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Showing posts with label ETFs. Show all posts
Showing posts with label ETFs. Show all posts

Wednesday, August 25, 2010

Crude Oil Inventories & Commentary



Oil is falling sharply in reaction to large builds in weekly inventory data. Oil stocks rose 4.1 million barrels with gasoline stocks up 2.3 million and distillates up 1.8 million. The data are for the August 20 week.

Gasoline demand slowed to a 3.0 percent year-on-year pace vs. 3.5 percent and 3.3 percent in the prior weeks. Distillate demand has been slowing abruptly for nearly two months, now at plus 4.9 percent year-on-year. Supply has been heavy the past year but signs of trouble on the demand side may now begin to shift the picture for oil which has been narrowly rangebound all summer.

Bloomberg.com


Has Crude finally found a bottom to this downtrend? It is hard to say. To quote Alex, " 50/50 chance crude ticks up." I do concur. Supply levels of NYMEX WTI are out of control. However, as long as emerging markets demand remains robust, crude should not fall below $65/b. I need to see price movement above the $75-76 line before I turn bullish once again. For now the tape is range bound. Until supply witless down and the EUR/USD pops, I expect crude to trade between $70.50 -$74.

In case anyone was wondering, I was stopped out of My USO calls. Extremely poor trade on my behalf. At least I learned a valuable lesson. Don't buy calls without protection. I will be trading futures for the foreseeable future.

Related ETFs: PowerShares DB Crude Oil Dble Long ETN (DXO), UltraShort Oil & Gas ProShares (DUG), iPath S&P GSCI Crude Oil Ttl Ret Idx ETN (OIL)

Sports: Team USA smacked Greece 87-59. Eric Gordon led the way with 18 points, 4-7 from the promise land.

Patrick M. Ambrus
Analyze Capital LLC
Twitter: Analyze Capital

Wednesday, August 18, 2010

Gauging Market Sentiment


The current equity market is a lethargic trade. The more I look into potential trades the more I find a lack of opportunity. Since The May 9, 2010 ‘Flash Crash’ markets adopted an elusive modus operandi. The European Sovereign Debt crisis waned in and out of news, a bubble in Gold prices tempted us, and economists argued the nuances of stimulus vs. austerity. I miss the ubiquitous uncertainty.

Over the last 10 days volume in the SPY SPDR ETF averaged almost 190 million shares per day. In contrast, over a 3-month span, the SPY averaged close to 252 million shares changing hands daily. Thus, volume decreased by 24.6%. In addition, The GLD SPDR Gold Trust averaged only 10.3 million shares traded in the most recent 10 days. Meanwhile, GLD volume averaged 14.2 million shares per day in the most recent 3 months. Hence, volume declined by 27.5%.

The SPY is the largest ETF by AUM with 66.8 Billion under management. StreetTracks Gold is the second largest with 51.2 Billion under control. What has cooled trading in the aforementioned derivative-like securities? For one, volume has decreased throughout equity markets for the better part of August. Though, with all the technological advances in High Frequency Trading, iPhone/BlackBerry trading apps, and trading robots, we live in an age were trading routinely flashes 24/7-365. Vacation time alone cannot explain the illustrious drop in volume.

Let’s skin this cat another way. What market has seen a consistent uptick in volume without decline? The bond market has. The iShares Investment Grade Corporate Bonds ETF, LQD, volume rallied 13.53% over the past 10 days in comparison to the prior 3 months. Additionally, the iShares TIPS Bond ETF, TIP, saw volume increase by 5.23% over the past 10 days in comparison to average 3-month volume. Now don’t let me get carried away with these statistical redundancies. Empirical reason suggests a normalcy in the gradual volume changes. Spreads continue to tighten as interest rates remain at near zero levels and inflation subsides. Yet, I’m not convinced investment grade debt is the correct safe haven.

Aside from bond prices and yield curves, what catalysts chauffeur equity prices? U.S. economic data often sits behind the wheel. Central Bankers remain the biggest elephants in the room, in particular the FED. The FOMC has found a way to implement a new Quantitative Easing program without calling it QE. The Fed will take proceeds from its MBS securities and buy U.S. Treasury Notes. Hence, U.S. notes continue to yield near-all-time-low interest rates. One thing the FED is clear on, the committee fears deflation. Thus, the committee led by Helicopter Ben will continue to shower the economy with liquidity. Until the day of reckoning comes, expect investment grade debt to rally. I also expect corporate debt issuance to exacerbate demand.

