Financial Market Forecast is Looking Bleak
Mideast violence is pushing oil higher, while Europe's economy is bringing the commodity lower, reports CNBC's Sharon Epperson, with Addison Armstrong, Tradition Energy.
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Monday, July 23, 2012
Financial Market Forecast is Looking Bleak
This week could be a huge one for stocks and commodities. This morning the dollar index is taking another run at our weekly chart resistance level. If it can break out and start to rally this week then a possible 4-6 week sell off in stocks and commodities may be just starting.
And we know just how we are going to play it when it does!
Watch the morning video or at least the last 4 minutes where I cover the SP500 intraday and daily chart which shows the main cycles. The video clearly explains where the market seems to be trading in terms of cycles and what we should expect this week and in the coming month.
Read and watch Chris' > "Financial Market Forecast is Looking Bleak"
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Halliburton Announces Second Quarter 2012 Earnings [HAL]
Halliburton’s consolidated revenue in the second quarter of 2012 was $7.2 billion, compared to $6.9 billion in the first quarter of 2012. Consolidated operating income was $1.2 billion in the second quarter of 2012, compared to $1.0 billion in the first quarter of 2012. All international regions experienced double digit percentage revenue and operating income growth from the first quarter of 2012. North America margins were negatively impacted, however, by rising costs and pricing pressure in production enhancement services.
“I am pleased with our second quarter results, which set a new revenue record for the total company and all three of our international regions,” commented Dave Lesar, chairman, president and chief executive officer.
"We continue to be successful in executing our strategy of market share growth while maintaining a focus on industry leading returns. From a global perspective, we achieved record revenues in eight of our product service lines, with four of them. Cementing, Completion Tools, Multi Chem, and Testing and Subsea, generating record operating income as well.
“Consolidated revenue for the second quarter was up over 5% sequentially. The international rig count was up 3% during the quarter, compared to a 15% increase for our international revenues. North America rig count decreased 17%, while our North America revenues were essentially flat compared to the first quarter. Key strategic market share gains in international operations, continued capacity additions, and strong utilization contributed to this outperformance.
Read the entire Halliburton earnings report
Just Click Here to get your free trend analysis for HAL
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Andrew Su: Crude Oil to Head Below $90 This Week
Andrew Su, CEO of Compass Global Markets says that WTI crude prices will head lower this week as speculation of more quantitative easing from the Federal Reserve eases.
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Sunday, July 22, 2012
Schlumberger [ticker SLB] Announces Second Quarter 2012 Results
Income from continuing operations attributable to Schlumberger, excluding charges and credits, was $1.4 billion. An increase of 8% sequentially and 20% year on year. Diluted earnings per share from continuing operations, excluding charges and credits, was $1.05 versus $0.96 in the previous quarter, and $0.86 in the second quarter of 2011.
Following Schlumberger’s previously announced sale of both the Wilson distribution business and its equity ownership interest in CE Franklin Ltd. (CE Franklin), the Distribution segment has been reclassified to discontinued operations. All prior periods have been restated accordingly.
Schlumberger recorded charges of $0.02 per share in the second quarter and $0.01 per share in the first quarter of 2012 and $0.05 per share in the second quarter of 2011.
Oilfield Services revenue of $10.45 billion was up 5% sequentially and increased 16% year on year. Pretax segment operating income of $2.1 billion was up 8% sequentially and increased 20% year on year.
Schlumberger CEO Paal Kibsgaard commented, “Solid activity growth and a consistent focus on execution led to results that continued to strengthen in the second quarter.
Read the entire quarterly report
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Friday, July 20, 2012
Put Your Seatbelts On, It’s About To Get Bumpy!
It was just about a year ago today when the S&P was sitting at fresh highs and everyone was enjoying a rather upbeat summer. It was a nice summer, the markets were calm, and there was a surreal sense of optimism. Then, in the matter of a few days, things got real ugly, real quickly.
Well, it doesn’t seem like too much has changed since then. We’ve had mixed earnings reports, ever evolving worries in Europe, and the always looming fiscal mess in the U.S. Once again, are we in the calm before the storm?
