Archive for 2010

Potential Second Spill Found Near BP Blown Out Oil Well, BP Evaluates Potential Break Up Opportunities

Potential Second Spill Found Near BP Blown Out Oil Well, As BP Evaluates Potential Break Up Opportunities

Courtesy of Tyler Durden

GRAND ISLE, LA - JULY 17: People sport fish off a pier at dusk July 17, 2010 in Grand Isle, Louisiana. Louisiana has reopened most of the waters of the Gulf of Mexico to recreational fishing. The cap sealing the BP oil well in the Gulf of Mexico has remained sealed in the testing period offering a glimmer of hope in the disaster. (Photo by Mario Tama/Getty Images)

In case you missed George Wahsington’s update, here it is straight from the AP horse‘s mouth. And, if this story is true, we can only hope one is not long BP stock or short the CDS.

NEW ORLEANS — A federal official says scientists are concerned about a seep and possible methane near BP’s busted oil well in the Gulf of Mexico

Both could be signs there are leaks in the well that’s been capped off for three days.

The official spoke to The Associated Press on condition of anonymity Sunday because an announcement about the next steps had not been made yet.

The official is familiar with the spill oversight but would not clarify what is seeping near the well. The official says BP is not complying with the government’s demand for more monitoring.

And if that wasn’t enough, some more bad news from Sunday Times, via Reuters:

Under-fire oil company BP Plc (BP.L) has started canvassing shareholders about a restructuring in the wake of its Gulf of Mexico oil spill which could include a break up of the business, the Sunday Times reported.

The newspaper, citing unnamed BP insiders, said options included selling the group’s refineries and petrol stations, scaling back its U.S. operations and ramping-up in-house engineering instead of outsourcing.

These are on top of the sale of about 10 percent of its assets, including its stake in the giant Prudhoe Bay field in Alaska, the Sunday Times added.

A BP spokesman said it did not comment on rumour and speculation.


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The Dark Horse Hedge

THE DARK HORSE HEDGE 7-18-10

By Scott at Sabrient and Ilene of PSW

Friday gave us a real-time example of why we use Hysteresis* and confirmations from our technical signals, MACD 12-26-9 and RSI 14-day, to select and monitor the tilt (long-short ratio) of the Dark Horse Hedge’s virtual portfolio.  

The SHORT tilt Friday allowed us to make +1.37% from our 6 SHORT, 3 LONG positions while the S&P 500 gave back -2.88%.  The economic data out Friday of course played a large roll in the failure of our indicators to turn from short to BALANCED.  A sharp decline in the University of Michigan Consumer Index to 65 in July compared poorly with a June figure of 76 and Briefing.com’s estimate of 74.5.  Google’s earnings miss didn’t help either as the S&P 500 fell through its short-term support area to close at 1064.88.  The MACD reading is currently at -3.56 and RSI 14-day at 42.85.  The preponderance of evidence heading into the July 19 week is that the market needs to find support in the 1040 range.  

Despite the poor economic data that pushed the market lower on Friday, 19 of 23 S&P 500 companies reporting thus far reported better than projected EPS, and 15 of them beat revenues as well.

Earnings reports will continue to flow in this week.  In our virtual portfolio Western Digital Corp (WDC, long position) reports profits on Tuesday while USG Corp (USG, short position) and Sun Trust Banks Inc (STI, short position) report their losses on July 22.  We will continue to monitor the market action and look for guidance on entering new positions. Key support areas appear to be 1040, 1022 and then 995.

Dark Horse Hedge maintains 10% cash for swing trade opportunities and we are highlighting one for entry on Monday at the Open.

SHORT Terex Corp. (TEX) at the Open Monday.  

TEX will report its latest loss figures on Tuesday, July 21.  Twenty analysts project losses ranging from -$.15 to -$.44 with an average of -$.30.  Looking back over the last four quarterly announcements, we see analysts often underestimate Terex’s losses.  For example, in March 2010, analysts estimated -$.52 while the actual loss was $.64. In December 2009, analysts targeted -$.49 and TEX delivered -$.89.  In September 2009, the loss was projected to be $.34 and the company came in at -$.77.  In June 2009, investors were looking…
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DARK HORSE HEDGE

DARK HORSE HEDGE 7-18-10

By Scott at Sabrient and Ilene of PSW

Friday gave us a real-time example of why we use Hysteresis* and confirmations from our technical signals, MACD 12-26-9 and RSI 14-day, to select and monitor the tilt (long-short ratio) of the Dark Horse Hedge’s portfolio.  

