zman’s Energy Brain

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Wednesday – Oil Prices Begin Retreat Over Demand Growth Concerns

Posted by zmann on February 28, 2007

I couldn’t have picked a better day to write about the OIH getting cheaper than yesterday! To be fair I got lucky on the timing. The OIH and the rest of the energy complex simply marked losses in the broader indexes, which took their cue from the strange bed fellows of Greenspan (2H07 recession a possibility) and the Chinese (reigning in growth) – both factors that will reduce hydrocarbon demand.

Oil Was Remarkably Resilient Into The Close Of Nymex Trading… April crude closed up $0.07 at $61.46 in a wild day of trading.

…But When The Dow Took A Header Around 2:30 EST, The USO ETF Started To Trade Off Sharply. No doubt hedge funds heading for the exits. Electronic trading saw NYMEX oil reverse course before the close of stock trading, easily tumbling through $61 as the possible global deceleration and its potential impact on oil demand and prices began to be felt.
Recent demand growth prognostications now in question. From the IEA’s January Oil Market Report dated two weeks ago: Global oil product demand is raised by 111 kb/d in 2006 to 84.5 mb/d and by 273 kb/d in 2007 to 86.0 mb/d following revisions to China. They may have to trim this back some.

Oil Inventory Day: Analysts and Traders Are Looking For More Large Product Draws And A Small Build In Crude. As I mentioned yesterday, the Houston Ship Channel (HSC) was shut down due to dense fog beginning last Thursday and appears to have remained shut through Friday, the last day of the oil inventory reporting period. This is temporary and in my mind provides bears with a sort of “get of jail free” pass. By this I mean seemingly bullish numbers (unless they are vastly out of line with expectations) can be dismissed like non-recurring items on an income statement.

Oil Inventory Expectations (from the Reuters survey) :

  • Crude Oil: Up 1.9 million barrels. The change in crude inventories could easily be lower than Street expectations due to the partial week closure of the HSC and potentially could be a small draw on inventories.

hsc-closure.JPG

  • From the beginning of December to the middle of the month crude imports fell by roughly 1.6 mm bopd or 11 mm barrels per week through the Gulf Coast. Then analysts “expected” a draw of only 1.7 mm barrels but got blindsided by a drop of over 6 mm barrels. That’s a long winded way of saying that today’s number could even be a draw on crude supplies as could next week’s report. It all depends on the duration of the closure. However, as always “this too shall pass” and the U.S. remains exceedingly well stocked as seen below:

crude-inventories-022607.JPG

  • Gasoline: Down 1.8 million barrels. With all the refinery outages and an increasing number of local shortages gasoline is moving towards center stage as a key determinant of oil prices. Blending component consumption could easily make this number larger than this which would lend support to crude prices on a normal day. I think the amount of fear in the market will require a much bigger draw than the 1.8 mm barrel expectation to rally/support crude.
  • Distillate: Down 2.8 million barrels. I think this is probably a bit light but I’m not sure a “low ball” miss here will prompt much of a rally (at least much of a sustainable one) in heating oil or crude oil this late in the heating season.

Odds & Ends

Natural Gas has been quietly trading lower on the expectation that this week’s inventory report will show a withdrawal somewhere in the neighborhood of half of last week’s pull from storage. Gas sliced through $7.50 overnight and, barring any surprises tomorrow, could be headed towards a test of $7 by the weekend as inventories continue to track towards a seasonal trough of 1.4 Tcf. More on gas in tomorrow’s post.

Spring Is On The Way. The weather “will turn very warm for much of the area that had one of the coldest Februaries on record,” said Joe Bastardi, lead forecaster at AccuWeather in State College, Pennsylvania.~Bloomberg

Opec Watch: Iran says it will “never” stop uranium enrichment, no doubt in a bid to ease tensions and lower oil prices for everyone. Admed’s trying to enrich something all right and not just uranium. Check here for all the latest Iran facts, figures, and er, um critiques.

Analyst Watch: nada.

