US Natural Gas Fund Cannot Issue More Shares Without Authorization

Tuesday, October 13, 2009

This was the reason UNG was suspended earlier today,

"The United States Natural Gas Fund will temporarily suspend issuing new shares pending regulatory approval to expand the number of shares it can issue to 1.2 billion, the company said in a filing with the U.S. Securities and Exchange Commission on Tuesday.
The U.S. Natural Gas fund , also known as UNG, filed on June 5 with the SEC for permission to issue 1 billion new units, adding to the previously approved 200 million units.

The SEC has not yet approved the request and a spokesman for the agency said the SEC has no comment.

The UNG fund tracks the price of natural gas futures on the New York Mercantile Exchange, providing a way for smaller, retail players to invest in commodities like gas by buying shares in the fund without worrying about margin calls associated with futures trade if their bets go wrong.

The long-only exchange traded fund's move to massively expand the number units it can issue has sparked concerns among market players who say the jump in the number of units may open the natural gas market to more speculation and influence prices when it rolls positions on the futures market from month to month.

On Monday, UNG had 32.1 million units left of the 200 million it is authorized to issue. By Tuesday, all of those units had been issued and UNG suspended the issuance of "creation baskets"—UNG's term for blocks of 100,000 units.

The suspension of issuing creation baskets will have no effect on the ability of authorized purchasers to redeem baskets of units, the company said in its Tuesday SEC filing." in CNBC

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Volume Is Anemic In The US Stock Market

Bespoke has a very interesting article on the anemic volume of the US stck market, "Using the S&P 500 tracking ETF (SPY) as a proxy, the 50-day average dollar value of volume in the ETF has declined by 54% since its peak last Fall. It is also currently at its lowest level since the S&P 500 peaked in October 2007."

In the graph below we can see the drop in the dollar volume on the SPY.


Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Good Trading Quote From The Book I am Reading

I really enjoyed this passage from Curtis Faith in the "Way Of The Turtle", "Good trading is not about being right, it is about trading right. If you want to be sucessful, you need to think of the long run and ignore the outcome of individual trades".

Very good material.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Great Trading Book: "Way Of The Turtle"

This weekend I re-read the "Way Of The Turtle" while I was lying around the swimming pool. The "Way Of The Turtle" is a fantastic trading book from Curtis Faith, one of the original turtles. I read it last year but I really enjoyed this re-read. Perhaps because I am doing a lot of systematic, system generated trades these days.

Trading coach Van K. Tharp considered it one of the best five trading books ever written and I agree with him. This is a look at the legendary Richard Dennis`s Turtle Traders and his famous trading experience. Curtis Faith was the most sucessful member of this elite group and he describes the trading experience like a seasoned writer. Great trading book.

On other topic, I kept my short S&P Futures position from Thursday and I am almost 30 points in the money. My trading account made a new high for the year last Thursday and I will close this discretionary trading position in the next few sessions because I will focus again on my systematic trades. Opportunities like that, going short into the Employment Report, do not come often and as Stanley Druckenmiller once said, "trading is about capital preservation and home runs". This was a very leveraged trading position and a decent home run in my trading account. Its time to protect my equity, placing only some very risk limited systematic trades for the next few trading sessions.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Oil Had Its Biggest Quarterly Rise In 19 Years

Nymex Light Sweet Crude Oil Futures jumped 41 percent in the second quarter, the biggest since 1990.

This rise was not driven by demand at all. This is the reason why some many great traders were caught on the short side of this trade.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Bad Economic Data. 2 Good Trades.

The economic data released today was quite disappointing. Both the Chicago PMI and the Consumer Confidence Data printed below expectations.

I have made 2 good trades today, one short Crude Oil Futures trade from 71.00 to 70.50 and one short trade on the EURO Currency Futures from 1.4100 to 1.4050. They were both mechanical trades generated by a system I have developed.

I will not trade any discretionary plays until Enzo is born, and he can arrive at anytime now.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Latest Hugh Hendry Interview




Latest Hugh Hendry`s interview. Hugh is my favourite money manager but he has been completely wrong footed since March. He was on CNBC earlier today.

