Market

Weird market. I did not think we would hold up so well after that huge sell off yesterday. I am even more cautious on the market now, both long and short. I might update a few charts today, but it is hard to find any trends in this market. I am keeping my trades to very short term, 1-2 hours.

Wow

I won't be giving any recommendations or suggestions since I have no idea what to do here. I always thought the market would continue to have a hard time even if the bill got passed. But now that the bill has been stalled, I don't know what to think! I watched stocks go down HUGE today.

FSYS - I never thought it would break the channel like this!
CLF - 5th down day in a row. Today it was -20%, at worst, -28%. Last 5 days it has gone -60%, now it has a forward PE of 3... something has to change here. I don't understand the discrepancy between spot coal prices and the dry bulk rate. I am very interested to see how these coal names get resolved. do estimates come down? do stock prices go up? do earnings meet expectations?
CNX - Almost completely returned to 2007 levels, -24% for the day. FPE 5.6
WLT - Same as CLF

Huge down day for oil stocks, particularly the ones I pointed out:
PXD - 11%
DVN - 11%
CRK - 14%
HES - 15%
ARD - 16%

Some of the bullish/bottoming stocks got completely washed out.
CME, NYX, MEE, WNR, TSO, FTO, HANS

VIX

I guess I was wrong about the VIX double top. Looks like we need a real second top in the 40s.

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

Refiners

My little chart to show the direction of the crack spread. Seems to be pulling back a bit, but it is hanging in there.

I expect oil to pullback some more and hopefully improve the crack spread.

The charts of the refiners look very promising, however you always have to consider the possibility that these stocks have not bottomed. But given that crude has topped, the outlook of the refiners should not deteriorate further unless gasoline demand drops down huge.

FTO

Breaking to the upside again, I wouldn't chase it here. But it is now above the 10, 20 and 50 DMA which are all increasing. Very bullish.

TSO

Breaking to the upside and showing a lot of strength. A little overextended here since it has gone from 15 to 20 in 8 days. It is above the 10, 20 and 50 DMA which are all increasing. It is also right at the 100 DMA, which may provide resistance. A pullback or a breakout followed by a pullback should be bought. Very bullish.

WNR

It is now above the 10, 20, 50, 100 DMA and they are all increasing. This gives me a lot of confidence that this has bottomed. Bullish but only intraday since I expect pullbacks.

SUN

Stabilizing, the least extended of the refiners that I follow.

HOC

Another example of strength, not my favorit, but it can make moves.

Market

This market is a mess. Too much bickering about the bill, now McCain is getting into the ring. I honestly hope this is just for show to see which politician is the bigger jackass. But until this is resolved I find it hard to hold on to any stock for more than a few hours. But that is just me.

It seems that JPM stole a few trillion dollars wroth of assets from WM for a few billion dollars, must be good to be them!

Update: FSYS

Acting very strong so far +8%, at the high end of the channel. Can it break out from here? Maybe. But I don't see it being strong yet, a pullback is needed. Oil is currently at HOD, rallying with the market like I predicted.

Update 2: LULU

Apparently this morning's weakness should have been bought. It is up $1 since then which is about 4.5%. I will try and buy a bit on a pullback to 23.

VIX, XLF

I think the VIX has put in its double top I was talking about. XLF also seems to have bottomed with recent lows at 20. But this is all contingent on congress and therefore can change on a dime. Expect the VIX to remain high for a while.

Update: LULU

Pulled back to the 10 DMA. And a previous high. There is a good chance that this can go a little lower to 22 (which would make it an easier buy), but it looks tempting here, especially if the market as a whole picks up.

Now, a check on the short interest

As of 09/15/2008 the shares short are 12,736,393 from a previous 14,869,887 with an average volume in the stock of 1,592,988.

Unfortunately, this only include 2 days of major short squeezes, 9-11 and 9-12 and not 3 following squeeze days 9-16, 9-17, 9-18. Lets assume that 2 million shares were covered during this time. That leaves us with 10.7 million shares short and about 7 days left to cover at this current volume. This is still pretty high!

