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My Stock Value Strategy Starts Now (1 Viewer)
- Thread starter David Dodds
- Start date
David Dodds
Administrator
I had a buy order for 10,000 DXO at 2.97 but got just 3,300 before it took off higher.
The Z Machine
Footballguy
Got in a smallish buy of DXO at $2.97. Trying to catch the DD magic!
None_More_Black
Footballguy
Sold some april 40 BP puts for a buck today. Would not mind getting in at 39 for the summer.
David Dodds
Administrator
sold 20,000 FREE at 1.29. still holding 10,000 shares
David Dodds
Administrator
This is going to sound conspiracy laden, but this is how I expect this to play out.1. Starting on the 8th of this month UCO will start rolling out of May contracts and will buy July contracts at 20% per business day. (April 8th - 14th)2. DXO only holds July contracts and will roll over likely in May/June to some unspecified months (TBD)3. So what I expect to happen is the speculators (USO hedge fund did this last rollover cycle) to start buying up July oil now and keep buying it forcing UCO to pay a premium for it (even if the fundamentals do not support it). I think this should keep DXO elevated in the short term. 4. Once UCO has completed rolled into July Crude, I fully expect it to tank and possibly really fast. The inventories are through the roof and nothing has changed fundamentally in the economy when oil was $35/barrel. But because summer is approaching, I really don't see oil getting much below $48/49 a barrel though. So at a high oil price on the 13th or 14th, I plan to buy SCO (the opposite of UCO) to complete this conspiracy.Now if tensions increase that could lead to war, all bets are off on said conspiracy
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None_More_Black
Footballguy
The used to roll their contracts over in a day and just changed to the 5 day strategy. I don't think you will see the pop like earlier this year but who knows. I don't know their size compared to the overall market.
David Dodds
Administrator
and now this sits at $1.22. If it gets under 1.20, I am adding the 20,000 shares back...lol
bigfishboy
Footballguy
Depends on your time horizon. This (and FAS) bounce all over the place on any hint of news. Your down less than 10%. These funds eat 10% before breakfast. I have to believe that at some point in the near future FAZ will get back to 18.25. With all that said, I am a FAS faithful and would not want to be in FAZ very long at all. FAZ will have a good day or two, but I firmly believe that FAS is the side to be on.There is lots of good info in this thread about how both of these are daytrading vehicles only, and in the long term are not good investments.Good luck on your decision.
David Dodds
Administrator
They did the 5 day roll in March too. What is stupid is they should not leverage to just one contract that is KNOWN in advance. It's way too easy for others to load up on before the roll and then sell when UCO must buy. UCOs market cap is $275 Million. That's a lot of oil contracts that WE KNOW will be buying July oil in the next few days. I am pissed off that I tried to time this thing at 2.97 when I easily could have had all 10,000 shares at 3.00. My plan is still to try and carry 20,000 shares into the tail end of this week.We may get a dip after the inventory report whch will allow me to get back in around 3.00
David Dodds
Administrator
and this works again this month, expect me to be part of this strategy every two months when they roll their contracts. They screwed all of us last time on this roll so even when oil rebounded we lost money due to buying over-inflated future contracts. I wont be on the wrong side of this maneuver again.I was also looking at SCO and their market cap is 34.55 Billion. I am guessing they have to be active in all of this as well? Now more than anything I am just curious to see if this comes true as expected.
JAA
Footballguy
so your buying stock in a company you know is going to tank?
David Dodds
Administrator
I like to think of it more like I am timing my purchases here. But yes I think there are a lot of short term (as in this week) reasons this bounces higher than where I got it at 2.97 (and is at 3.10 in afterhours trading). Whether I actually buy SCO later is still to be determined. I expect to exit this position though before Friday. And this is not a stock. It is an ETF that fluctuates with the price of oil.
