The market always gets clawhammered when I am away. Before heading out, the market was docile and I was vacillating between up and down. At the end of the day, there was an epic rout in refinery related stocks, helping crush me to the tune of 2.5%. It would have been worse, if not for my large position in CLF and 11% cash position. Additionally, two top 5 positions of mine, BGC and CY, were barely down.
June has been a shitty month, just like last year. The key to this market, and I will adhere to the trend, is the June jobs report. Should those numbers come in fucked up, I am bearish on the tape. Until then, my approach will entail long only positions, coupled with large cash positions for buying blood.
Providing the most horrific thing possible does not occur this weekend (as you know, ANYTHING could happen), I will be buying UCO amd EXK, in size. And, I will be putting together my semiconductor buying list for July.
With regards to the refiners: today’s sell off was absurd. 321 spreads are still above $24 and the rip between Brent and WTI is still 15%. People are putting the carriage before the horse on the sector. Selling down HOC by 10%, on no tangible news, is ridiculous. I will be adding to my WNR position on Monday, as I am supremely bullish on the earnings potential.
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Would you just tweet your WNR to Barney Frank already…he’s been waiting
TMI: frankly.
FIRST!
damnit!! I mean SECOND!
epic fail.
Indeud
Crack spreads moving on the SPR release announcement from yesterday (I know, thank you Captain Obvious).
Along with our 30 mln barrels being released, Europe is throwing in 18 mln barrels. This will temporarily hurt Brent prices. The 30 mln barrels we are releasing are coming from the Gulf coast, not Cushing. That’s another bearish Brent / LLS neutral to positive WTI event.
WTI/Brent spread is still 15%.
Today it is still 15%. Goes lower from here short-term. Then it becomes face ripping time.
is that straight from your crystal ball or gut?
Based on the previous two times they released inventory from the SPR. There was a quick short-term drop then rocketed up past the level prior to the release.
In other words, short-term pain / long-term good times.
Here’s another thing I believe could happen. Everyone says this is being done because of the loss of Libyan oil production. Fair enough. We go a couple of months, things seem to be settling down so they figure everything is just fine. No more release of inventory because we’ve drawn it down, spare capacity is greatly reduced, etc. Everyone is feeling good, the manipulation worked.
But right around the same time that we’ve painted ourselves in a corner Japan’s economy starts to ramp up from post-earthquake devastation. No worries, we’ll just crank out more inventories.
Ooops.
WAIT UNTIL THE DEACONS OF DEATH HIT.
Immortal
This is the caffeine / narcotic infovideo that Jupe was talking about in the last thread:
http://youtu.be/sHzdsFiBbFc
That is fucking genius.
______________
QE2 quietly ended and no one said a peep.
Market sold off 15% from lower levels last year when the same thing happened before QE2 was announced.
Why would anyone think it would be different this time?
If anything the fundementals are materially worse this go around. GDP has come to a halt and unemployment is rising.
The internal optimism of the bulls amazes me.
Read the writing on the wall before you get slaughtered.
Bono says hello – and can you spare a couple quid? Elevation Partners was deep into Sino Forest…
This is the Sneaking Alpha article stating that anal ists expect WNR to rise 2472.7% this year.
http://seekingalpha.com/article/276204-3-sectors-to-play-a-rebound-in-stocks?source=yahoo
Anything else I can get you ? Coff …….. never mind.
2472 percent ???
and a .7 also
bb. went flat this afternoon. stinking alpha, just a bunch of frat boys who think they know something.
Hey Uncle Fly. That had to be the best graduation ever. Dad knew something was up when you started the wave in the middle of the school song. Dad said to me: “Watch your Uncle Fly. He has that space alien magician look in his eyes.” The best part was when you stormed the stage during Principal Gryzbowski’s introduction speech, grabbed her microphone, and called her a long winded fat cow. We heard you scream something about her speech taking too long and you had to get back to watch your WNR go down in flames.
Anyway, the police restored order when you were tossed out and Mrs. Fly came out from under the bleachers when the ceremony was over.
You are real cool Uncle Fly.
The employment numbers will be good this time.
in your dreams
Contrary thinking based on votes confims my proposition with a slight edge.
contrary to people who agree/disagree, versus being on the street and talking to business folks and trades people how business is going, and if they are busy or not? cause thats how i form my thesis. being a sole proprietor,, and a tradesman. besides,you dont believe for one moment that the #’s thats put out every thursday are real,or do you?
Did you write this article Mr. Fly?
Yesterday, the International Energy Agency (IEA) called an emergency press conference to announce that the US and its partners will release 60 million barrels of oil in the next 30 days to offset the disruption of the flow stoppage from Libya. The US will “dump” (my words) a million barrels a day from the Strategic Petroleum Reserve (SPR) into the Texas and Oklahoma markets to help alleviate global shortages.
