowledge such production is vulnerable to curtailment if prices drop significantly. Here is the link:
http://belfercenter.ksg.harvard.edu/files/USShaleOilReport.pdf
July 2nd, 2013 at 11:42 amrefiners: thanks for cmts, Z, NTI heads up, DaveH-have decided to wait to see where the Brent/WT I settles. Do like the yield on some but I've been bitten before when I start chasing yield and ignoring the underlying story.
July 2nd, 2013 at 11:44 amre 120 – Yield rarely holds something up when the group is sliding. Same argument could be made when NTI was a 16% yielder which is seen is high. Also, note for NTI that they are going to be more of a variable distribution play than you see with some of the names like LINE or MCEP. So unless you are modeling out the distributions simply multiplying by 4 isn;t going to cut it for me. Not saying it's going lower but would need to model it up to buy into that.
July 2nd, 2013 at 11:51 amSee the little buttons at the bottom of the post under the words Share and Enjoy? Please use them.
July 2nd, 2013 at 11:55 amCRZO – this would be a new closing high since we've owned the name. Saw a blurb from a broker note saying that catalysts here are piling up. We wrote much the same back on June 18. This was a GHS note so good to see them confirming same following their conference. Our list of catalysts and the snapshot on the company from last note are here:
http://zmansenergybrain.com/2013/06/18/tuesday-morning-47/
July 2nd, 2013 at 12:03 pmZ- have you returned or did your wife lend you her ipad.
July 2nd, 2013 at 12:23 pmre 124 – I am back in the office.
July 2nd, 2013 at 12:24 pmWelcome back!
TAT up a total of 10% the last two days.
July 2nd, 2013 at 12:28 pmKOG cramer asked about it last night during lightning round – said he liked and thought StatOil int in more bakken acreage.
July 2nd, 2013 at 12:30 pmrer 126 – thanks. Any news? Noting a number of small bumps, could be some increased sentimnet due to oil too. SSN up 15% today on nada.
July 2nd, 2013 at 12:34 pmNot seeing a good reason for $99 oil
http://www.cx-portal.com/wti/oil_en.html
There is a spread trade underway (long WTI, short Brent) that is working to collapse the spread and making WTI overbought (in my view). Those have a way of reversing without warning.
July 2nd, 2013 at 12:36 pmre 127 – clarification. Was he saying he thought STO wanted to buy more Bakken acreage?
July 2nd, 2013 at 12:36 pmz – re 124 vacation rally now over.
July 2nd, 2013 at 12:41 pmz – i thot that's what he said. was on very late last night (replay)
July 2nd, 2013 at 12:45 pmEPL mgt meeting with JRCO:
large shallow inventory, wide-asimuth seismic hoping to redefine u/s of salt dome structures. Potential 150-300mm boe could be a game changer. Start testing deeper stuff in '14.
July 2nd, 2013 at 12:48 pmre 131 – wow you guys are so short term, lol. Tell you what, I am taking another few days near the end of the month in an effort to boost the market at that time.
re 132 – thanks and it doesn't really matter. It's a common rumor. OAS would make a bit more sense given STO's footprint but KOG makes sense as well and STO might like the bigger well country of the FBIR after having primairy gotten Williams and McKenzie ND and some Richland MT acres with the BEXP buy.
July 2nd, 2013 at 12:49 pmS&P Futs Supply at 1620 CHVN sells, market back to 1607.25 CHVN volume pivot with volume gap below….
http://www.charthub.com/charts/2013/07/02/es_intraday_1307021048
July 2nd, 2013 at 12:50 pmre 133 – re deeper stuff – what depth? These guys deeper stuff is I'm guessing 16,000'. Risk is that's overcooked and is gas. Last time I thumbed through EPL stuff (last week) they were looking for oil.
July 2nd, 2013 at 12:50 pmEPL has always defined deep as ~ 12m-20m ft, then you get into the UD. Mgt has always wanted oil to the best of my memory.
July 2nd, 2013 at 1:07 pmre 137 – right, kind of my point. Spinnaker did a lot of looking for oil at those mid teens depths and found a lot of gas. I don't think their seismic is going to differentiate the molecules, lol.
July 2nd, 2013 at 1:11 pmLINE and LNCO – off 18 and 16%. This is why I was loath to add post Hedgeeyes little chat a couple of weeks back. I'm sure those guys are saying we told you so repeatedly at this point and my thought is that still little has changed and that Cooperman's comments on it all still apply as well. Moves gettering exacerbated by the market dipping now.