David Dodds
Administrator
Year to date Profit = $25,122
Today's Realized gains/Losses:
Sold 20,000 FREE @ 1.29. Profit = $2,200 - $18
Holding these positions (unrealized gains):
10,000 FREE at 1.18 (currently at 1.29; +1,100)
3,000 PRGN @ 3.37 (currently at 3.43; +180)
6,300 FEED @ 2.34 (currently at 2.49; +945)
3,300 DXO @ 2.97 (currently at 3.07; +330
Looking to add more DXO (if under 3.00), FEED (If under 2.35), PRGN (if under 3.30), and FREE (if under 1.20)
Looking to sell at these levels: DXO (3.18), FEED (2.60), PRGN (3.65), FREE (1.35)
Today's Realized gains/Losses:
Sold 20,000 FREE @ 1.29. Profit = $2,200 - $18
Holding these positions (unrealized gains):
10,000 FREE at 1.18 (currently at 1.29; +1,100)
3,000 PRGN @ 3.37 (currently at 3.43; +180)
6,300 FEED @ 2.34 (currently at 2.49; +945)
3,300 DXO @ 2.97 (currently at 3.07; +330
Looking to add more DXO (if under 3.00), FEED (If under 2.35), PRGN (if under 3.30), and FREE (if under 1.20)
Looking to sell at these levels: DXO (3.18), FEED (2.60), PRGN (3.65), FREE (1.35)
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David Dodds
Administrator
oil's future chain right now:
CLK09.NYM Crude Oil May 09 - 50.36
CLM09.NYM Crude Oil Jun 09 - 52.88
CLN09.NYM Crude Oil Jul 09 - 55.00
CLQ09.NYM Crude Oil Aug 09 - 56.34
CLU09.NYM Crude Oil Sep 09 - 57.05
My take: This is a deepening of the contango where the front month is now much cheaper than the next months. This seems to support my argument that July oil is too high right now and is being propped up by UCOs requirement to buy it. For the UCO roll that will happen starting on the 8th (and roll 20% per day), UCO shares will essentially be cut by 10%. In other words 10 contracts for oil at 50.36 will look more like 9 contracts at 55.00 oil.
CLK09.NYM Crude Oil May 09 - 50.36
CLM09.NYM Crude Oil Jun 09 - 52.88
CLN09.NYM Crude Oil Jul 09 - 55.00
CLQ09.NYM Crude Oil Aug 09 - 56.34
CLU09.NYM Crude Oil Sep 09 - 57.05
My take: This is a deepening of the contango where the front month is now much cheaper than the next months. This seems to support my argument that July oil is too high right now and is being propped up by UCOs requirement to buy it. For the UCO roll that will happen starting on the 8th (and roll 20% per day), UCO shares will essentially be cut by 10%. In other words 10 contracts for oil at 50.36 will look more like 9 contracts at 55.00 oil.
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David Dodds
Administrator
I will be looking to add UCO by the end of next week or the beginning of the following week (after they have rolled their inventory and then pressure falls off the July contract) because I am convinced this ETF is being manipulated with front oil way off and July contracts still retaining most of their value. We may see UCO reach 7.5 or lower very soon.
Ten Yard Fight
Footballguy
I like the approach you are taking David. If you can figure out how it is being manipulated and when, you should do very well. Reminds me of a friend of mine who figured out how some lines were being manipulated in the NBA playoffs. He went 17-1 one year. He based his system on a conspiracy theory, and later learned he probably benefited from Tim Donaghy's (and associates) cheating.
David Dodds
Administrator
I actually think DXO is safe while this roll happens because UCO needs to buy July Oil which is what DXO is based on. So if anything DXO is likely the safest oil play for the very short term (next 5 days). But I suspect July is headed lower within 15 days so it's not likely a position you wish to hold for a long time (as you could likely enter at a lower point after the rollover)
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Lord of Football
Footballguy
In for 1,500 shares of DXO @ 2.97, want to add more tomorrow.
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David Dodds
Administrator
I belong to a private Dry Index Mailing list and got this email which I thought deserved more love so am posting it here. This sector is hurting right now (even though the Dry Shippers have seen huge gains to their stock prices). I think I am going to look to exit my positions in FREE and Paragon here for the short-term and look for a better spot to enter the market. I really want to see the BDI improve from the 1400s it sits at now.
