Wrap – Week Ended 5/6/16



Questions and comments under The Wrap will be addressed in the Monday Post. 

The Blotter is updated. One Trading Only position was added last week. 


wrap 050616

23 Responses to “Wrap – Week Ended 5/6/16”

  1. 1
    Baylor Says:

    Z – thinking a bit longer ter (24-36 months), do you see us nearing the peak velocity in production reduction or is 125,000 a month just the beginning with much larger drops per month coming over the next 2 years?  

    We have DUCs and rigs coming back some here in the next few months, but I'm curious when bits start turning to the right if we will very slowly ramp up production and therefore see the reduction continue but at a slower velocity or simply flatten then increase?

    2) if flatten, where would you expect we flatten?  How much Lower for daily production?  Will we dip

    into the high 7 MMs?  Even lower than that?

  2. 2
    nrgyman Says:

    Saudi oil strategy unlikely to change with replacement of Naimi:


  3. 3
    zman Says:

    re 1 – in Monday post.

    re 2 – it had been a long rumored and at times refuted move, stories saying no change to policy, probably true but time will tell. 

  4. 4
    RB Says:

    CPE is looking as though it is going to build a base on base type structure (see two rectangles)….I've been trying to take an additional trading position in this one along the 20 simple moving average, which corresponds to the lower part of this base on base structure.  I think this is one Z likes very much.  I have a core and am going to add a 20% of core trading position, if the market God's allow me a good entry along the 20 sma….here is my chart….https://stockcharts.com/h-sc/ui?s=CPE&p=D&yr=0&mn=5&dy=3&id=p23551619315&a=457455971&listNum=77

  5. 5
    zman Says:

    re 4 – yep. 

  6. 6
    zman Says:

    Happy Mother's Day by the way. 

  7. 7
    RB Says:

    Thks Z…a lot of people have told me I'm some kind of mother….

  8. 8
    RB Says:

    FANG….I am looking for a new entry for trading shares in this one.  We had a sharp spike down last week below the 20 day avg. on Tues. which I bought @ 84.33 and sold at 87.91.  I'm looking to add back those traders between the close Friday, 85.46 and the current 20 day avg. 84.12 as marked by the rectangle.  I will be patient, see how the markets open on Monday and hope for weakness to give me an entry near the 20.  If weakness develops I will keep buying down to the 50, which I doubt we see unless a turnabout in the markets take place.  Here's my chart….https://stockcharts.com/h-sc/ui?s=FANG&p=D&yr=0&mn=6&dy=3&id=p32720225048&a=458105784&listNum=4

  9. 9
    zman Says:

    re 7 – heh. Thanks for all the recent chart work. 

  10. 10
    RB Says:

    PE..long a favorite of Z's and long a core holding of mine.  Haven't liked the chart structure in a while from a trading perspective, because it ramped to quickly and I didn't want to chase it.  Over the past month it has made some interesting and tradeable moves, which of course I missed because I wasn't analyzing this particular chart.  But I put some bollinger bands around the action the past month and found some action I find interesting.  Boy I hope we get another pull down to the lower band….I'll be watching….https://stockcharts.com/h-sc/ui?s=PE&p=D&yr=0&mn=5&dy=3&id=p96942003329&a=457585446&listNum=77

  11. 11
    RB Says:

    Here's an update on the relative strength ratio I keep on the XOP.  It has been looking great as energy has led the market in relative strength as we enter the new quarter.  It took a little breather last week as XOP and $WTIC pulled back from resistance.  All this still looks healthy but I'd like to see the support line I've drawn hold and to see the relative strength resume…..https://stockcharts.com/h-sc/ui?s=XOP:$SPX&p=D&yr=1&mn=3&dy=0&id=p63196033015&a=443632702&listNum=77

  12. 12
    Baylor Says:

    They're saying the Canadian fires will burn for months. Impact to energy production and for how long unknown. 


    What at a sad situation for those affected. 

  13. 13
    Baylor Says:

    RB how do you decide when to sell your profitable trades?


    and we need to grab that drink in Dallas someday soon. 


