PBF: In an uptrend, buy dipsI'm looking to reenter PBF at support near the 27.55 mark. I've highlighted my recent trades in the chart, showing my exits and reentries. I'm adept at working like this instead of holding during corrections. I anticipate the turns based on price action around key levels, and the application of Tim West's 'self contrarian' signals that we use to time exits in good profits, or trail stops and add to positions.
What we do is constantly asessing our own emotions regarding our positions, specially the winning ones, since this gives us a great edge in finding good profit taking zones, and determining when to reenter positions.
I'd reccomend buying a position gradually near the 27.55 mark, starting as soon as Monday would be ok, but ideally the correction will last until December 14th which is what I estimate.
I'd reccomend opening a 7% size position if we hit 27.55, and you can look to add once in profit confirming the rally. Entering over a week would be better.
Good luck,
Ivan Labrie.
MPC
PSX: Warren Buffet's callThis stock is acting great (and similarly to $PBF and $MPC, it's a great long term play, with immediate entry parameters).
If not long the stock you can look to get long on either, dips to support, price moving above the previous daily close or a new daily high. As long as it stays above the light blue box, it's highly likely accelerating to the upside, and heading to 84.53 in the short term.
Good luck!
Ivan Labrie.
Short MPCIf oil takes a significant dip overnight, I will be short MPC. I don't think there is any fundamental to support this stock to the upside anyways, so I am shorting calls. Plus I am not much of an options buyer unless to trying to hit a home run.
The blue line represents options expiration day. These are 4h bars.
Important to note that NOT all refiners are trading in tandem. MPC and TSO are down today, while HFC, PSX, and VLO are all up.
Note TSO and HFC report their second quarter 2016 results 8/3.
GBPUSD: STERLING STRENGTH MYTH? ARITCLE 50 ODDS - 50% NOT HAPPENMysterious sterling strength:
1. Sterling has managed to par losses and actually rise in past days despite a number of heavily weighted factors increasing GBP downside pressure e.g. MPC M. Weale switching to the doves, PMI/ Business Optimism 8yr lows, Sterling rates markets consistently pricing >25bps of cuts to the BOE base rate (details below), the median bank forecast of the Bank of England Policy change on the 4th of August is becoming ever more dovish (e.g. calls for >£50bn QE and more than 25bps of cuts by Banks).
2. Struggling to find answers I looked at the Article 50 odds/ Implied probability from the odds aggregator (oddschecker) - to my surprise, but in support of GBP top side I have seen the market shift aggressively in the last week - with odds of a 2016 signing falling to 16.5% from 35%, but more worryingly the odds of a 2018 or later or NOT AT ALL steepening aggressively to 50% from 30% .
- 2018 or later or not at all is now the most probable outcome, worrying that this is even possible given the referendum was decided by the people in a democracy - how is this even possible? IMO it should have been mandated to be signed within a given period e.g. 1wk/ 1m.
- Even more worrying is that T. May the newly elected PM, Pre-PM was a brexit Bull and vowed that exiting the EU was her top priority and she "saw it as a way to make Britain great again". However, now if you look at the news, she is somewhat of a Brexit bear, recently stating "The Article 50 will NOT be signed in 2016" - completely writing the front end of the curve off.
3. This is likely the potential driver of sterling strength as a delayed non-signing 1) increases the time until we actually leave the EU - given there is ALREADY a clause in the article 50 agreement that states there is a 2yr "cooling off/ negotiation period" where Britain's relationship with the EU will remain exactly the same for 2yrs once the article 50 is signed - so by not signing it until mid 2017 this means technically there will be 3yrs between Brexit vote and leaving which means three years of relatively unchanged economic conditions - thus this in mind why should GBP get weaker now/ in the near-term? 2) and in turn, the above reduces BOE cutting odds - if we're not leaving any time soon the economics should be relatively flat thus no easing needed which means less GBP near-term downside.
4. Also another potential sterling topside driver is the speculation that the BOE is coming underpressure NOT to cut rates by Retail Banks as by doing so it reduces their net interest margins (lower profitability) causing restructuring/ lay-offs in the industry - LLOYDS BANKING GROUP IS AXING 3,000 JOBS AND CLOSING 200 BRANCHES AS IT RACES TO CUT COSTS IN ANTICIPATION OF AN INTEREST RATE CUT - if considered a systemic risk this could seriously reduce the probability of BOE action. Though i think it is more of a isolated issue - Lloyds likely needed to restructure anyway based on already low profitability rather than as a direct function of a potential rate cut. It is almost laughable to think 3000 jobs are being cut because of a small 25bps cut alone.
Trading implications:
1. Obviously this is a downer on GBP shorts, however, this is ONLY a suggestion for GBP strength - i could be over estimating the impact but the argument is nonetheless a solid one.
2. Still below 1.36 i stay a seller of rallies - and watch closely for the 4th of August when the BOE is expected to deliver easing which should move GBP$ to 1.25-1.28 where i will TP.
- Current implied BOE bank rate cut probabilities are priced as the following:
-Three month short sterling (GBP) rate - 66% probability of a 25bps cut, up from 64% on the 26th.
-GBP Nominal OIS Spot rate - 84% probability of a 25bps cut on the 26th, up from 76% on the 25th
-GBP 1m Fwd Nominal OIS Rate - 29bps 100% priced as of 26th, up from 26bps on the 25th.
