Friday, December 9, 2022
DRIP - Oil Shares Weakening
Crude has been soft and energy shares are looking increasingly weak. Energy has been one of the few areas of outperformance this year, but the bear market may be weighing and dragging it down with everything else. DRIP looks to be turning up and may have some upside short term.
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Bought DRIP $15.78
ReplyDeleteDRIP 50 week average and the channel are at the same level.
ReplyDeleteGUSH breaking down below the 50 week average. Lower low around $80 looks possible.
ReplyDeleteWow, that's quite the drop, like 40%. SC, recession first half of 2023 would curtail oil consumption, thoughts?
ReplyDeleteThe recession will return and deepen and that will affect Oil more negatively. But I think for now we have soft seasonal demand for Oil.
DeleteHow bad is the contango on UVXY/UVIX?
ReplyDeleteVIX up 10%...UVXY/UVIX flat/down 3%...crazy!
Bad! Yes very steep contango.
DeleteDrip - 19 area will close gap and run straight into descending 200sma
ReplyDeletesc,
ReplyDeleteI got out of Gush calls way to early --my own fault--there is a lack of confidence in these markets with FTX problem--let's see Powel tomorrow--if there is no confidence in his Fomc speech--we could see a bigger move then what is expected!
It was a great run. The XLE Calls I had targeted 600% they went 1,500%.
DeleteBut now Oil shares are just too high.
GUSH back kissing the 50 weekly. Should plunge again soon...
ReplyDeleteTo tell you the truth I think GUSH could lose it all. The entire move. There's gaps around $26.
ReplyDeleteTook profit sold RIG $4.34.
ReplyDeleteYou see GUSH is a strong performer in an up market but once it rolls over, and it appears that it has, the leverage turns GUSH into a big time loser.
ReplyDeletesc,
ReplyDeletelooks like Powell killed Santa---we have to wait and see?
I'm just looking for the lower low on GUSH from July for now. $80 GUSH that's my level then I take profits on DRIP.
ReplyDeletesc--
ReplyDeletenew lows ---this year-----or 2023?????
Bad end of week, 9 out of 11 opex next weeks were not good, I think DRV and SRS are very primed for move....I see Powell blowing up cap rate models... 71 first target DRV, SRS 41 blowoff top 156 on DRV
DeleteWhen do you think tops will occur in drv and srs?
DeleteI would just buy the pullbacks to build position, perhaps a small santa rally could net IYR a 86, 88 tops....then load up, it looks to be a bad Jan. to wash out indexes..
Deletesc,
ReplyDeleteI don't know how to tell you ---but new lows are in-front of us and maybe by end of year ---amzn lost a trillion in market value--musk is no longer top dog!---we maybe down a good part of next year--closing at the lows of the year is not good!
TSLA perhaps finding 102 and if there no doubt some stops are up for graps in 90's
DeleteBOIL and UNG are very close to buys, suit your poison on leverage...a touch of oversold on NG would make me big buyer....
ReplyDeleteI agree with you but NG future price is still declining. What's your BUY price target for BOIL?
Deleteunder 35 RSI on weekly....28-30 for sure buying, they are pushing it hard down now to help with inflation talk....its the widowmaker, wait for Trix daily to perhaps turn or end of selling but were close
DeleteAppreciate sharing your thought. One more thing. When do you think time to buy UVIX? I believe bitcoin crash will come first than the stock market crash. what do you thinK?
Deletebought first tranche this AM of BOIL, not large, still waiting on RSI weekly to wash out...
DeleteIf a playa and know someone with Alzheimer's or Retts or Fragile X or Parkinsons....AVXL might have the pill and really cheap after results announced and punished by big pharma hedge funds
ReplyDelete"One of Beijing's designated crematoria for Covid-19 patients has been flooded with dead bodies in recent days as the virus sweeps through the Chinese capital, offering an early hint at the human cost of the country's abrupt loosening of pandemic restrictions, reported Wall Street Journal (WSJ)"
ReplyDelete"FDA Commissioner urges parents not to stockpile children’s flu meds amid shortages"
ReplyDeleteChina Covid and a bad flu season in the US. Hording behavior of flu medicine. Looks another biotech run coming soon. Fauci retiring at the end of this month. No one to save them. Looks like a good timing for Biotech.
ReplyDeleteI opted not to bother with volatility this month due to the unfavorable contango but that doesn't mean a person couldn't short SPX. I'm short Oil shares using DRIP. GUSH in trouble.
