DUG

[poli]

I bought DUG yesterday in low 29's,  nibbling a little on the short side of these high oil prices, with a little protection.  To all good health and trading.

poli

[soxguy]

On fast money fri. they couldn't understand why DUG went up as oil was going up.IT's just that a lot of traders are placing big bets that oil is going to start sliding.Too much anecdotal evidence about people not driving as much. We shall see.

[soxguy]

 AP       News of supply problems in mexico and nigeria didn't help oil today. Good for DUG.
Oil drops below $129 a barrel on demand concerns
Tuesday May 27, 3:14 pm ET
By John Wilen, AP Business Writer
Oil drops below $129 a barrel on concerns about demand; gas prices rise only slightly

NEW YORK (AP) -- Oil prices dropped below $129 a barrel Tuesday, falling sharply on a growing sense that soaring gas and oil prices have cut demand for fuel during the normally busy summer driving season. At the pump, meanwhile, retail gasoline prices rose, but only slightly, leading to renewed speculation that gas may follow the normal seasonal pattern of peaking around Memorial Day and then declining over the summer.

Although Energy Department data showing demand for gasoline over the Memorial Day holiday period won't be released until next week, Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J., said "it definitely was lower than (previous) Memorial Day weekends."

Tuesday's oil price decline was notable in that it came in the face of news of supply problems in Mexico and Nigeria that could have driven oil prices higher. That's an indication that demand concerns are weighing on the market, giving investors reason to pull back from record high oil prices set last week, said Stephen Schork, an analyst and trader in Villanova, Pa.

"I would be surprised to see that the (demand) numbers were stronger ... than had been anticipated," Schork said.

Light, sweet crude for July delivery fell $3.34 to settle at $128.85 a barrel on the New York Mercantile Exchange, but fell as low as $128.18 in after-hours electronic trading. It was oil's biggest one-day decline since March 31. Prices peaked at $135.09 a barrel Thursday.

Last week's surge in oil prices drove gasoline prices sharply higher just before the long Memorial Day holiday weekend. But those increases appear to be tapering off. The average national price of a gallon of regular gas rose only 0.1 cent overnight to a record $3.937, according to a survey of stations by AAA and the Oil Price Information Service.

"I think that we're going to see that that is the peak or very close to it," said Michael Lynch, president of Strategic Energy & Economic Research Inc. in Winchester, Mass.

Lynch thinks energy investors are selling on recent data showing that Americans are driving less due to high prices -- including weekly Energy Department reports that demand for gasoline is falling, a Federal Highway Administration report showing Americans drove fewer miles in March and a AAA survey released before Memorial Day predicting that fewer people would hit the road over the long weekend.

"If present trends continue, we could be heading for the first annual drop in gasoline consumption in some 17 years," said Edward Meir, an analyst at MF Global UK Ltd., in a research note.

If oil prices continue to fall, gas prices may not reach $4 on a national basis as some analysts have predicted. Still, prices are already above $4 in many parts of the country, and average more than $4 in 11 states and the District of Columbia.

Diesel prices also rose slightly Tuesday to a new record national average of $4.768 a gallon, according to AAA and the Oil Price Information Service. High diesel prices are part of the reason prices for consumer goods and food are rising.

Oil prices were also pressured Tuesday by the dollar, which gained ground against the euro. Investors who buy commodities such as oil as a hedge against inflation when the dollar falls tend to sell when the greenback strengthens. Also, a rising dollar makes oil more expensive to investors overseas.

Investors shrugged off a number of events that could have sent oil prices higher, including reports that crude oil production in Mexico fell by 13 percent in April compared to the previous year, the temporary shutdown of a North Sea oil platform and the latest in a spate of oil-pipeline bombings in Nigeria.

In other Nymex trading Tuesday, June gasoline futures fell 1.3 cents to settle at $3.383 a gallon, and June heating oil futures fell 6.64 cents to settle at $3.7992 a gallon. June natural gas futures fell 5.6 cents to settle at $11.801 per 1,000 cubic feet.

In London, July Brent crude futures fell $4.06 to settle at $128.31 a barrel on the ICE Futures exchange.

Associated Press Writer George Jahn, in Vienna, Austria, and AP Business Writer Thomas Hogue, in Bangkok, Thailand, contributed to this report.

[soxguy]

Oil supplies down,price of oil declining anyway. Good for DUG. A trend?

[poli]

Soxguy,  I hope so,  I added more last Thursday in the low 27's.  We will know in the fullness of time.  Good trading and health to all.

poli

[poli]

On another note,  I feel we will see a down move starting soon that will produce the cyclical low that runs every 39 to 40 trading days which is due June 9th or 10th.  Or perhaps Wierd Wally Wednesday which is due June 11th will produce the low before we rally futher.  I started to lighten up a little today and booked some short term profits.  We will know in the fullness of time.

poli

[poli]

I would not be buying anything long this week,  except some select mining stocks for long term.  I bought CDE on Friday and still have GRS and PAL as long term picks.  Still studying GSS.  I am still holding DUG.  After the beginning of next week I believe we will continue higher.  We will know in the fullness of time.  Good health and trading to all.

poli

[poli]

Good day for DUG again.  Overall market reacting just like I thought.

poli

[soxguy]

The talking heads on TV say oil will test $120,if that doesn't hold,$115,$110,down to $100. These speculators are dumping oil to avoid attention. Good for DUG.

[poli]

A bad day for DUG today which I am still in, but a great day for overall market.  My overall portfolio was up over 5% today.  Anyone still in IMMR like myself?  It had a good day.  Some say it is due to rumors about being in new Iphone from Apple.  I still believe we will see lows sometime before the end of Wednesday next week.  My guess the lows on the SPX will be between 1350-1370 before we really start a rally to climb above the last current highs.  We will know shortly.  To all good health and trading.

poli

[la-onda]

fyi:
DUG, which we suggested as a buy entry on June 3, is now looking like a failed breakout pattern. It's still holding near the low of its recent consolidation, but one should cut the loss quickly if it moves much below yesterday's low. The daily chart of DUG is shown below:

Failed breakouts often reverse quickly because the bulls who bought the breakout become trapped and are quickly forced to sell, thereby attracting the interest of the short sellers as well. Crude oil, as well as the oil-related indexes, could still form "lower highs" on their daily charts and resume their recent weakness, but yesterday's sharp reversal of momentum means all bets are off for new bearish positions in the energy sector.

[soxguy]

Sold Fri. Looking to get back in low 20's. We'll see.

[poli]

soxguy,  Good luck,  I am still in.  I am in no hurry.

poli

[poli]

Sold my DUG today to book some profits,  Been on vacation off and on for last couple of months.  Glad I was not around to watch my portfolio go down, it was much easier on my mental health that way.  To all good health and trading.

poli

[setravis]

updated chart scene.......