Japanese Banks: The Best Play In 2010

Yesterday I wrote about the japanese banks on my Investment Outlook for 2010. I agree with Marc Faber, buying japanese stocks and specially japanese banks can be one of the great investment opportunities of 2010. Its the pure contrarian play.

There are a few japanese banks traded in the US: Mizuho Financial Group, Inc. (ADR) (Public, NYSE:MFG), Mitsubishi UFJ Financial Group Inc (ADR) (Public, NYSE:MTU), Sumitomo Mitsui Financial Grp, Inc.(ADR) (Public, OTC:SMFJY) and Nomura Holdings, Inc. (ADR) (Public, NYSE:NMR). That is probably the easiest way to play this investment theme.

I will end this tumultous year with a magnificent quote from Robert Rhea, "No profession requires more hard work, intelligence, patience, and mental discipline than successful speculation."

I wish a Happy New Year to all members of this community.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Investment Outlook 2010

I decided to write my own Investment Outlook for 2010. Of course, I am a very short term trader and very flexible and nimble in my action. So in my trading an Investment Outlook merely serves as a roadmap, where the main trading ideas are organized.

Anyway, one of my trading resolutions for next year is to trade less, wait for panic buying or panic selling to set in and then go the other way. I plan to be very agressive in these trades. I did far too many trades in 2009 and while I had a spectacular first 4 months, I only recovered my trading form in December after a so-so May-November period. I think I got lost in so many trades, that in some instances I lost the perspective. Even though it was a great year for me, but it could have been much, much better...

So, here we go.

HMS Investment Outlook 2010

S&P 500 Index: After an impressive bear market and a mega bull market, 2010 will be dull; market will seasaw between 1,000 and 1,200 points with nothing really going on; It will be a buy low and sell high type of market where all the mini panics should be bought;

Oil: It will trade range bound between 65 and 85 dollars a barrel; It will look mighty strong at 85 dollars but it will be unable to break out, it will look weak as everything at 65 dollars but it will find support;

Gold: Gold has topped and it will not print new highs in 2010; Gold stocks will suffer badly as consequence; The correlation Dollar Up - Gold Down will persist;

US Dollar: The dollar recent strength will continue in 2010, surprising most market participants; Euro will be one of the worst major currencies as trouble in Euroland keeps unfolding;

Treasuries: The yield of the 10-year U.S. Treasuries will fall and ends the year at approximately 3%. Despite the current consensus that higher inflation and interest rates will weigh on the fixed-income markets, bonds surprisingly outperform stocks in 2010;

Agriculture Commodities: it will mostly depend on the weather as always; but if the weather gets tough, we can have a big spike in agriculture commodities like corn, wheat and rice;

Japan: I think Japan will outperform every other market and nobody will be able to explain its strength; its just historically so depressed that the only way to go is UP; Japanese Banks will be the best bet of 2010 (I have stolen this idea from Marc Faber);

Refiners (Valero Energy (VLO), Western Refining (WNR), Tesoro (TSO), Sunoco (SUN) and Frontier Oil (FTO)) will double or triple from current levels, even if they make new lows in early 2010; The downtrend from 2007 to date is nearly over;

Please post your ideas for 2010 in the commenting section. Other suggestions are appreciated.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Western Refining (WNR) With Record Short Interest. Is A Major Short Covering Rally Around The Corner?

Western Refining (WNR) fell 2.7% in today`s session and is nearing its all time closing low of 4.65. Meanwhile the short interest in this stock is at all time highs, with 14,363,641. (link)

I am moderately bullish on the refiners, specially the major ones, like Valero Energy (VLO) and Tesoro (TSO). But Western Refining (WNR) is a pure speculative stock and a major short covering rally may be just around the corner. When we trade this kind of stocks with decent size we are always one trade way from making a killing and one trade way from making lasting damage to our trading account. I will try to play this short covering rally if it develops. Maybe in Livermore`s way, if my timing is right and I can be agressive and sit tight...

For those that are going through a rough patch, maybe you can get some inspiring thoughts from Winston Churchill,"Success consists of going from failure to failure without loss of enthusiasm."

Have a great trading day.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Four Trading Days Left In `09

The Christmas is gone and we are already on the highway to the New Year. There are only four trading days left in `09 and no big moves are expected. I will be on my trading desk this week but I will keep my trading light.

One of my trading resolutions for 2010 is to trade less and be much more selective in my trades.