I think this stock can easily see 28 soon, the entry point on this will need to be handled with care so that you don't get burned out of this. I will try to make an intraday post if I go long LULU. I will be using small position sizes to minimize loss and add to it if my thesis proves correct.

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.

AIG

I have let go of any of my bullish feelings towards AIG. They are taking the loan with NY, which means the government will dilute shareholders like crazy. The stock is down big because of this.

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.

AIG update

regarding its loans

lets see how the market acts tomorrow

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.

A quick look at coals

Going through all the charts, the coals look very messy. Some look like they are trying to form a bottom, some look like they want to head lower. The only things I would consider here are day trades, preferabbly longs on stocks that have been hit the hardest (MEE, CNX, PCX, ACI). There is nothing long term here, too volatile and unpredictable.

A quick look at casinos

No charts. WYNN, LVS, MGM all look like they are healing. The trend is still downward, so they should not be considered as longs.

A quick look at exchanges

I am starting to turn bullish here.

NYX

Critical point for point for the NYX. If it holds above the moving averages and that descending line, it could very will be on its way to bottoming.

ICE

Made a lower low. I love to see stocks break below their lows, bring in fresh shorts, then squeeze them all the way up. If it can regain 80, then a bottom could be in.

CME

The most promising of them all. Huge consolidation, breakout, now it is very close to testing the breakout. CME looks very interesting here, above the increasing 20 and 50 DMA.

Long Term

This is the reason I am long term bearish. If you don't want to read the summary of the article, here is my summary of the summary:

• GDP to take a hit from likely moves by state governments to cut costs
• over 12 percent of the U.S. GDP is driven by government spending
• consumer under more pressure, credit card debt may grow
• home prices to ultimately be at least 25 percent lower
• unemployment rate, is headed materially higher

I don't know WTF is wrong with my bullets. Any help from anyone?

XLF, GS

On the GS news, XLF is up 3%. I think the bottom today @ 20 is going to be a decent temporary bottom. I wish I jumped in when it was flat at 20.1, but I was thinking we could head lower to 19 level. Oh well, another boat I missed. Don't chase it here, but if you do trade the financials, trade them to the upside (haha like there is any other choice).

AIG

I have been meaning to make a post about AIG for a while, but it keeps running up. I really think this company has a good chance at a strong comeback. They should be able to sell assets and refund the government's money, which will (hopefully) not allow the government to take an 80% stake. If this happens, the stock can easily reach 20 (currently trading 5 and has trading at 2!).

AIG Today 01:12pm - American International Group, Inc Large Holders reportedly expect to receive notice on financial position of company later today

Watch out. This can also be a catalyst for XLF to move higher.

XLF

Today's bottom in XLF will be very crucial. 20.

FSYS, LULU

FSYS is looking strong after a pullback. I am still waiting for more conviction before I act, especially with my bearish view on crude.

LULU formed a temporary bottom at 23. I was tempted to buy, but I was afraid it would just stop me out of a quick loss (which it probably would have at 22.8), so I never bought. Now it is at 24 and change. I will wait to buy this on weakness in the 23s.

Also, I need to reevaluate the sectors I trade in and see if any are bottoming.

ENER

Simply wow, now it is -15%, guess sometimes its not too late to short!

FSYS

Showing some real strength this am, looks poised to break its channel. But can it sustain this move with oil headed lower?

Market

The market does not look so bad today. We might have a nice rally.

ENER

I forgot to mention I like ENER short. Today it dropped 7% in the first 5 min, so it is already too late to get involved. Makes me mad!

Top?

Financials look interesting

Here is a long term trend for the XLF. Too many lines, but somewhat necessary.


Now, I usually don't trade the financials, but I am getting interested. The trendline was violated intraday twice, but both times the index closed below it as well as the 100 DMA. You also see that it has been healing very nicely the last 3 months, as it moves sideways. As the VIX moves higher for a possible double top. at the 36-38 level



I will be very interested in trying a long in UYG. If the VIX does spike again, that means people will be panicking (again), a perfect time to buy and try to catch a bottom. If you do try this, I recommend using SMALL positions with stops. That way you can easily walk away unsuccessful.
On second thought, UYG is very screwed up do to the ban on shorting, so I am not sure how profitable this plan will be.