As you can see by the chart below (from the Energy Information Administration (EIA), US domestic crude oil stocks have been consistently below historical averages for the past year, well before the shutdown of Libyan oil. As we head into the summer driving season, the release of an extra million barrels a week from the SPR should help relieve any spot shortages, and minimize any price spikes this summer.
Wait a minute, this chart’s upside down! It really looks like this:
Obviously, the release of an extra million barrels a week when inventory is higher than normal reeks of the obvious — politics. The only real question is what is the political agenda? The choices are many.
Let’s go through the obvious choices which the press are beating into the ground since the announcement made yesterday morning.
President Obama did it to increase his election chances next year. Lower pump prices = better polls.
Seems a bit early for that. Next June, that might be more logical.
He did it to hurt oil speculators, much like a currency intervention.
Possible, but oil peaked the first week of May, and it’s been in steady downtrend since.
Obama and the Europeans did it to stick it to the OPEC pricing hawks, Iran, and Venezuela.
Couldn’t happen to a nicer couple of guys, but this seems like pleasant collateral damage, not the primary reason.
He did it because the Europeans wanted it and like the Libya bombing, he eventually folded under European pressure.
Definitely a Rush Limbaugh-type analysis, but the Europeans did want it badly.
He did it because the Fed is out of bullets and direct commodity manipulation is the only remaining bullet.
Hmmm…
Finally, we have the actual reason that the IEA stated. The loss of Libyan sweet (low sulfur) crude production cannot be made up through increased sour (high sulfur) production elsewhere because European refineries that lost Libyan sweet crude cannot handle sour crude.
This seems to be true. It also explains why the British and French forces have stepped up the air attacks on Libya to try to force Qaddafi out. They don’t care who is running the show as long as sweet crude is pumped. There is nothing like altruism and protecting civilians when oil is concerned.
I think the most logical answer is the final statement, though the president had no problem with the benefits from the first five possibilities. All of this understates the real issue. The loss of 1.6 million barrels a day of sweet crude called the Saudi bluff that they could increase production enough to negate that loss. They clearly haven’t/couldn’t and Europe blinked. In my opinion, this is the first test that Peak Oil (the world will be unable to produce enough oil to meet demand) is right around the corner.
With any kind of reasonable economic growth, the demand for oil will continue to increase. China is well beyond the “chicken in every pot” stage, now it’s “a car in every garage.” They want to be like America, except they are now at the stage we were back in the 1950’s. Any global economic growth will drive oil consumption in Asia. Political unrest in the Middle East that halts the delivery of crude oil beyond the stoppage on Libya has significant potential to spike oil well above the recent peak.
The downside of owning oil is what happened yesterday. Political games can occur, but the IEA shot a reasonable amount of powder yesterday. The US Treasury can issue massive amounts of debt and the Fed can print paper to buy it, but they can’t print oil.
The oil futures market has asymmetric risk. The commodity futures markets got started by farmers and food manufacturers hedging each others’ risks. Farmers would sell the current year production to lock in a profit, and the food processor would buy to lock in costs. The oil futures market is different. If you are a speculator and think that crude oil is priced too high, you can sell a futures contract against it. Since you are not producing oil, you have nothing to produce against a Middle East disaster that spikes oil to $200 or worse. You could wake up the next morning and have the markets limit up against you for days.
The events of yesterday make me more comfortable that owning US oil assets in the ground is a safe way to sleep at night. Horizontal drilling in the Bakken shale in North Dakota is producing a new domestic boom. My favorites are Continental Resources (CLR) and Whiting Petroleum (WLL).
Politicians play political games by definition. Actions like what we saw yesterday may give you chance to pick up domestic assets at a sale price. The Saudi bluff has been called. If they fold and Peak Oil happens, you’ll be riding scooters a few years from now. Think about hedging yourself, unless you like the open air…
yea, so let all the powers that be, here in the good ol u.s. of a drag their feet with nat gas for transportation purposes.it’s not like they havent perfected synthetic oil for cars. soooo, what are we waiting for then. we can tell the saudi’s and chavez and all of them to go piss up a rope. we CAN do this,if we want jobs,and plenty of them. screw globalization,the time has come for america to start looking inward. first, we need to purge the politico’s. they by default, are pretty much the monkey wrench in the works
Purge the politicos? Like this?
http://americansresistance.blogspot.com/2011/06/they-dont-call-goldman-sachs-vampire.html#more
We always keep purging the politicos– over and over. We throw the bums out and replace them with new bums. Maybe it’s the TBTF banks that need to be dealt with differently– as the politicos are just their puppets, just like the politicos we vote in next time will be, if we don’t deal with the root cause of the problem– the campaign financiers and controllers of the politicos.
