MV Weather Report: No Clouds in Sight for Energy Sector
Rain or shine, we review the day's biggest stock stories.
The market was directionless prior to the release of the results; afterward, the S&P 500 sprinted higher by 1.54%. We're now up slightly for the week, but it's really been pretty static. This could be viewed as positive - many bulls certainly see it that way.
Today on the Buzz and Banter, Professor Cooper gave his take:
"The S&P was repelled by its overhead 50 period on the hourly chart near 900 this morning and is attempting a second conversion here. The resolution of this attempt should determine the direction into the weekend.
"A move over 900 that sticks sets up another attempt at the hourly right shoulder near 915 that rejected the index yesterday.
"See hourly of the last 10 days with 50 period below."
Click to enlarge
The S&P 500 closed today at 906 off a high of 909. This sets up the possible move to 915 that Cooper discussed. This level will be in play tomorrow as mutual fund managers do their end-of-the-month mark-ups.
Today's rally was across the board, but energy was the big winner, which rallied on news that US energy stockpiles were much bigger then analysts expected. A few of the big winners: Transocean (RIG), Cheveron (CVX), Schlumberger (SLB), Hess (HES), and National Oilwell Varco (NOV).
Today on the Buzz and Batner, newest Minyanville Professor James Kostohryz gave his take on crude oil:
"The problem is that inventories are coming down from absurdly high levels. Thus, it will be difficult for oil prices to climb above a $60-$70 range. And given that oil exploration stocks are already generally discounting oil prices well above $80-$90, and natural gas prices 200%-300% above current levels, the valuations of these stocks are hardly compelling.
"However, the trend in the change of fundamentals must be respected. As we have seen with the equity market rally, the marginal deltas of fundamentals are far more important than their absolute levels.
"I think that the rally in oil stocks, and especially oil service stocks, could have legs. Nonetheless, given the overvaluation of stocks the oil sector as a whole, and the overheated prices of crude relative to fundamentals, I prefer to look for greener pastures. If anything, at some point, I will probably be looking for potential shorts amongst companies exposed to natural gas."
Heads up: Before the bell tomorrow, we have GDP, Chicago PMI at 9:45, then Michigan Sentiment at 9:55.
Have a great night, Minyans!!
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter