WNR – YAY!
VLO – there is nothing they can do to support themselves if gas and oil keep going in opposite directions like they are now. I’m only mostly negative on them anyway, they are one of my favorite cover plays as well. CNBC seems to be responding to my posts too and is talking up backwardation like it validates strong current demand but that’s an asinine way to look at it when the long contracts are falling. They are talking about backwardation when front month contracts rise FASTER than longer contracts, a situation you can assume will catch up over time but that’s NOT what’s happening now. Of course all those technical terms assume some sort of purity of market movement that has something to do with supply and demand.
WFR pins down almost every month, non-news articles are a great catalyst (see Cramer’s classic video on how hedge funds manipulate the media at will by planting stories). That’s why they are so great to sell calls against! With the SOX up they are a nice buy opportunity on the Aug $65s, now $2, that were $4 yesterday. I’d wait and pick it up on momentum up if the markets hold strong and they hold $60 but this is very likely a flush looking at the very big volume spikes at the open. They may hold this through expiration (earnings are 25th) so you could go longer, like Oct $65s for $4 and sell the July $60s for $1.40 and the 2010s are very cheap with the $60s at $19 (look how much premium you get for 4 days of the July $65s!). XXX
COP was just kidding with that opening. Oil sector heading south in general – markets may follow, especially with much of brokers’ gains coming off energy sector investments! So forget the XLF for now, ignore the Dow and if the SOX fail it’s all over for the Nasdaq! XXX
NMX – if they oil bubble pops and no on wants to trade 200,000 contracts 500,000 times a day anymore, their revenues could go to half really fast but yes, in hurricane season, they can clean up on volatility.
Uh oh, oil move down starting to look like a flush, going to cash out those TSOs – too far ahead. XXX