I don`t know if you are a fan of Alexander Elder`s work, but I will leave you with one of his thoughtful quotes, "The goal of a successful trader is to make the best trades. Money is secondary."

Wen Pledges to Cool China Property Prices, Resist Yuan Pressure is a Bloomberg article that I recommend.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Vision And Action. This Is What Good Trading Is All About.

"Vision without action is a daydream. Action without vision is a nightmare." - Japanese proverb

In my view, good traders must have vision and also the decisiveness and the courage to act.

I wish you all a merry christmas and I hope you can enjoy the holidays with your family.

PS: Can`t wait to open the gifts...I bought an awesome leather jacket for my wife and a gold necklace. I hope she likes it.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Best Commodity Performers Of The Decade

This decade was characterized by a bull market in commodities. Although most commodities were on a steady upward trend from 2002 to late 2006, it was in 2007 and mid-2008 that the rally really caught fire.

Crude oil futures hit a record intraday high of 147 dollars per barrel on July 2008, nearly tripling its price from levels in mid-January 2007. Most of the gains, were quickly evaporated as the financial crisis brought down commodity prices to their lowest levels since January 2005.

In the past decade, the best performing commodity has been sugar, posting a gain of 316%, the second best performing commodity of the decade has been cocoa, with a gain of 288% and Gold was third with a 278% appreciation.

The worst performer in the commodity complex was palladium losing nearly 19%.

I wish a Merry Christmas to all readers of this blog and to all members of this trading community.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Buying Japanese Banks. The Pure Contrarian Play.

Marc Faber told the Economic Times recently that buying japanese banks and japanese stocks in general are the most pure contrarian play and his top investment pick going forward.

I am also bullish on the japanese stock market (not on the japanese economy) and I am looking into the banks as well for a 2010 long play.

Some of the biggest japanese banks have ADR`s traded in the US. Mitsubishi UFJ Financial Group Inc (ADR) (MTU), Mizuho Financial Group, Inc. (ADR) (Public, NYSE:MFG) and Sumitomo Mitsui Financial Grp, Inc.(ADR) (Public, OTC:SMFJY) all trade in the american exchanges. The problem with this play is that it may take a long time for these stocks to begin trending up but I think its almost impossible to lose money in the medium to long term in these battered japanese banks.

I am playing defense for now, but this may very well be my next big play alongside the refiners that are already doing great. Tesoro (TSO) rallied 4%, Valero Energy (VLO), Western Refiniong (WNR), Sunoco (SUN) and Frontier Oil (FTO) also rallied nicely. I am calling the reversal on the refiners. They are all showing me some nice profits and the move is just beginning.

I will leave you with a picture of one of my favourite Ferrari`s, the 512 BB. Beautiful, isn`t it?

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Are We Going To Have A Santa Claus Rally?

The only question still open for this year is if we are going to have a Santa Claus rally in the stock market. The Santa Claus rally is measured by the performance in the seven trading days that start with Christmas Eve and end with the first two days in January:

The S&P has increased an average of 1.5 percent during the seven trading days that start with Christmas Eve and end with the first two days in January since 1950. That's the widely recognized period for the Santa Claus rally, as first identified in 1972 by Stock Trader's Almanac founder Yale Hirsch, Jeff's father.

Stocks went up in 12 of the last 15 of those year-end periods.

I believe all is set for a rally because volatility is dropping and the seasonality is quite strong. What will happen in January is a different story but we still have time to figure it out.

Have a great trading day.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Iran - Iraq Tensions Easing. How Will Oil Respond?

The Iran - Iraq tensions that was supporting the oil market late last week seems to be resolved,

"Iraq said Sunday that Iranian soldiers who had been occupying part of a disputed Iraqi oil field had withdrawn, ending a three-day standoff that has strained relations between the countries. But Labeed Abawi, Iraq’s deputy foreign affairs minister, said some Iranian troops remained inside Iraq late Sunday. “They withdrew from the field, but they are not completely out of Iraqi territory,” he said." in NY Times

Crude Oil Futures ended the week at 73.360 (USD/bbl.) rebounding from a 69 dollars a barrel low printed early in the week.

