25
Jan
Wrap – Week Ended 01/24/14
Somewhat better tone last week as the gassy names reflected firmer pricing and helped to lift the ZLT slightly on the week despite the market backdrop. Note the crushed net short position but still quite high absolute short position (legacy shorts are likely starting to be quite concerned). $5+ natural gas is not sustainable but storage is set up to be price supportive (and from a higher level than we'd thought) once the forecast finally turns milder and thoughts regarding trough storage and the trajectory of injections in April begin to enter more heavily into traders' thinking. Our sense is that many of our under-hedged (compared to historical habit) gassy names are using the boosted strip to add to positions in 2014. Wrap comments will be included in The Week That Was section of the Monday post. Have a good weekend.
The blotter is updated: http://zmansenergybrain.com/subscriber-data/zeb-zlt-blotter/
January 26th, 2014 at 4:58 amWeekend Homework
Notes…… 1832.25 CHVN rejected as too high, breaking key short term support at 1806 CLVN on high volume. Market closed at the Major CHVN (1781.75). Far Support at 1764.75 CLVN. Congestion above from 1781.75 to 1798.75 with resistance at 1806 CLVN. High odds short term swing setup triggered.
Thoughts ….. Market acting pretty much as expected with a big move off the Major CHVN at 1832.25 to the lower downside target at 1781.75. If 1781.75 is rejected Monday as too high I see 1764.75 CLVN as support and expect a short term bounce to retest congestion and prior acceptance (1781.75-1798.75) with resistance at 1806. Markets seldom go from strong uptrend to strong downtrend but the small caps went from all time highs to testing their 50 Day Moving Average in two days with distribution widening into many of the former leading group/sectors. The odds for a short term bounce are high but there’s now market structure above for the first time since December. Looking at the stats, the average intra-year pullback is 14%. I plan to honor that stat and my lack of a crystal ball by staying light and observing the reaction to defined levels. Any trades will be into those stocks that emerge as leaders prior to or during the market advance, with smaller position size and defined risk.
Glossary http://www.futurestrader71.com/?page_id=1280
1834 Minor CLVN/Resistance
1832.25 Major CHVN/Current volume pivot. (183.52)
1818.25 CLVN/ Minor Resistance
1806.25 CLVN/Resistance (181.85)
1798.75 Minor CHVN
1781.75 Major CHVN
1764.75 CLVN/Support (177.61)
1723.50 Far Support CLVN/Trend Support
SP500 Futures
http://www.charthub.com/charts/2014/01/25/es_master_140125075115
SPY Support 177.61
http://www.charthub.com/charts/2014/01/25/stock_master390_140125082649
January 26th, 2014 at 9:24 amXOP No short term edge with E&P trading at the volume point of control mid-range between 64.27 key support-69.46 resistance. Demand volume and ease of movement favor another test below 65. Confluence of long term volume base and major trend support below around 63.31. Short term bounce setup (70% win) below 65. Nutshell….. patience is golden.
http://www.charthub.com/charts/2014/01/26/stock_master390_140126063342
E&P Demand Volume…breaking down again
http://i1223.photobucket.com/albums/dd503/zorgnak/XOP125_zps80f9a476.png
January 26th, 2014 at 10:09 amhttp://www.fool.com/investing/general/2014/01/17/should-companies-in-the-utica-be-disappointing-by.aspx
Zman would appreciate your comments.
January 26th, 2014 at 11:40 amre 4 – sure, will do for the Monday post.
January 26th, 2014 at 11:51 amAreas of Interest in Non ZLT Stocks
AREX Showing some relative strength and a positive shift in demand volume last week. Support 19.73-Resistance 22.36.
http://www.charthub.com/charts/2014/01/26/stock_master390_140126081008
APA Short setup from a couple of weeks ago. Accelerating to the downside with next support at 79.32
http://www.charthub.com/charts/2014/01/26/stock_master390_140126081458
APC Broke out of volume base, closed gap. Expecting a retest of 79.90. If it manages to hold above 81.65 next resistance at 85.63
http://www.charthub.com/charts/2014/01/26/stock_master390_140126081736
January 26th, 2014 at 1:22 pmCOP Head and Shoulder break at 68.88 works to the CLVN at 63. Ugh…
http://www.charthub.com/charts/2014/01/26/stock_master390_140126082553
CWEI Short setup looks interesting below 69…
CPE Relative strength. Trading just below long term volume base. Breakout potential above 7
http://www.charthub.com/charts/2014/01/26/stock_master390_140126092346
January 26th, 2014 at 1:23 pmPDX Trading in a low volume no man’s land with a gap to be filled below 155.
http://www.charthub.com/charts/2014/01/26/stock_master390_140126094052
WLL Near support at 57.49. Next support at 52.70
http://www.charthub.com/charts/2014/01/26/stock_master390_140126095026
January 26th, 2014 at 1:24 pmZLT stocks will be posted Monday AM…I'll be in and out through Wednesday while family visits..If you wish to have individual volume profile charts posted that you might find helpful, let me know.