It looks like things in Europe may start to heat up again. Riots turned violent again in Spain as protestors took to the street over austerity measures. With seemingly no resolution, a sinking tourism industry in the PIGS, and a typically hot summer August on its way, all signs point to further turmoil.
Technically, we’re currently seeing a number of bearish indicators setting up in the S&P and other markets. First, on the weekly chart of the SP500 Futures we can see what appears to be a bear flag formation developing. Note the recent rise in price since the beginning of June on decreasing volume.
Weekly SP500 Futures Chart Patterns
Daily Chart Elliott Wave Count For SP500
A second look at the S&P daily illustrates a down trend and 5 wave count bounce in the market, both are currently pointing to lower prices.
>> Completion of two intermediate cycles within longer term 5 wave pattern
>> Downwards wave one from April until beginning of June followed by wave 2 correction from June until present.
The wave two correction typically proceeds the longest wave, wave three, which is pointing towards a large move down (Note that in the first shorter term cycle the downwards wave three was the longest by far. We expect the same to be repeated in the longer term cycle.)
SP500 BIG PICTURE Wave Count
A look at the longer term view once again using the weekly chart, again supports our argument for a major correction. We have just completed a 5 wave pattern since the 2009 lows, and it is looking more like a big pull back is due. Remember most major trends end after the fifth wave.
Copper Weekly Chart Patterns
If we take a look at the copper ETF, “JJC”, we are provided with further justification. Copper is often referred to as “Dr.Copper” due to its industrial application and is known to be a leading indicator for equity markets. Copper has significantly underperformed equity markets and is likely leading the next move down. A look at the weekly chart which points to a rather dismal outlook. There is a major head and shoulder patterns developing.
Major Market Pattern Analysis Conclusion:
Last summer turned into a bloodbath with nothing but red candlesticks taking stocks and commodities sharply lower. If you haven’t already, it’s time to lock in some profits. Short, intermediate, and long term cycles are pointing down, and the increasingly bearish technical developments cannot be ignored. We’ll be looking at entering multiple shorts potentially in the very near future once/if setups present themselves.
Buckle up and stay tune for more....
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Well, it doesn’t seem like too much has changed since then. We’ve had mixed earnings reports, ever evolving worries in Europe, and the always looming fiscal mess in the U.S. Once again, are we in the calm before the storm?
It looks like things in Europe may start to heat up again. Riots turned violent again in Spain as protestors took to the street over austerity measures. With seemingly no resolution, a sinking tourism industry in the PIGS, and a typically hot summer August on its way, all signs point to further turmoil.
Technically, we’re currently seeing a number of bearish indicators setting up in the S&P and other markets. First, on the weekly chart of the SP500 Futures we can see what appears to be a bear flag formation developing. Note the recent rise in price since the beginning of June on decreasing volume.
Weekly SP500 Futures Chart Patterns
Daily Chart Elliott Wave Count For SP500
A second look at the S&P daily illustrates a down trend and 5 wave count bounce in the market, both are currently pointing to lower prices.
>> Completion of two intermediate cycles within longer term 5 wave pattern
>> Downwards wave one from April until beginning of June followed by wave 2 correction from June until present.
The wave two correction typically proceeds the longest wave, wave three, which is pointing towards a large move down (Note that in the first shorter term cycle the downwards wave three was the longest by far. We expect the same to be repeated in the longer term cycle.)
SP500 BIG PICTURE Wave Count
A look at the longer term view once again using the weekly chart, again supports our argument for a major correction. We have just completed a 5 wave pattern since the 2009 lows, and it is looking more like a big pull back is due. Remember most major trends end after the fifth wave.
Copper Weekly Chart Patterns
If we take a look at the copper ETF, “JJC”, we are provided with further justification. Copper is often referred to as “Dr.Copper” due to its industrial application and is known to be a leading indicator for equity markets. Copper has significantly underperformed equity markets and is likely leading the next move down. A look at the weekly chart which points to a rather dismal outlook. There is a major head and shoulder patterns developing.