PS: The Santa Claus Rally measured (good reading)

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Marc Faber`s Investment Outlook 2010

Dr. Faber likes the japanese stock market and will avoid US Treasuries,

Article: Marc Faber`s Picks For 2010

Marc Faber also commented the oil market and gave his long term outlook:

"Believe me crude oil is still the cheapest alternative for energy. (...) So in emerging economies, in the last 18 months although we had a huge collapse in economic activity globally their oil demand still growing and in the developed world it is going down. I am convinced that in Asia the oil demand over the next 20 years will more than double so we consume today in Asia 22 million barrels a day. We will go to something like 40 million barrels. The oil production in the world is 85 million barrels of oil a day and every year we find new oil but we use much more oil than we find new reserves so essentially the reserve level in the world is going down. So eventually I suppose we will have much higher prices."

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

I Am Trading Like A Sniper. Only Shooting For Great Opportunities.

I have been trading lightly over the last few trading sessions as I am preparing for 2010. I have even made a large withdrawal from my trading account into a money market fund to avoid any trading temptations. One of my goals for the next year is to be more selective in my trades while keeping the agressiveness that characterizes my trading. My idea is to be out of the market waiting for a big trading opportunity and them go "all in". That is the sniper trading approach:

"The sniper may wait hours or even days in a hide, waiting for the perfect shot. Wet, cold, cramping, and simple boredom are the sniper's greatest enemies. It is a rare individual who can keep still for extended periods of time and then function with the utmost skill and accuracy. How do they do it? Many keep themselves mentally occupied and active, even while they're physically still.

One characteristic I've found among successful traders is that they function effectively when they're not trading. When markets become very quiet and range bound, they occupy themselves with a variety of activities, from sharing ideas with peers to conducting research. Traders who do not tolerate inactivity well inevitably feel the need to trade, often when there is no objective edge present. For them, losing money is less onerous than experiencing boredom." in Trader Feed

Several members of this blog have been trading the "buy the last 15 minutes" setup. I am pleased with their success. I first came across that strategy in a Martin Pring book, "Technical Analysis Explained". Then I did my own research and began trading it my way. It has been a money maker for me over the last few years.

Have a great weeekend.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Time To Sell Ford (F) Short?

I found this very interesting article about the best stock performers since the last market peak in 2007. Surprisingly Ford (F) is in that list. Yesterday I sold some Ford (F) stocks short. Its not a big position by any means but I may add to it in the near future.

"The S&P 500 is down 30% from its all-time high reached on October 9th, 2007. The average stock currently in the S&P 500 is down 23% from its price on 10/9/07. Just 77 stocks in the S&P 500 are up since 10/9/07, and below we list the ones that are up more than 10%. These names have not only managed to stay afloat over a very tough period of time for the market, but they've shined.

As shown, priceline.com (PCLN) is up the most of any S&P 500 stock since 10/9/07 with a gain of 135%. Southwestern Energy (SWN) is the only other stock up 100% or more. Mastercard (MA), Amazon.com (AMZN), General Mills (GIS), Apple (AAPL), and even The Gap (GPS) are all on the list. Every name that is up more than 10% since the market's peak back in 2007 is noteworthy, but none is more noteworthy than Ford Motor (F). After everything that the US auto industry has gone through over the past couple of years, Ford Motor is now up 13% from where it was on the day the S&P 500 hit its record high of 1,565.15 on 10/9/07. That's hard to believe." in Bespoke Website

The refiners did well yesterday despite the sell off in the market. I am still holding a moderate line on several names and planning to further to these names. Its a low risk idea with lots of potential profit. Its quadruple witching today, so expect some volatility in the early going.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Meredith Whitney Lowers GS Earnings

The stock has been under pressure recently and there are rumors that Goldman Sachs employees are driving the stock down because this year they will be paid in stock and they want cheap stock, of course. I do not know if there is any truth to this but it makes some sense.

Bespoke also wrote about Goldman Sachs stock recently and its decooupling from earnings estimates:

"Up until mid-October, Goldman's stock price was moving hand in hand with its earnings per share estimates. As shown in the chart below, this relationship between earnings estimates and stock price has diverged significantly since the stock peaked. Goldman's stock has moved from about $190 down to $165, but its Q4 earnings per share estimate has remained steady and even increased slightly over the past couple of months." in B.I.G. website

The full story on Meredith Whitney lowering the estimates on Goldman Sachs and Morgan Stanley can be read here.

Goldman Sachs is trading lower almost 2% in pre-market.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Trading Like A Sniper.