"Fears about inflation and hyperinflation could create another economic downturn, bigger than the one the world went through, Hugh Hendry, chief investment officer at hedge fund Eclectica, told CNBC Tuesday." in CNBC

Use Internet Explorer or Google Chrome browsers to watch this video. Mozilla has some problems with these CNBC videos.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

IEA Cuts Oil Demand Through 2013

The IEA, has cut five-year forecasts for global crude demand because of the economic slump, predicting that consumption will not regain last year’s levels until 2012.

The IEA cut its oil demand estimates for every year through 2013 by about 3 million barrels a day, stating that consumption will average 86.76 million barrels a day in 2012, the first year it will rise above 2008’s level of 85.76 million barrels a day.

“The deep economic recession that has spread worldwide in the past year has taken a severe toll on oil demand,” the IEA said in the report, updating estimates made in December. “This marks a break after several years of strong oil demand growth.”

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Taking A Trading Vacation.

After having a fantastic start to the year these last few weeks have been rather difficult. I got trapped on the short side of the oil market and I was only able to do some good S&P Futures trading and two other good trades on Natural Gas and on the 2 Year Schatz Futures on the ECB meeting day.

But I am feeling out of sync with the markets and a bit tired. I have closed all my trading positions and I will do a small trading vacation. The imminent birth of Enzo, excess trading and a very stubborn oil market have taken its toll.

Every trader needs a rest once in a while. And its better to rest before a big drawdown and not after. So the time is right. After two consecutive flat trading months its time to stop and re-energise.

As Stanley Druckenmiller once said, "trading is all about capital preservation and home runs". I will play good defense for now and I will try to hit some home runs later.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Buzz On The Oil Trading Desks

Oil trading desks are a busy place. Today the talk was about economic news, Iran, stock market and hope:

"Any shred of decent economic news gives bulls a positive reinforcement while bears continue to shake their heads. Hope has been a big factor in the oil market in the past two months." Andy Lebow, senior vice president for energy at brokerage MF Global

"The market got a little support from the stock market and consolidated its recent gains," Peter Donovan, vice president at Vantage Trading.

"The market is stubbornly holding up. Prices are up on expectations that the economy is recovering and demand will strengthen.” Peter Beutel, president of Cameron Hanover Inc., an energy consulting company

“Down the road, it is likely that we see a sharp downward correction in the market because recent rallies look very fragile. If we don’t get some clear and concrete visible signs that the economy is recovering, we might see some profit-taking in the market by some funds in the next two or three months.” Frederic Lasserre, Societe Generale SA’s Paris-based head of commodities research

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

ENI`s CEO Says Demand Is Not Behind This Rally

The rise in oil prices this year has not been caused by a rise in demand, the head of Italian energy firm ENI said on Wednesday. "I don't see the consumption, I don't see the reason why oil prices should move up again," ENI Chief Executive Paolo Scaroni told reporters during a presentation about mechanisms to reduce volatility in the oil market.

I am still short Nymex Crude Oil Futures but I was able to reduce some positions when oil traded down to below 69 dollars moments after the Oil Inventories data release. As I said eralier today I had some buy orders around the 69 dollars level, to close those added shorts. I may put those added short lines tomorrow.

I could only trade for the first hour of the US trading session and I did 2 Guerrilla Trades in the banking sector. They both went OK.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage. Trading is not as hard as some think and definitely not as easy as some wanted it to be.

G8 Finance Minister Says Extra Liquidity Is Fueling Oil Speculation

"Italy's finance minister Saturday expressed concern that the big stimulus used by the Group of Eight leading economies to fight the recession was already recreating the kind of financial speculation that was at the root of the economic crisis.

Giulio Tremonti told a news conference at the end of a meeting of G8 finance ministers that financial speculation had returned, especially in oil markets, where prices have recently risen sharply, posing a threat to the recovery.

"Instead of financing the real economy, the extra liquidity in the system has this tendency to fuel speculation," Tremonti said." in the WSJ

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage. Trading is not as hard as some think and definitely not as easy as some wanted it to be.

What Is Driving The Oil Market?













A look at this week's energy inventory data, with Ray Carbone, Paramount Options. Ray explains what is driving this market. Very interesting.

Is The Market Topping? Guerrilla Trading.

It was a very stressful day, holding a big short S&P position. I got scared a few times with the several rally attempts but the S&P`s ended the day flat. Bull forces were still at work for the most part of the trading session.