    Howd wd you make out on the derby?  I hammered a WPS bet on #13. I had some smaller exotics that didn't lay off but made some walking around $

  14. 14
    Baylor Says:

    How'd you. Not how'd wd

  15. 15
    RB Says:

    Baylor…I am primarily a pick 4/pick 5 player.  missed both plays, had a good win bet in the Pat Day with a $28 horse…lost about $150….on m pick 4 and 5 tickets.  Should have gone a bit deeper…the pick 4 paid $11K; pick 5 $24K…missed two races in Pick 5, both with horses I considered…one i PIck 4

  16. 16
    RB Says:

    now to the lesser important question.  it depends a lot on general market conditions.  I think that oil is bullish now but the general market is kind of neutral.  So, mostly I'm buying pullbacks and selling at a previous high.  if the market gets a bit more traction and it could.  I mean it could be "sell in early May" buy in June or sooner.  If it gets more bullish I'll start being a bit more aggressive and only sell one-third at the previous high, especially in the oils the sector leading the markets for a change

  17. 17
    Baylor Says:

    I haven't heard people around her talk about the Dollar much.  What are the things that would be likely to make it go up in the near term?  Could oil AND the dollar rise?  Doubtful.

    May get an opportunity to short oil here early this week for those more inclined to near term trading.  Oil may not be up at the open, but seems the canadian wild fires are propping up the price a bit right now and that's likely to be a relatively short term impact that's almost immeasurable on the overall supply demand equation beyond a couple of weeks out.

  18. 18
    Baylor Says:

    Re 15 – i hear ya.  I'm not a great horse bettor, but enjoy going to LSP.  Have been to Ratama and several tracks in New York / New Jersey with my Pop Pop when I was a younger man. 

    I went rather heavy on my WSP and luckily #13 hangs on.  If it was the Belmont, there'd be a different winner.  The only way to make money at the track, for me, is to put a lot of money on favorites and have them come in or get lucky with some exotics by boxing a lot of horses, which cuts into your margin but increases your odds of winning.  I love playing some superfectas, but my payouts on those have been hit and miss.

  19. 19
    Baylor Says:

    RB – Any thoughts on LUV near term?  It hit the 200 DMA on Friday and immediately bounced off it.  Had an 11% sell off after stellar earnings on 4/24 with no end in sight of making bank.  A rise in oil prices to $50-55 won't have a material impact on earnings and the should increase record earnings from last year by at least 50% this year.  Stock has been stuck in the mid to low 40s now for 18-24 months as the PE just keeps on coming down as they stockpile cash.

    Longer term, they have massive expansion coming into central and south america where it's relatively cheap to do so – likely adding 50 or so new international cities over the next 5 years.

  20. 20
    Baylor Says:

    RB – also, what are your thoughts on XOP near term given the events of the last couple of days and how it's traded?

  21. 21
    RB Says:

    LUV….it put in a huge run and is now consolidating and trying to pick a new direction.  I don't especially like to think in short-time frames when it comes to an old and established company like LUV so I am presenting the weekly chart.  After the stock peaked it entered a broadening pattern, which is bearish.  But now it is moving sideways in a channel and looks to be moving a bit higher.  I would note however how all the momentum indicators are pointing down.  I think it'd be a great buy off the lower channel and it is presently tagging the 50 week avg. which might be buyable too.  I won't buy it however unless it tags the lower channel.  The research on most airlines is negative now.  Most of them are cheap, but the fundamentals are all deteriorating.  All costs are expected to be a headwind so you need to make a good buy at a low risk entry to make money

  22. 22
    RB Says:

    Baylor, if you want to meet me.  I'm at Lone Star almost every Saturday of the year.  It is my second occupation.  

    I'm usually sitting at table 414 or 413 in the Bar/Book with my buddies.  We could chat a bit about stocks then if you like.  Give me a heads up and c'mon out!   

  23. 23
    RB Says:

    XOP…I've put a chart up several times Baylor.  I have a large amount I put in play betting for a swing after the recent pullback.  It was buyable off the 200 day around 32.78 and is still near there.  It could be it gaps up this morning, I don't know.  I'd expect inventory draws with this Canadian fire could help a bit but I just don't know.  

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