The SHORT tilt Friday allowed us to make +1.37% from our 6 SHORT, 3 LONG positions while the S&P 500 gave back -2.88%.  The economic data out Friday of course played a large roll in the failure of our indicators to turn from short to BALANCED.  A sharp decline in the University of Michigan Consumer Index to 65 in July compared poorly with a June figure of 76 and Briefing.com’s estimate of 74.5.  Google’s earnings miss didn’t help either as the S&P 500 fell through its short-term support area to close at 1064.88.  The MACD reading is currently at -3.56 and RSI 14-day at 42.85 (bullish signal is above 50).  The preponderance of evidence heading into the July 19 week is that the market needs to find support in the 1040 range.  

Despite the poor economic data that pushed the market lower on Friday, 19 of 23 S&P 500 companies reporting thus far reported better than projected EPS, and 15 of them beat revenues as well.

Earnings reports will continue to flow in this week.  In our portfolio Western Digital Corp (WDC, long position) reports profits on Tuesday while USG Corp (USG, short position) and Sun Trust Banks Inc (STI, short position) report their losses on July 22.  We will continue to monitor the market action and look for guidance on entering new positions. Key support areas appear to be 1040, 1022 and then 995.

Dark Horse Hedge maintains 10% cash for swing trade opportunities and we are highlighting one for entry on Monday at the Open.

SHORT Terex Corp. (TEX) at the Open Monday.  

TEX will report its latest loss figures on Tuesday, July 21. Twenty analysts project losses ranging from -$.15 to -$.44 with an average of -$.30.  Looking back over the last four quarterly announcements, we see analysts often underestimate Terex’s losses.  For example, in March 2010, analysts estimated -$.52 while the actual loss was $.64. In December 2009, analysts targeted -$.49 and TEX delivered -$.89.  In September 2009, the loss was projected to be $.34 and the company came in at -$.77.  In June 2009, investors were…
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Plan on 850 on the S&P 500 (SPY)

Plan on 850 on the S&P 500 (SPY)

Courtesy of John Nyaradi at Wall Street Sector Selector

Man holding crystal ball in front of his face

Weekly stock market and ETF,  Exchange Traded Fund commentary from Wall Street Sector Selector

I never make predictions because no one can foretell the future and no one has a crystal ball.  However, after last week’s market action and economic developments and looking at both technical and fundamental indicators, I believe that S&P 850 is a reasonable probability in the weeks and months ahead. 

The fun could start as early as Monday, July 19th, as the International Monetary Fund made a surprise move on Saturday and walked away from talks with Hungary regarding the IMF 20 Billion emergency loan that the IMF has been offering that country.  A shade of Greece contagion is very likely to rattle not only Hungarian assets but possibly global markets, as well, as Hungary will not have access to this loan without further commitment to cut their deficits which are 80% of GDP.

Beyond this surprise news, last week’s news was mostly dismal, at best, and so let’s take a closer look at why S&P 850 might be a reasonable destination as well as factors that might be in play to change our current course. 

Looking at My Screens 

Two of our three portfolios are currently profitable for the year while the S&P is now down -4.6% Year to Date.  Overall, the downtrend remains in place and we remain in the “Red Flag Flying” mode, expecting lower prices ahead.  However, this manic market has proven again and again its ability to turn on a dime and so we will maintain a dynamic posture in response to events as they develop. 

Last…
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David Einhorn: “We Have Avoided The Volatility Of The Schizophrenic Market”

Courtesy of Tyler Durden

From Greenlight’s Q2 Letter, courtesy of Dealbreaker.

