Oil

With the market expected to go lower on the bailout delay, expect oil to follow. Look at the oil exploration stocks I highlighted as possible shorts.

Coals that I feel comfortable shorting: ANR, MEE, CNX, PCX
Additional energy: CRK, PXD

Update: wow, talk about not being able to execute a plan, all energy gaps down huge, no chance for anything

Energy Stocks

The stocks I pointed out are looking pretty good. Crude started strong and ended weak. Most of the stocks I mentioned were slightly red. I shorted HES intraday and made a small profit (could have done better if I held longer!).

Lets see if FSYS can find any support here.

Coals
They really fudged the bucket today. CNX restated estimates, but it also got a positive note from an analyst, lame. JRCC is going to offer a secondary, that was -15%. PCX got a buy rating yesterday and it is -5.5% today. ANR got a buy rating 2 days ago and since then it has been -15%. This is why I am glad I stopped holding stocks over night. Too risky in this environment.

USO

At a critical junction. Will the downtrend continue? If it does, I think USO can head back to 65-70 area. The one thing I am worried about is that oil will rally if stocks rally from this new plan.

Crude

Crude sold off after inventory numbers, went from +3% to currently flat. If it picks up momentum towards the downside, the short plays I mentioned should start working.

More downside for energy?

Now the first thing you have to understand is that these trade based on crude. So if crude is strong, don't expect to make much money shorting these. Crude can remain strong if the indexes are strong.

HES

Looks like there is more room down. Hitting resistance at the 20 and 50 DMA.

ARD

Interesting price right now. If it holds below previous high, this can go down to 35 in no time. This should be a very easily managed trade.

APA

Further downside after consolidation? Wish I was looking at this 2 days ago, would have been much easier to manage.

DVN

Didn't I just see this chart?

OXY

Trades inline with oil.

Oil on fire - play the coal

I said "Energy feels like it wants to rally." in my previous post. Mid day I thought I was early and maybe later this week. Supply numbers drove crude down. Then later in the day a huge rally. Right now oil is +6.6% and a lot of the coal stocks I mentioned are working back to green. The oversold ones look very tempting here.

One note: gasoline does not seem to be rally that much, but refiners holding up well.

The Crack Widens

Honestly, I can't figure out the actual crack for the life of me. It is supposed to be traded on NYMEX here but I can't actually get real numbers! So instead I just use UGA and USO with magic multipliers, which should be a good enough approximate. I am not sure how far up this will go, especially with the hurricanes here. Will gasoline go up more than crude?

WNR +16%
FTO +7%
TSO +6%

Other Refiners:
HOC +13%
VLO +9%
DK +13%

I will probably do a review of the refiners over the weekend.

Oil, temporary stabilization/rally?

The stocks I mention in my previous post rallied very significantly today. MEE, JRCC, POT, IPI, MOS, ACI, BTU. There maybe be 1-2 days of more rallying, but I would keep the stops tight.

Oil

I am seeing news about OPEC cutting production. If this results in a significant bounce in crude (currently +1.3%) then this could give significant bounce to coal and ag stocks. Look to MEE, JRCC, POT, IPI, MOS, ACI, BTU for any bounce. But be careful, rises in crude have been know to fail miserably.

http://www.reuters.com/article/newsOne/idUSLA55582920080910

Oil Refineries

The traders on Fast Money were talking about how refineries are very undervalued. Here are charts showing the performance of the refineries starting from January.

2005

Year long rally in 2005.

2006

Following the huge rally in 2005, only a slight rally in 2006 starting in February.
WNR: +30%
MRO: +20%

2007

Huge performance on all refineries. The top performers are:
WNR: +180%
TSO: +80%
VLO: +50%

WNR had the biggest and fall last year. Betting on this stock might prove to be very profitable.

Here are the debt to equity ratios for the stocks mentioned. Beware WNR has a lot of debt.
WNR: 1.64
TSO: 0.49
VLO: 0.36
MRO: 0.34
COP: 0.34
SUN: 0.70