Major Market Pattern Analysis Conclusion:
Last summer turned into a bloodbath with nothing but red candlesticks taking stocks and commodities sharply lower. If you haven’t already, it’s time to lock in some profits. Short, intermediate, and long term cycles are pointing down, and the increasingly bearish technical developments cannot be ignored. We’ll be looking at entering multiple shorts potentially in the very near future once/if setups present themselves.
Buckle up and stay tune for more....
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& videos to stay ahead of the crowd.
Click here to visit The Gold & Oil Guy.com
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Geology and Technology Drive Estimates of Technically Recoverable Resources
A common measure of the long-term viability of U.S. domestic crude oil and natural gas as an energy source is the remaining technically recoverable resource (TRR). TRR estimates are a work in progress, changing as more production experience becomes available and as new technologies are applied to extract these resources. The greatest uncertainty is associated with the "estimated ultimate recovery," or EUR, per well.
EIA updates its TRR estimates using the latest available well production data. EIA's recently released Annual Energy Outlook 2012 (AEO2012) contains a detailed discussion of TRR estimates and resource uncertainty. AEO2012 projections also include sensitivity cases varying the EUR per well and a high-TRR case. The TRR estimates provide context for the size of the resource, while projected production depends strongly on the number of wells, the EUR per well, other well characteristics, and economics.
The Annual Energy Outlook 2012 unproved TRRs are shown in the figures above for the major shale gas and tight oil formations. The formation parameters that result in these TRR are provided elsewhere. The volume of total TRR due to proved reserves is not shown. "Tight oil" refers to crude oil and condensates that are produced from low permeability sandstone, carbonate, and shale formations. The tight oil TRRs are for the entire formation, including the non shale portions.
Read the entire article at EIA.Com
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EIA updates its TRR estimates using the latest available well production data. EIA's recently released Annual Energy Outlook 2012 (AEO2012) contains a detailed discussion of TRR estimates and resource uncertainty. AEO2012 projections also include sensitivity cases varying the EUR per well and a high-TRR case. The TRR estimates provide context for the size of the resource, while projected production depends strongly on the number of wells, the EUR per well, other well characteristics, and economics.
.
TRR estimates consist of "proved reserves" and "unproved resources." As wells are drilled and field equipment is installed and productivity is assumed, unproved resources become proved reserves and, ultimately, production. The TRR estimate for a continuous-type shale gas or tight oil area is the product of land area, well spacing (wells per square mile), percentage of area untested, percentage of area with potential, and the estimated ultimate recovery (EUR) per well.The Annual Energy Outlook 2012 unproved TRRs are shown in the figures above for the major shale gas and tight oil formations. The formation parameters that result in these TRR are provided elsewhere. The volume of total TRR due to proved reserves is not shown. "Tight oil" refers to crude oil and condensates that are produced from low permeability sandstone, carbonate, and shale formations. The tight oil TRRs are for the entire formation, including the non shale portions.
Read the entire article at EIA.Com
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Welcome BreitBurn Energy Partners to the COT Fund
Todd Johnson wrote on Seeking Alpha this week....Breitburn Energy Partners offers an enticing 10.2% dividend yield to retirees. The upstream master limited partnership (MLP) generates revenues via natural gas and oil production. I would like to highlight 3 reasons why this MLP has its financials in order to pay out reliable dividends. The 10.2% yield can't be ignored by retirees in the world of a 2.61% 30 Year Treasury Bond yield. Click here to read Todds entire article.
In May equities research analysts at Citigroup lifted their price target on shares of Breitburn Energy from $26.00 to $27.00. The analysts wrote, “BBEP announced on 05/10/2012 that it signed two separate purchase agreements to acquire oil and natural gas properties in the Permian Basin for a combined price of $220 million, subject to customary closing conditions. The acquisition is expected to close within 60 days from the date of the announcement and will be funded with the company’s revolving credit facility.”