See cartoon at bottom of web page there.
divide and conquer, with lame stream media in the center. that cartoon says it all. better way/take on revolution that is non violent……..no one show up for work for a month, and in that month, dont pay one bill. almost like a strike, but better because everyone gets to participate. if ceo’s cant produce……no bonus’s….. take away the coin and watch how they cry. it always worked during contract time in the trade unions….. sorry,does not apply to the likes of seiu, that isnt a trade union.
The middle class needs to do this ASAP before the country is lost to welfare tards and greedy CEOs.
I like your thoughts. And you’re close. Obama has been slowly trading out the strategic reserve from sweet for sour already, even though the US doesn’t have enough sour refining capacity to make that much sour a “strategic reserve”. It nets the US money in the short term, in an off balance-sheet way. It still looks like there are XX million barrels in reserve, but they aren’t useful, and they aren’t as valuable. This release of remaining sweet crude is a way to accelerate the process, because (and I’ll bet you a ter-duck-en) that the strategic reserve will NOT be re-filled with sweet light crude. It will be refilled by sour heavy. And that’s garun-fucken-teed by a ter-duck-en. 🙂
Just corrected a shitload of grammatical errors. I must have been smoking opium
I was going to ask that. So I assume you are supporting the new Ron Paul/Barney Frank initiative?
That was for smoking pole.
Coincidentally, Telly Savalas was a big fan of opium.
In the middle east, they smoke that sheesh like tobacco.
That actually explains a lot.
The lollies bring up the blood sugar. The towlies use rock candy in their tea.
Treu.
From what grade did your son graduate?
I would expect that information to be supplied on a need to know basis.
Ignore King Dollar at your own peril Le Fly.
Tonight on CNBC Geithner repeated several times that “we will have to take a little pain over a period of time in order not to take a big hit”. When the Sec. of Treasury says this, you better take note. I for one will not bet against the elites. They tend to win.
im a bottom feeder
but you’re all plankton
Looking forward to the semiconductor list.
The history of the middle finger
I never knew this before, and now that I know it, I feel compelled to send it on to both my more intelligent friends in the hope that they, too, will feel edified. Isn’t history more fun when you know something about it? Before the Battle of Agincourt in 1415, the French, anticipating victory over the English, proposed to cut off the middle finger of all captured English soldiers. Without the middle finger it would be impossible to draw the renowned English longbow and therefore they would be incapable of fighting in the future. This famous English longbow was made of the native English Yew tree, and the act of drawing the longbow was known as ‘plucking the yew’ (or ‘pluck yew’).
Much to the bewilderment of the French, the English won a major upset and began mocking the French by waving their middle fingers at the defeated French, saying, See, we can still pluck yew! Since ‘pluck yew’ is rather difficult to say, the difficult consonant cluster at the beginning has gradually changed to a labiodentals fricative F’, and thus the words often used in conjunction with the one-finger-salute! It is also because of the pheasant feathers on the arrows used with the longbow that the symbolic gesture is known as ‘giving the bird.’
IT IS STILL AN APPROPRIATE SALUTE TO THE FRENCH TODAY!
thats funny. i always thought the word was shortened from, F.or U.nC.arnaled K.nowledge. when a woman got caught being unfaithful she was placed in a clamp like device in town for all to see with the letters F.U.C.K. inscribed on it so every one can see her misdeed.
oh bitch please
watch me bedazzle you wankers
go fly
EXK is a mistake.
I say this as one who rode it from 2.50 to 10.
Silver is going to consolidate for years before it goes to $200. In the meantime, it goes to $25.
EXK is a $4 stock.
Fleeting Foxes is much better than Arcade Fire…
http://www.youtube.com/watch?v=KyP0DACgdgc&feature=related
Red thumb means you like it in the butt. Green thumbs means you like it to give it in the butt.
Here is my Libya plan. Tell the Egyptian Army to invade and kick Kadafi out or we will stop giving them billions of dollars. Kadafi will run as soon as the Egyptians enter the country. We pay for everything and everybody with that sweet Libyan crude.
How is the plan of paying for everything in Iraq with their oil revenues working out?
Uh, my plan for Iraq was to drop a battlefield nuke on Saddam at one of his palaces……..see, you just put a small nuke on a cruise missile and dial the coordinates in and poof – no more Saddam – no more problem. My Afghan plan is just get the fuck out. Anybody who likes the Taliban should have the Taliban.
http://www.detnews.com/article/20110626/METRO/106260342/1361/TSA-forced-woman–95–to-remove-adult-diaper-for-pat-down–daughter-says
TRUE BLOOD IN ONE MINUTE!!!!!!
That time of the month?