(Bull) Market March 2021

[ducati916]

Seasonality for all 3 indices:

If seasonality is any indication, potentially another rocky month for stocks.

Plenty of new supply coming to market in the form of SPACS:

3 asset classes that are generally considered 'safe havens':

In fact, the 10yr is a strong conviction to move to 1.6% and possibly even higher. We know that foreigners have been dumping Treasuries for quite some time. There are (apart from the Fed.) no buyers currently. Hence the move lower. For the moment at least, that will continue. If/when the 10yr enters the 2%-3% range, I think the stock market has issues. We have seen already last week, just how quickly the stock market will react to negatives in the Bond market. Nothing in the Bond market currently is going to improve: therefore the stock market is likely to become very choppy and somewhat directionless, ie. the trend higher will become bogged down.

Gold is positioning for a comeback. It's not there yet, but it is getting close. I think 1 more decline and we will hit the inflection point for a bounce higher. I've been working on my 'gold' models, so we'll see if there is any validity to them. Generally, the miners outperform gold itself (up/down) and I would expect this to hold true due to their natural leverage. The smaller miners more than the majors. So I'm getting ready to take profits in the shorts and get long. Not there yet, but close. Obviously, this implies that 'something' will happen in Treasuries. I think it will. I don't think the Fed. can or will let rates across the longer end of the curve (10yr-30yr) continue to rise. They will increasingly cap them, whether covertly or overtly. If they do...gold will be the tell: it will reverse fast and hard.

Now assuming that the Fed. does cap rates, what about stocks? Well commodity based stocks should continue really strong, capping is highly inflationary. Growth stocks (Tech) should catch fire again. Financials will probably sell-off. Housing based stocks should catch fire.

Now this is pretty old news. Newer (stupid) investments constitute video clips of NBA games. Baseball cards have been collectible for decades and are again on fire, but this video clip thing is a few months old.

So in summary: I am less enamoured of stocks currently. I am preparing for gold.

jog on
duc

 

[ducati916]

During the 4 years after 1982, two of the main supporting factors behind the stock market advance were: (a) falling commodity prices and (b) rising bond prices (falling yields). In 1986, both of these markets bottomed.

In the spring of 1987, commodity prices broke higher and bond prices started to fall. The market rally continued into August. The dollar, which had been falling, rallied in August, failed and rallied again into October, where it again failed.

We have today, essentially the exact same inter-market scenario that existed in 1987: (a) rising commodity prices, (b) falling bond prices (rising yields), (c) falling DXY complete with a rally that will likely fail and a stock market that is narrowing in participation.

Do we see the same result? Who knows. None of the conditions currently favour a continued bull run in stocks. While stocks may rally as the BTD crowd, ignorant of market history and the forces from other markets arrayed against them currently, continue to BTD and rally prices for the moment, under the surface, the smart money has already taken profits and are out.

That spike in the curve last week was to me similar to the spike in the repo rates prior to the collapse in 2020. Yes the repo spike was a few months ahead of any collapse, but it was the early warning sign that something was seriously amiss. It was 'explained' off as a failed auction on the 7yr. Why exactly did the auction fail in such a spectacular fashion? WTF is going on behind the closed doors? I have no idea, but when prices in staid Treasuries spike in that manner, the duc takes note.

Why is it important? Because INSIDER TRADING is a real thing. Politicians have portfolios and trade on inside information or leak political information all of the time. Was COVID a wet market or a lab created virus? I have no idea, but someone knows (knew) and that information leaked into the markets and prices adjusted. I had no idea why prices adjusted, but when the collapse came I was 100% ready. Somewhere, somebody always knows and they adjust prices.

The rate of rise in the 10yr is faster than I have ever seen. That is information. Add to that commodities (oil) rise and the weak dollar, ask yourself why should stocks continue to rise? The economy re-opening? Pent-up demand? My bet, already priced in months ago.

Add in that gold is looking to bottom in the next few weeks. Coincidence? Maybe. I'm not a big believer in coincidences. The issue with using 'trends' as an indicator is that trends can end in a blow-up very fast. Currently all the safe haven trades are indicating via their trends all is well. That however is not the message of the markets on aggregate. The stock market in this regard is the laggard, the slowest or dumbest market.

