Holdings Watch:

$10KP

• $20,600
• 46%
• The Wiki Holdings Tab is updated.

Closed Trades on the Week:

• (EOG) - Sold the EOG July $55 Call for $9.40, up 57%.
• (CRL) - Sold the July $25 Calls for $1.65, up 150%,
• (HK) - Sold (30) of the July $20 calls for $1.20, up 22%
• (RRC) - Sold the July $42.50 calls for $0.55, up 120%.
• Had scuds in a higher strike position in (EOG), (HK), (PXD), and (XCO).

Wrap Notes:

1) Big Week For The Broad Indexes, Bigger For Energy Groups. Seems like a case of "too far too fast" on the broad indexes as this all stems from a couple of better than expected jobless claims reports, a scattering of stronger than expected earnings reports that beat severely reigned in earnings estimates, and a couple of indicators like housing starts and the Empire State index which are notoriously volatile. But I digress. Energy got a lift from stabilizing crude prices and natural gas prices that, if not stabilized, decided not to plunge into the $2s. Earnings season kicks off this week with (HAL) on Monday followed by a who’s who of oil service and a couple of our favorite E&P’s.

2) Oil Stabilized. This was largely a function of a bouncing S&P500 but we can point to tentative signs of product demand stabilization (weak to be sure but not apparently getting weaker) and a continued larger than expected reduction in crude stocks. So many of the talking head camp had been looking for $50 crude, finding strength in their conviction from falling prices (a bad way to invest on either side of the issue by the way) that I figured it would not plunge the next 20% like they were prognosticating. Much less the next 20% that they surely would have seen crude falling had it made it to $50 (for that move would have certainly emboldened them to predict further cliff diving). I will add that further crude stock reductions (much beyond the next four weeks) will likely be somewhat muted as independent refiners reduce capacity in the face of the end of driving season, the beginning of maintenance season, and with the knowledge that distillate stocks are at record levels.

3) Natural Gas Short Position Increased. Someone should point out to congress that the shorts have been all over the natural gas trade for a year now and prices are at or near (depending on which day of the week you were watching) 7 year lows so who says all speculators are bad? I expect increased volatility in the gas markets in coming weeks as the tropics heat up and the shorts get nervous that this trade, while far from over, has seen the easy gains portion of the trade get long in the tooth.

4) Coal Vs Coal. Stocks versus the commodity that is. Interesting delta on the year’s performance. I’ll have more on this in a post later in the week.