Friday, December 3, 2010

12/3/10 You Don't Mess Around With Slim!

http://tinyurl.com/nx8a6o

Party!

David's headed to Five-O. vb's riding all that glitters. Even tof finally turned around and joined Craig and the rest of us in following the Big Blue Arrow.

Fantastic week for my account.

Drinks all around!

99 comments:

  1. JB- I have total confidence in Brain Mayo-Ham :0

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  2. 2nd - Being bearish for one day scared the crap out of me. I immediately closed my shorts and ended the week up nicely. I mentioned this a couple of times, but I think long banks, short momentum stocks is a winning strategy right now. Throw in a little BYD and how can you go wrong!?

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  3. What?? Is everyone passed out drunk already??

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  4. Rest easy drunkards. Port and I are still working tonight :)

    From Port e-mail...

    The crude forward curve has pancaked.
    Front-month prices for NYMEX WTI and ICE Brent crude oil rose by around $6/bbl in the past week. However, the most striking development, which has caused a lot of talk and buzz in the market, has been the flattening of the crude forward curve across its length. The chart below shows the change over the past week.

    The flattening in the front months is due to strong fundamentals in Europe and Asia. In Europe, extremely cold weather has boosted gasoil demand and caused higher crude runs. Also, there were some supply disruptions in both Nigeria (Bonny Light), due to pipeline issues, and Angola (Cabinda and Girassol), due to technical problems and maintenance in Angola. As a result, the Dated Brent vs. ICE Brent M1 contango narrowed to only $0.03. Interestingly, the ICE Gasoil vs. Brent crack widened, but only by $0.90 to $12.60.

    In Asia, strong Chinese demand led the way, related to the ongoing gasoil demand surge. This has been due to the shutdown of some coal-fired power generation and replacement by small-scale diesel-fuelled generators. Chinese refiners have ramped up crude runs in response, as have refiners elsewhere in Asia (who will export more gasoil to China). As a result, Dubai M1 vs. M2 contango remained very narrow at only $0.05.

    The flattening at the very front of the curve (or very small backwardation in Thursday's close, shown on the chart) is explained by these strengthening prompt fundamentals. Gasoil demand has also been strong in the US, and combined US and Japanese crude and product stocks drew by 400 kb/d in November. So with stronger fundamentals in all 3 main regions, the front of the curve “makes sense”. The return to contango after the first couple of months also makes sense, as overall inventories are still ample (perhaps currently down to 59 days OECD forward cover).

    The longer-dated part of the curve is harder to explain, at least with a high degree of certainty. There is ample anecdotal evidence that in the last couple of weeks, there has been significant producer hedging (i.e., selling). However, the flattening in the longer-dated part of the curve just in the last 2 or 3 days has been so fast and so big that it has caused some market participants to wonder “what is going on and why?”. Aside from the aforementioned producer hedging, we simply don't know yet.

    What we do know is that strong historical statistical relationships between inventories (both in absolute terms and in days forward covers) and the shape of the crude forward curve suggest that the recent pancaking of the forward curve has been overdone. Although our forecast stockdraws suggest that a flat curve might be fundamentally justified as we progress through H2 11, for now, that is not the case. We believe that the contango should widen again. The question is how? Will the front weaken or will the back strengthen? We are bullish not just for next year, but beyond. We forecast OPEC spare capacity to fall from around 5.5 Mb/d this year to 2.9 Mb/d in 2012 and to 2.0-2.6 Mb/d in 2013-2015. Our view is that longer dated prices are now undervalued and there is significantly more upside than downside. We reiterate the long Dec. 12 ICE Brent trade recommendation from our quarterly last week. It is an even better trade now, in our opinion.

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  5. MOG commented yesterday how strong Europe has been for PCAR.

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  6. FF- URRE...


    China spending $511 billion to build up to 245 nuclear reactors

    Share
    According to Michael Kruse, consultant on nuclear systems for Arthur D. Little, the Chinese are ready to spend $511 billion to build up to 245 reactors.

    Money is not an issue, which is different from the rest of the world. The Chinese have the capacity to deliver and they are deadly serious about achieving it,” says Steve Kidd, director of strategy and research at the London-based World Nuclear Association, the industry trade group.

    President Hu Jintao wants non-fossil fuels to produce 15 percent of China’s energy by 2020. Although the Chinese have spent plenty on wind turbines and solar panels, only a buildup of nuclear power can make that target reachable.