HIGH VOL: KEEP WATCHING!!!Look guys, this is the same Fib retracement that has HELD since the Jan-Feb selloff. Do not take my word for it. Look at my previous predictions, load the new data, and see how much money was made.
MPC has had a history of bucking the market. When SPX was down 2%, this was down 7%. When SPX was up 3%, this was up over 8.5%. This is a lower liquidity, higher volatility play.
I am NEUTRAL on MPC. To be honest, I've put no money into for a long time. Money could have been made straddling the 2nd fib level, but the reaction to Brexit (not the market reaction to Brexit itself) has caused everybody to look at everything closer, and rightly so.)
Here's what we know: MPC is range-bound in the 2nd fib level. We also know it's good for a 8% pop or drop in a one session. Is that within your risk tolerance?? It's not within mine.
Conclusion: IF YOU DO NOT HAVE TO TRADE, DO NOT TRADE. I honestly would not look at this stock until after earnings (July 28th). That will give the market plenty of time to digest new capital inflows from stock buy-backs, and allow for a reaction that may be based on technicals vs. fundamentals.
There is money to be made, but patience is a virtue. If you see something I don't?....Please share! I need to eat too...
Cash in: No hold weekend for meNo reason to hold anything over the weekend unless you have to. Something smelly about the markets. I can feel the SPY wanting to sell.
MPC rallied up testing 37.00 fib level. It tested that level and it did not breach. The chart indicates overall bullish. It has/is building a nice $35 floor for itself. THE MODEL HAS NOT BEEN RE-DRAWN AND MPC IS TRADING PER THOSE FIB LEVELS SINCE MY FIRST MPC FIB POST. You can put a strangle on at 37.00 and 35.00 if you can afford to be that close to the money, but my money is better off elsewhere.
Now, if it rallies to $37.80, that'd make a nice cup formation. MPC has history of cup-and-handle breakout (see older chart).
Now, if you have followed my posts, you will have noticed me repeatedly saying that MPC has a history of bucking the SPY. It has. With that said, it's outside my own personal risk appetite.
Have a good weekend!
Time to buy MPC? This is a simple overlay of MPC and OVX. They share an inverse relationship with the most recent cross at the first session of 2016. Since then, OVX has skyrocketed, and MPC tanked eventually finding some support at $29. Previous support is near the high teens, but those are early historical lows.
Since the MPC $29 support, there appears to be a technical base for MPC to rise to $50, at the mid to lower end of analysts price targets for this stock.
There is more upside to being long MPC than being short OVX. What I'm saying is that OVX need not cross with MPC for the refiner's stock to rise. What I'm saying is MPC is oversold, and OVX is one reason to go long this stock.
Stay Long MPCIf you went bullish on calls per my previous post, you are enjoying a nice pop today. My time horizon is longer so I am holding until $38.75 (the next fib level). The MA just crossed and I want that to marinate for a few sessions. You should be just playing with house money now if you bought the day or day after I posted.
This is technicals-only trade devoid of any fundamentals if that had to be said for this website! The narrative is refiners have been oversold for the past couple weeks. The market has realized that now. I'm not paying attention to anything in action in CL or any news about Nigeria. That is all noise to me.
The only thing I'm paying attention to is that MA cross and the two fib lines that define my stop/sell positions.
Buy MPC callsGet em while they're cheap! You might find cheaper premiums on HFC as they nose-dived yesterday, but MPC has stronger fundamentals IMO.
And a reminder like always, MPC has a history of bucking the market the market: SPY.
In regard to fundamentals, this is an oversold reaction to MPC and other refiners' posting losses for Q1 2016. We all knew the refining margins honeymoon would come to a close eventually. This is a response not in rising crude prices, but rather a response to the lack of rise of gasoline prices (the other leg that makes up the refining crack spread).
BREAKOUT? MPC Fib Re-DrawnPlease compare this to my previous post where I had drawn the Fib retracement. I have redrawn this to capture the double bottoms. I was not sure if it could break out from it's previous fib level and so far this previous retracement model is holding up.
I have said this many times, but will say it again. MPC has a history of bucking the market and is doing so today. In fact, all refiners are selling off today. SPY is flat but not MPC, VLO, or PSX.
MPC hits top fib line. Sold.I was long at $36 handle on Tuesday. I sold at $38.70 which it is straddling right now at the top of the fib retracement. MPC is outperforming other refiners today like VLO, HFC, PSX.
There is no technical support above $38.70. Either it breaks out to $50+ or rather I am looking to buy another dip below this fib line if there is no sustained upside support for the next few sessions.
Time to buy MPC? OVX might be a reason why. This is a simple overlay of MPC and INDEX:OVX .
The chart is self-explanatory. I'm not saying these two will cross, but so long as they converge, it is a good sign to be long MPC. The stock itself is oversold. It has lost half it's market cap since early Dec. Since free-falling, it has found a nice bottom at $29.
Buying MPC in the low $30s and holding until April could bring us closer to the $55-70 valuation. Selling at $50 is more in line at the lower end of analysts revised expectations.
If INDEX:OVX stabilizes, and INDEX:SPX decides to capitulate, overlay MPC with the S&P, and you'll find that this stock has historically bucked the market.
Disclosure: I am long MPC.