ReplyDeleteDec 21 (Reuters) - Russian President Vladimir Putin gave his backing on Wednesday to a plan to boost the size of the armed forces by more than 30%
ReplyDeleteWinter storms now hitting 60% of the United States. Travel canceled
ReplyDelete6 degrees and wind chill -16, along with steady snow here in Michigan.
ReplyDeleteSC thanks for all of your great calls. I hope you have a great Christmas and a happy New Year for all of us!
Merry Christmas everyone😀
ReplyDeleteTo all a Merry Christmas!!! Thank you Scott and Deena!! All the best to everyone!
ReplyDeleteSC... any updates on OCGN?
ReplyDeleteIt has gotten absolutely decimated
Fauci retiring at the end of the month.
DeleteGreat stock and a good value as the pandemic continues. I'll do a full update as we have timing.
Deletesc,
ReplyDeleteLooks like Spx--3900--sometime this week --Santa rally --in January we could see a large drop --if we don't get above Spx 4000--too many problems out there--be nimble!
DRIP surging as travel collapsed Oil demand.
ReplyDeleteAn of course if New Years travel is also canceled DRIP poised for further gains.
ReplyDelete"The U.S. has officially recorded more than 100 million confirmed Covid cases, but the actual number is probably at least twice as high."
ReplyDeleteyep. that's what they mean by endemic. It's here to stay, most of us have already had it. Dr. Malhotra said recently the pandemic is over. Fortunately the current variants are much less lethal than the original.
DeleteNot sure why the public has such binary thinking when it comes to Covid. It’s not LIVE or DIE. There are 5 Covid outcomes:
Delete1. Mild Covid without LC (long Covid)
2. Serious Covid without LC
3. Mild Covid with LC
4. Serious Covid with LC
5. Death
Regarding 3 and 4, odds of Long Covid with Omicron are 5% or 1:20. Each subsequent reinfection multiplies your odds of LC (like cumulative radiation exposure multiplies odds of someone having radiation poisoning)
After 2 Covid infections, LC is 1 in 10....still pretty good right?
3 infections is 1:3
4+ infections over 50% have LC
LC is the leading driver of disability claims in 2022.
The current ‘Let Covid Rip’ mentality shown by the government is asinine. There will come a point when the working population crippled by LC reaches critical mass and then what will all these companies do with no workforce?
Just want to say that thank you everyone for sharing your thoughts and wish you all have a great year of 2023! Happy New Year!
ReplyDeleteVIX getting close. The VIX I think can get a little dip to 17 then pop towards 35 again.
ReplyDelete2021 trended up. 2022 trended down. 2023 year promising to be an interesting ride!
ReplyDeleteHappy New Years to all!!!
Happy New Year everyone. Make it a great one!🚀
ReplyDeleteHappy new year.
ReplyDeleteSC, vix 17?, then SPX?, target 4400?
VIX can move independently of SPX sometimes. So just looking at the VIX charts.
DeleteSC,
ReplyDeletevix 17?, then SPX?, target 4400?----this year?
uvix-or Uvxy--should be the biggest money maker this year!
Be nimble!
Yes it's going to be volatile year.
Deleteso close to bottom for NG, waiting for touch of 200 weekly at 3.75 before adding large....should bring 30 RSI
ReplyDeleteDRIP heating up yesterday. Ready for stronger gains next week.
ReplyDeleteFor energy this is going to be a volatile year. A good year to be Oil and gas trading both short and long.
ReplyDeleteThere is a historical imbalance currently where Oil companies shares are trading too high for the commodity price of Crude.
This typically would be rectified in two ways. Crude prices and natural gas rise while share prices of Oil companies fall.
we are in the same place --right before --we started to collapse last year---2022----funny ----let's wait and see?
ReplyDeleteWhat is the deal with Natural Gas? Is it ever going to bottom out?
ReplyDeleteI have a position in a 2x leveraged Natural Gas ETF (HNU on the Toronto Stock Exchange.
I'm down but not out since I can still dollar cost average in my position but........this decline is getting extreme! I know the U.S. and Europe are having unusual warm weather so far but winter is really just beginning. There's another 3 months of winter remaining. Surely it's not going to stay warm all winter or is it. Has winter been cancelled and no one told me?
"For The First Time In 100 Years, There’s No House Speaker In Congress"
ReplyDeleteThat's a government collapse!