    “Developing clean, low-carbon energy is an international priority,” says Zhao Chengkun, vice-president of the China Nuclear Energy Association. “Nuclear is recognized as the only energy source that can be used on a mass scale to achieve this.”

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  7. SHAW?...I can't believe I didn't have to look that ticker up.

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  8. Nice breakout for FLR. I've done well trading that one. Sorry I missed it.

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  9. Thanks mark!

    Here are the U plays I'm playing: URRE/URZ both have decent pullbacks the last couple days after substantial gains for quite awhile.
    DNN has a nice trending chart. I'm holding a small position.

    Got the new Landry book today. So far I love it. Works with my new "don't micro-manage positions" set-it and forget it method.

    FF

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  10. Craig- Yeah I'm starting to get into the 'set-it/forget it' mode myself. It was a pleasure being able to wake up each morning this week without worrying about opening/closing or adjusting positions.

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  11. All cash...

    Accounts back well into all time highs thanks to huge RBY win.

    As usual unhappy with myself for not buying enough DGP, and selling too early, and not reloading on the pullback.

    Waiting for a panic to reload something......

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  12. Yes, but I'm a VERY TIMID bear :(

    I just expect something will screw up that the market neglected to anticipate...

    In the meantime, huge amounts of additional pork is being prepared in Washington, and just in the nick of time, I'm confident Santa Bernanke will arrive with a sleigh full of freshly counterfeited loot to cover it all.

    The day the vigilantes arrive won't be as joyous, I don't think.

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  13. Maybe it won't be BOND vigilantes this time, with the Fed printing to buy them ad-infinitum. Maybe instead the oil producers will finally reduce production so that the $140 a barrel economy-killer price from a couple years back is breached, and gas/other commodities zoom skyward as the dollar becomes an unstable medium of payment.

    None the less, I might be bearish in terms of real value, but in terms of nominal prices in dollars, I think EVERYTHING goes up.

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  14. CB- It will be interesting to see what Ben has to say on 60 Minutes Sunday night.

    Port- Thanks for all the great e-mails!!

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  15. Mark - you bet

    FYI, I bot 7 IWM FEB 74/76 strangles yesterday. I started to post some comments on it last night then I thought, why not write up a whole trading plan on it. Man, that's a lot of work but that's probably what the instructors would tell a 15 year novice like me to do. I worked on it for 15 min last night and I'm still not finished,

    How do you post charts on this website?

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  16. CSCO - Still getting the crap beat out of it? A few discouraging words go a long way. Sheesh, what kind of business plan is that?

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  17. Port- To post charts, the easiest way is to use screencast. It's free and easy to use/download.

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  18. CP- You up and running again? You jinxed me yesterday. No internet here for all of the trading session.

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  19. Yep, got my connection back! Quick glance now then off to other stuff, scream at ya'll tonight!

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  20. This is a test.

    http://www.screencast.com/t/O2Jibyy1

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  21. No bears, no bull.

    The market doesn't trade on news, fundamentals or macro economics. The market is emotional, people's emotions....period.

    As long as the big blue arrow points up, the markets point up, the sector points up, and stocks point up, then bullish is the only position. Like one of those TV ovens, just set it and forget it.
    From Landry's new book..."you're just a trend following moron". Yep. You got me.

    FF

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  22. Port- You want to use the "share URL" link.

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  23. Christmas with Santa - If I were a 3-yr old...a grand-prix racer would do the trick but I wish this one were painted with enamel like the others, enamel has better adhesion delamination characteristics than powder coat. The Aqua 55 Chevy has the enamel finish:

    Pedal cars don’t get any sweeter than this! Inspired by the world-famous 1950s Ferrari F2 and other racers from the golden era of Grand Prix, this heavy-gauge steel pedal racer is ready to set world-record laps around the driveway. It comes with a beautiful red, lead-free, powdercoat finish and wrapped in genuine chrome accents from its big grille up front, to the windshield, steering wheel, and side-exit exhaust pipes. It rides on chrome 9 1/2” wire wheels with knock-off spinner caps, complete with solid rubber tires for maximum grip in those hairpin turns. Designed for kids 2-6 years old and measures 49” L x 26” W x 19” H.

    http://www.genuinehotrod.com/search/department/Models-Reproductions/category/Pedal-Powered-Vehicles

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  24. I dunno. It depends on the budget and the kid. If you have more behind him that it gets played with for years and years, a toy that pricey might be a bargain because they look sturdy. Different kids might like different ones, too. That red fire truck with ladders, lights, and bell looks like the one for a 3 yr old to me. But it depends... Maybe he is more into race cars than fire trucks, I wouldn't know.

