$100/bbl oil

War & Oil stock trends. Take notice.

During the 9/11 war oil prices surged and energy stocks followed. Currently the entire market is finally, I say finally, because I shorted it too soon but if I had deeper money longer puts I would be reaping the rewards. My prayers to the Ukraine people. Reading headlines of 10% nuclear war chance seems dreadful. It doesn’t matter how much money you earn flipping houses or in the market if the world is bombed with nukes. Money is worthless at that point so I’m just staying positive that we, including Putin, will get to some point of agreement or end to this conflict. Usually when the USA enters a war we say months but it turns into years. If you view the chart below it shows and energy company following oil.

Oil futures and oil companies trending with an oil war

Just recently, as oil began to spike, oil rig companies that weren’t as profitable now are reopening their unused rigs again for foreign and domestic capabilities to drill. Same thing happened when we had oil conflicts. From my experience in the stock market trends repeat themselves and that’s when you should take notice, journal it, and use it to your trading advantage.

So part of me wanted to invested in long calls on Facebook. It’s still a cash generating machine globally and I really liked my metaverse VR goggle experience even though I’m not a gamer. However, I decided after seeing how energy stocks were up I researched a little more. I came to the conclusion that if this war continues and draws out energy is where to be until it is resolved. So I’m taking a big gamble on beaten down energy stocks that typically follow the leaders around oil prices. We have been living on cheap imported oil for a very long time…

Stocks like RIG, SWN, HAL, XOM

I bought contracts on 1 leap year call options. A whole year to be right or wrong on RIG which predominantly has oil drilling rigs, equipment, and services foreign and domestically. It would actually make a great covered call play at the current price if trends up long-term. I think as long as there is war and conflict we will see a lot of movement in these stocks that have been dead since the end of 9/11.

The real question I have to answer and take action myself is if I’m very right at what point am I happy with my profit and take it off the table. I guess that would be when Putin gives in or his country takes over his country or maybe his army just loses. But, how soon will that happen? You think with all the super tech military drones we have this war would end soon. And what about cyber wars? If Russians have been hacking companies and governments you would think more than ever they would be hijacking everything they can to control the digital e-commerce world creating more problems.


No internet!!! – Bought NTRI APR 20 CALLS after earnings, whoops.

Okay I’ve had no internet on the boat since patroling back from Alaska to Hawaii so far. I’m finally able to login and post somethings I’ve been meaning to get around to.

Bought Nutri System after its stock dropped -25% @ $17. Now I consider it a mistake. I was thinking, “well what if it drops again, and again”, but it was pushing through the bollinger bands so I was convinced it would spring back up and move up from being sold off so quickly. Wrong again. Buying Puts on it (you know the trend is your friend) would have been the correct thing to do. I still own the CALLS because I could not sell out. The trade isn’t over yet. I highly likely even with a poor outlook the company still creates continual growth and with one positive news piece the stock with its sold off part should rise which my goal is to $18-19 before dropping again in which I would be sold out. NTRI has done this many times with hard drops. It creates a small peak before dropping lots more and that is what I’m going after. A hard trade? Yes, I picked a very difficult trade.

Here’s my order and it’s logged in my $1000 trade log:

Completed on 2/20/2008 12:21:41 PM (ET):

Symbol: .NSIDD
Description: NTRI APR 20 Call
Stock: NTRI at 17.00
Action: Bought To Open
Quantity: 2 contract(s)
Price: $0.85
Commission: $14.95
Reg Fees: $0.00
Net Amt: $184.95

As for my SWN MAR 55 PUT’s I’ve found surprises with the energy industry and again I’m trying to break its trend! What is wrong with my thinking! I find myself constantly trying to trade against the trend when I see a trade. I don’t understand how at the time I feel convinced these are my best trades when they are really sour entry points specifically for these types of trades. The energy industry is still high right now. On weekly charts its at the top and what I see most important is “spinner candles” forming near the top and this usually indicates a change in trend. I could be wrong. It seems to me 100% that after its big run up from $49 to $64 it would fall some, but another factor a BIG factor I have to keep in mind is that it has earnings Feb 29th. Shit. Realistically this stock should profit off all these high prices and move higher just like RIG did. So knowing this knowledge even if I have a sharp loss if I can keep only $100 because it hasn’t fallen into earnings or just has not fallen with news or oil problems I 1000% should NOT go through its earnings.