Remarkably, I managed to construct a top down argument that bottoms up. The FED’s decision making on monetary policy and QE will affect the bond market, which will drive equity prices. I surmise, global debt markets coalesced to form a bubble. Now that we know a bubble exists, we need to know how large it will grow and when it will pop. Although calling a top or bottom is dangerous, pointing out a bubble is reasonable and needs recognition. Undoubtedly, equities will benefit tremendously from the unwinding of the crowded debt trade. My suggestion is to short overbought bond ETFs and long growth/value equity ETFs. This may be a defensive play, but it will work in time.

Bond ETFs: iShares TIPS Bond Fund (TIP), , iBoxx $ Investment Grade Corporate Bond Fund (LQD), Vanguard Total Bond Market ETF (BND)

Equity ETFs: Russell 1000 Growth Index Fund(IWF), Vanguard Total Stock Market ETF (VTI), ELEMENTS Benjamin Graham Large Cap Value ETN


Patrick M. Ambrus
Analyze Capital LLC
Twitter: Analyze Capital

Monday, July 26, 2010

Victoria Concordia Crescit



Victory! Today I had the best P&L day of the year. On July 14, I was stopped out of my NG position at $4.34. Then on June 15th I watched NG rocket up from 4.31 to 4.60. Needless to say I was upset.

On Friday July 16, I decided to get long a double-digit amount of ES (E-mini SPX) contracts at around 1070 with 1100 price target in mind. By the close my position was underwater 1%. However, I learned my lesson from the NG trade and stuck to my guns by setting a looser S/L. This increased my risk/reward ratio, however, I felt very confident my position would rally.

Last week, I monitored my position less frequently than normal, as I was in Japan conducting some business with my partner Clark. Thus, I adjusted my stops accordingly each day and was able to let my profits ride. On Friday, I thought about selling but decided to juice my trade out until the resistance levels of about 1110.

Today, I made the right decision. I locked in a 3.6% profit. Weather or not my position continues to rally is irrelevant. I am proud of my ability to macro-manage my trade with careful risk management in place. This was not only my best P&L day of the year, but also my most disciplined trade.

I owe this successful trade not just to myself but also to my family, partners, business associates, and fellow traders who helped me clarify my thoughts everyday. Thank you all.

Music Selection: If you are into Hip Hop music I suggest Rick Ross’ new album Teflon Don. Up-tempo and soulful sound mixed with hard street bangers. Maybach Music.

Related ETFs: ProShares Ultra S&P 500 (SSO:US), SPDR S&P 500 ETF Trust (SPY:US)


Patrick M. Ambrus
Analyze Capital LLC
Twitter: AnalyzeCapital

Thursday, July 1, 2010

Crude Oil Inventories


A drop in imports made for a 2.0 million barrel draw in oil stocks for the June 25 week. Imports fell to an in-trend 9.5 million barrels per day, down from last week's 2010 high of 10.1 million. Refineries increased output, feeding a 0.5 million barrel build for gasoline stocks and a 2.5 million build for distillates.

Gasoline demand is a plus for the report, at a year-to-date best of 9.3 million barrels per day for a plus 1.5 percent year-on-year rate. Distillate demand softened slightly to 3.8 million barrels but continues to show a strong year-on-year rate of 10.9 percent that reflects industrial activity

Bloomberg.com


Oil is selling off in early Globex trading. I did not see WTI touching $74/b again until a new high of $83/b:

Reasons for pull-back:

1. Supply issues in Kushing, Oklahoma still remain a large concern.
2. Couple this with bad economic data and/or fear of stagnant global growth
3. Strong Dollar vs. Loonie, Aussie, and Sterling


I will stay cautious and watch the tape closely on this. If I see $72.50-73.00 buying may be a viable option.