The extremely difficult part is determining where XLF will bottom. Right now it has closed at the 10 DMA, below the 20 and 50DMA. These might act as support, but seeing as how they have already failed, we will not rely upon them. Instead I would expect some support in the 18-19 level or even possibly slightly higher. At these prices, people who missed the first rally should step in and buy, causing another rally into the 22-23 range.

But then again, I can be completely wrong and we make new lows! But I believe the perceived value in these companies are too great for this to happen.

Where is the market headed?

I said in a previous post:

I am.
Short Term (few days): Bearish
Medium Term (few weeks): Bullish/Neutral
Long Term (few months): Bearish

The short term seems like it will pan out. People are starting to doubt whether the government will bail the banks out, and even if they do, who is going to save this economy, unemployment, debt etc. But as for the medium term and long term, those are too complicated for me to be confident about. Who knows what this market is going to bring.

But as of now, I anticipate:

lower crude
lower commodities ex-gold
lower enthusiasm for stocks
increased choppiness
quicker trades, take the profits while you have them, today was great evidence of that

There is also one other comment I would like to make. This is a bear market. I don't think bear markets usually last... ahhh the rest of this got cut off. I think what I was trying to say was that bear markets do not usually end this quickly and this weak (need to be -30% from the highs). So expect more downside along with quick bear market rallies.

Shippers: not bad, but not good

Shipping rates have flattened out. But they are back to where they were 2 years ago. I would love to get bullish here because these stocks can make so much $$ for you, but the truth is that it does not look so great. It looks like this 'bubble' has burst and it is time to move on. I will however keep a close eye on the chart, just in case! If the rates can form a bottom here and move up, the future of the shippers should be much better. DRYS, EXM, GNK, TBSI.

Charts

FSYS obeys this trendline way too nicely. Its kind of scary.

If my predictions come true with lower oil prices, this should be taken right back down to the bottom of the trend. And that momentume indicator on the bottom looks like it wants to head down down down.

WNR

A pullback to the 20 DMA (blue line), 10.5ish, would be a very nice setup for continuation move up. Crack spreads should hold steady as crude bounces around in a range.
Old news, but: WNR 9/16/2008 02:55pm Hearing renewed takeover chatter circulating

TSO

This stock has not performed. But it is setting a very nice base if it chooses to move higher from here. Old news but, 9/17/2008 08:12pm Hearing Valero may be shopping to take out peer refiner Tesoro

I don't understand why TSO is acting similar to VLO, when it seems like VLO has many more issues: notes it has limited price changes at gas stations and is currently losing money on fuel sales. That does not sound good at all! And this: Reports malfunction during restart of Houston refinery (83K bpd).

I believe I suggested this before, going short VLO and long TSO or WNR sounds very good to me, but they don't seem to be trading on my analysis.

Oil, what is going on?

I am not going to talk about the difference between the front month oil contracts and the Nov ones. But I did find that the strength in crude was very weakly reflected in energy stocks. Crude was +6% today, which is a pretty big move, yet OIH was -.1%! What does this mean? Well, it means that the energy stocks were being thrown away with the rest of the market.

I had a great time going long coal today, and thankfully I am a day trader and took my profits as soon I got them. As oil hit the high of day (HOD), coals really began to rally. But soon they were pulling back, nice and healthy. Until they gave most of it back and closed pretty flat! +6% oil, and flat coal stocks?

My guess is coals will be choppy here. Don't be long, don't be short. Play intraday swings. Don't buy break outs, don't sell break downs. Buy the dips with small size and sell the rips.

Also, something has to be fixed here. Oil can't keep going up with the oil stocks, so which will correct? My guess: crude is headed back to the mid 90s. Expect the 'world slowdown' story to pop up again as a reason for crude to head lower.

LULU

LULU looks good if it pullsback to the 22 level. I wonder what FSYS will do today. Will it break out of its channel? If it does not today and acts weak again tomorrow, then it might be good for a quick short.

No Post... Yet!