Putin Watch: Gazprom lowers Rospan’s gas volume transportation allowance in a move critics say is more strong arm tactics designed to force a sale of the TNK-BP venture.

Holdings Watch:

  • Small BHI and SLB positions remain ontrack posting nice retrenchments on the day,
  • BP puts came back to life after the settlement party of the prior two days was abruptly cut short by the group’s retrenchment,
  • sold my XOM position bought at $1.25 over the last 10 days for $1.75 and thought I was lucky to have escaped (that was before the Dow plummetted 200 points while I grabbed a Coke and the $75 March put I had just sold went on to close at $3.30 bid!!! (kick, kick, kick)),
  • shied away from any more TSO puts although they reversed hard with everything else. They and VLO may be reasonable shorts going forward as gasoline prices should begin to sort themselves out (that’s code for fall) in the next few weeks as a number of snafu are fixed and refinery utilization slowly climbs out of its current maintenance season induced lull of 85%,
  • Picked up a small put position on PTR (March 110s for $1.30 near the close) – a rank wildcat of a trade on the sincere belief that their will be further follow through in the morning on yesterday’s weakness. The better decision was to avoid the temptation to play the early bounce in the market and the group which was brief and would have been very painful,
  • HES – the insider selling continues and although the stock fell 4% yesterday it was essentially in line with it’s peers and remains near record highs. I have not yet seen the catalyst (other than substantially lower oil) that can put a real dent in the shares.
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83 Responses to “Wednesday – Oil Prices Begin Retreat Over Demand Growth Concerns”

  1. tom2oc said

    Well, so far the sky is still above us. I expected a huge move starting this week, up or down, on that 2500 crucial kiss test but certainly not that brutal in such a short time. Today is the confirmation or not day. Need to see a sharp recovery process getting under way sometime this morning for the bull to survive. I continue to give the best odds for this happen because of the extreme bearish sentiment as shown by the insanely high put/call ratio closing at 1.7. But will follow the market and will trade based on these simple guidelines:

    For a recovery: COMP has to trend above 2400. BKX above 116 and GOOG above 452.

    For signs of lots more pain ahead: Formation of a short term continuation pattern with COMP closing below 2400 eventually today or in coming days and BKX unable to recover 116.

    Learned a lesson on OIH yesterday. When the market is going through high volatility like yesterday, the rule of using USO as a leading indicator stops working. These stocks then follow the market and they should be traded for their own TA like any other blue chip or tech stocks. I missed to repeat a double yesterday on OIH by not repurchasing OIH at 140 resistance as I wrongly assumed that USO trending in the green zone would put a floor on OIH. Learning everyday in this business.

    Will be another fun day. Will be looking for your quick take and analysis on the inventory numbers. Thanks for sharing your insights and your hard work. Good luck!

    PS: I read that it’s National Chocolate Souffle Day today. Hopefully the market be inspired by it… 🙂

  2. zmann said

    Morning Tom! Nice post. The USO is a tricky, manipulated little ETF that trades rather losely around oil interday but matches up to WTI on the daily.

    The Big Cap energy stocks have been trading with the broader market and not the commodities for at least 6, maybe 7 months now. Lots of damage has been done to the small and mid cap E&Ps however as oil and gas prices fell last year.

  3. dave said

    Zmann do you think the big oil co.’s will start buying back their stocks this week?

  4. zmann said

    They’re continually buying back shares but it will accelerate yess. There was a 3 mm share cross of XOM before the open and a 1mm+ share cross of BHI, both at yesterday’s closing price. Pretty likely that’s the companies buying themselves.

    So the broker in charge of the buyback (maybe it’s a syndicate in XOM’s case) calls around last night to nervous investors (hedge funds and mutual funds) and puts together a bundle of stock for the company to take out at last sale. Its a win-win for everyone. Although it takes away some of teh com anies firepower to support the stock during the rest of the day or week.

  5. zmann said

    PTR – ahhhhh . Roll of dice not such a good idea. Will wait for inventories but I thnk the stocks get weaker after the initial pop.

