Tag Archive | "oil"

Weekend Reading: The Next Leg of the Bear

Sunday, August 10, 2008

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Random Roger, following up on the 300-point rally meme, agrees that during bear markets, there does tend to be more volatility.  Remember, volatility doesn’t necessarily equal whatever is happening (or not happening) in the VIX.  And more importantly, volatility doesn’t equal large-size selloffs – monster one-day rallies are constitutive of volatility, too! Adam has had enough of people deriving some major magical causal link between the price of crude and equity rallies.  We couldn’t agree more – oil-related stories are…

Ryanair: Airline, or Energy Bear Fund?

Monday, July 28, 2008


Ryanair (RYAAY) is down about 25% today after it warned that it would miss expectations for Q1 and would probably post a loss for 2008.  The reason?  They deliberately refused to hedge their exposure to oil prices… Ryanair said last year that it would not hedge against the rising cost of oil last year, unless fuel prices fell below $100 a barrel. …oh, until now, that is: However on Monday, O’Leary said the airline was now hedged 90.0%…

Equities Can’t Get a CLUe

Friday, July 25, 2008


Ok, stupid pun.  But the August crude futures contract (CLU8) is down another $2 today (about 1.6%), and the market indexes don’t seem to care that much.  While the NDX(QQQQ) and RUT(IWM) are up about 1%, SPX(SPY) and DJIA(DIA) are only modestly higher.  A small rally this morning faded pretty quickly, and we wouldn’t be surprised to make a new low for the week into the close. Among the key sectors we follow, broker/dealers, banks, and biotech are bringing up…

Selling Premium on the Uncertainty in Oil

Thursday, July 24, 2008


The inverse relationship between oil prices and equity markets still seems intact: as crude has sold off over the past week, markets have lifted, and some analysts have even tried charting an hour-by-hour mapping of the correlation.  While we’re long-term bullish on oil (how could anyone not be?), we don’t anticipate an immediate or intense turn around in crude prices.  At the same time, while the price of oil could certainly drift a bit lower, we don’t foresee any catalysts…

Weekend Reading: Oil, Iran, and Greener Capitalism

Sunday, June 29, 2008


Here are some articles of interest we found this weekend.  Subscribers, make sure you’re logged in and check out our weekend portfolio update. Also, warning: information and ruminations dealing with ethics, justice, and good governance ahead, so stop reading if you are allergic to any of those things. Michael Greenberger is the most cogent defender of the view that the recent parabolic move in oil prices is due largely to structural factors enabling manipulative speculation.  In this…

Exiting XLE Iron Condor After Some Good Defense

Wednesday, June 18, 2008


We published the following bonus trade for our members back on May 2: Buy to open XLE June 70 put Sell to open XLE June 72 put Sell to open XLE June 90 call Buy to open XLE June 92 call for a net credit of $0.47 or better. Anyone following this trade should have already exited – remember, we want to be out of any front month short options by Monday of expiration week at…

Weekend Reading

Saturday, June 14, 2008


[Members, be sure to check in for the weekend portfolio update.] The Financial Times has a fascinating interactive map of key oil players and movements. Roger Nusbaum profiles one of several forthcoming frontier ETFs. For when BRICs get too boring, you can own some Poland, Chile, and Egypt. Greg Feirman wonders whether Lehman really is bankrupt; in Barron’s, Steven Sears notes that the premiums in LEH options “show that investors think the stock is more than twice…

Inescapable Oil

Thursday, June 12, 2008


For mental health reasons, we hardly ever watch CNBC anymore. But glancing at it this afternoon, at one point we saw three separate live graphics displaying the price of crude oil. So much screen space was taken up by live oil trackers, there wasn’t enough space left to show the chart of whatever alternative energy company they were pumping. Was oil making a new high today? Did the U.S. unilaterally attack another country?  Did someone accidentally double-park in the Strait…

Yawning About Oil

Thursday, May 29, 2008


Maybe it’s just us, but markets seem really boring and indecisive this week. There’s not much to talk about unless you want to talk oil or bonds. We’re beyond sick of hearing and talking about oil (though we’re dipping a toe into some short positions here), and although bonds are always more exciting than people give them credit for (we’re still in love with munis this year), well, meh. We’re in the mood to do another newsletter takedown, so…

Punctured Rally

Monday, May 12, 2008


The rally off the March lows is starting to seem like a hot air balloon that has sprung a leak and is getting ready to collapse in on itself.  For today’s rally to be believable, we’d need to see a lot more volume than this. NYSE volume made a new low for the year, and the lack of significant news today suggests this is likely some short-covering rather than a genuine bullish vindication. The ratio of front-month to…


Jared Woodard specializes in trading volatility as an asset class. With over a decade of experience trading options and other volatility products ... Read More


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