Mr @gartley has a count that moves stocks higher for a time in price, before a (major) correction. That pretty much tallies exactly with the pattern being communicated in the various markets.


jog on
duc

 

[Smurf1976]

Mr @gartley has a count that moves stocks higher for a time in price, before a (major) correction. That pretty much tallies exactly with the pattern being communicated in the various markets.

Another observation - the S&P500 is within reach of a big round number, that being 4000.

OK, it's just a number, but given it's a very widely watched index there may well be a psychological response (profit taking) once it's reached. Similar to the NASDAQ reaching 5000 back in the year 2000 followed by the crash.

Just mentioning it as another thing which fits with the notion of the market going higher for a while then down.

 

[ducati916]

Trading up hard off of the lows, primarily due to:

Unfortunately, it is a lull in the storm. The 10yr is heading to 1.6%. Unless the Fed. steps in with curve control.

Until we find out whether or not the Central Banks are going to initiate curve control, we can assume that Bonds will continue to fall if (a) commodities continue to rise and the (b) DXY remains weak.

Currently the DXY looks to be ready to put in a bounce higher.

This may or may not blunt the advance of yields. I think it will. There has been a lot of movement in Bonds, which are normally staid. They will likely cool off for a period, helped by a bounce in DXY.

The bounce in DXY may not however help commodities as much. Commodities usually means oil. Oil is tied to OPEC and the Shale drillers etc. Shale (say they are not expanding production) is stable, OPEC (less Russia) wants higher prices, so supply will not increase and economies are with the vaccine, starting to re-open. Sum total: oil could continue higher. Again, oil has had a big run. There could be some consolidation.

While Commodities, Bonds and DXY take a breather, stocks will very likely continue higher. We will probably see new highs in the various indices. What we also want to see is a return of breadth. New highs without participation (divergence) will be increasingly dangerous. I will also want to see the growth/value rotation reverse:

And a return to the offence based end of the market for the big Mutual Funds and Pension Funds.

I would also require a reverse in quality of credit, back to Junk:

Failures, indicate that the market is unstable. An unstable market is a very dangerous market, particularly with high leverage.

As can be seen from the charts, everything is somewhat over extended. Which means that (if we have a mean reversion) most asset classes could be consolidating, prior to either (a) continuing their original trend or (b) reversing (breaking) their trend. Which means a break, if it comes, might seemingly happen very fast, out of nowhere so to speak.

The other issue with (potentially) a number of asset classes consolidating are (a) choppy, seemingly directionless markets, because (b) the correction takes place not in price, but in time.

If a correction in time, vol. will also move sideways for an extended time with failures on b/o:

We may be in for a period of very frustrating, boring markets, until they are not. Bright spots could be currencies and crypto, which could likely trend, divorced from stocks/bonds/commodities, but informing as to potential outcomes in them.

From Mr flippe-floppe-flye:

jog on
duc

 

[peter2]

Interesting how one very bullish day can lessen bearish outlook. I'm still bullish and one large down day lessens my bullish outlook. There's no doubt that many of us are cautiously bullish but wary of a falling market that can start at any time.

The number of positions in my portfolios are falling dramatically as I sell in response to falling prices. Even though I remain bullish the number of good opportunities are fewer and many of them that start well are showing no follow through. Prices are drifting back to their BO levels. Prices in companies that recently reported good results are falling.

Our ASX is being held up due to the market cap dominance of the banks and large miners. I'm not seeing an underlying bullish breadth in the ASX at the moment. The ASX bullish rally (not a bull market until index gets above Feb20 high) is running out of energy.

 

[qldfrog]

Interesting how one very bullish day can lessen bearish outlook. I'm still bullish and one large down day lessens my bullish outlook. There's no doubt that many of us are cautiously bullish but wary of a falling market that can start at any time.

The number of positions in my portfolios are falling dramatically as I sell in response to falling prices. Even though I remain bullish the number of good opportunities are fewer and many of them that start well are showing no follow through. Prices are drifting back to their BO levels. Prices in companies that recently reported good results are falling.

Our ASX is being held up due to the market cap dominance of the banks and large miners. I'm not seeing an underlying bullish breadth in the ASX at the moment. The ASX bullish rally (not a bull market until index gets above Feb20 high) is running out of energy.