-------------------------
“Falling steel prices continue to put a brake on ore activity, and earnings fell again last week across the bulk market. Panamax rates again proved to be extremely volatile and the BPI lost 20% Friday-to-Friday, canceling out the gains made in late January/early February. Financial results from China’s steel industry belie talk of a recovery and suggest the likelihood of further production cuts and rising ore stockpiles. China’s metal melting and processing sector logged a gross loss of Yuan 769m ($112m) in the first two months of the year, a far bigger profit decline than seen in China’s other large industries. Baosteel also announced a second round of steel price cuts for May, reflecting the weak demand. In the shipping industry, we have yet to see a true picture of earnings for ship operators, with many companies delaying 2008 results pending agreement over new loan covenant agreements.
However, for some, last year’s results were only modestly affected by the financial crisis, with operating losses in the second half offset by strong results in the first half. However there are now a raft of potential non-operating expenses facing owners: from cancellation fees for newbuildings, to claims against bankrupt counterparties and unrealized losses on stock investments.
The release of first-quarter results will be keenly awaited.
Capesize
There was a fair amount of activity in both the Atlantic and Pacific this week, though rates softened again due to the generous supply of tonnage in each market. As a result the BCI lost another 6% and the four time charter fell US$1,357 to finish at US$17,107. There were no obvious signs of encouragement in the ore market, though port congestion has crept up in all the main export/import areas since early March, which may have some positive impact on rates going forward. No period deals were reported during the week, though the market appeared to have stabilized by the start of the new week and the BCI lost just one point on Monday.
Panamax
The Panamax market witnessed a drop of 20% in value as the BPI fell 306 points and the average of the 4 time charters saw a fall of US$2,446 as both the Atlantic and Pacific basins eased significantly. Weak demand in the Atlantic, assisted by a vast tonnage oversupply, saw owners with vessels in the Atlantic preferring to stay there rather than take the premium to go east and join the ever -growing list of tonnage that we will surely witness in the next couple of months and beyond. With limited activity in the Pacific, numerous ships found themselves in ballast, and charterers once more were able to pick off vessels with ease for the South American round business. With holidays in China today, and Easter holidays in much of Europe at the end of the week, we may see an influx of preholiday fixing. However, it would be hard to envision any change to the trends of last week.
Supra/Handy
The Baltic Supramax Index went down by 77 points last week to finish at 1,236 points, while the time charter average lost more than US$800 daily to end close to US$13,000. In the Atlantic, the market fell continually with not much fresh requirement injected. Just a few sugar stems enabled the market to offset the growing oversupply. However, the news at farmers in Argentina had called off their strike provided some arguments to owners trying to resist the downward trend. The Continent and the Black Sea started to weaken too, with less and less requirement for fertilizers/grain to absorb the incoming flow of vessels open prompt in the area. Regarding the smaller sizes, the Baltic Handysize Index lost 30 points last week to finish at 666 points,
while the time charter average lost about US$500 daily to finish at around US$9,600. In the Pacific the sentiment was very bearish for both Handies and Supras. There was a big spread between the Atlantic and Pacific basins. Some players took this opportunity to arbitrate their position on the period market, either on short period, or on a 2 to 3 LL basis. Supramaxes were
trading at US$11,500 daily for short period. One 52,000 dwt was also reported fixed at US$12,000 daily for one year with delivery in Japan.”
-------------------------
“Falling steel prices continue to put a brake on ore activity, and earnings fell again last week across the bulk market. Panamax rates again proved to be extremely volatile and the BPI lost 20% Friday-to-Friday, canceling out the gains made in late January/early February. Financial results from China’s steel industry belie talk of a recovery and suggest the likelihood of further production cuts and rising ore stockpiles. China’s metal melting and processing sector logged a gross loss of Yuan 769m ($112m) in the first two months of the year, a far bigger profit decline than seen in China’s other large industries. Baosteel also announced a second round of steel price cuts for May, reflecting the weak demand. In the shipping industry, we have yet to see a true picture of earnings for ship operators, with many companies delaying 2008 results pending agreement over new loan covenant agreements.
However, for some, last year’s results were only modestly affected by the financial crisis, with operating losses in the second half offset by strong results in the first half. However there are now a raft of potential non-operating expenses facing owners: from cancellation fees for newbuildings, to claims against bankrupt counterparties and unrealized losses on stock investments.
