4:00pm
Nice continuation rally today despite a surge in oil prices. Volume was decent as well. Stay tuned for today’s video.
3:31pm
The ES is approaching session highs at 1280.50.
3:02pm
After the close, we see earnings from AW, AYE, DIS, DRIV, ESRX, FSLR, LVS, MUR, OI, PRU, SBUX, SYMC and V. Tomorrow before the open ADP, AET, APA, AZN, CBS, CNX, CVC, CVS, EK, EXPE, FPL, GT, IP, K, MA, MO, MOT, MRO, NMX, RDS/A, SIRI, TSO, TYC, WYN and XOM.
2:56pm
The US House has reportedly voted down the energy anti-speculation bill due to offshore drilling dispute. In other breaking news, Merill has declared quarterly dividend of $0.35/share.
2:30pm
XLF catching a bid, helping boost the ES into the 20/50MA necktie. The selling today has come on light volume and it looks like the bulls are trying to spur an afternoon rally.
2:20pm
The ES is consolidating under the 50MA while oil moves higher, now up $5 above $127. Nat Gas has broken above 43.10, now trading at 43.40. The market’s resiliency is impressive in the face of oil’s rally.
1:52pm
Oil moving out to fresh session highs at 126.50. The ES is struggling to hold its gains. The 200MA sits below at 1257.75.
1:11pm
UNG at 43.10 resistance level that could not be broken earlier this week.
1:05pm
Oil just rallied higher by $1, now up $3.70 to 126.
12:57pm
The ES closed a 10-minute candle below the 50MA but the confirmation candle is now above it.
12:47pm
Oil still rallying, now up more than $2.50 to 124.70. Equities continue to sell. XLF down 1.8%.
12:39pm
Oil approaching session highs above 123.50. The NASDAQ just went negative on the day. The ES is testing its 50 MA at 1267.80.
12:12pm
The ES is threatening to break below its 20 MA, wait for a confirmation candle. 50 MA rests below at 1267.25. Oil bouncing some, now up 80 cents.
11:48am
The ES continues to hold its 20 moving average. Oil pulling back on light volume near the flat line.
11:46am
If you are trading TSO, be aware that they report earnings tomorrow morning before the bell. Consensus estimate is a loss of -$0.06. Playing a stock into earnings is very risky.
11:37am
ES pulling back into its 20 moving average at 1273. Pullback on light volume. XLF down 1%.
11:01am
See Michael’s interpretation of the oil inventory data in the comments section below. Our TSO (L) trade is working well, as it just broke above 16.10 resistance. It looks as though Nat Gas put in a short-term bottom this morning. This will depend on Nat Gas inventories due out tomorrow.
10:49am
Nat gas finally seeing some volume buying here. Oil moving back up toward session highs, currently up 46 cents.
10:46am
Crude back into negative territory, ES moving back towards session highs.
10:40am
Crude breaking out to session highs on the inventory data. Nat gas trying to rally. ES feeling some sell pressure.
10:18am
Interesting to note that XLF is no longer leading the market because it is not at a session high with the S&P. Buying volume waning in financials.
10:13am
ES at session highs. Next resistance level at 1291. If you’ve been long, 1291 is a logical profit taking point, and then you can re-enter on a break above it. The market is acting as if the inventory number will be bearish for oil and bullish for stocks. We’ll see if it plays out that way.
9:57am
Oil inventories come out at 10:35am. I don’t want to play oil going into the number, but I certainly would not want to be short.
9:49am
Market rallying on a much better than expected ADP employment report (+9000 jobs). Natural gas has broken below 41.70. We covered a large portion of our position (ouch). Oil lower by 85 cents.
12:00am
Good morning. Just wanted to remind everyone that the ADP Employment report is due out at 8:15am. The consensus estimate for private sector employment is a decline of 60,000 jobs, following a 79,000 job loss in June. The report has a shaky track record of predicting non-farm payrolls, but still must be viewed as a leading indicator for Friday’s report.
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July 30th, 2008 at 9:23 am
‘ report has a shaky track record of predicting non-farm payrolls, but still must be viewed as a leading indicator for Friday’s report.’
- That was funny you mentioned that. Back in early June, when the unemployment number jumped one Friday from 5.0% to 5.5%, and the market was crushed, the ADP Payroll number, which was released the day before, missed it entirely. I *believe* this was June 5, a day with a huge sucker rally when the SP500 had broken below its previous upward trend. In fact, there was another less publicized payroll statisitic that was released earlier that week that was right on the money, and was an accurate indicator of the published payroll number. I can’t recall what it was, it might be a private sector report.
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July 30th, 2008 at 10:26 am
Would you consider SKF for a trade?
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July 30th, 2008 at 10:29 am
I’m thinking about it. I think it’s too early. Maybe at the 22.50 level. Market could still go either way. We might see the counter-trend rally lift off from here. Or we might retest 1200. So far, there is no sign a retest is looming. Oil inventory and Friday’s jobs report will help us figure it out. It is interesting to see the financials stalling out here. Might be a play for a day trade.
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July 30th, 2008 at 10:41 am
Hi Craig, How about the crude inventory result? Thanks,
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July 30th, 2008 at 10:49 am
*DOE CRUDE: -81K V -1.2ME; GASOLINE: -3.5M V +250KE; DISTILLATES: +2.4M V +2ME; UTILIZATION: 87.2% V 87.1%E
*API Inventory:
- Crude Inventories: -2.1M
- Gasoline: -3.8M
- Distillate: -587K
*DOE:
- Distillate Demand +122K bpd to 4.19M bpd
- Gasoline Demand +126K bpd to 9.468M bpd
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July 30th, 2008 at 10:55 am
Crude inventories. - You may see some firming at the current price of ~120/barrel. Change in crude supplies basically flat. Also for the first time in 6 weeks, gasoline inventories decrease (dramatically) meaning demand is picking up at the pump and refiners have slightly scaled back production. Distilaltes continue a down trend in inventory. Oil is now down ~$27/barrel in a very short period of time.