Related ETFs: iShares S&P GSCI Commodity Indexed Trust (GSG:US), PowerShares DB Oil Fund (DBO:US), United States 12 Month Oil Fund LP (USL:US)

Patrick M. Ambrus
Managing Partner
Analyze Capital LLC
Twitter: Analyze Capital

Wednesday, June 23, 2010

Market Update-06.23.2010


Equity Indexes
INDU- 10298.40 4.92 (+0.05%)
NASDAQ- 2254.23 -7.57 (-0.33%)
SPX- 1092.04 -3.27 (-0.30%)

Commodities
WTI Crude Oil- $76.14 -0.21 (-0.28%)
Brent Crude Oil- $76.270 -1.770 (-2.27%)
Natural Gas- $4.7990 -0.005 (-0.10%)
Gold Spot- $1238.00 3.20 (+0.26%)
Silver Spot- $18.585 0.081 (+0.44%)

Bonds
2 Year UST- Price:99.89 (-0.02) Yield: 0.68% (+0.68)
10 Year UST- Price:103.20 (-0.02) Yield: 3.12% (-0.05)
10 Year Gilt- Price:110.75 (+0.17) Yield: 3.43% (-0.02)
10 Year Bund- Price:103.05 (+0.39) Yield: 2.64% (-0.04)
10 Year Oats- Price:103.51 (-0.11) Yield: 3.08% (+0.01)
10 Year JGB- Price:101.32 (+0.12) Yield: 1.15% (-0.04)
10 Year Greek- Price: 74.97 (-2.91) Yield: 10.36% (+0.59)

Foreign Exchange
EUR/USD = 1.2313
GBP/USD = 1.4973
USD/JPY = 89.9340
USD/CAD= 1.0394
EUR/JPY = 111.1698
EUR/HUF= 279.5028

Equity Index Futures
Nikkei 225- 9,950.00 +50.00
Hang Sang- 20,935.00 +96.00
SPI 200- 4,481.00 +8.00

10 year Greek debt is now trading at a whopping 772 bp over 10 year Bunds. It will be nearly impossible for the Greek government to roll over their debt in private markets or access short-term financing for their day-to-day operations, if spreads continue to widen. Unfortunately this story did not get enough play today.

The U.S. economy was front and center. Bernanke reminded us he and his team can continue to drop money out of the FED's helicopter if needed. Kansas City President Hoening was the lone dissenter today.

I took some profits on my SPX puts early in the session today. Tomorrow I'm looking to go long Nat Gas for part of the session. Crude is in play too.

By the way, All Kobe does is win! Good luck trading tomorrow!

Related ETF's: United States Oil Fund LP (USO:US), United States Natural Gas Fund LP (UNG:US), United States 12 Month Natural Gas Fund LP (UNL:US)

Patrick M. Ambrus
Analyze Capital LLC
ambrus.anlzgroup@gmail.com

Wednesday, June 16, 2010

Daily Market Recap-06.16.2010


Equity Indexes
INDU- 10,409.46 4.69 (+0.05%)
NASDAQ- 2,305.93 0.05 (+0.00%)
SPX- 1,114.61 -0.62 (-0.06%)

Commodities
WTI Crude Oil- $77.560 0.620 +0.81%)
Brent Crude Oil- $78.120 1.020 (+1.32%)
Natural Gas- $5.017 -0.172 (-3.31%)
Gold Spot- $1231.400 -3.000 (-0.24%)
Silver Spot- $18.465 -0.113 (-0.61%)

Bonds
2 Year UST- Price:100.05 (+0.05) Yield: 0.73% (-0.02)
10 Year UST- Price:102.00 (+0.34) Yield: 3.26% (-0.04)
10 Year Gilt- Price:109.91 (+0.15) Yield: 3.53% (-0.02)
2 Year Schatz- Price:100.01 (+0.25) Yield:0.50% (-0.012)
10 Year Bund- Price:102.85 (+0.28) Yield: 2.67% (-0.003)
10 Year Oats- Price:103.21 (-0.05) Yield: 3.11% (+0.01)
10 Year JGB- Price:100.49 (-0.09) Yield: 1.24% (+0.01)

Foreign Exchange
EUR/USD = 1.2309
GBP/USD = 1.4733
USD/JPY = 91.4500
USD/CAD= 1.0244
EUR/JPY = 112.5685

Equity Index Futures
Nikkei 225- 10,040.00 -50.00 (-0.50%)
Topix- 893.50 -1.00 (-0.11%)
Hang Sang- 20,145.00 56.00 (+0.28%)
SPI 200- 4,558.00 4.00 (+0.09%)

Today I did not trade. We had some administrative issues to take care of with our platform. Tomorrow I will be back at it. I enjoyed Obama last night. Short and to the point.