I found this very interesting analogy between a trader and a sniper,

"In a previous post, I compared the trader to a sniper, blending self-control with a high level of aggression and decisiveness. There is one other respect in which traders are like snipers: both engage in periods of intense performance activity punctuated by potentially long periods of inactivity."

I am feeling like a sniper now, because I am basically out of the market while I wait for this year to come to an end and I will only trade if a perfect trading opportunity comes along. I sold short a few emini S&P 500 futures contracts after the Fed statement but maybe a 1/10 of a my usual trading line. Just to keep in touch with the market rhythm.

I am keeping an eye on the refiners as I am expecting a big rally to start in the next few weeks. Maybe after a general market correction. I still hold a few small positions on Valero Energy (VLO), Western Refining (WNR), Tesoro (TSO), Sunoco (SUN) and Frontier Oil (FTO) but nothing to really make a big impact on my trading account. Activity will pick up again in my trading early 2010.

PS: Is the stock market topping? : Rydex Money Flows Show A Top In The S&P 500

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Bernanke Signals What The Fed Will Say Tomorrow. Nothing New.

Ben Bernanke wrote a response to Senator Jim Bunning where he basically said that inflation is no threat:

"Federal Reserve Chairman Ben S. Bernanke said the U.S. unemployment rate and the level of unused manufacturing capacity signal “substantial” slack in the economy and will help keep inflation low.

"“The bulk of the evidence indicates that resource slack is now substantial,” Bernanke said yesterday in a written response to questions from Senator Jim Bunning, a Kentucky Republican. “I continue to expect slack resources, together with the stability of inflation expectations, to contribute to the maintenance of low inflation in the period ahead.”" in Bloomberg.com


So I think nothing new will come out of the FED statement tomorrow afternoon. I will be ready to act if something scares the market but I think there will be no opportunies to trade either way.

I closed my long oil position with almost a full point profit per contract and I will sit on my hands, or sit on cash to be more precise for the next couple of weeks unless something really, really good comes along.

Have you watched the cartoon I`ve posted yesterday? Quite funny, wasn`t it?

For today I will link the new annotated edition of Reminiscences of a Stock Operator:

Reminiscences of a Stock Operator is the fictionalized biography of perhaps the most famous financial speculator of all time-Jesse Livermore. This annotated edition bridges the gap between Edwin Lefevre's fictionalized account of Livermore's life and the actual, historical events, places, and people that populate the book. It also describes the variety of trading approaches Livermore used throughout his life and analyzes his psychological development as a trader and the lessons gained through hard experiences.

- Analyzes legendary trader Jesse Livermore's strategies and explains how they can be used in today's markets
- Provides factual details regarding the actual companies Livermore traded in and the people who helped/hindered him along the way
- Explains the structure and mechanics of the Livermore-era markets, including the bucket shops and the commodity exchanges
- Includes more than 100 pages of new material

Reminiscences of a Stock Operator has endured over 70 years because traders and investors continue to find lessons from Livermore's experiences that they can apply to their own trading. This annotated edition will continue the trend. in Wiley

One thing I can guarantee you. This is the best book you will ever read on trading.

PS: What Is Jim Chanos Shorting? : Chanos Is Bearish On China, Ford And Fiat

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Crude Oil Futures Close Lower For The 9th Session.

Crude futures closed lower Monday for the ninth consecutive session. The dollar has stabilized and inventories are higher then average for this time of the year. These are the reasons behind this sell off.

Crude Oil futures crude for January delivery settled 0.36, or 0.5%, lower at 69.51 dollars a barrel on the NYMEx, the lowest level in over 2 months. The hefty level of crude stocks in the U.S. continues to keep oil prices under downward pressure, with oil market participants becoming increasingly unconvinced that the upturn in the global economy will be enough to lift oil consumption in the near term and clear that overhang.

Analysts surveyed by Dow Jones Newswires expect the inventory data to show crude stocks fell by 2.1 million barrels last week, gasoline stocks rose by 1.1 million barrels and distillates dropped by 900,000 barrels.

Regarding my own trading, I closed some of the refiners I was carrying from lower prices as I was a bit disappointed with the weak rally on the sector despite the Exxon/XTO Energy deal. I will keep holding a moderate line and buying refiners on weakness and selling them on strength. I will keep my trading light till the end of the year as I want to rest a bit and begin trading in 2010 fully energised.