Refiners are going to have their turn at the trough. Their margins are recovering and the price of gasoline has declined fractionaly relative to the drop in crude. Be patient with this trade.
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July 30th, 2008 at 10:56 am
(Distilates continue an UP-trend in inventory.)
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July 30th, 2008 at 11:54 am
when did you guys enter TSO
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July 30th, 2008 at 11:56 am
My cost average is 15.35
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July 30th, 2008 at 11:59 am
I see XLF closing at 22. The shorts are trying to pummel financials each time they rally up, but ultimately they are forced to cover which adds to the powerful rallies. Remember the funds are buying to re-weight their portfolios, if they don’t they risk underperforming the market (gasp). There is a strong trend line up on a 3 day chart and we did get a gap up today.
I am tempted to sell and take some very nice profits but at the same time I don’t feel its the right time - too many people are still trying to short this.
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July 30th, 2008 at 2:01 pm
Dan, are you still feeling bullish on XLF, I made a quick scalp buying SKF at 119 and riding it to 125. I’d like to buy back in, but not sure where XLF is headed.
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July 30th, 2008 at 2:05 pm
For what its worth, the volume on the pullback in on light volume. The 50MA on the daily chart appears to be strong resistance. At his point, I’m most comfortable on the sidelines in financials.
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July 30th, 2008 at 2:40 pm
Craig, a good re-buy of UNG may become available at the 42.25 range. It looks like it may be developing a base here for some time. Do you have any interest in this stock after bailing out. I prematurely sold mine.
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July 30th, 2008 at 2:43 pm
AL, I do like UNG. I actually re-entered earlier today and made back some of my losses. The inventory number tomorrow is going to be key. I would feel more comfortable if it could hold above 43.10. The accumulation today was on solid volume.
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July 30th, 2008 at 3:35 pm
Yes I am still bullish on XLF/UYG. If you look at a 3 day chart you will see what I pointed out earlier today. I may have overshot by saying 22 @ close but if we close @ 21.75 thats fine with me
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July 30th, 2008 at 3:44 pm
Roop - I added TSO at 16 as a core holding. I’m not playing the earnings announcement.
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July 30th, 2008 at 4:17 pm
I’m BACK! Trip to Houston was HOT.
Good posts by all last couple of days. I’m a bit puzzled by Craig’s closing out of UNG and reentry, why not just stay in? I should have bought at 42.50, but still not long. Looks like good intraday bottoming candles around 10:00 then decent volume in following them.
I went long 200 GRMN at 34.87. Looking for a pop in the AM and after hrs. Say a prayer for me.
Nice to be back!
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July 30th, 2008 at 4:29 pm
Shanky, welcome back. And puzzled you should be regarding my UNG trade. Let’s go over the trade so others can learn from my mistake. Keeping emotions in check is a lot easier when you obey your original entry and exit plans. When I first mentioned the UNG long trade on the blog, I identified $44.50 as a mental stop price. ( you can read that post here: http://www.stocktock.com/2008/07/23/stocktock-playing-a-natural-gas-bounce/ ). But the next day, after a bearish inventory report, the ETF got pummeled and I started buying more. This impulsive reaction was a violation of my plan and discipline. Adding to a loser usually brings more losing. At this point, I was stuck in a falling knife position with a much larger position that I was comfortable with. Over the last couple days, I identified 42.16 and then 41.70 as short-term support, but a fakeout move below this level was possible. This was more of a hope than anything else. Because my position was too large and I abandoned my initial exit strategy, I did not really have a plan for a worst case scenario. My position was too large and my loss was too great to keep emotions out of the equation. When UNG broke down this morning, I sold about 1/2 my position for a huge loss. This was not part of a plan but merely an emotional reaction to loss. Whenever I sell at an emotional pain point, it almost always represents the bottom. When the selling slowed down and we approached the inventory number, I loaded back up and improved my cost. Moral of the story: follow your initial trade plan and don’t let emotions get involved.
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July 30th, 2008 at 5:28 pm
LMAO - Craig, your reaction to UNG is so true to the human reaction. It’s funny, but not really (especially given your loss - sorry about that). I’m laughing at the emotional turmiol. It is kind of like when I go to my trainer. He laughs at my pain for an hour, because he’s been there. I’m laughing (sarcastically) at your pain, because I’ve been there. Bottom line (since I have been professionally trading for 8 years now) is I know when I finally get in panic mode and all my clients are there as well, it is time to buy, but making that move is sooooo difficult. Look at the bright side - you are smart enough to haul ass and not risk your hard earned cash. As tough as it is, you pulled the trigger. Good job. Why have I stayed here? Because of your honesty and conservative nature. As i have mentioned before, those traits are hard to find these days. Hell, you win some and you lose some. If we can hit 65% of our plays, well be in good shape. Plus - playing in this market right now - can you say thin ice? Check out socionomics.org, the study of human emotions in trading patterns is becomming quite the rage.
GRMN had a big spike to 37.26 after hrs, but gave it back immediately. That would have been almost 7%. Lets judge my “human” reaction to this trade.
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