"The S&P500 fell about 7% by early February. Then, it went straight up, rising about 16% by late April only to give back all those gains and a bit more by the end of June. Just after the economy finally appeared to be recovering earlier this year, a series of weak economic data have put the recovery into question. What will happen next? We have no idea. We have maintained a conservative and defensive portfolio, with a small net long position throughout and have almost entirely avoided the volatility of the schizophrenic market…We made some gains on our macro positions (most notably gold, which appreciated from $1,113 to $1,244 per ounce during the quarter)." – David Einhorn

Full letter:


Greenlight Einhorn

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Breaking: Seep Found Near Blownout Well, BP Not Complying With Government Demands for More Monitoring

Courtesy of George Washington

Washington’s Blog

AP notes:

A federal official says scientists are concerned about a seep and possible methane near BP’s busted oil well in the Gulf of Mexico

 

Both could be signs there are leaks in the well that’s been capped off for three days.

The AP article implies that the seeps are new since BP shut off the oil flow into the Gulf as part of its “well integrity test”, but doesn’t directly address that issue.

But as I pointed out on June 24th:

The Washington Post made a very important point yesterday:

Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University, said additional leaks are a possible source of deep-sea plumes of oil detected by research vessels. But this part of the gulf is pocked with natural seeps, he noted. Conceivably the drilling of the well, and/or the subsequent blowout, could have affected the seeps, he said.

 

“Once you started disturbing the underground geology, you may have made one of those seeps even worse,” he said.

Remember that geologists have said that if the well casing is substantially breached, the oil and methane gas will find a way through fractures in the surrounding geology and make it into the ocean. For example, the Houston Chronicle notes:

If the well casing burst it could send oil and gas streaming through the strata to appear elsewhere on the sea floor ….

Obviously, if there are natural oil or gas seeps nearby, there are already pre-existing channels up to the seafloor … so that may very well be the path of least resistance for the subterranean oil to flow up to the seafloor.

 

Therefore, if there were a substantial breach in the well bore, nearby natural oil and gas seeps could very well increase in volume.

 

Because BP would like to minimize leak estimates to minimize the damages it has to pay under the Clean Water Act, BP would undoubtedly try to pretend that the nearby natural seeps always had the same volume. In other words, the owner of the oil drilling prospect where


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Curious Déjà Vu: Explosions & Oil Spill in China

Courtesy of asiablues

Just when BP finally seems to have got a handle on the Macondo well with the successful containment cap, multiple explosions and oil spill are taking place--halfway around the globe--in China.  

Chinese CCTV reported that six explosions hit two oil pipelines in northeastern Dalian’s Xingang Harbor (see map) on the evening of July 16, while a 300,000 ton foreign oil tanker was being unloaded.

Over 2,000 fire fighters, along with 219 fire trucks were mobilized for the rescue mission.  The subsequent blaze had burned for 15 hours before finally being extinguished on Saturday morning.  So far, no casualties were reported.

The oil spill had contaminated about 19 square miles (50 square kilometers) off the coast of Liaoning province. A government official was quoted saying it was unclear how much oil had leaked from the pipelines. 

However, on July 17 evening, nearly 20 vessels started performing oil contamination removal process, according to Epoch Times .  Over-5-million-tons of foam and 20-tons of dry powder fire extinguishers were used, which China National Radio indicated could have some environmental impact.  

China National Petroleum Corp. (CNPC), the country’s largest oil company, is the owner of both pipelines. China Daily reports that CNPC indicated on its website that the oil had stopped leaking after a valve was closed. It said the oil spill has been “fenced off and contained.”    

The BP Gulf of Mexico disaster has elevated all oil related incidents to immediate top priority status by global governments. In China’s case, this has aroused the attention of President Hu Jintao and Premier Wen Jiabao, with Vice Premier Zhang Dejiang rushing to the site Friday night to direct operations. 

Dalian is the only ice-free port in northeast China with important commercial and strategic interest throughout the history of China.  WSJ says the pipelines were links between ships and oil tanks on land.  CNPC has 20 storage tanks that can hold 1.85 million cubic meters of oil in a special tax zone at the port.  

So, the explosion and fire could have easily been another disaster had it not been contained and extinguished in a timely manner. Meanwhile, an official investigation team has been established, but the cause of the pipeline explosions is yet to be determined.

