zman’s Energy Brain

oil, gas, stocks, etc…

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Thursday Morning – Oil Review / Gas Preview

Posted by zmann on March 1, 2007

The market is in for another wild ride today so look for any picks in comments once things get rolling.

Brief Oil Review: My comments from this morning are in italics

  • Crude Oil – Street Expectations: 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. Actual: up 1.4 mm barrels.

    • Comment: if the Houston Ship Channel was closed last Thursday and Friday this could easily account for the smaller than expected number. I’d also note that the HSC has been closed at least three days this week which is lending some support to curde at present.
  • 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. Actual: 1.9 mm barrels.

    • Comment: Crude sold off after the number but rallied later (along with everything else) on Bernanke’s stable economy comments.
  • Erroneous Comment Watch: from Bloomberg: ``The demand is there and that will underpin prices,” said Angus Geddes, chief executive officer of Fat Prophets in Sydney. “Inventories for gasoline in the U.S. have dropped to 12-month lows so that’s having a positive impact on prices.”
  • Comment: Not Even If I Stand On My Head To Read This Chart (Aussie Perspective) Do I Get “Inventories at 12-month Lows”! Come on Bloomberg!

gasoline-stocks-030107.JPG

Maybe the following chart was what he was worried about.

days-supply-030107.JPG

  • The above chart could be a problem if you’re a bear as it definitely would lend strength to gasoline prices. That is if they hadn’t already priced this in. Retail level gasoline prices are up 10% ($0.22) nationwide over the last month and have risen even faster in areas in close proximity to one of the handful of refineries currently experiencing technical difficulties.
  • Voice Of Reason Watch: “While prices will rise into the summer, the pace of recent gains, and a likely increase in gasoline production, could see the market pull back as much as $4 a barrel before moving higher. We have a slew of clients wanting to buy into this market and we’re telling them to wait. Refineries are going to start coming back on line and you’re still going to be well within the normal range for gasoline supplies.” ~ Bloomberg quoting Excel Futures CEO Mark Waggoner.
  • 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. Actual: 3.8 mm barrel draw.

    • Comment: I think they (the surveyed traders and analysts) deliberately bagged the number to get a miss here. History will tell you that draws at the end of the heating season are not strictly linear to HDDs. These guys aren’t stupid they’re just bagging it!

Switching To Natural Gas:

Withdrawal To Decline On Warmer Weather, Nearly Cut In Half From Last Week:

  • My estimate: 130 Bcf withdrawal. While gas-weighted degree days fell from 246 in the prior week to 194 last week it was still quite a bit cooler than the CPC original forecast, especially in the New England and Mid-Atlantic regions. Like I said on Monday, this would cause me to bump up my withdrawal estimate. Note I’m expecting a small build in the West region.

gas-storage-030107a.JPG

Consensus: 140 Bcf withdrawal. Anything over this and I’d expect gas to drift in between $7.25 and $7.50. Closer to my number and you’re likely to get a test of $7.

Odds & Ends

It’s Starting To Warm Up… from the International Herald Tribune: The weather “will turn very warm for much of the area that had one of the coldest Februarys on record,” said Joe Bastardi, lead forecaster at AccuWeather in State College, Pennsylvania. “By the 10th, a major warm-up should be well entrenched over the southern and central plains and the Ohio Valley to the mid- Atlantic.”

…But El Nino May Be Shifting To La Nina Potentially Bringing More Heat And Hurricanes This Summer. A La Nina event appears to be forming. This could be supportive of natural prices as it generally brings more hurricanes and heat to the eastern seaboard and drought in the west. The actual impact depends on if it’s a strong or weak event and whether or not it forms at all or reverses as often happens. From a psychological standpoint it’s certainly gas bullish.

Analyst Watch: TK upgraded to overweight by JP Morgan. HES to outperform at FBR.

Snafu Watch: Imperial oil’s Toronto refinery is back to 50% of capacity.

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126 Responses to “Thursday Morning – Oil Review / Gas Preview”

  1. tom2oc said

    Morning Z, potentially more heat and hurricanes from La Nina? Gee, that’s it I’m off energy. The oil nice guys will be using this to scare people all spring and summer ahead of hurricane season and with the market going into correction it’s going to create conflicting currents for OIH/XLE. Down with the market or up from the La Nina scares?