  6. mike said

    zzz
    “10 mil shares on XOM on market” which side?

  7. zmann said

    XOM – 10 mm shares traded in 30 minutes. Slowing down now. Oil down, nat gas down. Market flattish (at least not much of a bounce off yesterday) and XOM is up $1.10. Tempoting to short but will wait for inventories.

  8. zmann said

    Mike

    The opening 3+ mm was a block which XOM almost certainly bought. The rest looked like retail and some fund selling at lightning fast speed. Looks like they’re running out of speed/waiting on inventories to buy more or quit for the day. Phil is taking the $72.50 puts for under a buck but I’m going to wait out the inventory numbers (17minutes) and either buy or not on the data.

  9. tom2oc said

    Weird. The oil stocks are all over the place today. Got as many reds than greens on my 40 oil stock watchlist. Will probably get a consensus after inventories. Market holding above 2400 so far which is a positive. Retail accounts not panicking so far.

  10. mike said

    When you say “buy” you mean the XOM march put?

  11. Rob said

    NYSE still looks desynced if you look at the trade differences per minute on XOM. Should have shorted the NYX at the open.

  12. zmann said

    Mike – yes.

    Tom – does it matter to you that we briefly pierced 2,400?

  13. tom2oc said

    Z, no not all. This was totally expected in the first hour to see the shorts and MM scalping any opening rally. If we go trend below it again though from now on it might be a problem but the only real and important number to look at will be the closing number. GOOG is soon to go over 452 and BKX over 116. So far following my script to the letter. Let’s see.

  14. zmann said

    Inventoires

    oil: up 1.4 mm bls
    Gasoline down 1.9
    Distillate down 3.8

    pretty much in line little large to the street on the distillate.

  15. El Diablo said

    Z- what do you think numbers would have been ex-HSC?

  16. El Diablo said

    Inline with HSC closed 2 of 7 days is bearish I think…

  17. El Diablo said

    Stated another way: when tose 59 tankers unload this week, next week’s numbers look pathetic

  18. tom2oc said

    All oil stocks on my watchlist except 4 have turned green now. Not sure I want to play OIH though in the 135/140 range. Might be churning/consolidating and reversing action all day. Will stay out of it unless it goes near 140 to assess for a short entry or same if going below 135.

  19. zmann said

    El D – I know what you mean. It’s pretty hard to find anything bullish about those numbers.

    Imports were off just slightly which means Opec has given up on enforcing the rest of the as of yet unmet production quota cuts.

    Refinery utilization ticked up almost a 1% which and you’ll note the draw on gasoline was not as severe as the prior week.

    Looks like they’re having trouble deciding how to read it but I don’t see the bull argument.

  20. dave said

    TK is having a good day

  21. El Diablo said

    Seems that the import/storage numbers must exclude those tankers–they’re still waiting to be ‘counted’. They will be counted next week.

  22. zmann said

    Tom – yup energy up but not with the support of commodities, just the market.

    XOM rocking now with the dow and it’s dragging the group higher.

    Meanwhile, oil looks like it’s about to tap the low of day. That’ll generally end badly for the stocks as soon as the general rally slows down, assuming it does.

  23. tom2oc said

    BKX over 116, checked
    GOOG over 452, checked
    COMP over 2400, cheked

    Ok will let those QQQ calls bought at rock bottom yesterday cook. I read that today is also the National Public Sleeping Day however silly or whatever it means, so I might do the same and take a break today. G/L!

  24. zmann said

    Dave – for now…which means I’m not having as much fun as yesterday.

    Bernake’s speach was loaded with negatives but when he passed over talking about monetary policy the market breathed a collective sigh of relief and started the rally.

    Those PTR puts (thankfully) small are whacking me around a bit too.

  25. dave said

    Zmann…I still have 20 mar50 puts on TK. Thinking of closing today.

  26. zmann said

    Dave – When in doubt sell half. You should have tidy little profit. I have the April’s and am going to see if this current pounding oil is taking takes a toll on the sector.