The Lake Shows dominated the Celtics last night. One more victory and Kobe will have 5 rings, Phil 11. Spain lost in their opening match-up. They better pick u the pace seeing as I have them winning it all.

Related ETFs: FXB:US Currency Shares British Pound Sterling Trust, DUG:US ProShares UltraShort Oil & Gas

Patrick M. Ambrus
Managing Partner
Analyze Capital LLC
Twitter: AnalyzeCapital

Monday, June 14, 2010

Market Recap- 06.14.2010


Equity Indexes
INDU- 10,190.89 -20.18 (-0.20%)
NASDAQ- 2,243.96 0.36 (+0.02%)
SPX- 1,089.63 -1.97 (-0.18%)

Commodities
WTI Crude Oil- $75.060 1.280 (+1.73%)
Brent Crude Oil- $74.970 0.620 (+0.83%)
Natural Gas- $5.030 0.249 (+5.21%)
Gold Spot- $1222.800 -7.400 (-0.60%)
Silver Spot- $18.235 0.004 (+0.02%)

Bonds
2 Year UST- Price:100.03 (-0.02) Yield: 0.73% (+0.01)
10 Year UST- Price:102.02 (-0.22) Yield: 3.26% (+0.03)
10 Year Gilt- Price:109.83 (-0.72) Yield: 3.54% (+0.08)
2 Year Schatz- Price:100.01 (-0.06) Yield:0.49% (+0.30)
10 Year Bund- Price:103.14 (-0.64) Yield: 2.63% (+0.07)
10 Year Oats- Price:103.40 (-0.59) Yield: 3.09% (+0.07)
10 Year JGB- Price:100.54 (-0.11) Yield: 1.24% (+0.00)

Foreign Exchange
EUR/USD = 1.2228
GBP/USD = 1.4751
USD/JPY = 91.5300
USD/CAD= 1.0325
EUR/JPY = 111.9850

Equity Index Futures
Nikkei 225- 9,890.00 10.00 (+0.10%)
Topix- 878.00 2.00 (+0.23%)
Hang Sang- 20,089.00 241.00 (+1.21%)
SPI 200- 4,528.00 2.00 (+0.04%)


Big moves in commodities markets today. Natural Gas was up over 5% on concerns of a worse then expected hurricane season. Crude oil also rallied. U.S. Equities were marginally positive throughout the day with the SPX briefly trading @ 1103. The Dollar paired back some gains from last week's strength. Today, I monitored my positions but did not actively trade.

The Lakers lost last night. Celtics now lead the series 3-2. I still expect LA to win the its 2nd consecutive championship. In world cup news Netherlands beat Denmark 2-0 on some goal keeping errors. Tomorrow Portugal takes on Ivory coast at the start of U.S. equity trading.

Realted ETF's: SPY:US SPDR S&P 500 ETF Trust, DIG:US ProShares Ultra Oil & Gas

Patrick M. Ambrus
Managing Partner
Analyze Capital LLC
Twitter: AnalyzeCapital

Greece Downgraded to Junk by Moody's


Greece’s credit rating was cut four steps to non-investment grade, or junk, by Moody’s Investors Service, which cited the country’s economic “risks.” The rating was lowered to Ba1 from A3, Moody’s said in a statement today from London. The outlook is stable, it said. Greece is already rated junk by Standard & Poor’s.

Bloomberg.com


It was only a matter of time before this happened. Why do two ratings agencies have so much power? The better question is, will traders and lenders continue to listen? I won't. As far as I'm concerned, Greek debt has been junk since March.

If you want to get short Greece, check out the Claymore/Delta Global Shipping Index ETF (SEA), which allocates 18% of holdings to Greece.