I did some guerrilla trades like buying EUR/USD for a 30 ticks profit and some Nasdaq`s for a quick scalp after 2pm in the afternoon NY time, the "institutional prime time hour for buying". So the trading day was OK, slightly profitable.

I have reduced my S&P`s by a third taking some profits on those I had sold at 944 yesterday. The remaning shorts are still well off the money.

Changing subjects, I was thinking about the traits of sucessful traders. While most trading books refer discipline as the best quality of a trader, I think the best traders are agressive, fearless and flexible. I rank high on the first two and low on flexibility. I like to keep trading on the same side of the market for extended periods of time. I would like to know your thoughts on this subject.

I will try to post my guerrilla trades in real time tomorrow if I can spot any market opportunities.

I did not even mentioned oil because it was flat today. I am still short with a very moderate line. I may add to this short position on market weakness. I sense good days ahead.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage. Trading is not as hard as some think and definitely not as easy as some wanted it to be.

Less Oil, More S&P`s

I closed half of my short oil position and added the S&P Futures that I closed last Friday at 910. Now I have re-shorted them at 936.50, almost 25 points higher in less then 24 hours. I think the stock market will probably have a bigger sell-off then oil.

I am short with a pretty big position on the S&P Futures. I think the time is right.

Keep a close eye on the long term bonds today. They may sell off again and push the stock market lower.

I will add to my short oil position if and when the market reverses and begins to flash some red.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage. Trading is not as hard as some think and definitely not as easy as some wanted it to be.

Oil Rises 30% in May. Biggest Gain in 10 Years.

Oil prices have risen roughly 30 percent this month — their biggest monthly gain in 10 years.

This is a good example of an overbought market becoming more and more overbought disregarding conditions. Profit taking and fundamentals will send this overbought down for a big correction soon and then I will be able to quote Jesse Livermore, "But I can tell you after the market began to go my way I felt for the first time in my life that I had allies - the strongest and truest in the world; underlying conditions."

When it turns, I will add agressively to my shorts. Playing the next downturn in oil will be the best trade for the next few months.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage. Trading is not as hard as some think and definitely not as easy as some wanted it to be.

Exxon`s CEO Comments On Oil Prices

"The recent run-up in crude prices to $60-plus from under $40 earlier this year isn’t necessarily evidence that the economy is recovering", Exxon Mobil Chairman and CEO Rex Tillerson said Wednesday.

"Oil demand remains down while supply is robust amid the lingering global recession, so those fundamentals don’t support crude’s slow uptick."

The weak dollar and “green shoots” — initial signs of a stabilizing economy and market momentum — could be contributing, but oil traders’ optimism is “just a bet on their part,” Tillerson said after the company’s annual shareholder meeting.

But without change to fundamentals, Tillerson isn’t betting. “I think it’s too early to call this economy,” he said.

But with the market this strong even the most bearish oil traders like myself are beginning to have second thoughts. But like Pit Bull Marty Schwartz wrote in his fantastic trading book, "When it gets so bad that you want to puke, you probably should double your position". I am not there yet, not even close. But this rally is giving me a major headache. I have to keep my calm, because I want to double up that position and make a home run on the sell off. But I will seat on my hands for now...

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage. Trading is not as hard as some think and definitely not as easy as some wanted it to be.

S&P`s Selling Off. Reacting to Bonds

it looks like the S&P Futures are selling off, reacting to the weakness in the long term bonds. Yields are surging and that will affect the stock market.

Let`s see how this unfolds. We can have a major sell-off on the S&P Futures.

When I first posted, the S&P was at 905. Its trading at 897 now. We can have a brutal sell-off. Fasten your seat belts. I have added slightly to my shorts with XLF.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage. Trading is not as hard as some think and definitely not as easy as some wanted it to be.

I Always Like Listening To Cashin













This guy has been doing this forever. I always like to watch him. One of the only guys worth listening to on CNBC TV.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage. Trading is not as hard as some think and definitely not as easy as some wanted it to be.

Trading Superstitions

I do not have many superstitions. I don`t even have faith or religion, I have the absence of belief in the existence of deities.

