Thursday, October 14, 2010
10/15/10 Silence Is Golden
Talking is cheap people follow like sheep
Even though there is no where to go
How could she tell he decieved her so well
Pity she'll be the last one to know
How many times will she fall for his lines
Should I tell her or should I be cool
And if I tried I know she'd say I lied
Mind your business don't hurt her you fool
Silence is golden, but my eyes still see
Silence is golden, golden, but my eyes still see
I'll be damned. The bears I follow are still talking up a storm. If you're not making money, I guess you're left with talking about making money...
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Sorry for the late post. Had another focus group this evening.
ReplyDeleteCredit Suisse summary comments, came out after this mornings storage report.
ReplyDeleteEIA Reports 91 Bcf Fill
3Q Reports to Show Gas Output Rise
1. The EIA reported a 91 Bcf fill for the week ended October 8 compared to last year's 60 Bcf fill, the 64 Bcf 5-year average fill and the 92 Bcf consensus fill (range: 70 to 97 Bcf). Last week's cooling degree days came in at 8, down 47% yr/yr and 56% below normal. Power generation for the week was down 3.4% yr/yr, but is up 4.3% year-to-date.
2. Storage Filling Fast into Season End. Storage levels now stand at 3,590 Bcf, 118 Bcf (3.2%) below last year but 247 Bcf (7.4%) above the 5-year average. Over the past month, fills have averaged 2.3 Bcf/d above last year's injection rate. We now project season-end (Oct. 31) storage in the 3.7 Tcf range. Following today’s report, the November contract is trading at $3.72 per MMBtu (flat wk/wk), while the 2011 curve is at $4.42 per MMBtu (down 1% wk/wk) and the 2012 curve is at $5.12 per MMBtu (down 2% wk/wk). Long-dated gas prices have improved in recent weeks, but remain sub-$6.00 gas until 2016.
3. Production Should Rise in 3Q10. Our bottom up producer survey forecasts an organic 2.4% sequential growth in 3Q for lower 48 U.S. gas production for the E&Ps (see Exhibit 1). Despite completion delays reported by various producers, production growth will primarily be driven by the lease-holding activity in the Haynesville and development programs in the Marcellus. However, we are forecasting producer growth to slow slightly from the 1Q10 pace of 2.8% qtr/qtr for the E&Ps as the gas rig count has begun to flatten out with gas rigs up 1.9% qtr/qtr in 3Q10 vs. a 9.1% sequential increase in 2Q10. In fact, we believe the 'dry' gas rig count is declining (rigs drilling in areas such as the Fayetteville, Haynesville and Arkoma-Woodford).
My comments about Credit Suisse's comments above
ReplyDeleteDavid, point #2 is my biggest concern about cash prices. This morning, Nov10 was around $3.615 right before the number, it popped up to $3.70 area after the number. What was interesting about that is usually cash will follow the screen, especially at 9:30 AM because most of the trading is done. Today cash just rallied a couple of cents after the number but that was it. That tells me cash is weak. Now that I've said that and you and I know the whole natty industry reads the blog, maybe prices will shoot up $.50 or so tomorrow :)
Point #3, in the summary Credit Suisse does't mention imports via Canada and LNG nor do they talk about industrial loads. Maybe the industrial loads are pretty consistent.
I've lost track. Are most of you still playing UNG/HNU.to? The 50-day SMA of a 2-year chart looks alot like the snow-covered hill I used to sled down in grade school.
ReplyDeleteI tell you what...PIR sure looks like it's gearing up for another thrust higher. Did you know in their latest quarterly report same store sales grew by 12%? and yet they're projecting earnings next year to be the same as this year. hmmm...with $204 Million in cash and $9 Million in debt, they have $1.66 in net cash. So it's trading at 9 times current year's earnings. GYMB just got bought out for about 18 times current years earnings.
ReplyDelete2nd- Took a sip (2000 shares) of the hard stuff this morning. After reading a pro's take (port) I'll probably have to spit it out tomorrow.
ReplyDeleteFYI, I'm sending MarkW and David the occasional report on natty. I do like the Credit Suisse report because they do a quick summary then go through several charts including the COT on natty. I don't get it all the time and I don't do biz with them so I dont' follow up when I don't get it. I know MarkW is getting it but I may not have the right email for David. You guys can ask Mark to send it to you since he prob has your emails. IF its something you'd like to get on a regular basis, when I get it, I can add you to the distribution list.
ReplyDeleteRB- Sorry, I thought it was your daughter. Is he playing in the tourny this weekend? My nephew is doing really well as a freshman at OSU.
ReplyDeleteGot to catch one of Kendra's practices today. Interesting, she played much "harder" than she does in games. Not sure what that's all about. Other than she doesn't mind running over her teammates.
Most smokers will tell you, beg you even, to never start even though they keep doing it.
ReplyDeleteUNG, how many peeps have I told to stay away from that. You want to play natty? Buy a producer, sell out of the money puts, sell covered calls, stay away from UNG. I should listen to me. Night all.
Thanks, but I've found that when it comes to trading, personally I do better with less information- then it becomes straight psychology, and I'm somehow more successful...
ReplyDeleteMark/David- Maybe you should listen to port. Stay away from H and stick to crack- cheaper and quicker high...
ReplyDeleteHmmm...what if I had it wrong and the corollary to 2002 on REDF is that it is at the equivalent of December 2002? I mean let's face it...the company is only worth $138 Million right now.
ReplyDeleteShanghai is now up +1.65%. Man this is getting to be too much. Going to bed. Something will crystallize in the morning, and hopefully I'll have a trade in mind.
ReplyDelete2nd- I'm taking a heavy dose of methadone (V) to smooth out the tough patches in H (UNG) :)
ReplyDeleteFWIW- I wouldn't short VIX here. Long players might buy protection which would drive the VIX higher.
ReplyDeleteMan, I'm checking out the long term chart (last 10 years) on the price of gold and it sure as hell looks similar to the Nasdaq chart from 1991 to 2000. i think we could very well be in the final thrust higher. where it ends who knows. i'm probably better off shorting it when it breaks violently down through the 50 DMA. my issue is i don't think i will be able to clearly identify that happening when it does happen.
ReplyDeleteMark, Yes the tournament is this weekend. What is your nephews name. I would like to follow his exploits, plus I believe he is the same stature as my son although obviously he is no where near as fast as your nephew. You realize that men's soccer scholarship is probably the hardest one to get in this country due to the complete lack of programs. Your nephew is a stud!
ReplyDeleteNow the vxx. I will not get shaken out of my position. Which is baasically a short with a 10% trailing stop. I got in when it broke 19 so basically the stop is 1.90 from the 52 week low. So my stop is 15.90 right now. Right now I am comfortable in the trade I sometimes forget I have it. I like trading this Darvis box style. When I first put on the trade I watched every tick and fretted and sweated you know like a regular trade. We can't all be David. But once I got to 10 percent and nearly assured at least a break even. I let the trade go on its own like a child leaving home. What happens happens. Sure i glance at vxx two or three times be cause it is first on my watch, but there is nothing for me to do.
Bob
"Mark/David- Maybe you should listen to port. Stay away from H and stick to crack- cheaper and quicker high..."
ReplyDeleteYes, I think I have finally learned that lesson! In fact, I'll short the sucker next August, right before the contango season! :)
David,
ReplyDeleteI just pulled up a chart of VLO. When I first started chatting with you it was about this stock. I believe it was in the 70 or 80s then. It looks like dead money and just don't understand why. Maybe it has something to do with the "CRACK spreads."
Bob
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