To be honest,i am fully bear minded now, we may have a couple of weeks even 1 or 2 months up but in the scale of things, i have the feeling we have reached a top and the reality is slowly sinking in.unless a play on currency crash or similar which push people into shares again, i think we can call the long bull over until at the very least a decent correction aka 20% at least time will tell

 

[ducati916]

Interesting how one very bullish day can lessen bearish outlook. I'm still bullish and one large down day lessens my bullish outlook. There's no doubt that many of us are cautiously bullish but wary of a falling market that can start at any time.

The number of positions in my portfolios are falling dramatically as I sell in response to falling prices. Even though I remain bullish the number of good opportunities are fewer and many of them that start well are showing no follow through. Prices are drifting back to their BO levels. Prices in companies that recently reported good results are falling.

Our ASX is being held up due to the market cap dominance of the banks and large miners. I'm not seeing an underlying bullish breadth in the ASX at the moment. The ASX bullish rally (not a bull market until index gets above Feb20 high) is running out of energy.

The breadth in the US is a major concern:

It needs to pick up and follow the market higher. If the market trades back to its highs or new all time highs and breadth is still lagging, then there will be (obviously) a divergence, which is never a good thing in this situation.

Rates are going to 1.6%. Not today, probably not this week, but they are going there. Rising rates, lack of breadth, commodities bullish and a potentially falling dollar spelt doom in 1987/1990. I don't fancy this market's chances if that scenario plays out again.

jog on
duc

 

[Smurf1976]

Our ASX is being held up due to the market cap dominance of the banks and large miners. I'm not seeing an underlying bullish breadth in the ASX at the moment.

Over the weekend I quickly looked at some charts. A chart of every large cap stock actually, took a brief look at each and every one of them just to build a mental picture of what's going on.

In short, some stocks are clearly in an uptrend but there's an awful lot that are going nowhere or which peaked quite some time ago and now clearly trending down.

There's enough that someone could, if they were particularly bad at stock selection, have put together a seemingly respectable portfolio of large caps and be in the red on every single one of them despite the index grinding higher if they didn't include a few key companies in that portfolio.

On the other hand, someone who picked the right stocks and excluded the rest will be doing extremely well at the moment.

It’s a market environment where stock selection is important, it’s not a case of pretty much everything going up.

 

[qldfrog]

Over the weekend I quickly looked at some charts. A chart of every large cap stock actually, took a brief look at each and every one of them just to build a mental picture of what's going on.

In short, some stocks are clearly in an uptrend but there's an awful lot that are going nowhere or which peaked quite some time ago and now clearly trending down.

There's enough that someone could, if they were particularly bad at stock selection, have put together a seemingly respectable portfolio of large caps and be in the red on every single one of them despite the index grinding higher if they didn't include a few key companies in that portfolio.

On the other hand, someone who picked the right stocks and excluded the rest will be doing extremely well at the moment.

It’s a market environment where stock selection is important, it’s not a case of pretty much everything going up.

More than picking, i believe sector and size are the keys right now.

 

[ducati916]

Bit of a meh market currently:

Breadth is increasing as the market trades higher. Assuming the market makes new all time highs, we want to see where breadth sits at that point.

Sectors:

And in the materials sector:

In the Tech. sector:

In Renewable Energy:

Doesn't necessarily mean anything, it is just a snapshot. However, if you trade individual names in sectors, lots of work to do.

Crypto:

An issue?

What exactly is that?

Are the 2 related?

Oil news:


- The volume of crude that went into Gulf Coast refineries declined by 2.7 mb/d for the week of February 19 as a result of the Texas grid crisis.

- The drop in refinery processing of 2.4 mb/d, or 28%, was the largest weekly decline since Hurricane Harvey in 2017.

- In total, an estimated 3.7 million b/d, or 20% of total U.S. refining capacity, was shut in as a result of the weather, according to the EIA.

Market Movers

- Texas utility Vistra (NYSE: VST) sees a $1.3 billion hit from the Texas freeze.

- Atmos Energy (NYSE: ATO) trimmed its expected loss from Texas grid crisis to $2.5 billion, down from $3.5 billion previously.