But I have my little market superstitions. For instance when I wake up and positions are running against me, or I have big positions on the market and I am expecting a very volatile day, I always dress up to the occasion. I mean, I wear my best suit, and one of by best ties. In these days only Hugo Boss, Cerruti or Armani ties qualify. Another superstition is to put on my One Million parfum by Paco Rabanne. Its box is a little gold bar.

I do that automatically and that makes me a little more confortable. I think I need the market to respect me in those days and that is why I wear by best clothes. If any phsycologist or a phychiatrist is reading this, please do your own interpretation and post it.

Back to business. I am still short S&P, not with a very big position (lots of room to add to this one) and a small short oil position. Oil inventories will come out later today (actually are coming only tomorrow because of the Memorial Day)and I may add to that position if it comes my way. Oil is trickier to short. All attention is neeeded.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage. Trading is not as hard as some think and definitely not as easy as some wanted it to be.

Buy On Weakness, Sell On Strength

There is no better feeling then being bearish, closing a short position within a few ticks of the low and shorting again near the highs of the session. I was inspired today, and read the market pretty well in the morning.

Now I am short again, at 905 but sitting on the profits I have made so far this month. I am still bearish, I think the consumer confidence was influenced by the green shoots that the media has been shouting about and because of the surge on the stock market from the March lows.

These rallies as far as I can see are shorting opportunities and those that have been following this blog know that I like to sell short on strength and cover short on extreme weakness. Its my style, its my way of reading and trading the markets. Everybody needs a style and its difficult to emulate other styles. What fits me, may not fit you. But profits fit everybody as far as I can tell.

I feel like taking risks, I want to be agressive now because I am synchronized with the market but after this trade I am going to rest for a few days because this run cannot go on forever. Maybe I will go to Roland Garros and watch a few days of great tennis. Why not?

Despite having closed half of my crude oil short position early today, I am still off the money on that trade. I won`t add to that position. Its too dangerous to be short oil and do not want to expose myself too much to that trade. I will keep pushing the S&P`s. Its been far easier. I will profit on the oil position if I have a little patience and if the US dollar does not crash...

I went to play some tennis this evening. I need to exercise to keep mentally and phisically fit. As Marty Schwartz wrote on his book Pit Bull, "a great trader is like a great athlete". I agree with him.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage. Trading is not as hard as some think and definitely not as easy as some wanted it to be.

Long Weekend. Time To Think, Reflect and Re-Energise.

Long weekend. Trading will only restart on Tuesday because of the Memorial Day. I was just re-reading one my favourite trading books, Pit Bull. Its written by a self made trader, Martin "Buzzy" Schwartz.

Its fun reading and you can also learn a thing or two. I will just post here some of my favourite quotes from this book,

"The market does not know if you are long or short and could not care less.You are the only one emotional involved with your position. The market is just reacting to supply and demand and if you are cheering it one way, there is always somebody else cheering it just has hard that it will go the other way"

While I don`t think Schwartz was a truly great trader, he has made big money trading S&P Futures and knows what it takes to succeed.

One of my favourite parts is this, when Marty was down big and very worried about his trading position he called his mentor, a guy named Zollner and asked him for advice. His mentor answered, "When it gets so bad that you want to puke, you probably should double your position". I think the same way too. Its dangerous, but hugely profitable. So, the question is, you have to know the markets very well to win at trading, but even more important is to know yourself.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage. Trading is not as hard as some think and definitely not as easy as some wanted it to be.

Bonds Are Selling Off. S&P`s Can Be Crushed.

I think I will make a ton with this short S&P position. Bonds are selling off, that will prompt some selling in equities.

Can we see some panic selling? Maybe.

Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage. Trading is not as hard as some think and definitely not as easy as some wanted it to be.

Oil is Overbought

Bespoke have just posted their commodity snapshot in their website. Oil is way overbought.

"The green shading in the charts represents between 2 standard deviations above and below the commodity's 50-day moving average. When the price moves outside of this range, the commodity is considered either overbought or oversold.

As shown below, oil has rallied nicely but it is currently in overbought territory and at the top of its uptrend channel." in B.I.G. Website


Petroleum Oil Gas info Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage. Trading is not as hard as some think and definitely not as easy as some wanted it to be.

Oil Futures Are Printing Red. My Favourite Color

Crude Oil Futures are printing red in my interactive Brokers trading plataform. That is the way I like it. Its the sound of cash coming in.