The release of first-quarter results will be keenly awaited.
Capesize
There was a fair amount of activity in both the Atlantic and Pacific this week, though rates softened again due to the generous supply of tonnage in each market. As a result the BCI lost another 6% and the four time charter fell US$1,357 to finish at US$17,107. There were no obvious signs of encouragement in the ore market, though port congestion has crept up in all the main export/import areas since early March, which may have some positive impact on rates going forward. No period deals were reported during the week, though the market appeared to have stabilized by the start of the new week and the BCI lost just one point on Monday.
Panamax
The Panamax market witnessed a drop of 20% in value as the BPI fell 306 points and the average of the 4 time charters saw a fall of US$2,446 as both the Atlantic and Pacific basins eased significantly. Weak demand in the Atlantic, assisted by a vast tonnage oversupply, saw owners with vessels in the Atlantic preferring to stay there rather than take the premium to go east and join the ever -growing list of tonnage that we will surely witness in the next couple of months and beyond. With limited activity in the Pacific, numerous ships found themselves in ballast, and charterers once more were able to pick off vessels with ease for the South American round business. With holidays in China today, and Easter holidays in much of Europe at the end of the week, we may see an influx of preholiday fixing. However, it would be hard to envision any change to the trends of last week.
Supra/Handy
The Baltic Supramax Index went down by 77 points last week to finish at 1,236 points, while the time charter average lost more than US$800 daily to end close to US$13,000. In the Atlantic, the market fell continually with not much fresh requirement injected. Just a few sugar stems enabled the market to offset the growing oversupply. However, the news at farmers in Argentina had called off their strike provided some arguments to owners trying to resist the downward trend. The Continent and the Black Sea started to weaken too, with less and less requirement for fertilizers/grain to absorb the incoming flow of vessels open prompt in the area. Regarding the smaller sizes, the Baltic Handysize Index lost 30 points last week to finish at 666 points,
while the time charter average lost about US$500 daily to finish at around US$9,600. In the Pacific the sentiment was very bearish for both Handies and Supras. There was a big spread between the Atlantic and Pacific basins. Some players took this opportunity to arbitrate their position on the period market, either on short period, or on a 2 to 3 LL basis. Supramaxes were
trading at US$11,500 daily for short period. One 52,000 dwt was also reported fixed at US$12,000 daily for one year with delivery in Japan.”
David Dodds
Administrator
I just added another 5,000 at 2.97 too. I may look to actively trade this though with a series of quick hitters. I suspect we will see $3.05 by the end of the day at least
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David Dodds
Administrator
I just added another 5,000 at 2.94 too. I hope I am right regarding all of this manipulation. But even if not, I suspect July oil will go higher than $54.06 or so that it is trading at. I expect this to pop tomorrow when UCO starts purchasing.
Cromedog
Footballguy
David, are you concerned at all about the inventory report tomorrow being even worse? Oil could go lower with that and/or more generally bad news...I've been pondering entry in DXO today, but don't want to hold long term (cash on hand issues). Longer term I agree.David Dodds said:
David Dodds
Administrator
I added 3,000 FEED at 2.36
David Dodds
Administrator
Oil really has not traded to this inventory report for awhile now. I think tensions in Pakistan are increasing and also suspect that UCO rolling their inventory to July oil should give DXO a jump starting tomorrow. If the report lowers DXO a lot, I will add to my position here.
JAA
Footballguy
Are you only focusing on Oil/Shipping? Any other vices or plans to diversify? Why these specifically? (Sorry if I missed it earlier)
David Dodds
Administrator
This was my life story on this stock before just taking the 1.29 yesterday. I tried to get the $1.29 today as well with my last 10K shares and it dived soon after I posted. This stock will likely return to that level though
David Dodds
Administrator
These are the two sectors I know the most about so this is my primary focus. I keep adding to my FEED position though (Chinese Hog Farms) that is completely unrelated. Long-term both oil and ships should rebound the hardest when the economy returns. And I think the economy is showing slight signs of getting better so that's where I want my money.
JAA
Footballguy
RE Chinese Hog Farms: Have you looked at Soy Beans at all?