  27. Rob said

    Oil getting dumped? I don’t have access to CNBC for real time.

  28. zmann said

    April down $1.01 at $60.40ish

  29. Attacking Mid said

    Sorry if I’m waking you Tom ;^ ), but have you replaced AAPL with COMP in your system?

    AM.

  30. zmann said

    La Nina is back – or it appears to be forming to be more accurate. This could be supportive of natural prices as it generally brings more hurricanes and heat to the eastern seaboard and drought in the west. Actual impact depend on if it’s strong or weak and whether or not it forms at all or reverses as often happens. From a psychological standpoint it’s certainly gas bullish.

    http://www.foxnews.com/story/0,2933,255340,00.html

  31. dave said

    Zmann…thanks your right, I should scale out even thou the position is not that large.

  32. tom2oc said

    AM, LOL! Not out to for a public nap in the park yet. Want to see those thresholds holding firmly first.

    To answer your question, no. They remain the important partners but depending on their charts some have more importance than others. All depends where the price is relatively to meaningful support/resistance levels or inflection points. Take yesterday for example. I posted premarket that the only important stock for the day was BKX that had to hold 117.50. This was an important support represented by the Feb low. Well, it did not. And after lunch I posted that it had to recover 117.50 for any hope of end of the trouble. It did not also and the rest is now history.

    Today it’s crucial for BKX to negate the failure of the Jan low at 117 reason why I have it as key number. And GOOG is crucial today to recover the gap zone support at 452 from the Oct and Dec lows.

    AAPL closed enough above the important support line at 82.50 to not make it a key factor today. If it closes below 82.50 then it will be back in play though.

    Hope that helps. I like to keep a simple view on the market and the max I have to monitor is only 3 stocks to have a feel for the market direction. Of course, got to be flexible at times and put few additional ingredients in the recipe like yesterday record high close of the put/call ratio or other times TNX but usually the 3 partners is all it takes. So far it looks like it worked well again yesterday. Was all sideline going into yesterday’ open except OIH puts which is a stock I trade when I have to be sideline due to a wait and see signal. Glad I told a friend yesterday to come and hit me with a baseball bat if I heard me considering buying market puts during the panick selling. Thinking about it scared me so much that I stuck to my plan and pinched my nose and bought QQQ calls when COMP went testing the 2400 line which turned out to be the rock hard bottom. Now protecting profit with a stop on it so it wasn’t a bad move after all and it saved me from the baseball bat. 🙂

  33. tom2oc said

    Typo, Jan BKX low is 116 not 117. sorry.

  34. zmann said

    Nice work Tom! You’ve got a good eye. Is that the famous GOAX you’re talking about?

  35. tom2oc said

    AM, you can see that 116 and 452 and tough levels to go above. Of course, they act as tough resistance now and scalpers use those levels to go short. Reason why I say if we can clear it and confirm them with a kiss, this market is on its way to a quick recovery. If not, then we have to monitor the 2400 support line.

  36. tom2oc said

    Z, yep!

  37. zmann said

    El D – if you look at the tankers today you can see the jig is up on the production cuts. FRO, TK, OMM all up big post inventories.

  38. zmann said

    XOM 19 mm shares 2 hours in. Avg daily is 21mm. Somebody (several somebodies) are pretty confident we go up from here. I however, think they’re wrong.

  39. Attacking Mid said

    Thanks Tom. I just wanted to make sure I recognized the Nobel prize in case it was awarded for GOCOX rather than GOAX! I keep GOOG, AAPL, BKX on my screen to loosely watch your system. Though I haven’t studied it enough to say I fully understand it all. Seems like it works for you, though.

    AM.

  40. foo said

    Tom – add me as another GOAX follower. I’m still not real sure of the mechanics of it though. For example, AAPL, GOOG, and BKX have been trending down for the last 30 minutes. Does that mean go short now?

    Thanks for all your input.