The US Dollar is strong today and that is definitely a plus for my position. We can have a 2 to 3 dollars move in the oil futures contract.

Still Short Oil. Invite Your SO to Dinner.

Today I rolled over my June Crude Oil Future to July. The July contract will be the most active from today.

Oil Futures have been a lot stronger then I expected. I attribute that to the upbeat sentiment in equities and in risky assets in general. But as I said before underlying conditions are bound to prevail and reality will set in and lower prices will follow.

Will it be here and now? Will it be 5 dollars higher? I don`t know.

Even though I am still short the NYMEX Crude Oil Futures at 59.42 dollars a barrel and I am very confident that this trade will be a good one.

Have you noticed the collapse in the contango? Its under a dollar in a month period. This is the lowest contango I have seen in almost a year.

Regarding equities I am still bearish and expecting lower prices ahead but I want to short the S&P Futures at higher levels. I can miss that trade if the stock market trades lower from here without rebounding, but I have a strong short position in oil and I would like to have a decent profit on that play before I commit any more capital to the market.

I will leave you with one of my favourive market quotes from Richard D. Wyckoff, "speculation, in its truest sense, calls for antecipation."

Have a nice trading day and if you are profitable today, withdraw some money and go out to dinner in a nice restaurant with your significant other. Trading is not a viable long term business if you don`t reward yourself and the ones surrounding you when things go well. Keep that in mind at all times.

Petroleum Oil Gas info Blog is a website for active online futures traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Tired of CNBC Commentators

I am really enjoying this project.

I am tired of those CNBC and Bloomberg commentators that always say they make everything right.

I think that only about 20% of them are really profitable and only about 5% of them could live only the money they make trading their accounts.

When I trade I post. If I get burned maybe we can all learn something from that trade. When I win, I´ll show you the mindset that leads to good trades and the merits of a good analysis. No half right projections, no bullshit. My mouth is where my money is.

Petroleum Oil Gas info Blog is a website for active online futures traders. I will provide my real time trading decisions and my market thoughts on this webpage.

I am Bored. Let`s Make a Trade

Quiet trading day. I made a very small intraday play (completely out of my usual style) in FITB. A typical "go with the (institutional) flow" kind of trade that I make when I don`t have anything else to do. That position is out of the money, but its only a chicken`s feed position. I think I did it mainly because I was bored. I will tell about how that trade turns out in the end of the day.

I am still short oil with a big position, as I am waiting for a big correction in the next few trading sessions. This is the position I am focusing on and I have waited several weeks to find a good shorting opportunity in the NyMEX Crude Oil Futures. I have certainly increased my odds of profiting big in this one.

The Initial Claims data in the US came higher then expected, with continuing claims at an all time high. The Jobs picture is not improving and I don`t think we will see many more green shots (as they say) in the near term.

I was bored to death in a meeting with some Fidelity`s representatives that were trying to convince me into mutual funds. I did not even know that Mutual Funds still existed. :)

Petroleum Oil Gas info Blog is a website for active online futures traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Still Short Oil, Commodities About to Roll Over

Crude Oil fell today shrugging the good news that came out on the Inventories Data. Art Cashin spoke today about a false dawn in commodities that started when the chinese announced their stimulus plan and I agree with him. Commodities are about to roll over.

I always like to listen to Art Cashin. He is practical and insightful.

So, I am still short NYMEX Crude Oil Futures and I expect them to hit the low fifties in the next few trading sessions. Demand is still going down, and OPEC members are beginning to cheat on their quotas, causing supply to go up (simplistically speaking).

So basic conditions call for lower prices ahead. The fact that the market is overbought also helps, and we may see a big drop in oil prices in the days ahead.

I made a few bucks today, nothing to write home about. Still, black ink is much better then bleeding. So after beginning May with the left foot I am now a little to the good. This short oil position will determine how well I will do this month.

As Jesse Livermore once said "There is a great deal in starting right, whatever the enterprise may be" and this trade is starting right. Lets see how it plays out.

Petroleum Oil Gas info Blog is a website for active online futures traders. I will provide my real time trading decisions and my market thoughts on this webpage.

What a Great Trading Day

What a great trading day.

As I said in the last post I was having a tough month after a fantastic trading performance in April.