I invite you to watch this very cool cartoon. Its a metaphor of a bear (bearish trader) trying to understand how the cross trainer (markets) work and getting angry at it when it behaves differently from what he expects. Very funny for all the bears out there.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Exxon Mobil Goes Shopping. More Consolidation To Come In The Energy Sector?

Exxon Mobil (XOM) is buying XTO Energy (XTO) in a deal that represents a 25% premium for XTO`s shares. I think we will have a wave of consolidations in the energy space including the refiners. I am holding Frontier Oil (FTO), Valero Energy (VLO), Tesoro (TSO), Western Refining (WNR) and Sunoco (SUN).

"Exxon Mobil said Monday that it has agreed to buy XTO Energy, a natural gas producer, for $31 billion in stock and the assumption of $10 billion in debt, the largest energy merger in nearly 10 years. Under the terms of the deal, Exxon will pay XTO shareholders .7098 common shares for each of their XTO shares, or about $51.69 based on Friday’s closing prices. Exxon says the deal represents a 25 percent premium for XTO’s shares." in WSJ.com

We will have the FED meeting tomorrow and Wednesday so I am expecting an upward bias on the stock market till Wednesday right before the FED statement.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

John Paulson Is Bullish On Gold. Why?

John Paulson has been hitting the news recently. He is launching a new gold fund where he will invest a big personal dollar sum. Here are the reasons for his gold bullishness:

"An institutional money manager friend sent over the presentation document for John Paulson’s new gold fund. On Slide number 2, right after the title, presents the well-regarded money manager’s rationale for opening his fund next month:

-Printing money will lead to paper currency depreciation

-Demand for gold as a reserve currency will increase

-Demand will overwhelm supply, causing price to rise sharply" in The DailyCrux

I own a small stake on Novagold (NG). I took advantage of this ongoing gold correction to get back to my favourite gold stock. I have extracted lots of money from this stock over the last few years and is certainly a personal "lucky stock".

For those who enjoy good poetry I highly recommend Fernando Pessoa, a portuguese poet. Visit his Amazon`s page here.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Are You A Momentum Trader On The S&P Futures?

Don Miller is a Short-Term S&P E-Mini Trader and member of the CME who bested the top CTAs in 2008. In his website he referred recently that the Globex session has been better for momentum traders then the US general trading session that has been rather lackluster in terms of market pace and rhythm:

"As I've mentioned many times this year, the most fertile - in terms of momentum - S&P trading environment continues to occur between the hours of 4:00am and 9:00am ET. Many of my highly profitable trading periods have occurred during those times, as opposed to the U.S. general session which has often been rather lackluster in terms of market pace and rhythm." Don Miller

I am long oil as I am trying to take advantage of the 8 consecutive days sell off. I think we can have a moderate rebound early next week. But my major trading position is on the refiners. I am holding Tesoro (TSO), Valero Energy (VLO), Western Refining (WNR), Sunoco (SUN) and Frontier Oil (FTO). These stocks are establishing a base after a 2 and a half years downtrend and are benefiting from the improved "crack spreads".

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

John Paulson Is Bullish On Equities

Very interesting comments made earlier this week by one of the most famous hedge fund managers in the US:

“Today our net long exposure is perhaps the highest it has ever been in our portfolio. We still find a lot of compelling long investments on the equity side.” John Paulson, Hedge Fund Manager

Among the stocks Paulson likes are Bank of America (BAC), Comcast (CMCSA) and Heidelberg Cement. He described B of A as “a great buy today” at $15.50. He added that the worst phase of the credit crunch for the banks is behind us

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Crude Oil Futures Close Lower For The 7th Session.

Crude oil futures prices closed lower for a seventh straight trading sesion, ending at a 2 month low. Light, sweet crude oil for January delivery on the NYMEx settled down 0.13 USD, or 0.2%, at 70.54 dollars a barrel, after trading in a range of 69.81 to 71.39 a barrel.

This settlement price was the lowest since October 7, while the intraday low was the weakest since October 8. The 7 day sell off in crude oil futuresis the longest string of declines since a nine day drop from December 12 to December 24 last year. Prices dropped 7.83 dollars a barrel, or 10%, in the latest streak.

The refiners I am holding in my portfolio performed very well today. Valero Energy (VLO) was up 3%, Tesoro (TSO) was up 4%, and Sunoco (SUN) traded up 1.8%. The smaller names dis less well with Frontier Oil (FTO) up 1.20% and Western Refining (WNR) down 0.4%. I think refiners are beginning to reverse their long term downtrend and may surprise on the upside.