Related ETFs/ETNs: EUFN:US iShares MSCI Europe Financial Sector Index Fund, URR:US Market Vectors Double Long Euro ETN, ULE:US ProShares Ultra Euro


Patrick M. Ambrus
Managing Partner
Analyze Capital LLC
Twitter: AnalyzeCapital

Friday, June 11, 2010

Market Recap- 06.11.2010


Equity Indexes
INDU- 10,211.07 38.54 (+0.38%)
NASDAQ- 2,243.60 24.89 (+1.12%)
SPX- 1,091.60 4.76 (+0.44%)

Commodities
WTI Crude Oil- $73.780 -1.700 (-2.25%)
Brent Crude Oil- $74.350 -0.940 (-1.25%)
Natural Gas- $4.781 0.134 (+2.88%)
Gold Spot- $1230.200 8.000 (+0.65%)
Silver Spot- $18.231 -0.120 (-0.65%)

Bonds
2 Year UST- Price:100.05 (+0.11) Yield: 0.73% (-0.06)
10 Year UST- Price:102.23 (+0.72) Yield: 3.23% (-0.08)
10 Year Gilt- Price:110.55 (+0.84) Yield: 3.46% (-0.10)
2 Year Schatz- Price:100.07 (+0.096) Yield:0.25% (-0.048)
10 Year Bund- Price:103.79 (+0.39) Yield: 2.56% (-0.04)
10 Year Oats- Price:103.99 (+0.39) Yield: 3.02% (-0.04)
10 Year JGB- Price:100.65 (-0.23) Yield: 1.24% (+0.03)

Foreign Exchange
EUR/USD = 1.2113
GBP/USD = 1.4549
USD/JPY = 91.6550
USD/CAD= 1.0360
EUR/JPY = 110.6800

Today I exited my SPX position before the close of trading. Locked in my Profits. My Short USO position recovered today and I will maintain my stance until I see evidence contrary to my view. In addition, I cashed out my short Nat Gas position for some small profits. I also went short the CAD and long USD around 16:00.

The Lake Show lost last night and foiled my "LA in 5" prediction. However, in order to win the Championship they need to win game 5 to preserve home court. Bynum was missed last night. Tomorrow I'll be watching some Futbol.

Related ETFs: FXC:US CurrencyShares Canadian Dollar Trust, USL:US United States 12 Month Oil Fund LP, SSO:US ProShares Ultra S&P500

Patrick M. Ambrus
Managing Partner
Analyze Capital LLC
Twitter: AnalyzeCapital

Tuesday, June 8, 2010

Market Recap- 06.08.2010


Equity Indexes
INDU- 9939.61 123.12 (+1.25%)
NASDAQ- 2170.57 -3.33 (-0.15%)
SPX- 1062.00 11.53 (+1.10%)

Commodities
WTI Crude Oil- $72.43 0.44 (+0.61%)
Brent Crude Oil- $72.30 0.180 (+0.25%)
Natural Gas- $4.790 -0.018 (-0.37%)
Gold Spot- $1237.200 -8.400 (-0.67%)
Silver Spot- $18.270 -0.207 (-1.12%)

Bonds
10 Year UST- Price:102.63 (-0.03) Yield: 3.19% (+0.05)
10 Year Gilt- Price:110.51 (+0.21) Yield: 3.46% (-0.02)
10 Year Bund- Price:104.28 (+0.46) Yield: 2.51% (-0.05)
10 Year Oats- Price: 103.63 (-0.14) Yield: 3.06% (+0.02)
10 Year JGB- Price:100.63 (+0.01) Yield: 1.24% (-0.00)

Foreign Exchange
EUR/USD = 1.1963
GBP/USD = 1.4448
USD/JPY = 91.4250
USD/CAD= 1.0509
EUR/JPY = 108.9350

Equity Index Futures
Nikkei 225- 9,460.00 -70.00
Hang Sang- 19,498.00 +163.00
SPI 200 - 4,401.00 +7.00

Thoughts
Today I made my entry into the SPX via June 17 calls. My position closed the day with a 3% pop. I'm going to ride this one for the rest of the week. My Nat Gas position came back a bit today due to cooler weather forecasts. Also, I got short crude via USO. My position there is underwater but I have confidence in the fundamentals.

U.S. equity markets rallied hard right before the close after trading marginally lower for the majority of the session. Short covering? Algorithms running wild? EIther way I'm still a SPX bull for the next few weeks.