    Will be another fun day today. Glad to start it 100% sideline. Back on the market now. Will focus on daytrading AAPL since it is the one with the highest 2 way potential today. Was fun hanging around your blog while waiting for the market to show its hand. Thanks again for the great information and good luck to you! Off trading this wild thing now.

  2. dave said

    nice open !

  3. zmann said

    Morning Tom!

    Glad I’m not 100% sideline as the energy sector is getting crushed along with the market. XOM 72.50s are up 150% since yesterday’s purchase. BP, BHI, SLB positions all coming into their own. My PTR 110s are rebounding nicely as well as the stock retests its Tuesday lows. Even TK won’t be saved by an upgrade on a day like today

  4. zmann said

    BP chart just broke down…in my opinion. What do you think Tom?

    On the energy sector: there’s too much of a bullish effort to find data points and news to support prices. There are plenty of short term items and some medium term ones that are potentially bullish. For instance, CNBC is acting La Nina is here when forecastors are really only saying that it may be coming. There’s a big difference. Then you’ve got all refineries off line for maintenance or problems…most of them will be back up within a few weeks.

  5. dave said

    Zman sold 10 TK mar50 puts

  6. mike said

    zzz

    Lost connection on Phil – I’m selling oil puts, are you? Are they?

  7. El Diablo said

    I don’t think fundamentals of any particular market are going to matter today. Looks like Tuesday’s drop confirms my suspicion of excessively high correlation BETWEEN markets (which I hypothesize is due to many large speculators all making the same bets across markets). So if dow tanks today, so will crude, gas, etc…. Doesn’t make sense to make long bets anywhere. Even if you’re right on the fundamentals of that market, you could get drug down by the contagion. Unless of course, you are bullish on ALL markets.

  8. zmann said

    Dave – exactly, when in doubt sell half.

    I’m seeing a lot of late, hinky looking trades. Abounce on the DJIA could certainly hurt quick (and somewhat unjustifiable gains) so I’m tossing half my XOM 72.50s here. I’ll continue to play the other half but with profits only.

    NXY chart just officially broke.

  9. zmann said

    El D – you should have written my opening paragraph. I just punted on it and said no joy before the open on new trades but you said it all!

    SWN earnings not bad, stock is a monster, low cost grower…today…taken to the woodshed.

    If the nat gas number comes out huge (150+) we might get a small boucne and I’ll be playing either SWN or KWK to the long side but you’re right, it just may not matter today.

  10. zmann said

    Mike- I’ll check, haven’t been over yet this morning!

  11. zmann said

    Mike – Phil’s coming out of his puts. Isaw mention of the XOM 72.50s (which I still have half of), VLOs (I have a position here but it’s long dead along with my TSO) – not sure it makes it that far down by espiry, BP cover (which I’m still holding and still like lower).

    Looked like he was buying some BTU puts but that may be a sell…hard to tell. I wouldn’t add yet as it’s down 10% in 3 days.

    That’s all I saw

  12. dave said

    I hope we do not have problems again today due to volume

  13. tom2oc said

    Congrats Z!! Nice OIH dive at open. AAPL has been a joy so far. I’m glad I’m trading and focusing on it because since it’s one my 3 buddies, if it keeps on flexing its muscles it might reverse the whole market later today. Heck we never know. Watch 86! Another fun day! G/L

  14. dave said

    GE is green

  15. zmann said

    Hear ya Dave on the volume thing

    I’ve decided to go with KWK 40 March calls in the event the gas number is 140+ Bcf AND the market is not falling appart.

    First market bounce starting to fade.

  16. zmann said

    Dave – flight to quality is on. Big caps not getting hit like the smalls and mids in this.

    Awesome timing on your TK sale by the way!

  17. zmann said

    Watch you’re prices carefully. Systems are behind/inaccurate this. I about puked when I saw SLN up huge a minute ago – just a bad trade.

  18. Attacking Mid said

    Tom – I strangled AAPL two days ago thinking that it could start swinging wildly either way. Naturally, it’s hardly budged one way or the other since. If z doesn’t mind, I’d love to hear your thoughts throughout the day.

    SU briefly broke resistance at $69.24. It may be a good choice to play long when it’s time for a reversal. Now if I can only KNOW when that will be!

    AM.

  19. El Diablo said

    Buy-On-Dippers everywhere. Conditioned response, worked well for last 3 1/2 years. When they give up (which they will on the NEXT big drop), look out below.