- Baker Hughes (NYSE: BKR) and Akastor (OTCPK: AKKVF) have announced a joint venture company to pursue offshore drilling solutions.

Tuesday, March 2, 2021

Oil prices pared gains at the start of the week, seemingly hitting a temporary high note. Traders are on edge as they away a decision from OPEC+ regarding the potential easing of production cuts.

Oil up, but bearish forces remain. Oil prices have posted substantial gains in recent weeks, and most recently after fully pricing in the impacts of U.S. economic stimulus, combined with more positive vaccine news with the approval of the one-shot Johnson & Johnson vaccine. However, Rystad Energy points to some caveats and potential pitfalls for crude prices: OPEC+ could add more supply this week; refinery maintenance season is upon us, and Chinese demand has run into a bit of a soft patch.

Rystad: Energy transition to cut oil by $10. The downside risk that the energy transition can bring to oil prices is calculated to as much as $10 per barrel in the long term, meaning oil prices could end up $10 lower in the future than they otherwise would if the transition to cleaner energy speeds up, according to Rystad Energy.

Texas utility files for bankruptcy. Brazos Electric Power Cooperative, Texas’ largest and oldest electric power cooperative, filed for bankruptcy after getting hit with a $1.8 billion bill from the grid crisis last month.

Oil titans unsure about the energy transition. At CERAWeek, oil executives grappled with how aggressively to pursue energy transition. Some urged faster movement, others talked up the need for more fossil fuels. “We don’t think peak oil is around the corner - we see oil demand growing for the next 10 years,” said John Hess, CEO of Hess Corp. (NYSE: HES). “We’re not investing enough to grow oil and gas in the future.”

UAE signals easing supply cuts in April. Abu Dhabi’s ADNOC has told Asian oil buyers that it plans to increase crude allocations in April, sources close to the matter told Reuters. The news comes just ahead of the OPEC+ meeting.

U.S. cold snap leads to a record gas drawdown. Natural gas inventories plunged during the extraordinarily cold weather that hit much of the continent in February. Weekly stocks fell by 338 billion cubic feet (Bcf) in the week ending February 19, 2021, nearly three times the average withdrawal for mid-February, according to the EIA. A record amount of natural gas, 156 Bcf, was withdrawn during that week in the South Central region, which includes Texas.

DOE to tap $40 billion in clean energy funding. U.S. Secretary of Energy Jennifer Granholm said she plans to revive a $40 billion loan program for energy projects. The program was authorized by Congress but went unused during the Trump era.

Private shale step up drilling. Private shale drillers are leading the charge on new drilling as publicly-listed companies face pressure from investors. As Bloomberg reports, privately-held DoublePoint Energy has more rigs in the Permian basin than Chevron (NYSE: CVX).

SEC says Exxon has to let shareholders vote on resolutions. In an early sign that a shift in direction is underway at the Securities and Exchange Commission, the SEC shot down a request from ExxonMobil (NYSE: XOM) to exclude a shareholder resolution. Major institutional investors, including BNP Paribas, pushed a resolution that would require Exxon to release more information on its lobbying activities and its climate risk. Exxon wanted it tossed out, but the SEC declined.

U.S. gasoline demand surge. U.S. gasoline demand surged by 1 mb/d last week to nearly 8.8 mb/d. “Last week was pretty eye-popping indeed,” Patrick DeHaan, head of petroleum analysis at GasBuddy, told Bloomberg. “We’ve seen a continued recovery as Covid-19 slowed, on the warmer weather, and basically a big bounce since the Texas cold weather hampered numbers.”

Texas PUC Chair resigns. The head of the Texas Public Utility Commission resigned on Monday in the wake of the grid crisis.

API considers carbon tax. The oil industry’s most powerful lobby group is preparing to endorse a carbon tax. The Wall Street Journal reports that the decision has been highly divisive internally.

Deep cuts put African oil at risk. Five of OPEC’s 13 member states are from Africa. Angola has gone from being Africa’s top crude producer just five years ago to barely pumping more than war-torn Libya while Nigeria--another key OPEC member--is in grave danger of suffering Angola’s fate as Big Oil makes yet another round of deep CAPEX cuts.

Can abandoned oil wells be used for geothermal? Some companies have been researching and testing something that could expand geothermal’s reach and benefit oil companies: turning abandoned oil wells into geothermal wells.