Have you ever heard that its better to be lucky than smart? Well, today I feel both lucky and smart. I closed my short S&P Futures position at 896, pretty close to the lows of the session. I lost 2 full points in the contracts that I was carrying, but it was enough to put be back in the plus column for this month.

I had a few scalp trades in oil and despite losing some bucks in this ill timed short position, I am again profitable in May.

Now I only have the short oil position, but I am very confident that I am going to make a few points in that position. Oil was lifted by the positive sentiment in the stock market and I think being long oil at these levels is a pretty asinine play. Time will tell if my confidence in this trade is misplaced or not. Have you read the Krugman article I have recommended you?

Have a good trading day. I will be back tomorrow.

Petroleum Oil Gas info Blog is a website for active online futures traders. I will provide my real time trading decisions and my market thoughts on this webpage.

US Dollar Weakness Impacting My Short Oil Position

The US Dollar is extremely weak again in this early trading. I think this is the biggest threat for my oil short position today.

How this dollar weakness is going to affect stocks and bonds, I am not sure yet.

But this is a very big move in a few days and that video about the off balance sheet losses by the Federal Reserve is one of the reasons behind this move.

It seems like I will have added pain in the oil position but I am not sure about the S&P. Lets see how the session unfolds.

Petroleum Oil Gas info Blog is a website for active online futures traders. I will provide my real time trading decisions and my market thoughts on this webpage.

I am Fading This Rally in Risk

I am fading this rally in risk that has been going on for the last 9 weeks and I am short S&P Futures and NYMEX Crude Oil Futures.

The futures are green early on, but I think markets yesterday began reversal that will lead us to a correction in the S&P. Oil is rallying in Globex and is trading over 59.40 dollars a barrel.

After a fantastic month of April, where my personal account appreciated over 40% I am having a tough month in May. My two positions are cutting about 8% of my account, but I am confident that this rally in risk, this unintelligent bullishness is misplaced and the bulls are going to be scared off their positions. We can`t always win, can we?

The price of NYMEX crude oil reached 59.49 dollars a barrel on Tuesday, the highest level for six months as the US currency slid against leading currencies. I see a really great opportunity shorting oil on strength.

Petroleum Oil Gas info Blog is a website for active online futures traders. I will provide my real time trading decisions and my market thoughts on this webpage.

It Turned Out to Be a Good Trading Day

It turned out to be a pretty good trading day. My big S&P Futures short position gained a few points and my NYMEX Crude Oil Futures ended the session in the money.

I think I will make over 5 full points in the Crude Oil Futures short position over the next few trading session. As I said before, the Supply / Demand situation is not compatible with an almost 60 dollar a barrel oil.

In the S&P Futures short position I am off the money almost since the moment I put the position on. Maybe today`s action is a reversal of fortunes for the shorts. S&P Futures will correct to the 850-870 area in the next few trading sessions.

Petroleum Oil Gas info Blog is a website for active online futures traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Futures Are Red. My Favourite Color When I am Short.

After a persistent sequence of green days it seems like we will see some red today. I love red whenever I am short. I am even wearing a red tie today. Everything helps.

I am short S&P futures and and I am short June Oil Futures again at 58.58 USD. The market is extremely overbought and everyone who bought in the last few days are going to witness pain. I expect a major correction here.

The quote of the day goes to George Soros, one of the greatest of all time, "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong.".

Petroleum Oil Gas info Blog is a website for active online futures traders. I will provide my real time trading decisions and my market thoughts on this webpage.

I am Going To Short Oil Again

After a very good run, this month is being a bit tough. I have shorted the S&P Futures several times for a profit in April, but in May my short position is 30 points off the money.

My view is that the market is overbought, the market sentiment is almost hysterical. Things will slowdown for sure and this week the market will probably correct somewhat.

I am planning to short oil futures again early this week. The demand / supply situation is not consistent with almost 60 dollars a barrel oil. Oil is being pushed up in this risk rally, as Hugh Hendry so nicely puts is, and will get back to terms soon.

I recall one of my favourite Jesse Livermore quotes, "But I can tell you after the market began to go my way I felt for the first time in my life that I had allies - the strongest and truest in the world; underlying conditions."

Petroleum Oil Gas info Blog is a website for active online futures traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Carrying a Losing Trade Into the Weekend

S&P is strong after the Employment Report, it seems like I will go with my positions off the money to the weekend.