  20. dave said

    Zmann…fear I sold @9:46:36. Two days ago greed. I watched the puts print @ 3.00 or 300% and did nothing. Bad money management. Oh well another lesson to enter in my trading journal.

  21. tom2oc said

    AM, I’m busy with an AAPL long position from after opening but I can just say to watch 86 because it might fly above it and market might turn green on it. Heck, the market has regained 50% of the losses already. OIH only down .5%. AAPL is the leader. Got to watch it. Above 86, next resistance is 87.50. G/L

  22. zmann said

    AM – who me mind? I just work here. Comment away Tom!

    EL D – right. Everbody’s glued to 1 minute tick charts. Later in the day they’ll look like those people you see slumped over the slots at 4 am.

  23. tom2oc said

    COMP back above crucial 2400.

  24. tom2oc said

    Ain’t going to be easy for AAPL to go over 86 and COMP to cross 2400 for good but it’s possible. Let’s see. 86 is the key for this market. If it fails, market will falls back to test the lows again. If it crosses it, odds are market will close green.

  25. zmann said

    Sorry Dave – thought you meant this morning. I was just wishing I’d sold with you TODAY.

    10 minutes to inventory – big number and I’m buying KWK and/or SWN if I can grab them. PLLL had nice numbers as well but its already moved well.

    Flipside…very small number say 130 or less and I’m jumping back into APC which is flirting with new lows since October, is trying to sell assets in a what should be a declining gas price environement and what it bought last year, it bought under much higher commodity levels.

    If gas is going to fall then you want to be in the low cost producers like CHK, SWN, KWK. (not for the fall of course but when the dust settles) since they are the ones who have the full cycle return to make it through without getting too damaged.

  26. El Diablo said

    winter’s over

  27. zmann said

    I missed by 2 Bcf

    132 Bcf – no long play for now.

  28. dave said

    Zmann…I did sell 10 puts today @ 1.65 at 9:46:36 print. Should have sold two days ago but greed kicked in and I did not sell

  29. dave said

    EST

  30. zmann said

    Dave – oh …I forgot you had the March’s… I’m still inthe Aprils which are getting beat up on this move as well. JP Morgan ruining some of my fun today.

  31. mike said

    zzz thanks but I went ahead and sold almost all oil puts vlo, xom; as well as puts on hon. This is one time I’m glad I panicked – hit near lows of a.m.

    So, I assume you’re not playing the retracement at all on the long side, but looking to add to shorts? (I think I added something to mine on that drop – but it wasn’t options!) 🙂

  32. zmann said

    I’m going to take puts on APC and work my way into them on high cost western producer BBG on the gas news.

  33. zmann said

    Mike – I’m being patient. The gas number was a bit low to consensus and oil undergoing another rally attempt. Everything is keying off the DOW, then XOM for energy. I see some flight to quality with the biggest of the big caps outperforming like SLB vs the rest of the OIH. Still, lots of late trades hitting and people are a bit freaked.

  34. tom2oc said

    AAPL over 86. If it sticks above odds are the market will close green and it might be the end of this mass panic correction. Had to go back in DE this time using equities for quicker exit if needed.

  35. nltd said

    Z

    Thought you missed by 12 (I was skimming in a hurry and missed the graph). Your text says 120 instead of 130…

    Good call!

    N

  36. zmann said

    COP – I really need to have put on COP here and don’t yet. I’m watch the Dow and tick charts far too much. Don’t want to end up slumped over my machine. Coffee time.

  37. zmann said

    Ahhhrrggg, I was 120 in the earlier draft but changed it last night. Stupid bust! Need an editor. Gottta get than coffee.

    Thanks for the catch

  38. mike said

    Tom – what did you see as the entry point for DE?

  39. mike said

    zzz – where I’m sitting (Midwest) at 5 a.m. I decided to sell puts on the clean sweep at open and try to catch a ride up in oil when I woke up to snow headed toward the NE. (I know it’s foolish but people trade sentiment more than logic.) Got the sells but nothing to ride – scared out now.

  40. tom2oc said

    Mike, I’m already it at 107.64 at 10:40 when AAPL crossed 86 for the first time. I just raised stop to 107.50.

    AAPL struggling with 86 but that’s normal, lots of scalpers at that level. Should overcome it though.

  41. tom2oc said

    If we close green today, this will no doubt be filling all criteria for a key reversal day. And that usually means the bottom is in.

