Afternoon update. of our morning trackers STEC looks the best it has traded it's volume already and has attracted steady buying throughout the morning.
GPN looks good on a chart too (daily) but there is little vol today to speak of.
To this list a couple other stks of interest....
Two friends JOE & DUG.
JOE has had whispers of a take out today judging by the cold calls I've been getting. A little check into the options yield some nifty clues... 1,405 call contracts vs Put volume of 148 contracts (as of this morning)
the implied volatility is very high... something over the weekend?
DUG the ultra short oil play is putting in a cascading low today and at $26 this is setting up for a quick $7 trade, if oil would ever fall. Judging by the superspikes today in my Bekken oil plays BEXP, CLR, NOG, GEOI... I would say that we are near the end of this frivolity but what will happen to S&P earnings after oil falls??? Is this a case of be careful what you ask for? From Bloomberg today- Take away Exxon Mobil Corp., Chevron Corp. and ConocoPhillips and profits at U.S. companies are the worst in at least a decade.Without the $70 billion that oil producers earned in the last two quarters, profits at companies in the Standard & Poor's 500 Index tumbled 26 percent and 30.2 percent as of last week, the biggest decreases for any quarter since Bloomberg started compiling data in 1998. Energy companies made up almost half the income growth reported by S&P 500 companies in the first three months of 2008 as oil prices surged past $100 per barrel.
The results leave the benchmark for American equities vulnerable to declines as oil companies' costs balloon and production slips, according to Bank of America Corp., Charles Schwab Corp. and Allianz Global Investors. The industry is getting less profit from a barrel of oil than at any time since 2005, just as the rest of the U.S. economy is sputtering. Still, energy shares posted the S&P 500's steepest gains in the past year, bloating their representation to 15 percent of the index.
``It's kind of a Catch-22,'' said Joseph Quinlan, 49, New York-based chief market strategist for the investment management unit at Bank of America, which oversees $643 billion in client assets. ``The better energy does, the weaker the rest of the S&P. It masks some of the weakness.''
Earnings Disparity
Energy companies in the S&P 500 reported an average 25.9 percent gain in first-quarter profit, the biggest of the index's 10 industry groups, data compiled by Bloomberg show. For the broader market, earnings declined by 18.3 percent, based on the 441 companies in the S&P 500 that already announced results.
The drop increases by 7.7 percentage points when profits for energy producers are stripped out, according to Bloomberg data, making the contribution of oil companies the biggest in at least 10 years. Even after taking out financial firms and consumer companies that reported lower earnings, oil profits accounted for almost half of the overall gain of 11.02 percent for the S&P 500, Bloomberg data show.
>>> So we must ask ourselves as we rallied lately into these puke earnings... did the high price of oil actually save the market!!!!! It's ultimate stoned thinking but maybe yes! Some of the biggest hedge funds have begun bailing from the oil trade...
Caxton, Atticus Sell
Caxton Associates LLC, the $12 billion New York-based hedge fund run by Bruce Kovner, sold its entire 430,955 share stake in Exxon in the first quarter, according to Securities and Exchange Commission filings released last week.
James Simons's Renaissance Technologies Corp., a $30 billion hedge fund firm based in East Setauket, New York, unloaded all the 54,600 shares that it held in Chevron last quarter.
Atticus Capital LP, which oversees about $19 billion and is run by Timothy Barakett in New York, cut its holdings of ConocoPhillips by 15 percent after dumping 1.81 million shares.
For Liz Ann Sonders, chief investment strategist at Charles Schwab, the ``real'' price of oil should be closer to $80 a barrel. The San Francisco-based firm, which oversees $1.4 trillion for clients, is ``underweight'' energy shares on expectations that oil prices will retreat.
>>>Of course if we get that Liz Ann drop to $80 which I agree with that 37% decline would severely damage the S&P's earnings and the headlines would not be good.... just 5 years ago the weighting of these energy plays was much less, just as tech stocks ballooned and then devistated the nasdaq... the oil plays are ready to scuttle the S&P... so do we want oil to go down or not? Now I'm confused even more but the DUG is looking mighty tempting to me today.
~stoney