I am short at 894, losing almost 30 full points in my futures contracts. The S&P Futures are up over 40% from their low early March. Everybody is bullish now, especially on CNBC. I am expecting a big and dramatic pullback on the market that might take the S&P 500 to the low 800`s.

I am carrying a big short line and I am annoyed with all this unintelligent bullishness.

By the way, I did well to close my Oil Futures Contracts yesterday. They are trading back up today and I am planning to short them again later today or early next week.

Trading is never easy, is it?

I need a rest. This week was exhausting...

Stress Test Fireworks. Still Short S&P

Stress Test fireworks impacting the futures early on. I am still short S&P Futures and waiting for a severe correction.

Jobs Data are a threat. ADP early in the week came better than expected and the data will cause volatility. Even though I think the market will end the day lower no matter what the jobs number is going to be.

I closed my crude oil short position with a 2 full points gain in the NYMEX Oil Futures. I don`t want to go overextended to today`s session. This way I still have some ammo left to play if things go against me today.

Petroleum Oil Gas info Blog is a website for active online futures traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Oil Is Up Over 70% in 3 Months

Oil has been moving sharply higher over the last couple of weeks, and it is now up 71.15% over the last 3 months. A move of this magnitude in any other market would normally be getting front-page headlines, sparking fears that energy prices would "break the back of the consumer." But since the consumer's back is already supposedly broken, nobody seems to care -- yet.

But rest assured that a continued increase in prices at the pump will start to be felt at some point, causing another area of concern for both the people that consume it.

Petroleum Oil Gas info Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

I am Short Oil and S&P Futures: Rally in Risk Is Coming To an End

Benchmark U.S. crude oil futures held steady near 57 dollars a barrel Thursday in Asia after a round of short covering from traders in Japan, who returned from the Golden Week break.

Sentiment continued to find support from surging regional equity markets, amid renewed confidence in the outlook for the global economy, or so says the Press.

I think its time to sell Oil short and to sell short all risky assets. The rally in risk we have seen in the last few weeks is coming to an end.

I am short oil at 57.89 and am I short S&P futures at 894.

Interesting comments from Christopher Zook, CIO of Caz Investments that is think best describe what is going on the stock market:

“There’s a whole lot of money on the sidelines that is worried the train has left the station without them, in other words they're fearful they’re missing this move."

“After being down last year there’s no way money managers can excuse being down this year and not participating in the rally. So we’re seeing panic buying which leads me to believe the rally is almost finished.”

Petroleum Oil Gas info Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Oil Inventories Rose Less Than Expected

Crude-oil futures rose Wednesday after government data showed U.S. crude inventories rose less than expected last week. Crude inventories increased by 600,000 barrels in the week ended May 1, the Energy Information Administration reported.

Oil Futures are trading up 4% nearing 56 dollars a barrel on Nymex. I think its a good time to short oil. oil has benefited from stronger risk appetite and uptrending equity markets, but the supply and demand situation still points to lower prices ahead. I am adding to shorts here.

Petroleum Oil Gas info Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Oil is Getting Overbought

Which commodities are overbought and which are oversold?



I found this analysis on the Bespoke Investment Group website. They usually post some interesting research on their website.

"The green shading represents between 2 standard deviations above and below the commodity's 50-day moving average. When the price moves outside of this green shading, the commodity is considered overbought or oversold. Oil is pretty close to the top of its trading range, and the last time it moved above the green shading, it pulled back pretty quickly. Natural gas is the closest to oversold territory and continues to trend downward. Gold, silver, and platinum have broken their uptrends recently and are approaching the bottom of their trading ranges. Copper, corn, wheat, orange juice, and coffee are closer to the top of their range than the bottom."

Petroleum Oil Gas info Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

How Are Commodity Futures Performing YTD?


Petroleum Oil Gas info Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Buffett Still Skeptic on Recovery

“There’s no signs of any real bounce at all in anything to do with housing, retailing, all that sort of thing,” said Warren Buffett in a Bloomberg Television interview before the Omaha, Nebraska-based company’s annual shareholder meeting this weekend.

“You never know for sure, even if there’s a leveling off, which way the next move will be.”