July 2nd, 2013 at 1:18 pmEOX quietly making a move on $7. Slow drift up in the wake of the last 3 wells. Recall that my estimates are quite a bit higher than the Street for next year and a little higher than them this year as well.
July 2nd, 2013 at 1:19 pmAndy — PQ bonds.
No opinion on the company (as I don't follow it). But the bonds are rated Caa1 / B. Rather unusual to have a 2 notch difference in rating agency opionions. But Moody's is almost always more conservative. That said, the version (registered) that non QIB's can buy (like you and me) is currently offered around $107 for a yield of 7.45%. That is not enough to get me interested. Not saying it's not a good investment… but I don't follow the company.
July 2nd, 2013 at 1:27 pmThe Street is at +75 Bcf for tomorrow's report (due out at 12 pm EST, a day early due to the holiday).
July 2nd, 2013 at 1:28 pmZ, current thoughts on ROSE?
July 2nd, 2013 at 1:30 pmre 143 – no change from recent thinking. Eagle Ford going very well, got to be a free cash flow name earlier this year and then they bought into the Permian. Deal didn't look overvalued on the surface, time will tell on results. Expecting a good quarter there in terms of operational commentary. Don't see anything wrong with the name but volatility has been up and I've noticed that of late there is again less attention being paid to the names in the space that don't have better looking charts. The name is cheap, well run, has a huge inventory. Chart is full of noise. Expect that to get worked out of the next 6 months resolving higher as long as crude doesn't fall out of bed and NGL pricing doesn't fall further out of bed.
July 2nd, 2013 at 1:36 pmRe 145: Great. Thanks. Chart looks to be in a support area to me. Been doing some buying in the name yesterday and today.
July 2nd, 2013 at 1:41 pmre 145 – hear ya on that, not really sure what causes the wide oscillations in the name, especially of late, metrics all strong and moving in right direction, good management there, very long term thinking type guys. I suppose you could have Pearshall disappointment in the name but that's a nothing type concern to me or them. Otherwise, it's an Eagle Ford first, Permian second. Eagle Ford probably has half a dozen years of well inventory left which will grow with downspacing and probably no surprises on well productivity. Permian stuff looked solid, could have well rate upside but time will tell. They run a tight ship, not one I worry over. If people are dumb enough to punt and sell lower I may add some more.
July 2nd, 2013 at 1:45 pmNoted the WPX comment above about adding below $18.50 while setting at the pool yesterday, that is my add level as well. If it is not there by the 2Q report I will add more anyway. But natural gas weakness is helping with my patience for the chart to improve itself. Would like it if gas gives one more big injection to crunk names like that one into filling gaps. There is also a gap below $18 which would be a fine place for me to add to the core as well.
July 2nd, 2013 at 1:58 pm3:21 PM Caught up in the Linn/LinnCo downdraft is Breitburn Energy Partners (BBEP -8.2%), which Hedgeye slammed this morning as "Linn Energy junior" whose fair value is $2-$8/unit and whose distribution is "largely a mirage." EV Energy Partners (EVEP -0.7%) and QR Energy (QRE -3.2%) also are mentioned as companies that "may significantly understate maintenance capex, and as a result, overstate DCF." (from Alpha)
Looks like Hedgeye is expanding its short 'coverage'.
July 2nd, 2013 at 2:28 pmLINN [LINE / / LNCO] has loss due to Hedging to add to their problems:
http://finance.yahoo.com/news/Linn-Energy-reports-4Q-loss-apf-213790690.html
July 2nd, 2013 at 2:34 pmre 149 – that's not new.
July 2nd, 2013 at 2:35 pmBeerthirty. If you asked a question above and I either missed it or didn't fully address it please ask again and I will get to it this evening.
July 2nd, 2013 at 3:00 pmI bought some LINE today ~ $28.5 to round out my position. I like even numbers. Time will tell if I was smart or dumb.
July 2nd, 2013 at 3:09 pmGST on the tape selling non core OK assets for $62 mm plus another $12 mm in proceeds as a partner exercises AMI rights. That's going to look pretty good on the back of any envelopeas they can point to having paid $74 mm for it and they are retaining what they see as core Hunton Lime acreage.