The Purple People Eaters will beat the Vitamin C's in tonight's showdown in Boston. I expect big things from Mr. Gasol, Odom, & The Black Mamba.

Related ETF's: United States Oil Fund LP (USO:US), United States Natural Gas Fund LP (UNG:US), United States 12 Month Natural Gas Fund LP (UNL:US)

Patrick M. Ambrus
Managing Partner
Analyze Capital LLC
AnalyzeCapital@gmail.com

Monday, June 7, 2010

Market Recap- 06.07.2010


Equity Indexes
INDU- 9,816.49 -115.48 (-1.16%)
NASDAQ- 2,173.90 -45.27 (-2.04%)
SPX- 1,050.47 -14.41 (-1.35%)

Commodities
WTI Crude Oil- $71.180 -0.330 (-0.46%)
Brent Crude Oil- $71.710 -0.380 (-0.53%)
Natural Gas- $4.944 + 0.147 (3.06%)
Comex Gold- $1241.80 +24.10 (1.98%)
Comex Sliver- $18.15 +0.85 (4.92%)

Bonds
10 Year UST- Price:100.08 (+0.52) Yield: 3.14% (-0.06)
10 Year Gilt- Price:110.30 (+0.17) Yield: 3.49% (-0.02)
10 Year Bund- Price:103.82 (+0.19) Yield: 2.56% (-0.02)
10 Year JGB- Price:100.61 (+0.30) Yield: 1.23% (-0.04)

Foreign Exchange
EUR/USD = 1.1914
GBP/USD = 1.4465
USD/JPY = 91.345
USD/CAD= 1.0615
EUR/JPY = 108.8312

Equity Index Futures
Nikkei 225- 9,580.00 +70.00
Hang Sang- 19,335.00 -479.00
SPI 200 - 4,301.00 -37.00

Thoughts
I traded some Gold via GLD this morning and was able to lock in a 2% gain by days end. There was no meaningful economic catalyst to drive equity prices higher today. Bearishness looms everywhere. This may be a great time to jump back in equities if one is still Bullish. I am. Tomorrow I will look for an entry position to get long the SPX.

Related ETF's: GLD:US SPDR Gold Trust, SPY:US SPDR S&P 500 ETF Trust, SSO:US ProShares Ultra S&P500, DIA:US SPDR Dow Jones Industrial Average ETF Trust


Patrick M. Ambrus
Analyze Capital LLC
Twitter: AnalyzeCapital

Thursday, March 4, 2010

Going in for the Kill- 03.04.2010


Well it looks like my timing on entry into the UNG was a bit off. I failed to correctly forecast the Nat Gas inventory reports this morning as they declined less then expected (see morning updates ). Domestic production, specifically supplies from unconventional gas fields such as the Marcellus Shale in the Northeast/Appalachia region and the Haynesville Shale in Louisiana, has not declined substantially despite reductions in overall rig counts compared with this time last year. Natural Gas sold off hard and UNG has touched a low of $8.25. However, I stand by my thesis.

Logic

Fundamentals

•Seasonality has beaten it up this winter while we have had warmer than expected temperatures in the Midwestern United States.

•As of Friday, February 26, working gas in underground storage was 1,737 billion cubic feet (Bcf), which is 1.2 percent above the 5-year (2005-2009) average. The implied net withdrawal from storage was 116 Bcf.


Technicals

•Since September the RSI is in a Bullish trend forming higher highs after a bounce off of support at 30 or so.

•The 50 day Simple Moving Average will act as near term resistance.

Conclusion:
Hence, the tape should carry me to about 9.25-9.50 before I have to make a decision.


Patrick M. Ambrus
Managing Partner
Analyze Capital LLC
ambrus.anlzgroup@gmail.com
 
Disclaimer
This Blog has been developed by Analyze Capital LLC, and as an independent organization we provide “AS IS” information without warranty. The ideas and opinions expressed by the contributers of this blog are personal and do not represent the actions or policies of Analyze Capital LLC. The contents of this blog do not intend to assert recommendations or to offer advice of any kind. We are not responsible the consequences, be they gains or losses, that may result from using any of the information from this blog.