Petaluma, CA first city to ban new gas stations. Petaluma, California became the first U.S. city to outlaw new gasoline stations. Activists hope that it becomes a trend, not unlike the proliferation of bans of natural gas hookups in new buildings that started in California just a few years ago.

Asia LNG price falls. The price of spot LNG in Asia has retreated almost as fast as it surged during a cold winter snap, leaving a market grappling with how best to deal with the recent extreme volatility.

China plans a power grid upgrade. China’s utility giant State Grid Corp of China has big plans to build ultra-high voltage transmission lines over the next few years to help shift the country away from coal.

Electrification requires new mines. Can the U.S. build them? You can’t have green energy without mining,” Mark Senti, chief executive of Florida-based rare earth magnet company Advanced Magnet Lab Inc. “That’s just the reality.” Reuters explores the challenges of building new mines for lithium and other metals critical for batteries.

Carbon emissions top pre-pandemic levels. Global CO2 emissions have surpassed pre-pandemic levels.

jog on
duc

 

[ducati916]

Some are turning bullish on gold:

Given their underperformance recently, time for a rally?

The miners:

I tend to agree, I'm also starting to get a little bullish on gold, but not yet.

Interest rates (10yr) are signalling 1.6%. If they hit that, then 2% is just around the corner. It is unlikely that gold (apart from an oversold bounce) is trading higher.

Banks are rallying due to the steepness and steepening curve. The big Tech. simply ran too far too fast to keep running. With banks at new all time highs, surpassing 2008, well you just know that there will be issues at some point. There is nothing more reliable than the greed of bankers to f**k everything up.

The SPACS. Tons of new supply. Not what you want to see. Most of these will be utter shite.

jog on
duc

 

[ducati916]

Sooooooo, this chart appeared:

The market that I'm going to concentrate on today is the 2000 market.

In late '98 we had the Asian crisis, LTCM, Russia defaulting and the market crashed. Only to come back strong in 1999.

In that 1999 stock market we had:

Rising 10yr yields:

Commodities rising after a long bear market:

Just like we have now. Even the COVID crash in 2020 has an eerie echo.

What we didn't have was this:

Is housing inflationary or disinflationary or deflationary? It can be any one of the above. But those charts indicate that currently, it is very much inflationary, along with commodities.

Now as in 1999, the bear waited all year before biting in 2000. Assuming the above trends continue, our current market could well have legs right through to 2022+, particularly if we get an economic re-opening.

Things to pay attention to: sectors. Sectors react differently to rising rates: utilities hate them, financials (to a point) love them, the point being, pay closer attention to where an individual stock might sit, if you are buying individual names. Interest sensitive (sectors) and their stocks will have (if they are bouncing) a much shorter holding period: ie. they are unlikely to enter a trend, rather, it is a short term fluctuation on news etc.

Gold:

Again, which is where I think we sit. Gold isn't quite there yet, but it is getting close.

And Mr flippe-floppe-flye:

jog on
duc

 

[ducati916]

We have this:

From the full article: https://www.marketwatch.com/story/t...le-isnt-anywhere-close-to-turning-11614793308

Is he right?

And from ZeroHedge: https://www.zerohedge.com/markets/w...the+survival+rate+for+everyone+drops+to+zero)

Interesting, particularly for gold.

jog on
duc

 

[qldfrog]

We have this:

View attachment 120869

From the full article: https://www.marketwatch.com/story/t...le-isnt-anywhere-close-to-turning-11614793308

Is he right?

View attachment 120870


And from ZeroHedge: https://www.zerohedge.com/markets/will-powell-unveil-operation-twist-30-tomorrow?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+zerohedge/feed+(zero+hedge+-+on+a+long+enough+timeline,+the+survival+rate+for+everyone+drops+to+zero)

Interesting, particularly for gold.

jog on
duc

Do i misread your chart: to me, discretionary stocks have peaked,clearing done and dusted, and that should indicate time to get out..
Or is it my bias.
While i also moved..too early it seems to gold, for a conservative,crash ready approach, i still remember the gfc..and the actual initial crash of pog.
Everything but cash was going down at fast speed .even PM.
So should we not touch gold until the actual crash starts?

