June 26, 2008

Global Market Comments for June 26, 2008 1) The president of OPEC predicted that oil would soon hit $170/barrel. Crude rocketed back up to $139, the top end of the one month's trading range. Traders piled in on the short side with tight $141 stops to play the range for the tenth time. You can buy the crude August $130 puts here for $2, which expire on July 17, and get a … [Read more...]

June 25, 2008

Global Market Comments for June 25, 2008 1) Weekly crude inventories fell 1 million barrels vs. an expected build of 900,000 barrels. Crude fell $6 from $138 to $132. See my earlier trade of the month to short deep out of the money crude calls. The Dept. of Energy put out a forecast that crude could reach $186/barrel by in 22 years, or by 2030. Wow, that's a big help! If … [Read more...]

June 24, 2008

Global Market Comments for June 24, 2008 1) Rumors of an Israeli attack on Iran drove crude up to $138. It then fell back to $136. 72% of US consumers now want to buy a hybrid car but will have to contend with a long waiting list to get one. 49% are willing to pay a $5,000 premium for the fuel efficient cars. 26.8% of US oil production now comes from offshore, which is why … [Read more...]

June 23, 2008

Global Market Comments for June 23, 2008 1) It is breathtaking the extent to which the markets ignored the incredible positive results of the weekend's oil summit in Jeddah. The Saudis guaranteed to raise production from 9.4 million barrels/day now to 9.6 million barrels next month to 12.5 million barrels by the end of 2009, and 15 million after that. They provided … [Read more...]

June 20, 2008

Global Market Comments for June 20, 2008 1) Crude crashes, down $7 from yesterdays high to a low of $132 on news that China is raising retail gasoline prices by 17% and diesel prices by 18%. Prices are still well below market levels and may be raised again after the Olympics to prevent rioting during the games. China accounted for 40% of the growth in world oil consumption … [Read more...]

June 19, 2008

Global Market Comments for June 19, 2008 1) Natural Gas hit a new high of $13.50. 2) Gaming revenues in Las Vegas in April were down $1 billion YOY. 3) Donald Trump believes that the US banking system is essentially closed now. Banks are only financing large deals when they get a piece of the equity. The Fed says that 15% of US homes have negative equity, creating the … [Read more...]

June 18, 2008

Global Market Comments for June 18, 2008 1) One airline analyst has ranked his companies according to the probability of bankruptcy. American (AMR) is at 33%, United (UAUA) is 25%, Delta (DAL) is 10%, Continental (CAL) is 4% and Southwest and Jet Blue (JBLU) are 0%. Watch out for your frequent flier points! 2) The recession is causing many consumers to switch from wine to … [Read more...]

June 17, 2008

Global Market Comments for June 17, 2008 1) Natural Gas hit a new high of $13.15. The Persian Gulf is now full of tankers carrying sour heavy crude that no one wants to buy. Deep water drilling rigs are now commanding $600,000/day, up from $100,000/day a year ago. The Saudis are arguing within OPEC for a long term crude price of $50, a price high enough for them to meet … [Read more...]

June 16, 2008

Global Market Comments for June 16, 2008 1) Crude jumps to a new intraday high today of $139.89, up $6.60. A fire in the North Sea took 150,000 barrels/day of production off the market. Natural gas finally hit a new high of $13. Then crude dropped $7. The big fireworks this week are going to be in the crude options pits, where the options expire on Tuesday, and the futures … [Read more...]

June 13, 2008

Global Market Comments for June 13, 2008 1) Saudi Arabia is considering a 'substantial' increase in oil production to 10 million barrels/day from the current 9.45 million in an attempt to prick the bubble. Crude fell $2 to $134.80. The Saudis are terrified of crude at these prices, fearing that the bigger the rise now, the bigger the crash later. If crude falls back … [Read more...]

June 12, 2008

Global Market Comments for June 12, 2008 1) The COO of Lehman, Joseph Gregory, was fired this morning. Also gone is CFO Erin Callan. The former tax attorney only had the job for 7 months. Dick Fuld may follow. The stock fell an immediate 10% to $21. People who bought the $6 billion equity deal on Monday, now down 25%, are going to be livid. They may try to walk away from the … [Read more...]

June 11, 2008

Global Market Comments for June 11, 2008 1) Crude inventories fell 4.6 million barrels for the week versus an expected rise of 1.1 million barrels. Crude rocketed from $132 to $138.50. It's time to go to the trough for the third time for the July $150 calls, which expire in four trading days. You could sell these today for $420, taking in $252,000 for 600 contracts. Crude … [Read more...]

June 10, 2008

Global Market Comments for June 10, 2008 1) There was coordinated verbal intervention by the Fed, the Treasury, and the president, to support the dollar, emphasizing the risk of inflation, which would lead to higher interest rates. The dollar gapped from the $1.58 handle to $1.54, and the thirty year bond futures dropped a full point to 113.50. In two days, two year Treasury … [Read more...]

June 9, 2008

Market Comments for June 9, 2008 1) Lehman announced a Q2 loss of $2.8 billion, far worse than expected, and a highly dilutive common and preferred fund raising of $6 billion.  This is Lehman's second $6 billion fund raising in two months. The stock dropped an immediate 12%. Moody's downgraded the company yet again. The company is raising money they said they … [Read more...]

June 6, 2008

Market Comments for June 6, 2008 1) Crude has made the biggest move in the history of the market, soaring $18 from yesterday's low to $139. Futures ended limit up today for the first time since the 1991 Gulf War. The initial trigger was provided by the ECB's Trichet who said he may raise euro interest rates. This caused a collapse of the dollar which fed straight … [Read more...]

June 5, 2008

Market Comments for June 5, 2008 1) Natural gas has hit a new three year high every day this week, reaching $12.55. Demand destruction that is hurting crude doesn't apply to natural gas because cars or airplanes don't use it. A mid West heat wave is boosting air conditioner demand, and we are only five days into the hurricane season. 2) Leading the charge … [Read more...]

June 4, 2008

Market Comments for June 4, 2008 1) Weekly Crude supplies increased and both India and Malaysia announced they are cutting gasoline subsidies, indicating that global demand destruction is accelerating. Crude fell from $125 to $121.80. Traders are now selling every rally. If this picks up momentum, we could see $100 in a few weeks. Airlines rocketed today, going up 5%-10% … [Read more...]

June 3, 2008

Market Comments for June 3, 2008 1) There was massive liquidation of hedge fund longs in crude, with outstanding positions being reduced by 80%, according to CFTC statistics. Crude plunged today from $129 to $124.50. The crude July 150 calls you could have shorted yesterday at $280 could be bought back today for $70. The one day profit on this would have been $283,000. The … [Read more...]