  41. zmann said

    Natural gas down $0.26 to $7.29. That builds on the loss of $0.27 over the prior 2 sessions. That may finally spell “sentiment change”

    After inventories tomorrow I’ll be looking at the “under-hedged” list of gassy mid cap E&Ps. I’ll have the short list out in tomorrow’s post but right now I’ve got my eye on BBG and CPE.

    I generally don’t like buying puts on great companies that haven’t had a really good run like CHK or SWN or KWK which have huge growth, are hedged to the gills and are low cost producers. I’ll save activity in those names until I think things are improving for the producers (I’ll go long calls on them). No doubt they’ll fall with the other if gas really tumbles but, I’d rather be in the weaker names for the fall.

  42. zmann said

    Dave – don’t forget to let us know how the TK turns out for you.

  43. mike said

    GOAX?

  44. tom2oc said

    Foo, depends on the time of the day. Right now, no. The market is usually drifting lower or going sideline from 11:15 to 1:15 on the retail buyers having bought in the first hour and the low volume lunch time. When there is no buyers the stocks fall under their own weights. I pay importance to GOAX movement between 10:00 to 11:15 and after 1:15 and even more starting at 2:30 when smart money get into action.

  45. tom2oc said

    Mike, it’s simple system I use to assess the market direction for all timeframes. Works pretty good for me. I once published rules on it but they’ve changed since. In a nutshell, I follow the direction and the TA standing of the 3 partners (GO)OG/A(A)PL/BK(X) to assess market direction. Kept me on the bullish side since August and sideline for weeks now. I was waiting to see what was going to happen to the 2500 breakout and hell did I find it yesterday! LOL! Now ready to go long or short the market on a swing depending on how the 3 partners close today and coming days. We might be going back up to 2450 and then 2500 or failing 2400 for months of pains. I give sligthly better odds for going back up but will follow the market using GOAX as a guide and ready to jump short below 2400.

  46. tom2oc said

    DJI up .5% and DIA up 1% ?! Do we have the same technical problem as yesterday but on the other side now? Weird.

  47. tom2oc said

    Another test of 116 and 452 coming up. Hopefully we’ll cross those before 1:15 and a trend up higher afterwards. The more those lines get tested the higher the odds they will be crossed. This is the second test.

  48. tom2oc said

    DE dropping this morning in sympathy to a miss and poor guidance of JOYG was so stupid that I had to re-purchase most of the calls I exited profitably yesterday when the market started to tank. Gee, JOYG is selling mining equipment and there is a slowdown in that sector! As far as I know DE is selling to farmers needing equipment to keep up with the corn demand for that ethanol push. Even TEX had no reason to drop as they sell surface mining equipment which is booming right now and JOYG crashed on underground mining equipment which is in a big slowdown. Need to start playing to Phil’s FA move more often! I still feel DE is going back to test 115 in coming days or by end of next week.

  49. tom2oc said

    Third double test of 116 & 452 coming up. Gee these lines act as tough resistance. But odds are increasing for a breakout now, hopefully…

  50. zmann said

    Oil rally seems very technical. XOM is roughly where it was 2 hours ago while oil is $1.30 higher. I don’t think it’ll last into the close. There’s no fundamental reason for the rally plus things are looking more calm ( a little) on the geopolitical front.

  51. zmann said

    All of the other energy majors outside the US save PTR and PBR are down today.

    Anybody see if something else caught on fire? It’s about time…

  52. tom2oc said

    Gee, these lines are too tough. Exited all longs and went sideline. Will re-enter long when thresholds crossed or probably short tomorrow if a close below 2400. Rather be sideline here while the bull/bear fight is going on.

    What’s your take on the oil patch Z? OIH went nowhere since inventories.

  53. dave said

    Do you think we will get a push against the rally around 2:30 or so ?