Nevertheless, judging from the strategic importance related to Dalian and the CNPC oil pipelines; one could not help but wonder about this curious oil spill déjà vu.

Economic Forecasts & Opinions





Cheeky’s Futures Charts – Jul 18

Courtesy of RobotTrader

“Here we go!!!  Futures are open.  It’s Showtime!”

Indexes

 

 

Energy

 

 

Metals

 

 

Agricultural commodities

 

 

Bonds

 

 

Currencies

 

 

 

New Zealand

 

 

Australia

 

 

Japan

 

 

Korea

 

 

Hong Kong

 

 

Dubai

 

 

Shenzen Stock Exchange

 

 

Shanghai

 

 

India

 

 





Here we go again

Courtesy of naufalsanaullah

Original piece here.

Risk assets plunged today, with Nikkei futures seeing a 250 point drop Thursday overnight, as the Yen was bid heavily across all pairs, with funds flocked to safe haven and carry trades reversing course. Several commodity FX yen crosses are on the precipice of head and shoulders breakdowns, after selling off heavily back to their necklines. Today’s biggest mover in FX was CAD/JPY in fact, which is very deflationary. Commodities in general are losing their fundamental bid. Intermarket corrs are at 1987 crash highs, eliminating the diversification premium investors offer for commodities. And global growth slowdowns, austerity, and deflationary threats in Eurozone, USA, & Japan are bearish for commodities, the nations that export them, and risk in general.

Speaking of commodities, the Aussie Dollar suffered big selling as well, both against JPY & USD. The skyrocketed nominal housing prices and very hawkish rate policy since crash lows could turn out to be more bearish than bullish if exports to China slow, as Chinese economic data and the one-time nature of its stimulus package suggest. With the Baltic Dry Index posting record consecutive losses, global trade probably will not be a “way out” of bearish developments in the forthcoming months.

On a technical basis, the AUD/USD seems to have double-topped at its June highs and was unable to break up to or back above its 200DMA (which price has had very high confluence to), leading to its current bear flag formation. As my technical analysis and FX Concept’s Jonathan Clark’s views suggest in the charts below, it appears to be a great short. The AUD/JPY does as well, as it found selling at its 55DMA and appears primed for a move down to 72.50 and 70.00 support levels, the latter of which corresponds to April 2009 levels.

AUD/USD

AUD/USD

AUD/JPY

And with the Aussie Dollar, so goes copper, as it is primed for a breakdown through the 2.60-2.70 zone, after finding selling at its 55DMA.

/HG

Even gold has bearish chart developments, breaking down through its 55DMA and subsequently forming a bear flag. The long gold/short euro trade on sovereign debt crisis was a popular and crowded position many traders took during the euro’s plunge but with the recent diminished-interbank-funding-fueled euro rally, many of these positions will most likely be facing liquidation and unwinding. The chart below exemplifies the recent inverse relationship between…
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The Dollar This Week

Courtesy of Bruce Krasting

There will be a Hungary story in the papers tomorrow. If you read ZH you know that already. I hope no one was long the Forint.

I don’t know what to make of this story. On one side you could say it looks bleak. It appears that the IMF is playing hardball. This from Christof Rosenberg who runs the IMF mission for Hungary:

“Our talks with the Hungarian government have been interrupted as we have not been able to find enough common ground and there remain too many unresolved issues to take this review to our board”.

“Interrupted” is about as strong a language as the IMF uses. Normal language might be; “Take it or leave it.” Bad news there. The other side of this is, “what are the fighting about?” It would appear to be nothing, and therefore resolvable.

Hungary’s government tried to persuade the fund to accept a deficit target of as much as 3.8 percent of GDP for 2011 instead of 2.8 percent. (Bloomberg)

So the flap is about whether Hungary can be at 3% or 4% deficit. That’s interesting. The US is around 10%. Most of Europe is currently double the IMF target as well. If the US were to impose measures that limited our deficits to 2.8% we would implode in less than one year. There would appear to be a fairness issue inside of this. After all, the US has the largest vote at the Fund. And it is also the biggest deficit spender.