As I was think about a good vacation, Brazilian beaches came to mind. I love going to Brazil and I have been there 4 times already. I highly recommend Brazil for a vacation. The weather, the food, the beaches and the people make Brazil an amazing traveling destination. Check it out.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Refiners: Time To Buy

Recommended reading on Refiners: http://www.theglobeandmail.com/globe-investor/investment-ideas/buy-valero-for-2010/article1393840/

“With all the major headwinds facing the refining picture, how can I possibly pick Valero as one of my top stocks for 2010? It's because the history of oil is one of quick changes, and I believe the refining picture is destined to change very soon. ” in The Street.com

This is the most interesting part of the article:

"What we have are all the makings of a true fundamental shortage of refined products that can change quickly at the first sign of increased demand. I believe we'll begin to see that demand, along with a whittled supply in the spring of 2010.

But once this trend is in place, it'll be too late to buy the stock. Now is the time, when the fundamental picture couldn't possibly look worse. Valero was a $70 stock at the beginning of 2008. It's trading a bit more than $16 dollars now. And to help you wait, it's still delivering a very safe 3.5 per cent dividend. It's a value story.

There's also a trader's maxim that one should buy when nobody wants it and sell when everyone does, and that's a big part of what makes Valero one of my top energy stocks for 2010."

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

How Are Energy Stocks Performing?

Here is a snapshot of the performance of the energy stocks in the S&P 500 (from B.I.G. website):

"As shown, Range Resources (RRC) is trading the furthest below its 50-day at -14.41%. Other names trading more than 10% below their 50-days include Chesapeake Energy (CHK), Tesoro (TSO), Baker Hughes (BHI), Smith International (SII), ENSCO (ESV), Murphy Oil (MUR), and Valero (VLO)." in B.I.G.

Oil fell for the 6th consecutive session, selling off hard again today. I am playing a bounce in oil for tomorrow going long NYMEX Crude Oil Futures.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Are Energy Stocks Oversold?

Energy stocks are a bit oversold and only 10% of them are trading above their`s 50 day moving average:

from Bespoke Investment Group

I am holding some refiners, Valero Energy (VLO), Tesoro (TSO), Western Refining (WNR), Sunoco (SUN) and Frontier Oil (FTO) that in my opinion is a takeover candidate. Anyway, they have been trending down for two and a half years and the crack spread is beginning to move up again improving their refining margins. Probably I am getting in a bit early, but I want to play the next upleg on this sector so I have to position myself.

Have you seen Hulk`s goal in the Champions League last night? Awesome.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Art Cashin: Stocks Can Have A Ridiculous Move

Markets fell for the third time in the last four sessions closing at 1090 (S&P Futures). Art Cashin made some very bearish comments earlier today:

"You can sense the tension in the air: A lot of people who've got the dollar carry trade on...know if this thing should suddenly break out, they could get trapped very badly."

Cashin reiterated his fear that a "geopolitical move" in one of the world's flashpoints could shake the markets, producing a "ridiculous move" in stock values."

NYMEX Oil futures fell Tuesday for a fifth straight session, extending their losing streak to the longest in five months reacting to the surge in the US Dollar. Oil is now a bit oversold and may rebound a bit in the next few trading sessions.

I am playing the refiners. I am bullish on the refiners because crack spreads are rising and these stocks are ending a two and a half years downtrend. We can witness a big surge in Valero Energy (VLO), Tesoro (TSO), Western Refining (WNR), Frontier Oil (FTO) and Sunoco (SUN) in the next few months. I am playing the big swing on these names.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

S&P 500 Stuck In A Trading Range. Where Will It Break?

The S&P 500 has been forming a trading range for the past month. The million dollar question is, "where will it break, upward or downward?

Don Miller also refered the 2 consecutive outside days, last thursday and friday as a very rare event and reminiscent of 2000`s top and of March`s bottom. But I agree with Art Cashin. The US Dollar is still king and will show us the way.

Have a nice trading day.

