Weak gasoline demand

U.S. refiners see serious pressure from weak gasoline demand and weak crack spread margins

The crack spread margin over the past year has been weak and has put severe pressure on U.S. refiners with high operating costs. The crack spread measures the theoretical margin in dollars per barrel that refiners can earn from refining (or “cracking”) three barrels of oil into two barrels of gasoline and one barrel of heating oil. The chart below shows the crack spread for the second nearest-futures contract in order to eliminate the spikes that sometimes occur when the front month contract expires.

The crack spread saw severe downward pressure in late 2008 when the financial crisis caused gasoline and heating oil prices to fall even more sharply than crude oil prices. The crack spread fell as low as $1.95 per barrel in late December 2008, a level at which all U.S. refiners would be losing money after taking into account other operating and overhead expenses. The crack spread in 2009 has recovered somewhat and is currently at $8.20 per barrel. However, that is still well below the average of about $13 per barrel seen during 2005-07 before the U.S. housing and financial crises emerged.

The crack spread is not likely to show sustained improvement until strong demand emerges again for gasoline. U.S. fuel demand is currently about 3% below the five-year average due to the recession and the fact that drivers and businesses are spending as little as possible on fuel. Increased ethanol usage is also having a negative impact on gasoline demand as the percentage of ethanol in fuel rises due to federal renewable fuel standards. In fact, BP CEO Tony Hayward in June made the startling comment that U.S. gasoline demand may have permanently peaked due to increased ethanol blending requirements, higher fuel efficiency standards, and gasoline-electric hybrid vehicles. He said BP in the first half of 2008 “probably sold as much gasoline into the U.S. as we’ll ever sell.”

The U.S. refinery industry will be in for some even rougher sledding if gasoline demand and prices do not soon recover to higher levels. The bottom line for market prices is that there is likely to be continued downward pressure on the crack spread at least until a sustained U.S. economic recovery begins.

Source: Futures Magazine Market Pulse

COT Data 7-28-09

Last weeks sector performance

Looking mighty bullish....

Dow Supercycle chart

Eco. Releases/ Earnings

Trading system

Here is another sweet system I got off eBay for super cheap! And here is the link:

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&ssPageName=STRK:MESELX:IT&item=160341263103

Final market delta revision

THis is the final revision. It has the bid x ask and totals in a vertical colum so you can see the areas of suppor and resistance based on volume. Also added is "Volume run" it take the total up and down volume and plots it as a histogram, to show you momentum of the volume.

FWIW I bought this setup on eBay for $25.00, soooo worth it. Here is the link to the auction in case you are interested: Considering the company "Market Delta" charges $150.00/month this is a steal IMHO.

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&ssPageName=STRK:MESELX:IT&item=160341282829

New market delta workspace

After hours of work I have finally improvd the market delta workspace. It now shows the total of bid vs ask at the bottom of the bar and the subgraph plots the totals as bars. Pretty handy, e-mail me if you are interested in this workspace and I can send it over.

Calculating The Hindenburg Omen Indicator

Hindenburg Omen:

I will be keeping a lookout for the Hindenburg Omen since NO MAJOR DECLINE has started without one over the past 25 years. Needless to say, one did occur at the start of the primary run down.


Here is the criteria for the Hindenburg Omen:

That the daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 2.2 percent of the total NYSE issues traded that day.

That the smaller of these numbers is greater than 75. (This is a function of the 2.2% total issues, not a rule)

That the NYSE 10 Week Moving Average is RISING.

That the McClellan Oscillator is NEGATIVE on that same day.

That the number of NEW 52 Week Highs cannot be more than twice the NEW 52 Week Lows. This condition is a must.

Todays Delta

Here is a snapshot of this AM's delta....buyers starting to step up to the plate. Rally was bogus on jobs #'s and everyone knew it. PPT hard at work to make it look like all is well.

Market delta

This is a market delta workspace I am working on, trying to make it similar to what Brett Steenbarger uses. The line is VWAP, and the subgraph is $VOLSPDC. The rest is obviously market delta:) If ANYONE has suggestions or ideas of how to make it better or where to get code to improve this please e-mail me!!

Best of luck to all.

Fibonaci Ratio Bands

SRS 9/39 system

Tuesday 4-27-09

Courtesy of subq

COT Data 4-27-09

This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A. If the current value is at a 12-month low, the cell will display a red/burgundy background. B. If the current value is at a 12-month high, the cell will display a green background. C. If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D. If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.

Sunday eve/Monday market commentary

10:37A.M. Taking a look at the $SPX I see 2 potential H&S patterns. We could be forming now the right shoulder but we could also be forming the head of a new H&S. Only time will tell. H&S patterns have a high success rate, when the neckline is broken.



8:02A.M. A look at many of the signals generated by the VIX vs SPX. The VIX has been in some form of a triangle for the last 6-7 months. I will be watching this chart for any sign of direction, especially a break of the top of the triangle, that could signal the beginning of a major run down...of course it could be 1/2 over by the time we get confirmation....every-one's entry will be different so follow your rules and plan your trades!