East Texas asset sale still unclosed, Cubic has until July 12 to come up with the cash ($46 mm deal announced back in April).
July 2nd, 2013 at 5:17 pmCrude up after hours on a big drawdown in crude stocks (according to API) of 9.4 mm barrels. That's likely due to the expected reversal (fall off) in imports after the last two relatively elevated import reports.
July 2nd, 2013 at 5:26 pm#153 — GST is very good at "transactions." Hoping they get better at "production." But it really was a nice deal for them.
July 2nd, 2013 at 6:06 pmre 155 – right, hire a new operations team and maybe they'd have a chance.
Big long graph laden post tomorrow. Tune in early.
July 2nd, 2013 at 6:28 pmTrip digit watch:
http://www.cx-portal.com/wti/oil_en.html
July 2nd, 2013 at 7:26 pmCharts are all equal weighted composites of the stocks within the index or ETF. Cumulative Volume is the aggregate of the stocks within in the index/ETF.
XLE Sector ETF below resistance (80). Volume showing strength. Bear flag or resumption of uptrend?
http://i1223.photobucket.com/albums/dd503/zorgnak/XLE72_zps0461fa35.png
ZLT Composite Index of 92 E&P Stocks below resistance. Aggregate cumulative volume flat.
http://i1223.photobucket.com/albums/dd503/zorgnak/ZLT72_zps71ff7fc1.png
ZLT Composite Index of 15 NatGAs stocks uptrend. Demand volume turning up today.
http://i1223.photobucket.com/albums/dd503/zorgnak/ZLTGAS72_zps31a735a7.png
July 2nd, 2013 at 7:49 pmZLT Bakken Index. Strong demand volume.
http://i1223.photobucket.com/albums/dd503/zorgnak/Bakken72_zpsb05a5703.png
ZLT Refiners Index lower lows on price and demand volume.
http://i1223.photobucket.com/albums/dd503/zorgnak/ZLTRefiners72_zps3e2aa5c3.png
July 2nd, 2013 at 7:50 pmOIH Looking interesting trying to break the bull flag and clear congestion with positive demand volume.
http://i1223.photobucket.com/albums/dd503/zorgnak/OIH72_zps10e70b41.png
http://www.charthub.com/charts/2013/07/03/stock_master390_1307021825.png
July 2nd, 2013 at 8:32 pmre 160 – $100 oil would help.
Crude on the daily looks like a breakout
And on the longer term chart its higher lows and lower highs until this one, forming a flag. Fundamentally I'm not overly bullish on oil (though I am 70% portfolio weighted that way) but here we sit at $101.30.
http://www.barchart.com/chart.php?sym=CLQ13&t=BAR&size=M&v=2&g=1&p=WN&d=X&qb=1&style=technical&template=
July 2nd, 2013 at 8:35 pm#161..Breakout into low volume area that runs to up to 105…Major long term acceptance lower at 95
http://www.charthub.com/charts/2013/07/03/crude_oil_multi_period_1307021844
Short OiL..Long Nat Gas
July 2nd, 2013 at 8:49 pmre 162 – those two commodities work on different cycles, noted your prior comment and meant to say good luck with the pair trade but I think a refining long is more closely aligned with the turn.
July 2nd, 2013 at 8:50 pm#163 Thanks ….I'll keep that in mind…
July 2nd, 2013 at 8:58 pmre 164 – actually, mine only works if you have a longer term time frame like a few weeks plus in mind.
July 2nd, 2013 at 9:02 pm#165 On the pair trade I'm just working off the stretch from major acceptance in both commodities as well as the expectation for higher Nat Gas prices going fwd. I'd cover the oil short with a return to the 95 CHVN.
To be clear..is your idea to go long refiners and short oil?
July 2nd, 2013 at 9:36 pmZorg- I do a lot of pair trading, but find it has been easier and more profitable to short USO and buy SU for example, or vice versa. Can't help but think that a short USO and long EXXI will make you at least 10% over a relatively short space of time. Have made good money shorting UNG and buying ECA in the past, when nat gas has had a spectacular rise. Right now the gassy stocks have outperformed UNG over the last couple of months.
July 2nd, 2013 at 10:29 pmre 166 – no, I don't do pair trades. I find them difficult to work at best. But if I were to want to short oil I'd want something related to it, that benefits from its drop to be on the long side. I get your purpose is technical on both.
July 2nd, 2013 at 10:40 pm