  42. mike said

    Thanks Tom – been ff. on paper the last couple days. Already see I need to study TA. Looks like a long road to education though.

  43. zmann said

    Once again …oil rallying hard. They got $62. Holding off on the new puts until it fails away from here as that’ll make a nice headline which could rally sector.

    Plus, if Tom’s right and we get a green close it would be ashame to get in front of that train!

  44. El Diablo said

    I sporadically hear talking heads touting crude as a defensive play! They’re taking the most cyclical commodity known to man and trying to sell it as a defensive play! Instead of carbon-credits, congress should be contemplating oxygen-credits: idiots like that should have to pay a premium to consume our precious air….

  45. tom2oc said

    Boy, that 2400 line is acting as tough resistance. Same with 86. Only normal TA action though. Crucial tests here.

  46. zmann said

    El D – those are the same people who need to read the Iran tab before making any more stupid comments.

    Tom – I guess, in your mind, today is better than tomorrow if a cross back over the 2,400 is going to happen.

    I’m wondering if investors don’t get a little leary of remaining long through the weekend as more retired civil servants could come out fo the woodwork and be quoted about the state of the global economy in Barons (LOL).

  47. dave said

    PLLL is doing well today

  48. I have also heard a couple of people touting oil as a defensive play against a down market.
    Funny thing is oil is a bane on the market. Jack up oil market goes down, market goes down jack up oil. If we get a full scale recession, that $62 dollar barrel is going to look real stupid, especially if demand craters d/t a recession. Just my 2 cents

    -SaneO

  49. tom2oc said

    Could be Z. I paid to learn to not worry about what anyone might say in Barons or anywhere else. Only thing I pay attention to is what I see on the screen and the system I’m following. 100% TA! And what we might see by the end of the day is market charts showing KEY REVERSAL DAY action! That would be very bullish! Regardless what the fat overpaid crooked guys say in Barons to defend the portfolio or whatever they have to sell! WS is a crooked place!

  50. zmann said

    Oil still rallying, DJIA heading to green. PTR, PBR likely to get pretty good bounce here. Tempted to punt several positions and go long but this is all technical rally on the market and oil.

    The safe thing to do is raise cash and wait for the FA to work exert more influence on trades.

    Tom, you should be in heaven since this is your kind of market for now.

  51. zmann said

    Got stopped out of a chunk of my BP mar puts t $0.60 – it probably rolls over from here (LOL) but better safe…it was worthless two days ago.

  52. tom2oc said

    COMP 2408. That 2400 is feeling more secure now and might go back to acting as support instead of resistance. Wouldn’t it be something to see BKX climbing over my 116 line and GOOG above 452 now? LOL! Heck it’s feasible! AAPL was the key! GOAX rules!

  53. zmann said

    Sane – LOL! Exactly!

    Anybody see the latest reason for today’s run on crude? It’s probably just technical.

    Dave – PLLL is a neat little E&P, very oily as a percent of production and a good grower. It caught at least one new analyst the other day and they’re pushing it for all its worth. Ilike them but I don’t like oil up here so I really wouldn’t chase it.

  54. mike said

    zzz BP didn’t move up w/ the group?

  55. tom2oc said

    Z, oh yes, this is paradise! It sure would have been nice to be full loaded of puts in the morning but for some months now during the churning/consolidation/reversing phase I decided to focus on daytrade because any position could be totally undone the next day. Heck, that market could have opened up 200 pts as well, nobody knew. There are opps every damn day in this market and I prefer to miss the lucky strikes and stick to TA which is based on trading odds instead of relying on luck. 3rd day in a row I buy the dip in DE. AAPL has be a real treat since 84.10. Heck, I have no problem going to cash every night even if it means missing those opening gaps.

  56. Raj said

    Tom,

    Are in OIH today (call or put)?

    r

  57. zmann said

    Tom – AAPL caught a timely upgrade at Lehman for you!

    Oil up here on technicals and rising gasoline. TSO running hard again for new highs. Wholesale gas at $1.90. Wow. Now all the traders they have on CNBC are saying that if we can only close at %62.50 we’ll go higher. Fundamentals be damned.

    I’d say we’re pretty extended as gasoline is up over 12% in the last month and this is the weakest season for driving. When capacity comes back in line wholesale gasoline prices are going to get chop blocked. However, since the pendulum always swings too far we could see wholesale at $2. Which would probably drive TSO to $100 in the near term.