PS: still playing the refiners (Valero Energy (VLO), Tesoro Corp. (TSO), Sunoco (SUN), Frontier Oil (FTO) and Western Refining (WNR)), buying them on weakness and selling them on strength.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Bernanke On The Economy

Ben Bernanke made some comments on the state of the US Economy earlier today in Washington. These are the highlights:

“We still have some way to go before we can be assured that the recovery will be self-sustaining,” the Fed Chairman said. “My best guess at this point is that we will continue to see modest economic growth next year -- sufficient to bring down the unemployment rate, but at a pace slower than we would like.”

“The economy confronts some formidable headwinds that seem likely to keep the pace of expansion moderate”

In response to a question from the audience about the direction of interest rates, Ben Bernanke said: “Right now we are still looking at the extended period given that conditions remain: low rates of utilization, subdued inflation trends, and stable long-term inflation expectations.”

“Obviously there has been some signs of strength recently, we will want to factor that in as we talk about this next week.”

My interpretation is that nothing has changed in the mindset of the Fed Chairman. Low interest rates and the progressive debasement of the US Dollar are the official politics of the Federal Reserve. But the market sold off a bit and is closing near 1,100. I am still on the sidelines waiting for a good opportunity to trade either way.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Is Gold Worth Buying? I Don`t Think So.

Anyone who bought gold at the last big spike in the eighties is off 79% when adjusted for inflation. I believe that the same thing will happen to those who bought gold in the last few weeks.

Gold’s best year in three decades has yet to match the returns of an interest-bearing checking account for anyone who bought the most malleable of metals coveted for at least 5,000 years during the last peak in January, 1980.

Investors who paid $850 an ounce back then earned 44 percent as gold reached a record $1,226.56 on Dec. 3 in London. The Standard & Poor’s 500 stock index produced a 22-fold return with dividends reinvested, Treasuries rose 11-fold and cash in the average U.S. checking account rose at least 92 percent. On an inflation-adjusted basis, gold investors are still 79 percent away from getting their money back. in Bloomberg.com

I am out of the market as I am waiting for a clearer picture. The economy is firmer then anyone expected, at least according to the jobs munbers but the threat of inflation and rising interest rates may keep the stock market from rallying further. I am without any bias and I will wait for an overbought or oversold condition to get back to the S&P Futures trading. I am also resting and regaining my composure after a great trading raid over the last few weeks.

Have a great trading day.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Saudi Oil Minister Says Prices Are In The Right Range

Saudi Oil Minister said he is very pleased with current`s oil price range:

Crude oil prices are in “the right range” and there is no need to reduce inventories, Saudi Arabian Oil Minister Ali al-Naimi said ahead of an OPEC meeting scheduled for later this month. “Inventories are coming down, the price is perfect, and all investors, consumers, producers -- they’re all very happy,” Al-Naimi said today in Cairo, where Arab oil ministers are holding an annual meeting. in Bloomberg.com

When these OPEC officials make these kind of statements it is because oil is expensive relative to the supply and demand situation. I would not sell it short straight way but I will keep a close eye on this market.

Friday was a good trading session for me as I started the day with no positions and sold short after the data around 1113 on the S&p Futures. I closed my shorts at midday for a nice profit. I also traded the government bond futures on the short side and I also closed them just before the closing bell. I am having a very good trading run.

I will keep shorting long term government bonds futures over the next few trading sessions. If the economy is getting stronger as the employment report suggests treasury yields will have to keep rising and shorting 10 and 30 years government bonds futures will be the best way to play it.

Have you checked the refiners? I think they are starting to trend up.

I will leave with "The National`s - Apartment Story" video. One of my favourite tracks.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Good Jobs Number. Time To Sell US Long Term Government Bonds.

I was on the sidelines waiting for the data and I was stunned when Bloomberg printed -11,000 and the revisions to October`s and September`s payrolls numbers.

What did I do? I sold short 30 Year Government Bond Futures and 10 Year Government Bonds Futures. In the equity markets I waited for the obvious short term rally on the news and sold short at 1113 on the S&P Futures. I think that the dollar rally and the fear that liquidity may be removed earlier then expected may create a little panic on Wall Street. I will keep you posted on my actions through out the day.

Have a good trading day. Fasten your seat belts.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Plunged On The Short Side. Nice Run.

I sold S&P Futures heavily in the beginning of the session and added after the miserable ISM Services data. The services sector is the biggest sector of the US economy and it seems to be losing momentum.

Other factors contributed to the intraday sell off, there was a rumor circulating that the jobs number to be released tomorrow will be bad and the transaction tax proposed by the democrats. The tax is the most concerning of all this factors and if the market senses that this nonsense may go forward we can expect a market crash.