ReplyDeleteWhat’s that old saying? A fish rots from the head down. Government collapsed a long time ago from corruption/bribery. This is just the symptom not the cause.
Deletesc,
ReplyDeleteThis can cause a Black Swan effect into March---be careful!
I don't know when!
Total capitulation or a slow grind down? It seems like everyone is predicting at least a 20% drop from 3800s. What happens when we actually get some good news, joes out, interest rates cut etc?
DeleteWhat a difference a week makes...
Deletesc,
ReplyDeleteVix, under 20, Uvxy is under 6. Is the market resetting at SPX 4000?
You nailed it! How much higher...
DeleteThere VIX 18 getting close to the level I'd mentioned.
ReplyDeleteand after?, do you have targets for vix ?
DeleteYes VIX forming a low here 17 then 30 again.
Deletewhen?
DeleteGood question Charles. I pondered the same thing, when. I think we'll see ups and downs through quarterly earnings then maybe a selloff to last until early in March and bottom?
DeleteBought LABU $8.65.
ReplyDeleteLABU has finished consolidation and going back up to test August highs of $13
DeleteAny thoughts on BOIL?
ReplyDeleteHuge downtrend. Where's the bottom. You might get some bounces. Good luck!
DeleteIve been buying small positions at technical levels on the way down. There may be a flush to 3 bucks but I don't think it will go any further
DeleteAnd then hoping for a rally to at least 50 dma
DeleteI think your pretty safe buying here, the flush to 3.50 though still didn't push wkly to oversold which seems nuts, it will go back up, its a commodity....
Deletemy average is now 12.50, So really not worried at this time....
DeleteAs Dennis said, 30 seems reasonable. but 40 is not for sure.
DeleteIts still weak at 3.50, no real rebound. That why I think it may test 3, on a quick flush and then bounce. Get your low ball bids in because it will be quick
DeleteI just realized that I might misunderstand you. Are you looking at Nat Gas chart or Boil? Also 50 dma means weekly or daily? Because there's huge gap between them like $30 vs. $60.
Delete$natgas
DeleteEurope scrounged up enough gas to make it through this winter but they won't make it through next.
DeleteDennis, I did hold and bought largest lots in 9's, my average is now lower than price today.....the 30 RSI was first good sign of move almost over
DeleteSC... what is your ultimate target high for UVXY?
ReplyDeletethanks
We can look to make a swing trade soon in volatility. The VIX futures curve is remains a disadvantage for UVXY but with a sizeable move up in VIX it can be overcome.
DeleteOn a VIX run to 30 we can get a decent pop in UVXY. Later much more.
Delete1:5 RS in UVIX next week
DeleteSo the formula for UVXY/UVIX targets is as follows:
DeleteVIX target divided by current VIX price x UVXY factor 1.5 x current UVXY price
Or
VIX target price divided by current VIX price x UVIX factor 2 x current UVIX price
So for example: VIX 30
30/20x1.5x 5.75 = $13 UVXY price @ VIX 30
Or
30/20x2x4.50 = $13.5 UVIX @VIX 30
There is also contango/ backwardation to consider but that is the rough estimate
"Yellen warns of U.S. default risk by early June, urges debt limit hike"
ReplyDeleteThe country warns of default even BEFORE the recession hits. That is the problem with this looming recession.
ReplyDeletesc,
ReplyDeleteWe are coming to the reflection point, direction will be decided, either up or down. I guess you see this area, my point, uvix and uvxy maybe big players in this move is there any insight in moving forward this year, or are you waiting for the market to pick a direction?
Getting tired of waiting for VIX to move. I believe the Fed is using SVIX/SVXY to suppress volatility and prop up the market. Soon their games will end...maybe some contagion from Japanese bonds?
ReplyDeletePayday,
ReplyDeleteVery true--not this month so far--be nimble!
Sc ---any insight?
SPX can rally some more short term and we can expect it to be choppy and up. However, the recession will return and once we reach that tipping point SPX rapidly decline.
DeleteI've been thinking about volatility. Early on in the Trump presidency I had stated that we would see high volatility. We did see VIX in the 80's and it made sense. Trump had a lot to say and things frequently got heated. We saw it in the markets. High volatility.
ReplyDeleteBiden is in many ways the opposite. He has little to say. The country lacks direction and policies are incoherent. The stock market is fumbling and volatility is relatively low.