  58. tom2oc said

    Seems to me Z that OIH has a lot of catching up to do with USO. Might be the same with XLE but I don’t follow it. If energy goes on a catching up mode this pm, heck this market might rock!

  59. zmann said

    Mike it came up $0.70 off its lows to trigger my stop but its still down $0.50 or so on the day.

    Traders really want oil higher so we could see a massive push at noon EST to get to $62.50 and then action to hold it there or above through the NYMEX close.

    Part of me says, fine, the stocks are paying more attention to the markets now than oil anyway and that just gives it further to fall when they wake up and see that inventories are adequate and refiners are back on line. The flipside is that if they keep getting their desired technical levels we could see $65 before they wake up. So I’m being very patient on adding puts here.

  60. dave said

    Zmann Thanks, I have sort of lost the thread in the oil section. I’ll trade things I still am comfortable with

  61. tom2oc said

    Z, yes I saw this upgrade and this is the reason why I got in on the dive at support. Reason why I felt that this market would reverse because AAPL is one of my GOAX buddy.

    Just got out of it by the way at 87.16. Want to see what happens to 87.50 resistance now. Might enter other stocks ready to run if it crosses it and might go short the market if 86 fails this afternoon. Leaving DE open but raised stop to 108 to protect profit. Will probably be stopped which would be very fine with me since being sideline makes it easier to remain unbiased.

    Raj, I’m not trading OIH today. Although I was very interested to get calls in the morning I was focusing on AAPL. I think there might be some catching to USO for OIH. And that comment from Z this morning on La Nino would make me very prudent when shorting OIH or oil stocks. Heck, that’s all the oil nice guys needed to scare everybody into a crude at 100 once again for everybody to buy oil stocks all summer. This sector is 100% crooks and 0% FA. Even TA doesn’t work.

  62. zmann said

    TK flatlining … taking a look at tanker rates over the last few days there has been a huge rebound (25%) in VLCC – very large crude carrier – rates bound from the middle east. Those rates are very volatile but this could also be a signal that opec is pumping more again. I look around a bit on this today.

  63. tom2oc said

    Updated key numbers:

    For a continuation of the market reversal:

    AAPL over 87.50
    COMP above 2400
    BKX above 116

    For best odds of kissing goodbye to a key reversal day:

    AAPL below 86
    COMP below 2400
    BKX below 116

    Got out of DE at 108.32. Back on wait and see sideline mode.

    Could go both ways.

    G/L

  64. zmann said

    Thanks for the levels Tom. But you’ve got to watch the FA 0% comments or I’ll cry.

    ————————————————————

    Oil having a spot of difficulty hanging on to $62. Traders will no doubt re-rally but the HSC has been pronounced open for business according to CNBC which has taken away one of those near term supports.

    Imperial has that refinery back to 50% now and VLO is saying McKee will be back on line in April.

    Nat gas trading with oil rally, now only down $0.10 but winter is essentially over and we’re going to end the season with 30 to 40% more gas in storage than average (less than last year to be sure but this was one of the coldest Februaries on record according Bastardi at Accumweather).

    Speaking of Bastardi, I disparaged his rash, he comes the blizzard and unbelievable cold statements in early January and I just want to say I’m sorry Joe. You beat all the other weather forecastors to the headline and I won’t doubt you again. Can’t wait to see his read on La Nina formation and his thoughts on summer.

  65. tom2oc said

    LOL! Sorry about that but isn’t it true though? Heck with all that oil glut everywhere, oil should be below 50 today. This is pure insanity. Like I commented to Phil last fall, I understand all the terrible FA but I’m not sure I’ll live long enough to see oil trading where it should be really be trading. 100% crooks! And 0% TA also to make you feel better. I’m crying too! 🙂

  66. zmann said

    And now for something a little diffferent

    EEE – clean coal company. Missed numbers (again)

    Signed an agreement with Bechtel to optimize their plant which is pretty smart but also tells me costs will continue to run high and that the process/plant is still not ready for primetime (delay, delay, delay).

    They also formed a company to establish and trade carbon credits. Please just get you’re business running and stop chasing the fad.

    This story has failed to deliver volumes of product and has become much more complicated over the last 3 years. I say dream big but take care of business. Investors have borne the burden of heavy dilution without seeing earnings or revenues.

