Monday, May 27, 2013

What 9 Company Hedge Books Are Revealing about the Natural Gas Market

You can see it clear as day in their hedging strategies...

Natural gas producers are increasingly bearish on prices for their sector.

The numbers tell the tale.  Canadian gas producers surveyed for the Oil and Gas Investments Bulletin hedged AECO-sold production at $5.27 in 2011. Hedge prices have dropped steadily for gas sold since—to $4.27 in 2012, and to $3.29 for currently-hedged production in 2013.

Why the falling hedge price?  Because it made sense – Natural gas prices fell steadily from the beginning of 2010 through to early 2012. Faced with two years of declines, producers looked to stave off further price risk by forward-selling (hedging) their output.

So what has happened since the second quarter of 2012?

Gas prices have been rising. The monthly average AECO (the Canadian benchmark price out of Edmonton AB) price is up 110% over the last year. NYMEX gas has gained 95%.  (more)

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Under $7 Stock May be Traders' Ticket to 50%-Plus Profits

When it comes to finding stocks capable of solid short-term trading profits, investors often seek out potential positive catalysts to score quick gains. For example, I recently discussed an upcoming event that might give a quick boost to medical device maker Given Imaging (NASDAQ: GIVN).

But it's not just the appearance of positive catalysts that can boost a stock. Sometimes it's the removal of negative catalysts that can do the trick. And a notable technology firm that is deeply out of favor may soon make a comeback now that a key overhang on the stock is set to fade away.

Super-Charged Technology

Engineers often tinker with old technologies to see if they can glean new capabilities and uses from them. A key area of interest has been capacitors, which were first designed back in 1754. These devices are used to regulate the flow of energy, whether between various forms of current (alternate or direct), in a power source, or to stabilize the flow of voltage. Capacitors are also used to store energy, as they can quickly release lots of juice when needed (unlike batteries, which can store a lot more energy but release that energy more slowly).

Well, the engineers at Maxwell Technologies (NASDAQ: MXWL) seemingly struck gold by developing "ultracapacitors," which pack far more energy and can provide a quick jolt of juice in short bursts. Bus makers, for example, are starting to use Maxwell's devices to provide acceleration power, reducing the need for oversized engines that will rarely need to operate at full loads.  (more)

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Banking insider: The Japanese have lost control of their bond market

On May 24, a financial analyst and former head trader at the Royal Bank of Scotland spoke on the Hagmann and Hagmann Report regarding the current state of the global economy. Known in the public sphere under the pseudonym of 'V', and labeling himself the Guerrilla Economist, this high level insider stated that the Japanese have completely lost control over their bond market, and the threat for a collapse of the Nikkei equities market is very likely.
V: I basically just got this hot off the press, and hot from the board rooms over here. The Japanese, and this is official... I'm going out on a limb saying this, and you can take it for all it's worth... the Japanese have lost control of their bond market.

Doug Hagmann: V, for financial neophytes like me, what does that mean?

V: What that simply means is... see the stock market has been rising in Japan, as well as over here because of bond prices. Were in a very unique environment where, if the bond market goes bust, you're going to see the Nikkei go bust with it, as well as real estate.  (more)

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3 Factors Keeping Oil Above $90 a Barrel

The gushing oil well at Spindletop Dome in Beaumont, Texas, is one of the most iconic images in the history of oil. When the well hit paydirt, oil spewed 150 feet into the air at a staggering rate of 100,000 barrels per day.

We've come a long way since that Spindletop gusher 112 years ago, and today's industry faces greater challenges finding new sources that can be sold at a reasonable rate of return.

On a recent conference call, Core Laboratories (NYSE: CLB  ) CEO David Demshur stated that outside some of the best spots in the U.S., oil producers in the U.S. will slow down exploration if oil prices are to remain below $90 for a sustained amount of time. Let's look at a few factors that might give some credence to Demshur's claim.

1. Higher resource costs. According to Cheaspeake Energy (NYSE: CHK  ) , the average shale well in the U.S. is drilled to 7,800 feet vertically plus several thousand feet horizontally and is injected with more than 5 million gallons of water, sand, and chemicals to fracture the tight pores where the oil is hidden. All of this effort is for an average initial production rate of about 450 barrels per day. (more)

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Bank Corruption - Coast to Coast Am - May 25 2013

Host John B. Wells interviews Karen Hudes.

About this show: Joining John B. Wells, former World Bank attorney and whistleblower Karen Hudes talked about how she uncovered corruption in the World Bank. 

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Freescale Semiconductor Ltd (NYSE: FSL)

Freescale Semiconductor, Ltd. provides embedded processing solutions for automotive, networking, industrial, and consumer markets worldwide. The company's embedded processor products comprise microcontrollers, such as ultra low power, low end 8-bit products to higher performance 16-bit, and 32-bit products with on-board flash memory, which provide the digital logic or intelligence for electronic applications; single-and multi-core microprocessors; and applications processors with embedded memory, and special purpose hardware and software for multimedia applications. It also offers wireless connectivity products for low power wireless communications functionality; communications processors that perform tasks related to control and management of digital data, and network interfaces; and radio frequency devices, such as power transistors, amplifiers, receivers, and tuners. In addition, the company provides analog and mixed-signal products, such as power management devices, system-based chips, battery and motor control devices, CAN/LIN network transceivers, and radar and signal conditioners; sensors comprising pressure, inertial, magnetic, proximity, and gyroscopic sensors, which act as an interface between an embedded system and external environment; and cellular products.
To review Madden's stock, please take a look at the 1-year chart of FSL (Freescale Semiconductor, Ltd.) below with my added notations:
1-year chart of FSL (Freescale Semiconductor, Ltd.) After hitting $16 as resistance (maroon) twice back in February and March, FSL fell all the way down to $12. Since that time though, the stock has worked its way back up and broken through its $16 resistance, which was also a new 52-week high. A pull back to that $16 level could provide a nice long entry on the stock.
The Tale of the Tape: FSL broke out to a new 52-week high and now seems to be pulling back. A long trade could be made at $16 with a stop placed below that level. A break below $16 would negate the forecast for a continued move higher.
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US Weekly Economic Calendar

time (et) report period Actual CONSENSUS
  Memorial Day
None scheduled
TUESDAY, may 28
9 am Case-Shiller home prices March   -- 9.3% (y-o-y)
10 am Consumer confidence May   72.3 68.1
  None scheduled  
8:30 am Weekly jobless claims 5/25
342,000 340,000
8:30 am GDP revision 1Q   2.5% 2.5%
10 am Pending home sales April   -- 1.5%
8:30 am Personal income April   0.2% 0.2%
8:30 am Consumer spending April   0.0% 0.2%
9:45 am Chicago PMI May   49.9 49.0
9:55 am Consumer sentiment May   83.7 83.7
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