January 26th, 2014 at 1:27 pmThanks for the levels Zorg
Baylor – not sure how often short squeeze site updates, generally most of those grab data from the nasdaq site, so would think every two weeks and at that point it's 2 weeks old.
January 26th, 2014 at 4:46 pmZorg…
from the previous declines it could be ascertained within a reasonalbe margin off error, that the decline usually added up to about 2/3 of the previous advance, from the previous lows. in this instance the 1850 (roughly high) from about a 1750 previous low would suggest the bottoming should be taking place somewhere around 1783 or right about where your 1781 CHVN suggets. If this trend breaks, i would have to use caution as it would be unprecended from the perspective of the ascending line being broken. if i was a betting man, i would think we are close to a bottom.
January 26th, 2014 at 6:03 pmthe one thing that bugs me is that i'm not sure if i want to use the 1750 as the bottom in early November or the 1660 in early October as the last bottoming out in this uptrend. if 1783 doesn't hold, i would be more inclined to say that the breakdown may take us down closer to 1723 which is a 2/3 retreat from 1660 to 1850, this area is a bit more defined and i agree with your caution used here.
January 26th, 2014 at 6:17 pmin both instances, however, there is correlation between the basic 2/3 correction levels and your support levels referenced above. not sure how that happens but both 1781 and 1723 are triggers in my theory as well as yours.
January 26th, 2014 at 6:20 pmWhy would now not be an amazing time to short the UNG?
January 26th, 2014 at 7:10 pmZ, thx for 10
re tplm and further entry, as y'all know, I've been looking to deploy more capital and am curious how supportive the 200 day may be for TPLM that were a gnat
January 26th, 2014 at 7:14 pm'S ass away from. It's already a fairly large position for me by looking to DCA down further
January 26th, 2014 at 7:15 pmRe #11- #14…I'll take all the confluence I can get!
Best wishes
January 26th, 2014 at 8:21 pmThe recent move in UNG seems fairly unprecedented since the 2007-2008 run. I'm not a great trader though so will defer to those smarter than me but it seems the current price is not go
January 26th, 2014 at 8:57 pmThe recent move in UNG seems fairly unprecedented since the 2007-2008 run. I'm not a great trader though so will defer to those smarter than me but it seems the current price is not going to be sustainable.
January 26th, 2014 at 8:57 pmZorg….
watching for the accumulated names in the sell off, as often times they tend to continue with the buying pressure. to me energy is an area of interest for the first time in several months. one stock that i'm particularly liking the actoin in is CRZO. its been finding good support at 41 and has withstood all sorts of shocks. would love to hear your thoughts on the chart
January 26th, 2014 at 8:58 pmSorry for the double post. My iPhone seems to do weird stuff with the user interface (randomly submits or can no longer type after hitting the delete key). Probably just me though.
January 26th, 2014 at 8:59 pmBaylor – thinking same re ETF KOLD.
January 26th, 2014 at 9:11 pmAs in, from a piece of tomorrow's The Week That Was section:
The front month jumped a whopping 20% to close the week at $5.18, a 3.5 year high. The 12 month strip jumped as well, rising 8% (which is a lot for the whole strip to move in any one week) coming to rest at $4.50 vs our 2014 price deck of $4.25 and the Street's soon-to-be-rising $3.98. It is highly likely many of our gassy names are taking advantage of this spike to hedge prices or will be over the next two weeks. The ultra short ETF KOLD may be interesting when the weather moderates. The strip has become much more U-shaped relative to recent weeks and months and next winter's pricing is now well elevated over the summer strip which is what we used to see more often prior to 2008. 2015 remains much more subdued with little out month lift. We think the current 2014 strip will turn out to be too high while the 2015 strip is likely going to turn out to be too low.
Re 22,23 I've neve bought one of those fancy double short instruments. May w KOLD will be my first long position on a double short instrument.
January 26th, 2014 at 9:21 pm#22,#24-if you really want to roll the dice, DGAZ is one that will take your breath away-3x inverse short of NG plus it is an ETN with all of the associated credit risks-something imo (heh) would not be a long-term hold, maybe only for trading, depending on NG trend.
January 27th, 2014 at 12:10 amCRZO Trading in balance at 42.50 with the primary trend still positive. 39.72 is the lower value area and traders have bought it any time it's slipped below that level. CLVN support at 37.50.
January 27th, 2014 at 12:11 am#26 continued…fat finger…
No edge here to my eye in the short term.
http://www.charthub.com/charts/2014/01/27/stock_master390_140126210622
January 27th, 2014 at 12:23 amRE 25: KOLD vs DGAZ. These are for traders, as they are futures backed and therefore must deal with contract rollovers, which can impact performance due to the shape of the futures curve. That said, DGAZ had almost 30 million shares trade on Friday (5 million avg) vs only 400k for KOLD (with only about 53k avg). Liquidity is helpful when trading. Thanks for bringing these to our attention. Might be a useful hedge for some natgas-focused equity holdings, if only for a swing trade.
January 27th, 2014 at 12:37 am