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  25. Little H would be impressed all of the fire power behind TT is searching for his Christmas present! :))

    I actually was just at Hobby Town USA (yes, that's really the name of the place. I can't believe what they have now. Holly crap!

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  26. Whatever Santa brings, no doubt some thought will have gone into the physical exercise aspects.

    After all, we don't want him looking like Santa before he's 13!

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  27. Looks like their putting the big screws to Assange. I'm telling ya', this is ALL about money :)

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  28. SOL - This one has turned up, looks like a good entry...

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  29. http://paul.kedrosky.com/archives/2010/12/today_in_wtf_is.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+InfectiousGreed+(Paul+Kedrosky's+Infectious+Greed)

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  30. Another chart test

    http://www.screencast.com/t/4kDwcftgFx

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  31. OK, that seems to work ok for charts. My first test was my word document on my trading plan on IWM and you have to download it to see it.

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  32. So why is TBT rising if the Fed is monetizing debt like lunatics?

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  33. Cheapy - It could be argued that rates are rising because the economy is improving.

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  34. Time for us all to get back at it?

    TBT- Might just be as simple as the Fed is only buying the 2's and 5's? Besides, isn't the curve usually a lot steeper than it is now? I might have that wrong, but I don't think so.

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  35. It might have been better to say "spread".

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  36. VLO might look toppy hear, but go back 3 years.

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  37. TBT - From my perspective, it's a play reserved for insiders b/c the FED can move it any direction they want with just a choice few words in a phrase.

    It's more my style to try selecting something I'm convinced is priced incorrectly without having to rely on an assessment of how well the US economy is performing as a main theme.

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  38. ATNI - Hopefully I've got them where they want me...

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  39. CP- That's just too Fing funny man.

    FWIW, the H&S on CADC does looks troubling. Let's hope she breaks up soon.

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  40. CADC H&S - I think it's a fakeout, just like the H&S on gold was.

    We'll see, I hope CADC rockets from here so I can concentrate on other things like adding to ATNI and whether or not to hold GMO.

    GMO's getting to a critical point in terms of their permits with tomorrow's hearing. It's only house money now but it's still money I don't want to lose.

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  41. CP- When your connection was down, I asked how long you think the hearing will take.

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  42. Bernanke - On 60 minutes tonight - This man looked more nervous tonight than a cat in a room full of rocking chairs. His right upper lip kept quivering and he looked extra pasty and almost sweaty.

    I guess his QE2 program's been facing a lot of criticism, and why wouldn't it considering he's about the only one who's done significant and controversial stuff while all congress can accomplish is passing a law that limits television commercial volume levels?

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  43. How long will hearing take?

    Hmm, good question, and I don't even know if we can expect any decisions from this hearing or just a formal progress report and passing of private info for public review.

    That said, to avoid contractual penalties GMO needs to begin construction by mid next year latest, and that can't happen without permits.

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  44. Interview with Hanky Panky just starting here.

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  45. Here's a link to the GMO hearing announcement, I think the purpose is just to inform the public of the most recent details of the project and then set a schedule for moving forward.

    I wouldn't be surprised if this is where the environmental impact study is released for public comment, which actually may be viewed as positive progress and move the stock briefly higher.

    http://elkodaily.com/mining/article_7fcc326c-fc0f-11df-a53b-001cc4c03286.html

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  46. CP- Thanks. In local pols that's always the biggest one.

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  47. Finally, kids are asleep and I get 30 min or so of free time.

    I'm still working on my IWM strangle plan. At first I was going to sell my puts on any pullback but now I think I'll take a chance on holding them until they are profitable or rethink my plan if I'm holding underwater options during the last week of Jan.

    TBT - I'm actually not a big fan of these leveraged inverse ETF's but I suppose this is a combo play for me. If the economy really is doing better then the 20 and 30 yr interest rates are going to have to go up. If the economy isn't doing so good then I think the FED is going to have to divert all of their bullets to the short end of the interest rate curve. Everything I've read says the FED helps the banks by keeping a steep yield curve in place. So think of this as a bet on a improving economy and/or a broken FED not being able to (or wanting to) keep long term interest rates down.

    On Friday, I also bought 200 shares of TBT at 36.93 and I sold 2 DEC 37 calls at $.91. This is not a great entry price. Over Thanksgiving I was looking at the NFLX PUT trade which I'm sad to say I'm out of now and buying TBT in my long term account. IF my TBT doesn't get called away my average price will be around 36.12 after commissions and then I'll sell some Jan or Feb calls.