In the mean time check out the Option Addict's weekly watchlist.

Futures are down.

I am.
Short Term (few days): Bearish
Medium Term (few weeks): Bullish/Neutral
Long Term (few months): Bearish

Updated Blogger

I updated the template I am using (font size, side bar). Anyone have any suggestions or recommendations for look and feel? I think it looks much nicer now.

Review

I need to review charts and strategies this weekend. This will be a hard market to navigate. Can it actually continue to move higher from here? Or will doubt set in about the government actions? Is the government action a bad thing? Good thing? Does this mean that things are REALLY bad right now? Or should we just not care? What can history teach us about these situations? Which sectors are buys. Which sectors are sells (obviously not the fucking financials!)? Can the shippers form a bottom here? How about casinos? Or exchanges? What the hell is oil going to do? Nat gas? Energy stocks? Agriculture stocks? Home builders? Tech?

Wow. I didn't mean this post to be a list of questions. But at least I will have an outline for my thoughts this weekend.

Drybulk Shippers

Has the world economy (aka China) picked up? I am sure most people know that China stopped doing a lot of things due to the Olympics in order to keep pollution down. But the Olympics came and gone and still there seems to be no pickup in demand for coal, steal, grain, oil. I heard from someone about the Paralympics. "The 2008 Summer Paralympic Games, the thirteenth Paralympics, took place in Beijing, China from September 6 to September 17, 2008." So these just ended! Which means that if China wants to start burning coal again, it will start doing it very soon. We will be able to see this with a pickup in dry bulk shipping rates. They have been relativly stable the last 3 days (yah not very long). But if this index starts to pick up, look at the shipper stocks to gain momentum.

What I like about the shippers is that some are still near their 52 week lows, so if market picks up + rates pick up, this can be hugely beneficial for them. DRYS, DSX, EXM, GNK. There is no need to rush into these now except to day trade, but keep an eye on them. When they start to move up they can have 60-80% moves in a few months.

Crazy Day

The news today changes everything. SPY has room to run to 125 QQQQ can run up to 44. But, I expect it to be very choppy. The action in MS, GS, XLF was crazy. The lesson I learned today was to NOT chase anything. Nothing in this market is really worth chasing. Financials will have sell offs if you want to buy in. Coals will have dips before buyers are found. I almost never play the financials, and when I do play I use SKF and UYG. If I do decide to play financials I will need to greatly decrease my positions due to this volatility. This way you can buy more on dips. I highly recommend people check out Fly's list of heavily shorted financials here. Also, take a look at some home builders. I made my list HOV, LEN, MTH, PHM, CTX, DHI, GFA, KBH, TOL. MTH has 25 million shares short, with today's volume being 2 million. It is very close to a 52 week high. Can anyone say short squeeeeeze? HOV also has a huge short interest and looks like it has bottomed. GHL has almost 8 million shares short, with average volume are .4 million.

The sad thing is that all these stock will probably gap up tomorrow, leaving me confused and nervous about what to do. I guess we have to take what we got!

Did you guys see LULU today? Its so sad that I sold this stock, it has gone from 18 to 24 in such little time. I will try and buy it on any pullback.

FSYS is interesting for a long, but I would be careful with that one.

TSO is looking good. But oil is so tricky to play. Crack spreads look like they are poised to move higher.

Coal

FYI, I live in CA, so I make a lot of posts 8-10pm, which is 11pm-1am eastern. Sorry for east coast people.
I got whipped around today. Tried to go long coal, chased the open, got burned, shorted ACI made some money back, end of day went long coal made money. I think I love to trade coal too much. All coals ended in the green. JRCC +11%, PCX +10%, CNX +8%, ACI +7%.

MEE was only +3%, it should still have room to run.


I also still like CNX, PCX, ACI, BTU, JRCC

FSYS

Check out FSYS, no time for a chart, but it is at the lower level of the channel I drew earlier. I am not necessarily recommending this for a long, but if market picks up, this can be a huge performer. IF.

No update tonight

No posts today. Gotta find a job and take care of a few things. Tired. I think I really only have about 20-40 regular viewers, so no biggy. Right now oil is slipping lower, so I have no idea how the coals will be tomorrow. Be defensive.