 

[gartley]

Don't really like to trade by feel and gut instincts only the facts, but something just does not look right for the bullish at the moment for the All Ords. Looks like it's lost steam for more upside momentum at the moment. Having said that I have overhead projections that have not been met at 7800. That does not mean they must be met now and can be invalidated.
Don't beleive the BS the Central Banks will always have the markets back....

 

[ducati916]

Do i misread your chart: to me, discretionary stocks have peaked,clearing done and dusted, and that should indicate time to get out..
Or is it my bias.
While i also moved..too early it seems to gold, for a conservative,crash ready approach, i still remember the gfc..and the actual initial crash of pog.
Everything but cash was going down at fast speed .even PM.
So should we not touch gold until the actual crash starts?

So if you look at the breadth chart:

We see that breadth is an issue.

We know that interest rates are (yield) rising and DXY falling:

Which is going to have an effect (negative) on interest rate sensitive sectors:

Tech. is an interest rate sensitive sector (remember Schiller and his new valuation metric).

As are Discretionary (consumer debt)

Here are the sub-sectors of discretionary:

Break down 1 sub-sector: Autos:

Just from those, and their market cap. you can see why the breadth is having (currently) such an impact on the market, as opposed to Energy which while roaring higher as a % market cap. of the S&P is far smaller.

Add to that that energy is also inflationary, which is not (eventually) good for the overall market.

jog on
duc

 

[ducati916]

Bit of a wild one today with the Fed. basically trying to jawbone the market, which hasn't gone down that well.

The 10yr is up 5%.

Oil continues higher.

Stocks on the way down.

Mr flippe-floppe-flye:

Well not really the stock gods, more the Bond market:

Essentially we are having another Taper Tantrum. Will the Fed. collapse again, as they did in 2019 and step in with curve control? I'm guessing at some point yes...it just wasn't today.

If the Fed. does not step in, then the 10yr continues towards 1.6% and likely 2% (although my model does not indicate that currently) and possibly even 3%. If that occurs, the stock market is very likely headed lower.

jog on
duc

 

[ducati916]

So let's take a deep dive into gold and gold miners:

So not quite 1 week but close enough. Materials as a sector has held up reasonably well.

Gold mining is part of that sector. Again, has held up reasonably well.

The gold miners themselves.

Gold miners as a chart: In part they could be holding up because they never really went up. Certainly nowhere near their previous levels.

Gold itself:

Gold as against the 10yr: so with the 10yr approaching a potential resistance point, although I don't think the 50EMA will contain it, I do think the 200EMA will at least for a first test, gold could soon experience a bounce.

A bounce is a very different thing to a new trend. The chart above will inform as to a trend change. But the chart below will give us the initial bounce.

Now the Miners as to the 10yr:

Which? Gold? or the Miners?

There isn't much in it, but the Miners might have the edge.

jog on
duc

 

[ducati916]

So at the end of the 1'st week of March:

Start with the Oil news:

Friday, March 5th, 2021

Oil skyrocketed on Thursday after OPEC+ decided to hold off on easing production cuts for another month, surprising the oil market. WTI and Brent shot up more than 4%. During early trading on Friday, Brent surpassed $69 per barrel,

OPEC+ extends cuts, surprising market. OPEC+ extended the cuts through April, aside from a slight increase allowed for Russia and Kazakhstan, due to seasonal consumption patterns. Even Saudi Arabia decided to keep its 1 mb/d of voluntary cuts in place. The surprise news led to a price surge. “One of the reasons the market is continuing to react positively today could be that OPEC’s own balances suggest very steep draws,” Rystad Energy said in a statement.

Oil majors expect record cash flow. Big Oil is looking at 2021 with increased optimism, mostly because oil prices have rallied in recent weeks. Moreover, the ultra-conservative capital spending plans and the huge cost cuts have allowed international oil companies (IOCs) to materially lower their cash flow breakevens. These factors are set to result in a record cash flow for the biggest oil firms this year if oil prices average $55 per barrel, Wood Mackenzie said in new research.