Chart courtesy of StockTiming.com

7:50A.M. Market profile chart:


Courtesy of subq

6:00P.M.(Sunday) This is a 15 min chart, market hours only, that shows the resistance we ran into in the 870 area. First it is our highest high since the beginning of the year and it is also at a major 50% retirement, the target for that ambush short is 762, a 100 point move. I know I will be looking for bounces to add to shorts as long as we don't break 873 on a closing basis.



5:25P.M.(Sunday) Here is a look at the weekly 5,3,3 Stochasitc overlay. As you can see in the past it has been a pretty good indicator to show where tops and bottoms should occur, although it is not perfect it is fairly accurate. The hanging man candle we put in last week is also the signal of a top as well and many sentiment indicators showing extreme bullishness. All of those factors plus, NOW some in the mainstream media are declaring the bottom in or the recession over. I think there will be a week or two of consolidation as the public is panicking thinking they are missing something and the institutional crowd will be selling to them, then we should turn down and possibly break March lows.



4:50P.M(Sunday)The $BPNYA is registering an extreme level of bullishness and is coming close to matching the years highs of 67.90. We should see the market start to correct very soon...starting this week. It should be an interesting week, stay nimble.

Obama's Stealth Leap To Socialism

President Barack Obama showed his hand this week when The New York Times wrote that he is considering converting the stock the government owns in our country’s banks from preferred stock, which it now holds, to common stock.

This seemingly insignificant change is momentous. It means that the federal government will control all of the major banks and financial institutions in the nation. It means socialism.

The Times dutifully dressed up the Obama plan as a way to avoid asking Congress for more money for failing banks. But the implications of the proposal are obvious to anyone who cares to look.

When the TARP intervention was first outlined by the Bush administration, it did not call for any transfer of stock, of any sort, to the government. The Democrats demanded, as a price for their support, that the taxpayers “get something back” for the money they were lending to the banks. House Republicans, wise to what was going on, rejected the administration proposal and sought, instead, to provide insurance to banks rather than outright cash. Their plan would, of course, not involve any transfer of stock. But U.S. Sen. John McCain, R-Ariz., undercut his own party’s conservatives and went along with the Democratic plan, assuring its passage.

But to avoid the issue of a potential for government control of the banks, everybody agreed that the stock the feds would take back in return for their money would be preferred stock, not common stock. “Preferred” means that these stockholders get the first crack at dividends, but only common stockholders can actually vote on company management or policy. Now, by changing this fundamental element of the TARP plan, Mr. Obama will give Washington a voting majority among the common stockholders of these banks and other financial institutions.

The almost 500 companies receiving TARP money will be, in effect, run by Washington.

And whoever controls the banks controls the credit and, therefore, the economy. That’s called socialism.

Mr. Obama is dressing up the idea of the switch to common stock by noting that the conversion would provide the banks with capital they could use without a further taxpayer appropriation. While this is true, it flies in the face of the fact that an increasing number of big banks and brokerage houses are clamoring to give back the TARP money.

Goldman Sachs, for example, wants to buy back its freedom, as do many banks. Even AIG is selling off assets to dig its way out from under federal control. The reason, of course, is that company executives do not like the restrictions on executive pay and compensation that come with TARP money. It is for this reason that Chrysler Motors refused TARP funds.

With bank profits up and financial institutions trying to give back their money, there is no need for the conversion of the government stock from preferred to common — except to advance the political socialist agenda of this administration.

Meanwhile, to keep its leverage over the economy intact, the Obama administration is refusing to let banks and other companies give back the TARP money until they pass a financial “stress test.”

Nominally, the government justifies this procedure by saying that it does not want companies to become fully private prematurely and then need more help later on. But don’t believe it. They want to keep the TARP money in the banks so they can have a reason and rationale to control them.

The Times story did not influence the dialogue of the day. People were much more concerned with the death of 21 horses at a polo match. Much as we will miss these noble animals, we will miss our economic freedom more.

Obama's Stealth Leap To Socialism - The Philadelphia Bulletin Archives
http://thebulletin.us/articles/2009/04/23/commentary/op-eds/doc49f02b854584d519659188.txt

$SPX

A possible scenario from a trader friend of mine DJ Wadholm...nice chart.

Market 4-22-09

Market Profile:


Courtesy of subq

8:14 A.M. We are trapped between 2 ambushes...the long at 824 and a short at yesterdays high. Not too much to d but to see who wins out...bulls or bears. I am bearish and short the market.

Big Picture

Here is a daily $INX chart. You can see our newest level of resistance at 875 and the support we bounced off of yesterday, the bottom of the channel and the 20 MA served as support. I think this is a minor setback for the bears. As you can see the 60 period Stochastics are overbought and we will chop around for a while before heading down to work off some of the overbought condition we are in now.