Coal

I will be buying the coals tomorrow, but with very tight stops. These are great stocks to day trade if you know which direction they will go. The oversold ones would be the most optimal plays. The action today was crazy: opened strong, sold off with crude, rallied towards the end, sold off big at the very end. The only way you can make money here is to be very defensive and sell whenever you have any significant profit.

I *hope* an upward trend develops soon, but I would not be willing to lose money if this does not happen. I would rather make a little bit of money and watch a stock run off than to turn my gains into loses. There is absolutely no momentum in stocks in this market.

UPDATE: Oil is now trading higher after hours at 97.5, it closed at 96.6. If it can keep this up tomorrow, coals should be solid.

LULU is unstoppable

+4% today
UPDATE: close +3.3%

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.

Market tanking again

Coals looked terrific early on. I actually made made some money on ACI and MEE. Then it was all downhill from there. I got stuck in MEE, but made it up shorting WLT. My bearish plays are working out, ENER -9%. Too bad I had a positive lean coming in today. Stupid AIG.

MS

I probably wont trade this, but it looks like a capitulation day in a few financial stocks. I like MS.



Check out the volume. This 'capitulation' could be invalid with higher volume tomorrow. However, I doubt that will happen.

Note To Self

Watch the progress of casinos: LVS, WYNN, MGM and exchanges: CME, NYX, ICE and shippers: EXM, DRYS, GNK, TBSI, PRGN

Possible Bearish Plays

If the market continues downward, here are a few good bearish bets. I must admit, I don't like most of them here, so a few days and they might be ready for a fall. In fact they might even be long plays if the market rallies.

CF


ENER - my favorite, ideal entry at 65-70


FSLR


MON

Beautiful LULU

Bounce off of the 10 DMA, 20 DMA, previous low. I am expecting a move above the 50 DMA. Volume has been light the last 2 days, so with a further move up, expect more of a squeeze. First target should be 23-23.5

FSYS hit the low 46s. I would stay away form it for now.

Coals

Energy feels like it wants to rally. My favorite sector to invest in is coal. Here are a few stocks that are oversold.

ACI

35 has proven to be support, it is now red for the year. I am long.

BTU

45 has proven to be support, it is now in the red. It can easily run up to 55.

CLF

70 is support, this stock has held up very well compared to other coals. A move to 85 looks possible. I am long.

CNX

50 is support. It is red for the year. I want to get long with strength tomorrow.

MEE

35 is support and the low end of the trendline. A run to high 40s is foreseeable.

PCX

30 is support. A move to 40 is very possible.

Update: LULU, WNR, FSYS

FSYS currently -10%
LULU +4%
WNR rallying from the open.

I currently have 0 holdings, but LULU looks interesting around 21 (I will wait for further consolidation).

UPDATE: bought a few shares of LULU @ 21.4, couldn't resist. Stop loss (maybe) at break even.

UPDATE 2:
Stocks ended: LULU +7.7%, WNR +5%, FSYS -5.5%

WNR had a 14% turnaround from open to close.

Update

Crack spreads fell today. I thought they would surely rise today. Seeing crude below 100, and hearing about $5 gas, I thought it might even go higher today!


Falling significantly from the highs, but still looks good. Overall, I expect oil stocks to firm up this week.

WNR, pulling back, gave back most of its gaves form friday.

It is right at the 10 DMA. Further pullback followed by strength would make this a buy.

FTO, jumps right back into its former range.

I think this should be day traded to both side with the huge moves it has. It looks bearish here.

TSO, closes below 16, very bad.


VLO

With exposure to hurricane Ike, this look very bearish.

Pair trade? Long TSO short VLO.

LULU

Pulls back to the 20 level. Buy once strength is shown on the intraday level. Could be challenging in this market.

ICE and NYX looking very bearish.

FSYS

FSYS short still looks very good, if the bottom gives way in this stock, then look out!


A closer look. And we see that the first target is the 46-48 ranges.


I would play this very tight. It is still in a longer term uptrend, so if this trade goes against you, bail out ASAP.