    I like management here a lot but this is just too pie in the sky strange. I’ll be watching it for any kind of broker driven bounce tomorrow and heading back into the puts.

  67. zmann said

    Not going to get into that discussion now but respectfully of your TA talent, no, I really don’t agree. It all factors in (FA, TA, psych, and a bit of gut).

    And when I see a breakdown in natural gas for instance, knowing that CHK will likely fall less than BBG because of their hedges and exposure to different regional prices and conditions…well that’s FA.

  68. tom2oc said

    AAPL just crossed 87.50. Let’s see if it sticks now. If yes, key reversal day coming up.

  69. tom2oc said

    Z, you’re spot on. I agree 100%. A mix of all of that is the way to win.

  70. zmann said

    I’m probably 60% FA, 30% TA, and 10% pscych/gut. Which is why I need you around because on that 30% part I grade myself a C- LOL.

    Energy market cat napping. Back to my full cycle calculation drudgery!

  71. tom2oc said

    LOL! Gee, that’s a nice bullish handle on AAPL’s one minute chart. Gives the best odds for a breakout above 87.50 and the market going green later today. Thriller in Manhattan, this is fun! AAPL more than ever the key for the market this afternoon. Watch 87.50 and 86!

  72. tom2oc said

    GOOG is the break and is becoming a factor now. It has been stuck on 445 line for an hour. Not a lot of faithfuls in GOOG these days. Cramer bashing it every day is not helping. If GOOG goes below 444 it might take COMP with him for a move below 2400. Gee, that’s a tough market according to GOAX rules when GOOG and AAPL are mixed. Hopefully AAPL will be enough to pull it higher. But usually GOOG has more power than AAPL so could go both ways. GOOG and AAPL are now both in play.

  73. tom2oc said

    Watching GOOG now because a sudden move above 447/448 will mean the end of the recreation for shorts and put buyers and will trigger a short covering rally for a green close. Let’s see if AAPL can flex its muscles a little more to pull GOOG up. GOOG going trending below 444 would be a problem for longs. GOOG is acting as the break to this possible key reversal day today but not sure it can continue to that role for long. AAPL’s dip buyers vs Cramer’s GOOG bashing. Fun time! Who will win? I go with the dip buyer, Cramer is usually wrong.

  74. tom2oc said

    As expected AAPL is breakout out from the bullish handle.

  75. Attacking Mid said

    Tom – do you think there’s a decent chance of AAPL paring back into the close as traders take profits? I’m thinking of selling my calls around 2:30ish and wait for the puts to rise back up into the close.

    Overall market seems to be losing its correlation with AAPL’s move.

    AM.

  76. zmann said

    Hurricane play commentary from Marketwatch:

    “Predicting what will happen this hurricane season is tantamount to guesswork, but it seems safe to say that the 2005 season was extreme and 2006 was almost non-existent. So far it appears 2007 will likely be somewhere in the middle. With many of these commodities like natural gas so cheap and so vulnerable to hurricanes, this may be the time to add some to the portfolio, before the winds start to blow.”

    “natural gas so cheap”! In what universe does this guy live?

  77. tom2oc said

    AM, AAPL is working on the strong 2/26 resistance at 87.50. I’m not in right now but if I was I would use 86.95 for stop. Would give it a little breathing room now seeing that GOOG is pulled up by it. This might result in an additional buck up going into the final hour. Or even more. So it all depends how much you want to risk to participate in a possible strong closing. The less risk, the higher the stop. Above 87.50 I would just let run into the close. But that’s my system and it may not work for you at all. G/L

  78. tom2oc said

    That’s it! Cramer lost! GOOG broke 447 and is now running. Key reversal days odds are very goooooooodddd. Thanks goooooogg!!

  79. tom2oc said

    Z, LOL! In the crooked universe!! He must be fully loaded with gas plays. What a nice guy!

  80. lol!! natural gas cheap

    There is a certain group of traders who believe $7 gas and $60 oil is cheap. Their insane philosophy is that if gas was able to hit $15 ( Hurricane induced mind you ) And oil was able to hit $78 ( Retardation induced ) That anything below it is cheap. They take the Idea of what the market will bear to a whole new level. If there is even a smidgen of a thought that there could be any demand growth, they believe it is too cheap.

    -SaneO

  81. tom2oc said

    DJI green! Short squeeze on tap! Yeah!