BBEP has been the subject of a number of other recent research reports. Analysts at Global Hunter Securities initiated coverage on shares of Breitburn Energy in a research note to investors on Tuesday, April 17th. They set a “buy” rating and a $22.00 price target on the stock. Separately, analysts at Barclays Capital reiterated an “equal weight” rating on shares of Breitburn Energy in a research note to investors on Friday, March 30th. Finally, analysts at Deutsche Bank initiated coverage on shares of Breitburn Energy in a research note to investors on Tuesday, February 14th. They set a “hold” rating on the stock.
But just this week has been upgraded by TheStreet Ratings from hold to buy. With The StreetWire saying....The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, good cash flow from operations, impressive record of earnings per share growth and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.
BreitBurn Energy Partners is an independent oil and gas limited partnership, focused on the acquisition, exploitation and development of oil and gas properties for the purpose of generating cash flow to make distributions to our unitholders. Our assets consist primarily of producing and non producing crude oil and natural gas reserves located in the Los Angeles Basin in California, the Wind River and Big Horn Basins in central Wyoming, the Powder River Basin in eastern Wyoming, the Evanston and Green River Basins in southwestern Wyoming, the Sunniland Trend in Florida, the Antrim Shale in Michigan, and the New Albany Shale in Indiana and Kentucky.
Historical Dividends
| Declared | Ex-Date | Record | Payable | Amount | Type |
|---|---|---|---|---|---|
| Apr 19, 2012 | May 3, 2012 | May 7, 2012 | May 14, 2012 | 0.4550 | U.S. Currency |
| Jan 27, 2012 | Feb 2, 2012 | Feb 6, 2012 | Feb 14, 2012 | 0.4500 | U.S. Currency |
| Oct 28, 2011 | Nov 7, 2011 | Nov 9, 2011 | Nov 14, 2011 | 0.4350 | U.S. Currency |
| Jul 27, 2011 | Aug 5, 2011 | Aug 9, 2011 | Aug 12, 2011 | 0.4225 | U.S. Currency |
| Apr 28, 2011 | May 6, 2011 | May 10, 2011 | May 13, 2011 | 0.4175 | U.S. Currency |
| Jan 31, 2011 | Feb 4, 2011 | Feb 8, 2011 | Feb 11, 2011 | 0.4125 | U.S. Currency |
| Oct 29, 2010 | Nov 5, 2010 | Nov 9, 2010 | Nov 12, 2010 | 0.3900 | U.S. Currency |
| Jul 30, 2010 | Aug 5, 2010 | Aug 9, 2010 | Aug 13, 2010 | 0.3825 | U.S. Currency |
| Apr 28, 2010 | May 6, 2010 | May 10, 2010 | May 14, 2010 | 0.3750 | U.S. Currency |
| Jan 30, 2009 | Feb 5, 2009 | Feb 9, 2009 | Feb 13, 2009 | 0.5200 | U.S. Currency |
| Oct 29, 2008 | Nov 6, 2008 | Nov 10, 2008 | Nov 14, 2008 | 0.5200 | U.S. Currency |
| Aug 1, 2008 | Aug 7, 2008 | Aug 11, 2008 | Aug 14, 2008 | 0.5200 | U.S. Currency |
| Apr 28, 2008 | May 7, 2008 | May 9, 2008 | May 15, 2008 | 0.5000 | U.S. Currency |
| Jan 29, 2008 | Feb 7, 2008 | Feb 11, 2008 | Feb 14, 2008 | 0.4525 | U.S. Currency |
| Nov 1, 2007 | Nov 7, 2007 | Nov 12, 2007 | Nov 14, 2007 | 0.4425 | U.S. Currency |
| Jul 27, 2007 | Aug 3, 2007 | Aug 7, 2007 | Aug 14, 2007 | 0.4225 | U.S. Currency |
| Apr 26, 2007 | May 3, 2007 | May 7, 2007 | May 15, 2007 | 0.4125 | U.S. Currency |
| Jan 22, 2007 | Feb 1, 2007 | Feb 5, 2007 | Feb 14, 2007 | 0.3990 | U.S. Currency |
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Thursday, July 19, 2012
What is T. Boone Pickens Buying?