Oil majors going green? Speaking from the annual CERAWeek by IHS Markit energy conference, Big Oil chief executives from Exxon Mobil (NYSE:XOM), Chevron Corp.(NYSE:CVX), Occidental Petroleum (NYSE:OXY) and ConocoPhillips (NYSE:COP) have all spoken about the industry’s transition to a lower-carbon world, with OXY even branding itself a ‘carbon management’ company that wants to set the industry standard for the production of net-zero carbon oil. But are they really going green?

Oil market tighter with 500,000 bpd offline. Maintenance at three oil sands upgraders in Canada will take off some 500,000 bpd in production offline, helping tighten supply amid a price rally, Bloomberg reports.

IHS Markit: Shale discipline likely to stay. U.S. shale is unlikely to return to aggressive spending, but rising oil prices could tempt drillers to get off the sidelines. “At any given price growth will be less than in years past but if you get into the $70-$75 per barrel oil range, you can both return money to investors and have strong growth ... so there is a point at which the temptation becomes too strong,” Raoul LeBlanc of IHS Markit said at CERAWeek.

Pioneer: very little shale growth. U.S. oil production will likely see “very little growth” in the future after remaining largely flat in 2021 at around 11 million barrels a day, Scott Sheffield, Pioneer Natural Resources (NYSE: PXD) chief executive officer, said at CERAWeek.

ExxonMobil offers a new strategy. At ExxonMobil’s (NYSE: XOM) Investor Day, it outlined plans to keep production flat and return excess cash to shareholders, and/or cut debt. The new strategy is an about-face from previous aggressive production growth plans. Exxon also detailed more significant investments in carbon capture.

Exxon to cut 300 jobs in Singapore. ExxonMobil (NYSE: XOM) expects to cut about 300 jobs in the Asian oil-trading hub of Singapore by the end of 2021, part of a global retrenchment that was announced last year.

India urges OPEC+ to boost production. India, one of the largest and fast-growing oil consumers, wants OPEC+ to increase production to keep a lid on prices.

Volvo to go all-electric by 2030. Volvo will become a “fully electric car company” by 2030, the latest major automaker to promise an electric transition.

U.S.-Iran thaw? Iran has given encouraging signs about returning to the table with the U.S. regarding the potential revival of the 2015 nuclear deal.

Natural gas withdrawal tightens the market. The Texas freeze led to the second-largest natural gas inventory withdrawal on record for the week ending on Feb. 19. The drawdown tightens the market and sets the stage for higher prices later this year.

Biden federal lands moratorium could cut production. Closing off federal lands to new drilling won’t have an immediate impact on Permian production, given the thousands of permits and leases the industry has already stockpiled. By the end of 2025, however, the drilling ban could curb production by between 230,000 and 490,000 bpd, according to the Dallas Fed.

Chevron to build a carbon capture plant with Microsoft. Chevron (NYSE: CVX) said it would partner with Schlumberger (NYSE: SLB), Microsoft (NASDAQ: MSFT), and Clean Energy Systems to build a carbon capture plant in California.

Exxon drills a third dry hole in Guyana. ExxonMobil (NYSE: XOM) hit a third dry hole in four months in Guyana, a string of setbacks in an otherwise successful campaign. “Our exploration success in Guyana is 80pc with 18 discoveries on the Stabroek block,” the company said.

Pentagon tests solar in space. The Pentagon has successfully tested a solar panel in low-earth orbit as a prototype of potential future power-generating systems capturing light from the Sun and beaming it back as energy to earth.

And, no surprises, oil has been a good place to be this week.

From yesterday's Fed.:

So no capping in sight currently. The 10yr has set off a rally in the DXY or possibly it was set for a bounce in any case. Either way DXY is on the move higher.

The 10yr is headed towards 1.6%.

Given that the 10yr is moving higher, is it safe to go back into the water?

VIX suggests not. This is not a BTD moment. In fact, this is starting to look less like BTD to BTB.

Mr flippe-floppe-flye:

jog on
duc

 

[ducati916]

Re. Gold:

The line in the sand. The $31 level needs to hold. If it does, then the Miners catch the bounce. Is it a bounce or a trend? I think a bounce, but it may develop into a trend as there are some interesting issues for Bonds.

Which is most easily observed on the 30yr

That resistance has been in place for quite some time. If it breaks, it is curtains for gold and their miners. If it holds, or the Fed. steps in, or whatever, then gold and the miners will have another day in the sun.

jog on
duc