My NTRI calls have until the end of April so I actually feel pretty safe although I don’t want to be in a trade more than 2 weeks.


Good news! no no no Bad news! WTF? Surprise open, revised practice trading

So I have to admit today’s open when I opened Yahoo! Finance was just a big slap to the face to me. Everything showed the market was going to open lower and then on Tuesday across the board stocks make a big fat white candle moving up the first 3-4 hours of the day creating a doji evening star breaking the 10 day trend, raising or following up the daily trend, and keeping the weekly in motion. By the end of the day, the last 3 hours, stocks seemed to slowly fall and retrace back below the bollinger bands and the Dow Jones falls hard after oil goes over $100/bbl. It just shows you can’t predict what is going to happen and if you can’t predict or at least come to a sensible conclusion to make trades off of how can I make a trade even last longer then 1 day without forming some type of loss if it doesn’t go my way? This is mine boggling to a trader like me who is trying to write a better trading system (at least on paper). Currently stocks, at least energy – oil, are steadily moving up from January through Feburary 2008. It’s a shock. Shouldn’t stocks still be falling?

Walmart earnings – were they really THAT good? This my view of Walmart and its profits and revenues it discounted all its products meaning small margin for profit and sure more revenues, but not much increase in cash profits coming in. So why did the market take Walmarts news as the best thing ever and raise the entire market up just to get punched back by oil?

Commodities – duh! Of course prices are going up in all commodities because HELLO move over USA now China and India are taking over in major growth and need things to build, eat, and live a higher standard quality of life. I don’t see commodities as a good thing going up because the more expensive prices go up the less consumers are willing to spend and sooner or later since demand will be less in the US companies will shift most of their business to faster growing countries such as China and India.

So, yeah, wtf? My SWN 55 MAR PUT has been hammered. Am I out? No. Why? Personally something smells fishy in the markets and for the most part when oil moves high actually energy stocks first initially fall a lot with the market then move back up (because it makes them generate more profits of course creating bigger margins). So I’m not out. Yes, all my charts are showing the stock moving higher, does this make me a moron for not selling? Maybe. I also think this could be a big reverse where a stock jumps higher but then falls harder the following days. I don’t need a miracle, I just need the markets to make up their mind realize the economy does suck and fall as they should.

Nutri System earnings – wow! I guess it’s a good thing I forgot because I was too busy to watch the stock and put in a CALL option trade on NTRI earnings. The stock “beat” analyst estimates but shouted fear and panic saying “falling profits, lowering outlook 2008” which made the stock fall -30% after hours. This would have been a most disasterous trade. So thank you God for taking my mind off trading since I already knew SWN moved up +5% (bad news for a PUT option). NTRI peg is at .39!!!! But now with a second falling profit outlooks it feels good to play PUTS on it because this stock now with full-blown negative press and no good outlook should fall even more making it an easy short PUT option trade.

Practice Trading Plan – recently doing over 100 practice paper trades a day on 8 different industry has become more of a fun task it has become a JOB, a full-time job clearly. I’m struggling to keep up while also doing my military job and my college classes at HPU. Clearly I need to paper trade less and focus more on just a few stocks. Basically my old plan was practice trading 8 different industries a day and following them a week. Each day I’d do 8 new stocks within the same industries, but it builds up quickly to a stack high pile of papers. I feel I’m not gaining any new widsom from this even though I thought doing more practice trading work on the same 8 industries would help me spot trends and better trades quicker. I think if I did trading full-time I could easily do this why watching the market for the entire day, but I basically give trading 30 minutes to 2 hours a day which is my time limit. I have to figure out my trades after the market closes. Such as today I watched SWN move up 1pt to 2pts to 3pts. This could of been an acceptable real trade if I could have traded it intraday, but I’m working.
I have no excuses so my practice trading plans need to be revised to a better system. Okay I’ve got it. I’ll stick with my 8 different industries but only do those 8 trades a week so instead of around 240-400 trades a month (practice) I will focus extremely hard and consistent on only 32. My goal was to follow day movement to see if a stock moves down or up statistically more on one day then another going Monday to Monday. Then I can review and see how the stock moved throughout the trading week to see if I can find any patterns I could use to trade the stock with a better chance of it moving my way the following day to be sold out quicker.

-fn