Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: 8bits who wrote (4218)	12/17/2006 12:34:55 PM
From: Zincman	Read Replies (1) \| Respond to of 50177

The only real solution to the poor return on China's reserves is to stop accumulating them. That requires policy reforms to reduce China's massive saving, which drives its current-account surplus, and a more flexible exchange-rate system. But before that happens, China's reserves could well hit $2 trillion So, a doubling of FX reserves from here...? Not seeing a massive dumping of the dollar any time soon... ZM

To: 8bits who wrote (4218)	12/17/2006 1:47:22 PM
From: SliderOnTheBlack	Respond to of 50177

8bits, re: Natural Gas & XNG E&P Stocks. The XNG has been a trading range gift for nearly 15 months now...mainly, thanks to the volatility of natural gas prices and it being a favorite sector of the energy speculators. Back in August I said I liked the XNG as a shoulder season short and it did very well for Sept/Oct puts. I haven't bet the farm on anything since Palladium/Silver and the May exit. The trade for the last few months has been taking what the market gives me and it's been a good market for options straddles which I've mentioned time and time and time again... In the 2nd post below... I mentioned after the shoulder season, that we would see the bulls run the XNG up once again and they have. How it plays out... we'll just have to wait and see. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 8/6/2006 7:13:03 PM Message 22692715 "Here's my "don't fix it -- if it aint broke" Short Nat Gas Trade: We're looking pretty good for the set up on the Nat Gas/XNG shoulder season-rollover short" ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 10/16/2006 6:57:49 AM Message 22911830 "This has been a very, very tough market of late. Anyone making large bets and leaving them hanging out there too long has been crushed. We had a nice opportunity to take profits, pile up some cash in the bank, throw on a few shorts…and simply patiently wait for “the next mistake to be made”…and for the next “discrepancy between price and risk” to develop…be it short, or long. Presently, there are not any compelling opportunities, or glaring discrepancies. There was a nice little disconnect between the XNG Natural Gas E&P’s stocks and the price of natural gas…that allowed for a nice short trade with September & October puts doing well. I still think the stocks are over-priced considering where natural gas prices and inventories are…but, will wait as shoulder season ends…to see where the annual speculative run of the bulls takes both gas and the E&P stocks. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ re: "that annual specultive run." Nat Gas & the XNG have now moved from convergence to divergence -- per the chart below: The XNG was trading at 437ish fifteen months ago in Sept. 2005. It closed Friday at 464. In 15 long months... from peak to peak it's moved up a whopping 6%. Not to be hyperbolic... but, that's S&H Greenstamp returns. Suffice to say -- "holding tight" has not paid well. Even setting aside the technicals...fundamentally if you are an XNG/Nat Gas E&P stock bull, you have an underlying natural gas price that is literally HALF of what it was last December at nearly the same XNG valuation level. $7.51 Nat Gas & a 464 XNG close on Friday vs. a $15.52 peak Nat Gas price & XNG 422 last December. XNG/Nat Gas E&P bulls are paying an incredible premium this December to own E&P stocks - as oppossed to last December. With: -- an El Nino winter. -- a slowing US Industrial economy. -- record Nat Gas inventorys. -- a divergent technical chart. I ask -- WHY? Given the above, I'll take the Short bet here & now on the XNG/Nat Gas E&P stocks. On a risk:reward basis the short trade has never looked better. That doesn't make it guaranteed, but I like the risk:reward here based on the divergence of the XNG & Nat Gas prices. My risk is one that I've talked about for months. That the pump-job on the broad market continues past year end and it lifts all boats. It's not as good a bet as this was...but, I'll take it. Oh, and Hubris... for SARBOX & Deloitte & Touche purposes, yes - I did leave some of that on the table (as noted below) ...but, I so love posting the max-pain charts for the permabulls. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ From Jan. 12th, 2006: Message 22056343 Given that Pigs get Fat, but Hogs get Slaughtered... and also as there surely aren't too many more Bahammaian-esque days left in January here in the Midwest..twas' time to cover and bank some Nat Gas Shorts. Natural Gas is down -40% in a month....from $15.50ish to $9 bucks....whodathunkit ? For traders - that is equal to a $220 move in Gold.... but yet, hardly a word amongst the SI cognescenti on Shorting Nat Gas ? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ But, I did let a little bit roll over - re: From Jan. 19th, 2006: Message 22080387 "even with the - 40% one month collapse sub $9, I think Nat Gas has a good chance of seeing $5/$6 if the Iran/Nuke story doesn't take Crude significantly higher and pull Nat Gas with it." Kinda beats 4% & .34 cents now doesn't it... I said I thought we could see $5/$6 Nat Gas and was laughed at. -- whodathunkit? And we ultimately ended up at $4.35! As always -- we shall just have to wait & see... SOTB