Mark Pszeniczny

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Weak Jobs push Markets south, destroy extended rally

Posted by Mark Pszeniczny on Jun 4, 2010 9:24:00 PM

The sideways action continues as a healthy correction has once again seen buyers run for the hills. On the heels of healthy construction spending and new home sales, and some bullish inventory numbers, the Jobs data that was released today wiped away any chance of an extended rally. Most were expecting healthy increases in jobs but once the census workers were removed from the data, jobs actually were flat, setting off a firestorm of selling in all markets. The Dow was down over 300pts and the Euro continues to get hammered against the greenback. Short term, the prompt HEAT contract in the $1.85 to $1.95 range looks still to be defining the 5 to 7 o’clock hour on the clock. Anywhere in this range appears to bring out the buyers. Longer out is going to heavily depend on demand and when OPEC feels the need to jump in. At the Close, HEAT fell .0814 to $1.9577, RBOB lost .0859 to $1.9953 and Crude lost $3.10 to $71.51. The prevention of the magical third up day has most assuming the sideways action or range bound trading will continue.

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Topics: The Market, OPEC, HEAT, Weak Jobs Report

Futures show solid gains on home sales

Posted by Mark Pszeniczny on Jun 2, 2010 9:12:00 PM

It was one of those days in the pits as the market opened positive and stayed there all day. After yesterday’s impressive construction spending report and today’s strong Home sales news, buyers appeared willing to jump back into Commodities. Many point out that we still look to be oversupplied, but by how much, should be defined as the inventory report gets released on Thursday. As we see so often, and shown by the chart below, a good deal of buying occurs after a floor appears to be defined. Hindsight being perfect of course. One should note how little we have heard from OPEC over the last few weeks during the correction. This is also typically about the time when news outlets will pick up stories on gas prices. Remember the street pricing being several days behind what the NYMEX does. All in all, the taking back of yesterdays losses today was somewhat expected as the sideways action should continue prior to the first named storm of the season. At the close, Crude gained a mere .28 to $72.86 yet RBOB jumped .0436 to $2.0261 and HEAT added .0355 to $2.0059.

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Topics: NYMEX, The Market, OPEC, Commodities

NYMEX bounces, end negative

Posted by Mark Pszeniczny on Jun 1, 2010 9:10:00 PM

Almost on cue, the NYMEX sold off overnight as length added on Thursday was peeled away as what typically happens ahead of a long weekend. But, a surprise was in store as reports of May construction spending hit the wires and showed the largest monthly increase in years of 2.7%. Again, we weren’t starting from a very high number. The range bound action looks to continue for the short week as Inventory numbers will be delayed a day. What is surprising is with “Top Kill” of the leaking well officially dead, we haven’t seen a dramatic jump in prices. A few years ago, Crude would be $100 a barrel on such an event. The sensibility in the markets, fear of a still weak world economy and the overall bearish tone have kept the spill all but in check. As we mentioned last week, the Far East appears to be next in line for some economic Darwinism as weekend violence in Spain and Portugal spread due to those Governments actions to combat the worsening economy. Look for the see saw trade to continue as be ready for buying opportunities as some good values are still out there. All products fell hard into the close with Crude losing $1.39 to $72.58, HEAT lost .0341 to $1.9704 and RBOB fell .0441 to $1.9825

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Topics: NYMEX, The Market, Construction Spending Up

Futures end month on soft note

Posted by Mark Pszeniczny on May 28, 2010 9:09:00 PM

Thursdays buying frenzy continued into this morning session as early morning markets were up over 3 cents. A variety of news items led to the jump yesterday most importantly was the announcement of a “busy” hurricane season and the President declaring a 6 month halt on offshore drilling so the current process can be evaluated. While since 2004, every hurricane season has been forecasted as busy, that wolves cry has begun to fall on deaf ears. The true reason for Thursday looks to be more of traders adding length ahead of the long weekend before getting out of Dodge. As we said the overnight jumped on the momentum and continued as the GDP reported 3% growth and unemployment benefits fell by roughly 14k last week. But in true NYMEX fashion, rather than shooting higher, the markets reversed around noontime and actually traded negative, losing over 3 cents in value. The seesaw action looks to continue as we bounce between the 1.90 and 2.00 range for HEAT. The tension mounts as we wait and see if the length gets peeled off on Tuesday. At the close, JULY RBOB went off down .0088 to $2.0266, JULY HEAT lost .0052 to $2.0045 and CRUDE lost .58 to $7397.

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Topics: NYMEX, The Market, moratorium on offshore drilling, unemployment benefits fall, GDP up

Futures shrug off DOE’s, end higher

Posted by Mark Pszeniczny on May 26, 2010 8:39:00 PM

In what appears to be an about face to recent trends, the Pits reacted strongly overnight to yesterdays API report that showed Gasoline taking a whopping 3.2mbl hit. That message was contradicted this morning with the official DOE report that showed Crude build by 2.4mbl, Gasoline fall by only 200k bls and distillates draw by 267k barrels. The rather bearish report, when compared to estimates that had Crude only adding 250k barrels, was pushed aside as value seekers jumped on an already fast moving train. So much so that right after the report was released, again this is bearish news, the markets jumped higher. The length that was shed over the last few weeks appears to be burning a whole in the pockets of the funds. Or they could simply see this as buying opportunity as they did in late January. Again with Front month HEAT touching, but not breaking that 100% retracement level, expect to see sideways action until the next round of economic news is released. Many will focus on the Far East and their economic health as well as the tie to the dollar. At the close, Crude vaulted $2.76 to $71.51, RBOB rose .0396 to $1.9704 and HEAT gained .0490 to $1.9207.