David Dodds
Administrator
David Dodds
Administrator
Year to date Profit = $25,122
Today's Realized gains/Losses: no sales
Holding these positions (unrealized gains):
10,000 FREE at 1.18 (currently at 1.19; +100)
3,000 PRGN @ 3.37 (currently at 3.25; -360)
9,300 FEED @ 2.35 (currently at 2.35; +0)
13,300 DXO @ 2.96 (currently at 2.97; +133)
Today's Realized gains/Losses: no sales
Holding these positions (unrealized gains):
10,000 FREE at 1.18 (currently at 1.19; +100)
3,000 PRGN @ 3.37 (currently at 3.25; -360)
9,300 FEED @ 2.35 (currently at 2.35; +0)
13,300 DXO @ 2.96 (currently at 2.97; +133)
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Yeah, depending on where it opens, I may buy more!
JAA
Footballguy
my wife, a heath food nut, keeps going on about how the 'round-up' pesticide company has made these 'soy beans' that are resistent to their own pesticide (round up). Well this company is buying up the competition and as well as getting legislation passed that (im paraphrasing here) forces folks to use their pesticides. The company is called Monsanto. I had thought they were a foreign company (China / why I asked), but it seems they are a US company. Anyway ... I digress.
David Dodds
Administrator
Depends how bad you want it. If your entire goal is to get a great deal, set the number low so that if you do buy, you get a good price. Sometimes you just want the stock at where it's at now, and I usually lower the price a penny or two (I generally trade in stocks that are $4.00 and less) and place the order.
David Dodds
Administrator
API oil report is AWFUL. It looks like I miscalculated in buying DXO today. I am going to look to dump this for hopefully not much of a loss tomorrow before the real inventory report:
* API data show crude stocks rose well above forecast
* Wall Street down on bleak earnings outlook, GM woes
* Dollar rises as global stocks dip on earnings worries
NEW YORK, April 7 (Reuters) - U.S. crude oil futures fell further in post-settlement trading on Tuesday, after the industry group American Petroleum Institute reported a rise in domestic crude stocks that was much more than expected.
The API said that for the week to April 3, crude stocks rose 6.9 million barrels to 364.7 million barrels, gasoline stocks gained 2.9 million barrels to 218.5 million barrels and distillate stocks fell 2.3 million barrels to 142.2 million barrels. An expanded Reuters poll on Tuesday yielded a forecast for crude supplies to have risen 1.9 million barrels last week.
Forecasts also called for a 1.0 million barrel draw in gasoline stocks and a 200,000 barrels drop in distillates. "The 6.9 million barrel build in API crude stocks was well above the 1-2 million barrels expectation, and a similar figure from the DOE would certainly put added selling pressure on both crude oil and the wider petroleum complex," said Tim Evans, energy analyst at Citi Futures Perspective in New York. The U.S. Energy Information Administration, statistical branch of the Department of Energy, will issue its own inventory report at 10:30 a.m. EDT on Wednesday.
* API data show crude stocks rose well above forecast
* Wall Street down on bleak earnings outlook, GM woes
* Dollar rises as global stocks dip on earnings worries
NEW YORK, April 7 (Reuters) - U.S. crude oil futures fell further in post-settlement trading on Tuesday, after the industry group American Petroleum Institute reported a rise in domestic crude stocks that was much more than expected.
The API said that for the week to April 3, crude stocks rose 6.9 million barrels to 364.7 million barrels, gasoline stocks gained 2.9 million barrels to 218.5 million barrels and distillate stocks fell 2.3 million barrels to 142.2 million barrels. An expanded Reuters poll on Tuesday yielded a forecast for crude supplies to have risen 1.9 million barrels last week.
Forecasts also called for a 1.0 million barrel draw in gasoline stocks and a 200,000 barrels drop in distillates. "The 6.9 million barrel build in API crude stocks was well above the 1-2 million barrels expectation, and a similar figure from the DOE would certainly put added selling pressure on both crude oil and the wider petroleum complex," said Tim Evans, energy analyst at Citi Futures Perspective in New York. The U.S. Energy Information Administration, statistical branch of the Department of Energy, will issue its own inventory report at 10:30 a.m. EDT on Wednesday.
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