  54. nltd said

    Tom2oc

    Was out at time of your comment about Dow vs. DIA. Somewhere about that time (a little earlier?) I was seeing the “last” and “change” columns (for DIA) on my watch page flicking back and forth constantly. One second they would show right at bid/ask, next second WAY outside. At one point .10 to .50 MOre than bid/ask, and later .10 below bid/ask. For isolated circumstance I could see the occasional trade happening outside, but I wouldn’t think there’d be one every second or two. I kinda gave up trusting what I was seeing. . .

    N

  55. zmann said

    Tom – major oil pump for last 2 1/2 hours, big caps not buying it. Mid and small caps mixed, tankers up. Lots of volume but a lot of sideways action.

    XOI/XNG/OIH up about 1/2% which beats the market (which also looks strange and unsure of itself)

  56. zmann said

    Dave – I don’t know…I think oil closes lower than here. Where’s gasoline and nat gas now, my CNBC is off?

    N – I’ve been seeing hinky looking trading in a lot of names all day.

    XOM looks like it wants to go lower now but then, so does the DJIA.

  57. nltd said

    Tom2oc

    Forgot, thanks for discussion on GOAX. I’ve seen it mentioned before…somewhat clearer now. If I get better at seeing levels like you set for each component today, may understand enough to use.

    N

  58. dave said

    n gas 7.302 gas 1.8425

  59. tom2oc said

    Thanks Nltd. Weird.

    Thanks Z. Holy cow! you’re right! USO +2.6%. Maybe that’s why the market can get its act together. People are so scared of everything now after what happened yesterday. Crude going higher might not be seen the way as before.

    Dave, 2:30 don’t know. I’d rather look at it from the outside as I felt it’s way too risky to be holding below 116 and 452. There might be another round of panic selling starting any time now. Europe not being able to recover on US up is not giving some comfort to US traders. When I don’t know, I get the hell out.

  60. nltd said

    61.77(crude) 1.835(gasoline) 7.3 n gas

    N

  61. dave said

    Thanks Tom Iam closing out a small but put on GMR. I feel uncomfortable with this market.

  62. zmann said

    Crude = unreal

    It sold off in the after market yesterday. I wouldn’t be surprised to see it do that again. There was nothing in the numbers to inspire this rally. Not even the heating oil and I don’t care what the CNBC weatehr girl say, there is a lot of it and the real weather gurus are saying winter is essentially over with maybe a few good snow but no return of the cold we were seeing 2 weeks ago.

  63. dave said

    bull put

  64. tom2oc said

    N, you’re welcome. Funny how the most simple thing works the best at times. It’s only last year that I realized that these 3 partners was all I needed to figure the market out. Heck, I’ve been reading everywhere since the market closed yesterday that this market is doomed and we’re going down the drain. I say, hold on here, the bull will dead or entering a long correction period when my system tells me it’s dead, not before. Not very healthy now and on its knees but it could have only been catching its breath. No need to jump the gun!

    Heck, we might have a fourth test coming up!

  65. nltd said

    Dave

    Bet you’re one of the guys always beating me to the trigger on trades…I’m only 3 minutes behind you here…Hah.

    N

  66. tom2oc said

    Must be that Iran thing then. I’m not shorting this sector until I see OIH below 135.

  67. dave said

    N, not recently….not following the plan [ good money management ]

  68. Attacking Mid said

    z – don’t you follow NG, etc. on your quote system? Right now, April NG is at about $7.29 (-$0.25). The weird thing is that the gassy’s are mostly up.

    AM.

  69. zmann said

    Thanks AM – not live on my systems. No TV in my office so I have to walk 30 feet to check it in the other room. LOL.

    Oil closed at $61.75 on the button ?! USO not moving in after market. From what I’ve gathered so far this afternoon they’re spinning the gasoline number as positive based on inventories being slightly negative year over year. Never mind that we’re still above the five year average range.

    AM you ever look at full cycle costs? I’m running numbers for 2006 right now. SGY worst so far…very piggy…didn’t even replace production but spent $5/Mcfe to do that!