While Biden is in office we won't see volatility anywhere near Trump, but Volatility will have its moments especially with recession approaching.
ReplyDeleteBought UPRO $36.50. Short term.
ReplyDeleteRsi room to run to 70s.
Deletehttps://stockcharts.com/h-sc/ui?s=UPRO
Thanks Deena!
DeleteBBBY also have been doing some trading. It may see a small bounce here but may wait for a $2 gap fill before $6.
ReplyDeleteNotice UVIX continuing to decay. It's extremely difficult to go against and fight that contango. Only when the time is right...
ReplyDeletehttp://vixcentral.com/
UVIX has consolidated today
ReplyDeletesc,
ReplyDeleteAre you saying uvix has bottomed?
or the manipulation in the vix, our markets has come to an end,
Down is up and up is up. To something goes extremely wrong, we are in the most manipulated situation, I have ever seen.
UVIX completed the reverse split yesterday.
DeleteI ask again but what is going on with natural gas?
ReplyDeleteThere is more than supply and demand issues here. It's very suspicious. There's something nefarious going on in the Natural Gas market.
The Freeport LNG plant in Texas had a fire back on June 8, 2022 which took them offline. The initial restart of Freeport's liquefaction facility is scheduled for the second half of January 2023 pending federal regulatory approval. Why haven't we heard anything yet? If Freeport can start exporting U.S. gas again this will help stem the bloodbath in the price of natural gas.
The colder weather in the United States has not stopped natural gas from falling either. Nothing seems to matter regarding natural gas. It just continues to decline day after day, week after week, month after month. Look at a chart. I've rarely in my lifetime seen such a steep decline. It's literally almost straight down since the middle of Dec 2022. How does anything fall 5%, 6%, 7% or more day after day?
At the same time as Natural Gas prices plunge I got the most expensive gas bill I've ever had in my lifetime 2 days ago. I live in Japan and we use gas for hot water and cooking. It was crazy expensive while my natural gas ETF is getting slaughtered!
There has to be a bottom in here soon because at this rate natural gas drillers will have to shut down. And as I write this natural gas is falling further on the futures markets.
That's a disconnect, gas company making bank.
DeleteGeez, never thought it would break 3. Im looking for 2.5 now to load up
DeleteMarkets starting to thaw. SPX breaking up through 4,000
ReplyDeleteA golden cross coming?
DeleteYes SPX daily Golden cross is imminent.
Deletesc,
ReplyDeleteI am guessing you are looking for higher Numbers???
Yes I think SPX is up for a few months.
Deletesc,
ReplyDeletebbby?
BBBY looks good for possible small bounce next week. However I still expect a $2 gap fill to occur in February. BBBY is good for $5 to $6.
DeleteIn my view BBBY Is good to trade while SPX is trending up. Having said that it should be avoided later in the year when SPX tips down again.
Volume spiked way above average on UNG on a big down day (Thurs, Jan 26). Is that capitulation in natural gas?
ReplyDeleteKen,
ReplyDeleteYes you are correct with “something” going on with natural gas.
Who produces the most natural gas? Russia
According to Biden WH:
Russia = bad
Ukraine=good
So lower natural gas prices “hurt Russia”.
How to lower gas prices?
Well Europe et al. loaded up last summer and fall with NG at $10. Now they are full up.
Then (coincidentally) take off Freeport offline with an explosion to concentrate LNG in North America and suppress the price.
Then drag feet with repairs (watch Freeport come on line miraculously as soon as European NG stores get too low for comfort).
People were expecting European reserves to get used up during the harsh winter. Jan-Feb was also when Russia was supposed to make their full assault into Ukraine.
Well, the “mild” winter was created using Geo-engineering to help the European allies along and screw Russia both on the military front and profits from natural gas. And yes, weather manipulation using geo-engineering really does exist. However, I suspect with all the fuckery done to create this mild winter in January it is about to bite them in the arse with a super stratospheric cooling event in Feb.
Expect NG prices to also start rebounding in Mar-May as soon as planting season starts and high fertilizer demand. They can’t use geoengineering to make fertilizer.
And as SC has mentioned, Europe could cover NG storage in 2022, but won’t in 2023....so ban gas stoves to dampen NG demand so Europe can refill on the cheap.
BBBY bounce as anticipated!
ReplyDeleteWow, great call SC!
DeleteNew chart posted!
ReplyDelete