Petroleum Oil Gas info Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Shorting Oil on Rallies

The presence of a huge inventory overhang and continued bearish inventory dynamics in the U.S. suggests prices might well remain stuck in the current range or trade down from these levels.

I am shorting oil on rallies.

Petroleum Oil Gas info Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Abby Joseph Cohen: S&P May Jump 20% in 6 Months

The S&P 500 may jump 20 percent to 1,050 over the next six to 12 months as investors buy stocks trading at low valuations, said Abby Joseph Cohen, Goldman Sachs Group Inc.’s senior investment strategist.

“You could see the market sustain at these levels,” Cohen, 57, said in a Bloomberg Radio interview. “We’re going to set a new trading range much higher than the trading range in February and March.”

I don`t agree. I think the market is overbought, the economy will not grow any time soon. At best we will trade around these levels in a boring trading range. But my feel is that a big correction is coming.

Petroleum Oil Gas info Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Will Swine Flu Impact Travel?

Crude oil futures climbed back into positive territory Wednesday in Asia as regional share markets turned higher, although traders remained cautious ahead of weekly U.S. government data that could show fundamentals staying weak.

The federal Energy Information Administration is expected to post further increases in the country's crude and distillate stockpiles, potentially dousing hopes for an early recovery in demand.

Sentiment also remained under some pressure as oil and financial markets watched the global response to the swine flu outbreak from Mexico, amid concerns a pandemic may undermine prospects for an economic recovery.

"Swine flu is certainly one fact that's been a negative for the oil price because it's seen as potentially affecting international travel, and even travel within countries," said David Moore, a commodities strategist at Commonwealth Bank of Australia.

Despite this early 1 dollar rebound in Globex futures I think oil futures are shortable here. You will benefit from lower prices and be paid for waiting because of the contango.

Petroleum Oil Gas info Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Hugh Hendry Video Interview on CNBC













Hugh Hendry is my favourite investor on CNBC. I always like to watch his videos, and he always has some good ideas.

Petroleum Oil Gas info Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Latest Hugh Hendry CNBC Interview

The recent rise in stocks and talk about green shoots in the markets are optimistic assumptions, as the world downturn "still has a way to run," Hugh Hendry, Chief Investment Officer at Eclectica, told CNBC Tuesday.

World gross domestic product looks overestimated, because global consumption has been based on debt, and this cannot continue, Hendry told "Squawk Box Europe."

"In the last five weeks we had a rally in risk. Big deal," he said.

"I am fearful of the surplus countries, like China and Germany. I think GDP has been overstated," Hendry added.

"My notion was, you had Bernie Madoff doing US GDP accounting." China "built capacity to serve a world that doesn't exist. We're drowning in capacity. The idea to propose we build more… that ain't a remedy," he explained.

Although companies' results beat forecasts, this is mainly because they marked their expectations too low, but their outlook is grim, according to Hendry.

"I believe the downturn in the global economy still has a way to run. We've only been given evidence of further deterioration," he said.

The rise in bond yields shows that the yield curve is flattening, pointing to more economic weakness ahead.

"What it reveals is that it's terrifying. This rise in bond yields shows… the private sector is countering the Fed and is tightening policy," Hendry said.

During the Great Depression, there had been rallies in the stock market, but stocks generally fell, Hendry reminded, explaining his bearish stance on stocks. He added that nobody can predict where the bottom was for the stock market.

"Monkeys spend all their time picking bottoms. I refuse to pick bottoms as I don't live in trees," he said.

Petroleum Oil Gas info Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Swine Flu Impacts Oil

Crude Oil Futures traded lower Tuesday amid concerns that the swine flu outbreak would curb oil demand.

Light, sweet crude for June delivery traded $1.25, or 2.5%, lower at $48.89 a barrel the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded $1.14 lower at $49.18 a barrel.

Commodities and equities are falling worldwide as investors prepare for the possibility that the swine flu outbreak will become serious enough to disrupt global economic activity.

Petroleum Oil Gas info Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Oil Futures At a 2 Week High

Crude oil prices surged nearly 2 dollars a barrel in the last trading day of last week to settle at a 2 week high. Oil futures benefited from the strength in the stock market and the weak dollar.

Crude Oil Futures for June delivery on the NYMEX settled up 1.93 at 51.55 dollars a barrel, the highest level since April 9.

Petroleum Oil Gas info Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.