    Times up. Good trading tomorrow.

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  48. Correction, I think the FED wants to keep the long term rates down too but I think they are pretty comfortable with those rates staying where they are now. Either way I'll just keep selling calls against my TBT if they don't get called away.

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  49. OK, last comment then I'm gone. ON Friday, for the long term account I bought small starter positions in CYB - long Chineese Yuan an YCS - short Yen.

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  50. bought some DGP in pre mkt and sold if for $430 profit, net.

    I dunno where things go, short term...

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  51. Long 1 x GOOG Dec 18 $570 call, long 1 x GOOG Dec 11 $570 Call this morning at $15.4 and $13, respectively. I think it zooms back up to $630 soon.

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  52. Dude from GS calling SPX 1450 EOY 2011 on CNBC.

    Some names mentioned for margin expansion.

    VOL/SLB/CSCO/X/AA. He supplied a list of 25. I'll see if I can find it later today.

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  53. CSCO - Well, it can't go to zero can it?

    SOL - The sun shines on solar today?

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  54. hola gents. taking some coin off the BTX table, better late the never.

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  55. ATNI - Still looking to add once the selling subsides.

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  56. U$D - Bounce off the 20SMA this morning?

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  57. cp, how about gmo

    it is rocketing (8:00 am in NV)

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  58. GMO - Wow, today's water hearing is actually a series of hearings stretching out over the entire week.

    Talk about comprehensive, looks like they're actually going to button up a few loose ends...

    http://water.nv.gov/Hearings/hearings.cfm

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  59. as usual, sold DGP too early

    I don't know why I even try.........

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  60. China adopting a "Steady monetary policy" in order to combat inflation.

    My point of view is global demand for yuan seems strong, some experts claim it's undervalued by as much as 40%, others claim more...

    My translation of a "steady monetary policy" involves allowing the yuan to gain relative to other currencies, as Chinese consumerism is coaxed and the pendulum of trade imbalances swings toward normalization.

    This interpretation seems consistent with Bernanke's vision.

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  61. Commodites price collapse - This message must be coming from bears, and note it has a lose time horizon attached if at all.

    Last time I checked, rate of growth in a capitalistic sense was increasing at a rate even faster than human population.

    Something tells me we're not likely to observe many instances where an overabundance of commodities exists going forward... I'm anticipating the opposite. Just my feeling commodity prices are more likely to rise than fall in practically all time horizons!

    Trying to take advantage of dips.

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  62. 30 yr. auction on Thursday. I hope I can stay in TBT until then.

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  63. Hi All, the promised DSL connection did turn out to be present in the Hawaii apartment I am renting (nice 1BR with parking near the beach for only $109/night), so I figured I will do one daily check in before we all set out to the beach.

    This morning I did a major overhaul of my portfolio. I sold all the long put option positions I had: 1 FCX December $105 put, 5 IWM January $70 puts and 1 SPY January $122 put, and instead I purchased 7 EWP January $39 puts for $3.50 and 5 DB January $50 puts for $2.45. EWP and DB have obvious downtrends since the beginning of the year (actually, their highs form a decreasing line since the 2007 peak) -- so why should I try shorting the US markets when the European markets are obviously weaker?

    A couple of other positive developments worth noting for my portfolio: UNG hit a sell limit order at $6.17 for the 300 shares I purchased during the recent pullback to $5.77. I also purchased 400 shares at $5.90 during that pullback, but I think I'll keep them for a longer period of time, instead selling HNUZD on any further strength.

    Finally, ECU.TO uncovered some new mineralization in Mexico -- an insignificant report, but in the current climate it quickly propelled ECU.TO to new highs and my portfolio to new highs, correspondingly.

    WATG and ESLR, whose weight in my port I have recently increased, are having good days as well. So overall, a nice start for my Hawaii vacation.

    Off to the beach!

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  64. Wonder who the "single trader" is that's hogging all the copper?

    http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=116214&sn=Detail

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  65. GMO move on MCP news...Nice!!

    Crude now green going into the floor close.

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  66. Damn- Take a look @ the smack down SGEN got after it filled the gap on Fri.

    JB- Nice job holding BTX for a buck more than I did.

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  67. SD was upgraded this AM by Stifel Nicolaus.
    $7.50 pt.

    FF

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  68. Ah...Thanks FF.

