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My Stock Value Strategy Starts Now (1 Viewer)

Today was a good day for me. I made $7,310 less commissions of approximately $120 ($5.95 x about 20).

FAS Profit = $4,710

DXO Profit = $140

FAS Profit = $410

DXO Profit = $360

DXO Profit = $480

SCO Profit = $640

SCO Profit = $570

Yes I am a bit upside down in SCO at the moment (have 3,000 shares at an average cost of $33.44 against a market close of $32.51) for a paper loss of $2,800 currently. But I like my holding here going into tomorrow.

 
Just a heads up that DTO and SCO (The oil shorts) should trade up on the opening bell.

From Bloomberg News today:

Crude oil for March delivery gained as much as $1.62, or 3.6 percent, to $46.64 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $44.15 at 11:50 a.m. London time.

Using some simple math, I expect SCO which trades heavy to the front March contract to gain back 2 x $2.49/$46.64 or about 10.7% of yesterday's closing price of $32.51 to put this comfortably to about $35.99 near the opening bell. (Note: I messed up the math initially. This thing could come out very strong on the opening bell)

Although I still believe that SCO could soar with a great stockpile report, I am likely going to lessen my position considerably just in case that does not happen.

The EIA report will be released at 11:00am ET today (usually done on Wednesdays, but different this week because of the holiday). This will move oil stocks one way or the other. The report can be found here:

http://www.eia.doe.gov/oil_gas/petroleum/d...eport/wpsr.html

Bloomberg expects the report to show that crude inventories rose 1.4 million barrels in the week ended Jan. 16, according to the median of 14 analyst estimates. If inventories rose substantially more then the price of crude should drop (possibly substantially). If this estimate is close (or overstated), I think oil will hold steady or rise.

The contango continues to flatten making storing oil on tankers a less desireable option now and going forward. 80 million barrels of oil are sitting on tankers. This news should get more play today as well if the stockpile reports show Cushing to be nearing their maximums. Again, I suspect that will be the case.

 
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Forbes guesses stockpiles will rise about 1.9 million barrels for crude:

http://www.forbes.com/feeds/ap/2009/01/22/ap5950443.html

The Energy Department will likely report a 1.9 million barrel jump in crude oil reserves on Thursday for the week ended Jan. 16, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Platts expects gasoline stockpiles to rise by 1.9 million barrels, distillate stocks to fall by 2.25 million barrels and refineries to decrease capacity by 1.4 percent to 83.8 percent.

 
Where are you hoping to sell SCO? I've got a sell order at $35 for half my shares... but as volatile as it is (as high as 38+ yesterday), I'm wondering if I might get another buck or two out of it.

 
Keerock said:
Where are you hoping to sell SCO? I've got a sell order at $35 for half my shares... but as volatile as it is (as high as 38+ yesterday), I'm wondering if I might get another buck or two out of it.
Click to expand...
I am looking to move the first 1,000 near 35.5 and the second 1,000 near 36.0 before the report. It's possible I will panic a bit though if I don't get those prices before the report is due. I don't want to hold 3,000 shares before the report. My average price is 33.44 so I feel comfortable I can get out of this at a nice profit. I will hold 1,000 shares to see the inventory report (unless I can get 37.0 before the report) as I suspect the stockpiles are way worse than the analysts expect. If that is the case, I think we will see 38 or 39 by today or tomorrow.Outside of today and tomorrow, I will not be able to manage things very well next week so I likely will exit all oil positions by close Friday regardless of profit or loss.Note: Edited the prices higher based on my revised math in the posts above. This thing should vault much higher at the opening.
 
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We might not get quite the bounce I was hoping for at the opening. UCO is off about 3% in pre-market activity. SCO should rise by a similar amount.

32.51 x 1.03 = 33.48. Not sure what I do if this is the situation. If I can't get 34.0 at a minimum I think I am going to roll the dice and wait for the inventory report. I don't think $46/barrel for oil makes sense with 80 million barrels sitting in tankers at a cost around $33-$35. Not only do I suspect inventories will be way up, I think if oil stays this high, these tankers are going to be offloaded very soon because the cost to hold it on the tankers is about $1.25/barrel per month.