The dollar closed Friday at some very interesting levels. I called the long DLREUR trade a “rat trap” six big figures ago. But I am quick to admit I did not see this big a move in the cards. My comments on those closing numbers:

YENDLR at 86.55. This is a toilet bowl price. This is screaming short dollar. It is a terrible trade. It does not matter. This looks lower to me.

DLRCHF at 1.0514. Look at this thing on the charts. Now put the macro story on top. This could easily go to par. It has not held that level before. This time could be different.

DLREUR at 1.2908. What can I say? On paper you could argue 1.10. But the market says no. And the market…
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Zero Hedge

Enemy Of The People?

Courtesy of ZeroHedge. View original post here.

Via The Zman blog,

There has never been a time when normal people did not know the media was biased and biased in a predictable direction. For every non-liberal in the media, there were at least ten liberals. The ratio was probably higher, but then, as now, some lefties liked to pretend they were independents or some third option.

The media used to invest a lot of time denying they had a bias and an agenda, but the only people who believed them were on the Left, which had the odd effect of confirming they had a bias and an agenda.

...



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Phil's Favorites

A 2019 Earnings Recession?

 

A 2019 Earnings Recession?

Courtesy of 

Shout to Leigh!

On the new Talk Your Book – Josh Brown is joined by Leigh Drogen of Estimize, one of the leading providers of crowdsourced financial and economic data to talk about the trend in corporate profits that could potentially lead to an earnings recession later this year.

What is the thing that Leigh is seeing in the data that Wall Street isn’t yet picking up on? What segment of the stock market is most at risk? Why is the crowd smarter than the narrow consensus of Wall Street analysts?

Check out Estimize ...



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ValueWalk

D.E. Shaw Investment Calls For Leadership Change At EQT

By ActivistInsight. Originally published at ValueWalk.

Elliott Management has offered to acquire QEP Resources for approximately $2.1 billion, contending the oil and gas explorer’s turnaround efforts have done little to lift the company’s share price. The company responded and said that a thorough review of the proposition is imperative in order to properly act in the best interests of shareholders, “taking into account the company’s other alternatives and current market conditions.” The news came only a month after Travelport Worldwide agreed to sell itself to Siris Capital Group and Elliott’s private equity arm Evergreen Coast Capital for $4.4 billion in cash and two months after Athenahealth was bought by Veritas and Evergreen for $5.7 bi...



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Kimble Charting Solutions

Gold & Silver Testing Important Breakout Levels!

Courtesy of Chris Kimble.

Gold and Silver from a long-term perspective have created a series of lower highs over the past 8-years. Will 2019 bring a change to this trend? A big test is in play!

Gold since the lows in 2016 has created a series of higher lows, while Silver may have created a double bottom.

Gold & Silver are currently facing break attempts a (1) and (2). These falling resistance lines have disappointed metals bulls for the past few years.

The direction of Gold and Silver weeks and months from now should be highly influenced by what each does as they are attempting to break above important resistance levels.

To become a member of Kimbl...



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Insider Scoop

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Courtesy of Benzinga.

Related DIS Despite Some Risks, Analysts Still Expecting Double Digit Growth From Communications Services In Q4 ...

http://www.insidercow.com/ more from Insider

Digital Currencies

Russia Prepares To Buy Up To $10 Billion In Bitcoin To Evade US Sanctions

Courtesy of Zero Hedge

While the market has been increasingly focused on the rising headwinds in the global economy in general, and China's economic slowdown in particular, while the media is obsessing over daily revelations that Trump may or may not have colluded with Russia to get elected, a far more critical, if underreported, shift has been taking place over the past year.

As we reported in June, whether due to concerns over draconian western sanctions and asset confiscations following the poisoning of former Russian military officer Sergei Skripal, or simply because it wanted to diversify away from the dollar, Russia liquidated virtually all of its Treasury holdings in the late spri...



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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...



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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's failure based on his personality, which was evident years ago. This article, written in 2017, references a prescient article Bill wrote before Trump became president, in July, 2016, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Biotech

Opening Pandora's Box: Gene editing and its consequences

Reminder: We are available to chat with Members, comments are found below each post.

 

Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from www.shutterstock.com

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.

...

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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