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Topics: API report, The Market, DOE, HEAT, CRUDE

NYMEX reverses on economic news, to end day higher

Posted by Mark Pszeniczny on May 24, 2010 8:36:00 PM

The early morning session had all the makings of another big down day as news spread that China may be scaling back some of their economic recovery plans. And fears mount that Japan is not too far behind. The reverse came as existing home sales reported a better than expected increase in units. The dramatic sell off in the last few week has brought out the bottom feeders and judging by the chart below, they appear to be ready to turn this around. We had pinpointed the 1.8850 level as a possible bottom and so far that support level has held, this goes all the way back until the first week of February. The real question is there enough steam in the train to move south even more after the two day dead cat bounce. Even with the Dow soft, I tend to think that the 45 cents lost in value in the last two plus weeks has shaken the tree enough prior to the summer. At the end of the day Crude managed to stay above $70 closing up .17 to $70.21, RBOB added .0096 to $1.9708 and HEAT gained .0026 to $1.8993.

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Topics: NYMEX, The Market, Market analysis

NYMEX continues to slip on Jobless Report Numbers

Posted by Mark Pszeniczny on May 20, 2010 8:34:00 PM

The last three days has left me feeling the same way I do after watching an episode of “LOST”…. What the hell just happened??? Values have plummeted on European financial fears, Greenback gains and as Hedge funds dumped length at every turn. Todays fall was accelerated as a Jobless report showed an unexpected climb in claims, but a glimmer of hope for Bulls appeared as the market put their rally hats on and fought off an 8 cent decline in the HEAT pit and closed down only .0433 to $1.9019. RBOB lost .0507 to $1.9645 and Crude dropped $1.86 to $68.01. As we mentioned a while back, we saw a major resistance level at the $2.05 level, as that was broke earlier in the week, the technical selling pushed values all the way down to the 100% retracement level of $1.85, to which we touched today. That level held and the bounce off looks to define the pre season low. But we said that about $2.05. Long and short of it the near 50 cent drop in values has given many a second bite of the apple. As shown below, the play in early FEB was a home run for 3 months, we could be in that cycle.

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Topics: The Market, Jobless claims rise

NYMEX gives back Wednesday gains

Posted by Mark Pszeniczny on May 13, 2010 8:33:00 PM

The difference in todays action than yesterdays was that RBOB and HEAT actually followed Crude in finishing lower. With NatGas inventories showing a slightly smaller injection than expected, prices were held in check for most of the morning until turning sharply negative by early afternoon. The only other major item of note was that the Jobs data released showed that the labor market is improving, but at a slower rate than anticipated. Just as is the case with everything in this business, how well we perform against expectations (whosever they may be) is used as the instrument of judgment and market direction. The lack of news hitting the wires kept the pits lower without any reason to make a run. As mentioned, we will probably be held within this 2.09 to 2.16 range until some defining news pushes us one way or another. The downside bias still exists, even with OPEC appearing to thin exports. At the Close, Crude dropped $1.25 to $74.40, showing a slight disconnect between the products. RBOB lost .0153 to $2.1951 and HEAT fell .0272 to $2.1319.

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Topics: NYMEX, The Market

Mixed Data has NYMEX end Mixed

Posted by Mark Pszeniczny on May 12, 2010 8:32:00 PM

With the weekly inventory report came a mixed bag and subsequently a mixed close. As shown below, the largest variance was seen in gasolines which was the only thing that kept the trade positive today. Crude suffered losses finishing down 72 cents to $75.65, while products closed higher. RBOB added .0152 to $2.2101 and HEAT gained .0190 to $2.1591, further widening refining cracks. As we speak, Crude has fallen another 30 cents in aftermarket trading. Many are looking at demand, which has seen gasoline demand rise 10% over the same period last year and distillates rise almost 8% month on month. This after the EIA cut their demand outlook! How much of this is due to a strengthening economy remains to be seen. My sense is that demand, like IQ, wasn’t starting from a very high place so any increase is huge. Long and short, it looks as though we will be range bound for several sessions as investors keep a hairy eyeball on Europe and the DOW to evaluate how the financial crisis reverberates through the continent.

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Topics: NYMEX, The Market, CRUDE falls, Inventory report, gasoline demand rises

Futures edge higher off lows, products expected to build

Posted by Mark Pszeniczny on May 11, 2010 8:30:00 PM

As the morning began, we looked to head towards a session that was going to continue the downward slide after a brief bounce on Monday. That all changed as the opening bell rang and what was a negative market turned positive. HEAT bounced off the 50% retracement level and never looked back. With news relatively mild today as the country braces towards Wednesdays DOE report, all expectations are for the products to build by 1 mbl. The rig disaster in the gulf should not have a major effect on supply, yet should inventories come in lower than expected; it will be pointed to as the primary cause. HEAT appears to be range bound for the time being as last weeks big fall as many heads still spinning. It’s natural to see some buy back. As little as we want to put stock in the charts, as shown below, that 2.05 level held and the 2.10 level held today. But, “turn it upside down and it will say the same thing”. We could see a short term range defined with the inventory report on Wednesday. At the Close, Crude fell .43 to $76.37, RBOB added .0226 to $2.1952 and HEAT rose .0199 to $2.1401.

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Topics: The Market, DOE, HEAT

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