 
Initial Bloomberg report had weird numbers for oil contracts that I based the big bounce on. Those numbers ($46 and $44 prices appear to be wrong as I am seeing WTI crude close at 43.55 yesterday). From early trading, SCO should bounce 3 to 4% at opening. I am looking to sell 1/3 of my shares at 34.50 (if I can get it) and will assess things after that. If need be I will wait on the inventory report. Good luck everyone. Today should see some movement one way or the other

 
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sold 1,000 SCO at 35.80....going to now watch this for a bit

Profit on those 1,000 shares = 35.80 -33.43 = $2,370. Hard not wanting to sell the other 2,000 shares, but this could be a big day for movement

 
1/2 position in SCO sold at an average cost of 35.31 (+$281)

Holding the other half for 37+ (stop loss @34.75)

Thanks for the tip DD!

 
I'm out of my smallish position in SCO for a modest gain. Would like to have held off until later, but am busy and am unable to wash the position closely today. Good luck fellas!

 
I just sold 1,000 SCO at 35.10. Hating the fact that I rode this so much lower, but oil is showing lots of resistance.

I am going to hold the last 1,000 and sell after the inventory report.

Profit on these 1,000 shares = 35.10 - 33.43 = $1,670

 
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All this thread is telling me is that I'm doing the wrong thing with my life.

Dodds making $4k in one day....that's about 3 months of work for me. :shrug:

 
MrPhoenix said:
All this thread is telling me is that I'm doing the wrong thing with my life.Dodds making $4k in one day....that's about 3 months of work for me. :blackdot:
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problem is you need a ton of $ to start with, otherwise you wont be making enough minus all the commissions. and you need to be able to do without this money for a length of time should something go wrong and you have to wait it out, or take a big loss. its fun to watch, but i dont think it could be replicated with a smaller bank to start with.
 
Out of all (last at 37.23) , I had 750 shares total. It looks like I got out a little early but like they say Pigs get Fat and Hogs get slaughtered.

Thanks Dodds!

 
I am reading the report right now. The analysts had some of it right, but missed big on distillate fuel inventories. Plus consumption is down. Oil should drop (maybe significantly the next few days)

 
SCO now at $37. Damn why did I not wait. I knew this thing was going to look like this too. Oh well. Going to dump the last 1,000 here when I can get $38.

 
Out for the last 1,000 at $37.90. Very very nice. Bummed I sold the middle 1,000 so cheap, but that was the safer play I suppose.

Profit on the last 1,000 = 37.90 - 33.43 = $3,470

 
Bonfire said:
MrPhoenix said:
All this thread is telling me is that I'm doing the wrong thing with my life.Dodds making $4k in one day....that's about 3 months of work for me. :sadbanana:
Click to expand...
problem is you need a ton of $ to start with, otherwise you wont be making enough minus all the commissions. and you need to be able to do without this money for a length of time should something go wrong and you have to wait it out, or take a big loss. its fun to watch, but i dont think it could be replicated with a smaller bank to start with.
Click to expand...
Probably why you don't see many mid-to-lower class 23 year olds day trading.
 
MrPhoenix said:
Bonfire said:
MrPhoenix said:
All this thread is telling me is that I'm doing the wrong thing with my life.Dodds making $4k in one day....that's about 3 months of work for me. :sadbanana:
Click to expand...
problem is you need a ton of $ to start with, otherwise you wont be making enough minus all the commissions. and you need to be able to do without this money for a length of time should something go wrong and you have to wait it out, or take a big loss. its fun to watch, but i dont think it could be replicated with a smaller bank to start with.
Click to expand...
Probably why you don't see many mid-to-lower class 23 year olds day trading.
Click to expand...
I think it's also an unprecedented time in our nation's history to see stocks so battered. I am not sure I would try all these moves in a normal market. But in this climate there is a lot of movement going on as people are jumping in and out constantly. Not for the squeamish, but I do think with some study there is a lot of money to be made here. About 20 more days like today and yesterday and I might just pay cash for the house I want.
 
We will likely see the cheapest price for DXO today or tomorrow for those people looking to buy oil related stocks. This is an easy buy and hold situation if you are more comfortable doing that. The flattened contango has all but stopped the ability to load more oil and store on tankers. And the fact that Brent Crude (Europe's oil) is trading at a premium to our version should translate to a lessening of these stockpiles soon. Distillates will drop because of the cold weather we are experiencing now. Obama's stimulus will include construction jobs that will burn more fuel. And OPECs cuts are going to start playing out.

I fully expect DXO to trade at 2.95 to 3.00 within 30 days from now. At $2.39, this is about as fullproof a way to make money that I know of. I likely will keep daytrading it, but I think the buy and wait strategy also makes a ton of sense here.

 
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