  82. dave said

    Very nice trading call. A short squeeze would really be something.

  83. dave said

    Tom2oc

  84. tom2oc said

    AM, huge volume on that AAPL push above 88. Might pull back a bit here to 87.75 but odds are high for a very strong finish. Raise your stop and hold on! G/L!

  85. zmann said

    Hey Tom, what’s short interest look like these days? Haven’t monitored it in a while. Can you get it for the DIAs and QQQQ’s

  86. tom2oc said

    Thanks Dave. That put/call ratio said it all. Knowing that options traders are 90% wrong, except the ones trading on inside news and Phil I guess, this market just couldn’t tank today. The market might eventually tank in coming weeks but first it has to wipe out the shorts and the put holders and this will trigger a short squeeze. Then we can go down.

  87. tom2oc said

    DIA 1.6% and QQQQ 1.7% from what I see on the telechart screen. Seems quite high for ETFs. For stocks, I use 4% to call it high but on ETF I haven’t monitored but gut feel anything above 1% should probably considered high. Would have to look at the historical data and I don’t have it.

  88. zmann said

    Putin Watch: Russia plans to start new checks on the ExxonMobil-led Sakhalin 1 oil and gas project at the end of March, an environmental watchdog official said today. More arm twisting to come. Hint to XOM, if you renegotiate terms in favor of the motherland you’ll get a squeaky clean bill of environmental health.

  89. tom2oc said

    AM, AAPL 88.30. Hold on!

  90. mike said

    DE kept going too Tom

  91. tom2oc said

    GOOG already testing my crucial 452 line! Gee!

  92. tom2oc said

    Mike, yes I know, I got back in calls when GOOG started moving! This time for a swing. I figure that with such a bullish key reversal day today we might see the market gap up tomorrow. But isn’t it payroll day?

  93. tom2oc said

    AM, would raise the stop to 87.85 on AAPL.

  94. zmann said

    AXC.to – one of the few oil companies I like right here just got another piece of good news in Iraq. Second well at their Taq, taq prospect came in large (25,000 bopd). I mentioned these guys the morning of the 20th and it looks like they could be about to break out.

  95. zmann said

    AXC.to – very stable, very quickly growing Nigerian production base.

    This is a Swiss company, listed on the Toronto that I’ve done quite a bit of work on. The get on well in Nigeria because they employ locals…. never had a production stoppage due to the folks at MEND.

    This delineation of the previous discovery well should go into analysts models over the weekend or tonight, if not on the income statement then definitely into the NAV. Merrill covers it and they could definitely pop it.

  96. tom2oc said

    So far this market pullback is on lower volume and within normal Fib retracements levels. Looks healthy but we never know, got to be prudent when dealing with panicking crowds.

  97. dave said

    Tom margin calls around 3:10/3:15 ?

  98. tom2oc said

    Dave, could be. Market is moving like crazy. I still shoot for a green close but we never know.

  99. mike said

    What’s the name of AXC or is there an OTC listing?

  100. Attacking Mid said

    Okay – some FA talk on AAPL just for z. I have been whipsawed by AAPL after changing my mind on my first put positions taken on it immediately following the iPhone PR. Always one to be skeptical of new technology promises, I expected the iPhone to be overblown. After looking into it more, I found myself thinking the I, myself, might be interested in one. Being the type who is NEVER the first to embrace new technology items, it says something about the thing when I’m milking my 2.5 yr. old Samsung phone ’til summer before deciding to commit to a new cellular agreement in case I decide I want to jump on the bandwagon with an iPhone. If someone like me is actually interested, it makes me think this thing may have wings.

    Still holding both sides of my strangle. These are April options, so I may hold for several more days to see if we can get a really big move.

    AM.

  101. Henry said

    looking forward, crude has closed up on the last 9 fridays…

  102. umagumm said

    Interesting how the majors are lagging oil a second day

  103. umagumm said

    second day at least… have to look at my charts

  104. zmann said

    Thank you Henry. I thought oil had been replaced by itunes around here. LOL . Just kidding guys. I’ve got my head in the research box on AXC. Post on it after the close.

  105. tom2oc said

    gee, BKX 115.70 already soon to be testing my 116 line. Heck it’s even positively diverging from DJI and COMP in the last 30 min. BKX green is bullish and a close above 116 would be increasing the odds for a quick recovery by 5 points at least only on that.