I will keep trading on the short side but I closed all my positions on the closing bell as I will reassess markets tomorrow morning. There isn`t a single reason to be bullish. The market is overbought, markets leaders are losing momentum, the trader tax is looming, long term interest rates will have to rise and valuations are not attractive. So buy at your own risk.

I will leave you with a band that I love, DMB. Fantastic sound.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Market Leaders Beginning To Fade?

Apple (AAPL) and Goldman Sachs (GS) stocks have been the most prominent market leaders of this stock market rally. They are both losing momentum. Is this a warning signal? Is the green light for the bears to plunge on the short side?

"A couple of weeks ago, we noted that Goldman Sachs had been uncharacteristically underperforming the market. Throughout the rally, both Goldman and Apple had been market leaders, but Goldman was curiously left behind as the S&P 500 hit new highs in November. Now it looks like Apple is beginning to do the same. Since peaking in mid-November, Apple has been struggling, and it is getting close to breaking below its 50-day moving average just as the overall market attempts to make new highs once again. The S&P 500 is on a 3-day winning streak, but Apple (AAPL) is on a 6-day losing streak." In BIG website

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Economic Data Coming Out. Markets Will Move.

Major economic reports will be released today plus the Bernanke speech. We can have a volatile day in currencies and stocks:

Ben Bernanke Speaks

Jobless Claims
8:30 AM ET

ISM Non-Mfg Index
10:00 AM ET

EIA Natural Gas Report
10:30 AM ET

Have a good trading day.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Beige Book Is Non Event. Western Refiners (WNR) Rallies Nicely.

This is the FED`s assessment of the US economy released through the Beige Book:

Economic conditions continued to improve across much of the country in late October and early November, but a weak labor market and deteriorating commercial real-estate sector remain dark spots in the U.S. recovery. In its latest beige book report, the Federal Reserve said conditions across many of its 12 districts have "improved modestly." Consumer spending has risen, home sales picked up and upward wage pressures were subdued, the Fed said. in WSJ

I did a few scalps on the Nasdaq Futures and I was able to win a few points on the short side at midday and then traded back and forth till the closing bell managing a few more ticks. It was almost like a "training" session as I was committing little capital to these trades.

One of my refiners, Western Refiners (WNR) rallied strongly today even though the sector was trading slightly lower. I am expecting to make a killing on this one, Jesse Livermore style.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Dow Jones Performance (%) By Decade

I found this very interesting chart of the percentage performance of the Dow Jones Index decade by decade in Bespoke website:

After all the ups and downs, all the booms and bust of the last 10 years we are basically where we were 10 years ago. Remarkable, isn`t it?

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

API Data Is Bearish.

The American Petroleum Institute, an industry group, reported a 2.9-million-barrel increase in oil inventories, a 3.4-million-barrel addition to gasoline stocks and a 1.1-million-barrel build in distillate inventories in the week ended Nov. 27. Refinery utilization was estimated to be 80.1% of capacity. Oil futures traded down after the report`s release.

As you know, I am a big sports cars fan. I am looking into a Jaguar E Type, a car that on its release Enzo Ferrari called it "The most beautiful car ever made". You can see a 1966 E-Type here. Is it going to be my own Christmas gift?


Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Took The Day Off. Went Shopping With My Wife.

Things have been going very well for me and I decided to take a day off and went for a shopping session with my wife. She was delighted and I enjoyed the day as well. I am taking a breather after some frenetic and very sucessful trading activity in the last few days.

I wasn`t surprised with today`s rally and with the upmoves in the dollar and in oil. Several market strategists completely downplayed the events in Dubai and markets rallied. We will have plenty of economic reports this week and the all important jobs report on Friday. So probably I am going to keep my trading light unless something really good comes along.

January crude oil futures settled 1.09 dollars, or 1.4%, higher at 78.37 USD a barrel on NYMEx. A second consecutive day of big gains for oil marked a full reversal from late last week, when futures plunged slightly below 73 a barrel over concerns that state-owned investment fund Dubai World was on the brink of bankruptcy, potentially triggering a chain reaction of failures echoing last autumn's financial-sector meltdown. However, oil prices approached or breached 80 dollars a barrel almost every trading day in November while only settling above that price once. A massive global oil surplus is preventing crude from hitting new highs for the year so we may look for resistance levels to short it.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.