LULU

Traded 2.1 million shares on Friday. If we assume 1 million were covering short and using our previous calculated number,

11.8 - 1 = 10.8 million shares left to be covered.
New Days To Cover (Short Interest Ratio) 8

Bearish/Bullish

CF


No charts but also bearish on MON, POT, CLF, COF, FSLR, ENER, AGU, TBSI, CSIQ, WYNN


Bullish: WNR, TSO, FTU, maybe LULU on a pullback, still waiting for exchanges to bottom.

FSYS

Bearish on FSYS.



With a stop at 54. Keep it tight.

A look at some refiners

I will be updating this post with some info about refiners.

WNR
If you did not already know, WNR has by far the most debt. Debt to equity: 2.09
They do not have any refineries near hurricane Ike's path, locations.
Nor do they seem to have any significant retail locations there.
Days To Cover (Short Interest Ratio) 7.8

VLO
They do not have much debt. Debt to equity: 0.35
They have refineries around the hurricane areas, locations.
They also have over 150 retail locations in Houston and other cities. Not a good sign.
The news on it does not look good either.
Days To Cover (Short Interest Ratio) 1.8

TSO
They have some debt. Debt to equity: 0.6
No refining exposure to hurricane areas, locations.
And no retail stores in Texas.
Days To Cover (Short Interest Ratio) 4.7

HOC
Some debt. Debt to equity: 0.7
No refining exposure to hurricane, locations.
No retail stores, but their corporate headquarters is located in Dallas, Texas. Shouldn't be a big deal.
Days To Cover (Short Interest Ratio) 4.8

FTO
Little debt. Debt to equity: .14
No refining exposure to hurricane, locations.
Some retail stores in Houston area.
Days To Cover (Short Interest Ratio) 4.1

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.

Refiners, look at that crack!

Crack spreads moving up big today.


WNR bounced right off of support +6%.
FTO breaking out +13%
TSO firming up +9%

Buy any dips. But most importantly, manage risk. These are still very risky plays.

LULU Update

LULU is currently +10% (update: ended +14%)
Short Percent of Float 74.35 %
Days To Cover (Short Interest Ratio) 16.2

This squeeze can last a while!

14,869,900 share short
1.2 million avg volume

4.3 million shares traded, lets assume that 3 million were shorts covering (thats huge).
That leaves 11.8 million shares left to be covered.
New Days To Cover (Short Interest Ratio) 9.8

Reuters on Earnings
AP on Earnings

FSYS

Out of FSYS for a small loss. Will see how it acts rest of today and tomorrow.

FSYS

FSYS is testing its recent downtrend, will it hold? If it gets rejected here that would be very good bearish signal. Today, FSYS started in the red and fought its way all the way to +6.5%, I am currently short the stock with a stop at todays high, 53.5. But the better play is to wait and see how it acts the rest of today and tomorrow before shorting. If this stock has topped then it could easily to go the high 30s.

Refiners, crack spread

I can't seem to find a good source for the crack spread. So I decided to plot my own.

First a look at USO, a proxy for oil.

Notice that oil is back at the March levels, with a peak in July.

Now a look at UGA, a proxy for gasoline.

We are again, back to the March levels, with a peak in July.

Here is the chart of the UGA (proxy for gasoline) - USO (proxy for oil), which should be a good approximate for the difference in gasoline and crude oil (aka the crack spread).

You can see the pain the refiners were taking as oil peaked in July. However, we are now back to March levels with momentum to the upside. Can the refiners recover from the big hit they took during the last few months?

Now a look at the refiners, which have still been struggling.

WNR is right at a recent high, which could act support. It is also right above the 20 and 50 DMA. This can provide a great buying opportunity if refiners come into favor.

Days To Cover (Short Interest Ratio) 7.8 Very Nice.

TSO is much weaker. It is testing a recent lower low. If you buy here, at least the stop will be easy to set.

Days To Cover (Short Interest Ratio) 4.7 Nice.

FTO is still consolidating and trying to form some support. This is very healthy.

Days To Cover (Short Interest Ratio) 4.1 Nice.