  106. zmann said

    PTSG has held in like a champ. Again, if you go long this do it with funny money and buy it right. It frequently has down 15% days that are just a couple of joe bobs getting antsy.

    Here ya Umagumm – majors not buying the rally or some such. Volumes are pretty big as well – XOM off $0.30 on 150% of avg volume with 45 minutes left to go.

    TSO – wow that’s tempting because when gasoline does come in this is the one that’s benefited the most! Not going to do it today.

  107. zmann said

    XOM failing towards the close again. Oh so is the market. Hmmm. Are we in danger of busting your levels Tom?

  108. tom2oc said

    We wanted volatility, heck we got it alright. Here goes Cramer’s selling. Just read on a blog that Cramer said that this could be a V bounce and he doesn’t trust V bounces. Probably why the market is reversing now. What an idiot! Before calling a V bounce, we need to see it on the chart and that will take some days. This bounce can end up being part of various bullish or bearish patterns, need to let the chart form first. What idiots these Cramerlites are to follow him. Crazy.

  109. tom2oc said

    Z, could be. When crowds are panicking, anything can happen. Heck COMP just lost .5% in few minutes.

  110. umagumm said

    State legislators must have watched Al Gore win an Oscar last Sunday. Duke was only able to get permission to build one of the two 800 megawatt coal plants they proposed building. And to build it, they had to agree to all kinds of concessions and agree to shut 4 of their older megawatt coal plants. As with TXU, wonder where the extra energy is going to come from. Long term, this national trend could support gas.

  111. dave said

    Ken Wood on CNBC….go Woodie

  112. mike said

    Tom your GOAX is staggering, may be on knees?

  113. mike said

    zzz – you playin’ oil overnight? Who?

  114. dave said

    Sorry no Ken Wood…

  115. zmann said

    Mike,

    I don’t move in and out of positions as fast as some.

    Puts:
    Still holding a little of the XOM 72.50 puts, got stopped out of BP but should probably get back in,

    not touching VLO/TSO/SUN yet but close on the short side,

    still have the SLB and BHI.

    still have my PTR from Tuesday evening which is now barely profitable again.

    Should get HES puts but I’m typing this…I’ll wait for tomorrow for direction.

    In TK puts but not too confidantly at this point (probably make out ok, still profitable and I’m in the Apr’s so I can pick my day)

    Dislike what EEE did on their 4Q intensely

    Loving the AXC but not for options for a long play I’ll post after the close.

    That should hold ya!

  116. zmann said

    Forgot to add…got some APC 40 puts for $0.90 earlier.

  117. zmann said

    So crude closed at $61.50 on Tuesday, $61.75 on Wednesday, and $62 today. That’s not even subtle. Yeah, I’m playing oil overnight but remember, I always am and I scale in and out of positions.

  118. tom2oc said

    Well, didn’t get my green close but that wasn’t a bad day after all. COMP closed above 2400 despite Cramer’s urgency to prove to the world that he can move the market. Dow was down 200 pts this morning and closed off only 34. I guess traders were concerned to keep longs ahead payrolls. So much fears in the crowd it’s incredible. No change to odds and levels. Was a fun AAPL day! Good eve Z!

  119. dave said

    Another fun day ! Thanks for all the posts.

    Tom2oc great inda-day read of the markets, thanks for the AAPL trade and 87.85 stop

    Zmann thanks for all the oil info

  120. tom2oc said

    Dave, you’re welcome! Was fun and I wasn’t too busy as I focused trading on AAPL and DE only.

    Z, I’m looking at OIH and I feel an H&S with a short head might be forming. Left shoulder 140, head 142.50 and maybe right shoulder 140. Heck, I’ll be shorting this Monday at 140! 🙂

  121. tom2oc said

    neckline would be 132.50 meaning that a failure of it after forming the right shoulder would give a target of 122.50. Heck, not a bad move from 140 to 122.20 in about 10-15 days. If only the oil nice guys wouldn’t be there, would be soooo easy! LOL!

  122. zmann said

    Thanks to everyone for chatting it up around here! Tom and gang…very good stuff. Reminds me that there’s more to the world than the pricey black goo. New post on AXC coming now but feel free to keep using this thread for the day.

  123. nltd said

    Thanks both Tom and Z (and others). Always informative here. I’m too slow to chat and work, but checked in often today. Wow, what a day!

    N

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