    ASTM- I can't believe I didn't take a shot at that one.

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  69. ASTM - Took some profits today.

    Take a look at INFN, REE, SHZ, GMXR, LIOX, GAME

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  70. David,

    If your on Oahu, check out Longhi's restaurant at Ala Moana center, one of the best. Duke's bar on the beach, Waikiki.

    t3d

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  71. Halekulani Hotel also has a nice restaurant called House without a Key with an open pavilion, good but limited menu. Very relaxing place, shorts ok.

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  72. T3D!!!! How are you man?

    Nice break above R2 on MMR with volume.

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  73. Imbalances...

    BUY- C/CHK
    SELL- BAC/JPM/AXP/WFC/MS

    'Bout all I can find.

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  74. So do we take our gains and pay taxes on them then re-enter only to lose next year or do we hold and risk the uncertainty of having to pay at a higher bracket next year?

    Boy, our taxation system sure could benefit from a little modernization. Wonder which silly law has Congress working their butts off today, sugar industry safety reform?

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  75. Sold my BYD calls at a nice 25% profit. Still holding on to a full position in the stock. Sold the rest of my BAC Calls at about a 20% profit. Sold 1/2 my BAC longs at $12.67 for 3 or so gain. Still holding on to my OPEN short position and added a few more puts right before the close. Those are down about 25%, unfortunately.

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  76. OK, since no one asked, I'll give you my take on the tax deal. Makes me think, OK, go ahead and make some money for the next 2 years. We wont kill you for it with taxes. And hold those stocks if you want, cap gains not an issue.

    I bet we get a quick sell the news event tomorrow then boom!!

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  77. I think your "boom" last till Jan 1, and then people sell to take the profits in 2011 so they don't owe the tax this year.

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  78. Mark - Any rally will last as long as interest rates don't spike. I kinda feel like we're getting closer and closer to the "No Mas" point in the bonds markets. Hopefully we'll see GDP growth race higher so we don't have to worry about this as much.

    If we start seeing our country's rates rise like the Europeans without 3.0-4% or more GDP growth, we're probably screwed.

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  79. CB- Yep, makes sense to me.

    So I see the Treas. is going to start selling their final 2.4B of C. That's what 10% of the float. C averages about 500M shares a day. Let's say they dump 10% of the average volume, or 40M shares a day. That would then take about 60 trading days to sell out. Could they dump 20% of the average each day. Let's watch the daily average to see if we can take an educated guess as to when the will run out of shares. That's our buy date.

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  80. CP- Does this change your thinking? Your the only one here that might actually hold something for a year :)

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  81. Chicken - did you throw out the name LOCM before? I might do an about face on that one...looks interesting to me.

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  82. Man, there's some pretty big blocks of C still trading AH.

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  83. CSCO - If your looking for a long, make sure to consider this one.

    I'm still concentrating my efforts on ATNI/CADC/GMO

    GMO - Jury is out on this one (figuratively), just letting my freak flag fly.

    CADC - This chart still looks like an H&S to me, not interested in adding until this pattern resolves to the downside.

    ATNI - Looks like a potential bottom, but that's what I thought twice before as it leveled out for a few sessions.

    Make it work, people!

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  84. Thank you for your restaurant tips, T3D -- I'll try to check them out!

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  85. I am back from the beach and from a nice hike to Manoa Falls. Now, while my kids are resting before the evening stroll along the beach, I'll mention something I didn't notice earlier today: my sell short stop order on 100 shares of CRM got triggered today at $141.91. Since I didn't notice it on time, I didn't set the buy to cover stop at $145, and now, with the stock at $147 after hours, looks like I'll be in for some disappointment tomorrow...

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  86. Mark, I'm good thanks, just not blogging much. I usually scan you guys every few days.

    David if your into tennis, I play at Diamond Head Tennis Center on the edge of Kapiolani Park. I'll be there Wednesday at around noon. Most everybody there knows me just ask for Joe C.

    If not, enjoy your holiday, played three hours of tennis in this beautiful weather here today.

    Happy Holidays to all. T3D

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  87. T3D -- do you live on Oahu? It looks like a paradise here!

    I don't play tennis, but I play ping-pong. I go to the topspin.com club in San Jose twice a week...

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  88. After some thinking, I decided that I don't want to worry about CRM destroying my portfolio and will instead try to cut my losses at $146.1/$146.91, slightly above the previous peak and for a maximum loss of $500. I'll keep watching CRM and will jump in when its crazy up move stops.

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