Top 10 Holdings
| Company | Ticker | Value ($000s) | Activity |
| BP PLC | BP | 20,345 | 12% |
| ENCANA CORP | ECA | 18,392 | New |
| NATIONAL OILWELL VARCO INC | NOV | 14,262 | 0% |
| DEVON ENERGY CORP NEW | DVN | 13,513 | 36% |
| TRANSOCEAN LTD | RIG | 13,068 | 47% |
| CHESAPEAKE ENERGY CORP | CHK | 11,563 | -12% |
| WEATHERFORD INTL LTD NEW | WFT | 10,489 | 35% |
| SANDRIDGE ENERGY INC | SD | 9,250 | 0% |
| DAWSON GEOPHYSICAL CO | DWSN | 8,426 | 0% |
| SUNCOR ENERGY INC NEW | SU | 7,063 | 0% |
Encana Corp (ECA) is a new position in BP’s portfolio – the fund did not report owning any shares of Encana at the end of 2011 – but it is one of its largest holdings. During the first quarter of 2012, BP initiated a new position in the company worth $18 million. A few other hedge funds also have Encana in their 13F portfolios. At the end of last year, there were 19 hedge funds reported to own this stock. Steven Cohen’s SAC Capital Advisors had nearly $100 million invested in Encana at the end of last year. Martin Whitman and Ken Griffin are also bullish about this stock. See chart below.
Pickens likes Devon Energy Corp (DVN) as well. The stock is the fourth largest position in his latest 13F portfolio. Pickens boosted his stakes in Devon by 36% over the first quarter to $190 million. Devon is also quite popular amongst the other hedge funds we track. There were 32 hedge funds with positions in Devon at the end of last year. Devon has also shifted its focus from natural gas to oil and natural gas liquids. We think Devon is well positioned to benefit from the higher margins of liquids. See chart below.
Of course, just because BP Capital is natgas and alternative energy-heavy doesn’t mean that Boone Pickens’ fund is eschewing traditional oil firms. His fund picked up 188,000 shares of Valero Energy (VLO) last quarter, building up a $5 million stake in the country’s largest independent oil refiner. Valero has the capacity to process more than 2.8 million barrels of crude per day through its 14 refineries, in addition to a massive ethanol business and a 1,000-unit gas station business. See Chart below.
Other large positions in Pickens’ portfolio are BP Plc (BP), National Oilwell Varco Inc (NOV), and Transocean Ltd (RIG). Pickens did not increase or decrease his stakes in National Oilwell. He increased his BP position by 12% and his Transocean position by 47% over the first quarter. All of these stocks have attractive valuation levels, especially BP. It is currently trading at only 5.6x its 2013 earnings and has a dividend yield of 5.12%.
BP is the most popular oil company among hedge funds, followed by Exxon Mobil. Value investor Seth Klarman had a $400+ million position in the stock at the end of the first quarter. Billionaires Ken Fisher and Ken Griffin are among the fund managers with large XOM positions. They both boosted their stakes in XOM during the first quarter. See chart below.
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Forget "Libor Gate" .... Crude Oil Market Manipulation Is Far Worse
Consumers are paying an easy $35 dollars per barrel over what they would otherwise doll out for a barrel of oil, if fund managers didn`t use the benchmark futures contracts as their own personal ATMs.
Just a month ago Crude Oil WTI was $78 a barrel and today it is $93. Do you think the fundamentals changed one bit to merit this price swing? Nope! Supply levels are all at record highs around the world. Is it Iran? Please!! It is all about the money flows, nobody takes delivery anymore. Assets have become one big correlated risk trade.
Risk On, Risk Off. If the Dow is up a hundred, you can bet crude is up at least a dollar! It has nothing to do with fundamentals, inventory levels, supply disruptions, etc. It is all about fund flows.
Just click here to read the entire EconMatters article Forget "Libor Gate" .... Crude Oil Market Manipulation Is Far Worse
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