    Looking at the fundamental on CHK, SWN, KWK I wouldn’t touch them on the short side unless 1)they have a huge run up (unlikely) or 2) I think gas is going to plummet. KWK has been kicking butt in the shale and is looking at a long term growth rate of 25%! Once gas cracks and bottoms for a bit I’m in on the long side on that one.

  70. zmann said

    Check out the tankers! Up from 1 to 5%. $60 oil is one heck of an incentive to bust quota!

  71. zmann said

    XOM rally fading into the close.

  72. zmann said

    XOM closing down on low of day. 42mm shares and counting — that’s double normal and highly distributional. Its putting a lot of drag on the other majors and large cap service companies.

  73. dave said

    Zmann kept my TK puts

    N did not leg out of my GMR bull put

  74. nltd said

    ZZZ

    XOM: How very interesting! Don’t suppose that “fade into close” you noted earlier had to do with what’s in that 10K do you??? Did you see any other particular reason?

    N

  75. zmann said

    N – could very well be. They were supposed to pr their capital budget for 2007 ($21B seems to be expected) and reaffirm the buyback today. Haven’t seen that yet.

  76. tom2oc said

    Well, BKX couldn’t recover 116 all afternoon and GOOG couldn’t hold 452 once again. Another chance tomorrow but this market better gets its act together this week otherwise it’s going to be painful in the coming months. The oil nice guys sure didn’t help. At least we got a green close in all indices. After the carnage of yesterday, this is a small victory for longs. Same keys levels to watch tomorrow for the start of a recovery or resumption of the journey in the house of pain.

  77. zmann said

    XOM was one of Crmer’s hot picks today when it was up $1.25+. That seems to happen a lot with his picks. Saw someone refer to it as a Boooyaaah Screwyaaaa. ;->

  78. zmann said

    Tom – agreed, market needs to find direction soon or people will get more nervous. Lot of stuff Bernake said today was pretty negative although he’s said it before and no one listened then either. As he doesn’t talk about rising inflation or raising rates everyone seems to be happy with spiralling budget deficits, unsustainable social security and medicaid programs etc….

  79. Rob said

    XOM – I see heavy selling at the end. That might be foreshadowing the future.

  80. tom2oc said

    Z, true. Here’s an opp you and I should have jumped in this morning. I’m just realizing that I missed this no brainer trade. Last night I created a new scan to give the stocks that went down by more than 4% on lower volume than the previous day. Since most stock saw surges in volume I figured that a stock that went down on decreasing volume must be a buy the dip opp. Once I got the list I screened them by looking at the TAs. FDG was by far my nicest pick out there. The bloody opened down and since I wasn’t looking to get into energy before inventories I didn’t look at it and bought the DE dip instead. Arhhghghgh!!! FDG gain $2 or 9% after that dip!! The 25s went from .15 to .80. Arrhhghghhg!! In the meantime I exited DE in the afternoon for a small profit! I was aware of FDG because you or someone here said that FDG’s coal is not used in electricity plants. Arhghghgh!!! Waiting for inventories was stupid!! Next time I see such a TA setup I’ll let you know so you can force me to get in. We really missed this thing Z. Really dumb of me to miss a no brainer trades like these.

  81. tom2oc said

    Looking at COMP chart, I’m concerned that the action of today is the start of bearish continuation pattern. This is why we need to shoot higher in coming days Z like you just said. This is the only way to get out of the possible bear flag in formation. Gee, I just hope we do. Looking at what COMP did today I still give slightly better for that scenario but the odds have decreased significantly today. Maybe 55% quick recovery and 45% resumption of downtrend and failure of 2400 for months of bearish pain ahead. That’s the best I can give. If I see a bear flag by Friday’s close or a close below 2400 I’m going to have to give the best odds for much much more pain ahead.

  82. tom2oc said

    And I still give sligthly best odds for a quick recovery because I need to give it the benefit of the doubt seeing that AAPL remains above 82.50, GOOG did not confirm the 452 failure today and BKX did not confirm the 116 failure. That’s how my system goes so got to follow it.

  83. zmann said

    test

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