BP

INX – S&P 500 (CME) (Last:1511.29)

– Posted in: Current Touts Rick's Picks

A chat-room denizen posted a dandy SPX chart yesterday showing a target at 1502.76 that looked both precise and compelling. The index had yet to punch through the resistance, but it clearly was not backing off. In the end, buyers bulldozed their way higher, scoring their seemingly umpteenth gain in the last umpteen days.  When such a beautiful Hidden Pivot gets schmeissed, as this one did, we should look to the larger charts to explain it. Notice in the daily chart reproduced alongside that there is yet one more rally target even more daunting than the one breached yesterday. It lies at exactly 1551.12, and you don't need me to tell you we'll want to short the bejeezus out of it when the S&Ps get there. Which they will. We'll use a tight stop-loss even though it seems inconceivable to me that buyers will make much headway above the resistance, at least the first time it's hit.  We'll do the actual trade using equity options, so check out today's SPY tout for detailed instructions. _______ UPDATE (February 5, 10:26 p.m. EST):  I'm going to retire this tout to an inside page for now, since the target is well above.  You should set a price alert around 1545 nonetheless, since we'll want to take advantage if bulls get close.

BP – British Petroleum (Last:35.56)

– Posted in: Current Touts Free Rick's Picks

So much for the "Damage? What damage?"  phase of BP's heavily engineered short-squeeze. Last week's selling created the bearish component of "dueling impulse legs" on the daily chart.  The stock appears to be weighed down by the reality of dealing with the spill legally and environmentally, and last week's price action suggests it could be a long slog before shareholders get another chance to bail out on a feeding frenzy.

BP – British Petroleum (Last:38.65)

– Posted in: Current Touts Free Rick's Picks

There's no predicting how high this squeeze will go, although a doubling off June's $27 low should probably suffice to extinguish whatever temptation may have existed in this world at one time to short the stock.  Paradoxically, one cannot help believing that BP shares are destined to fall below $5 -- w-a-a-a-y below -- if one ponders Matt Simmons' version of the story.  He thinks the riser cap is just a stall tactic and that BP will eventually face tort liability for destroying the Gulf of Mexico and probably much more. Click on the link above and you may even find yourself agreeing with me that, most unfortunately, he still does not sound quite like a whack-job.

BP – British Petroleum (Last:34.02)

– Posted in: Current Touts Free Rick's Picks

Put-holders should brace for a surge to at least 36.60 -- or possibly 37.81 if any higher -- if it appears that BP's latest oil-gusher cap is working.  Even if they manage to stop the flow completely, however, the company will face calamitous litigation in the years to come.  For now, though, with implied volatilities in the low-to-mid-60s, put options are prohibitively priced -- so much so that the prospect of making a profit with them seems dim even if the stock relapses. _______ UPDATE (July 13):  Fascinating.  BP gapped up to exactly $37.76 on the opening bar, capping a 15% run-up in just 12 hours of trading; then the stock plummeted to $35.71.  This may or may not prove be The Top, but it sure as heck was a shortable top.

BP – British Petroleum (Last:27.03)

– Posted in: Commentary for the Week of March 8 Current Touts Free Rick's Picks

Let me reiterate the 18.39 downside target first broached here a while back.  That's where BP is going at a minimum, and it is the Hidden Pivot target of a long-term trend off the weekly chart. A lesser pattern implies 18.05, suggesting we'll be able to do some bottom-fishing within a fairly narrow range just above 18.00. In the meantime, the stock's down(fall) has been too brutal for easy shorting along the way down, although it's still possible to squeeze off a low-risk shot intraday if you play close heed to a-b impulse legs on the 5-minute chart. _____ UPDATE (July 9): BP's two-week rally is just shy of invalidating the 18.39 target.  That would take a move above 34.46 -- point 'C', recorded June 11 on the way down; the so-far recovery high has been 33.90.

Has BP Summoned the Fires of Hell?

– Posted in: Commentary for the Week of March 8 Free

We’ve railed at traders and speculators recently for their arrogant and sometimes breathtaking stupidity in failing to discount an onslaught of world-shattering news. If the dolts, rubes, bozos and mountebanks who have kept stocks afloat even remotely understood what has been going on in this world, we wrote here recently, the Dow Industrials would plummet 6000 points in mere days.  And the news has been grave, indeed.  America’s wholly imagined economic recovery died for good on Friday with the release of shocking retail figures for May. Household incomes have been falling, consumer credit imploding, M3 plummeting, and now it turns out that corporations have allowed $1.8 trillion to sit idle in low-yielding bank accounts, hastening the economy's deflationary collapse and the onset of a Second Great Depression. We face the impossible task of getting out from beneath $130 Trillion of debt and liabilities amassed by government at all levels. The nation is adrift under a weak president whose radical politics have sharply divided the voters. Iran and Turkey (a NATO member!) have declared war on Israel, sending warships to run the Gaza blockade. Europe’s financial house of cards is within months, or even weeks, of total collapse.  The jihadists may be turning the tide against U.S. and British forces in Afghanistan. Unfortunately the list does not end there. For in fact, there is one crisis that greatly overshadows all of them:  the seabed irruption in the Gulf of Mexico. We won’t even pretend any longer that there is a market “angle” to this story.  In fact, the markets are a side show, and politics a droll burlesque, in comparison to the geophysical dreadnought taking shape in the Gulf.  Because it could eventually threaten all life on this planet, there may be no “investable issues” here. Seabed Fissures The problem is no longer a leak or a spill, you see,

BP – British Petroleum (Last:29.20)

– Posted in: Current Touts Free Rick's Picks

I'm not sure where the residual value will lie when BP is charged with cleaning up beaches from Trinidad to Aruba to Namibia and beyond, but the worst- case bottom I can project using the weekly chart is 18.39, a clear and important Hidden Pivot (A=77.69, B=33.70 and C=62.38).  That number looks like a lock-up to me.  Perhaps it represents a bid from one of the surviving majors?  Or maybe it'll be a tender from Kevin Costner, armed by then with a low-cost technology for undoing all of the damage.  Hey, whatever happened to Costner's Tom Swift contraption, anyway?

Wetlands Disaster Makes BP’s Fate Seem Insignificant

– Posted in: Commentary for the Week of March 8 Free

British Petroleum’s shares have shed 40 percent of their value in the last six weeks, falling from $61 to a low yesterday of $36, but if sellers keep up the pace for just a few more days, the company could be trading at salvage prices by next week. Despairing news from the Gulf of Mexico over the holiday weekend set up the avalanche of selling that buried BP stock when it began to trade Tuesday morning.  Last Friday, the world had been transfixed by live images from the seabed that showed oil continuing to gush out-of-control from the broken well despite BP’s efforts to plug it with a “top kill.” We now know that that mud sealant that was injected into the drill hole didn’t build up the necessary pressure to resist the gusher because the wellbore itself was ruptured.  For all the good it did, the 1.2 million gallons of mud forced into the wellbore by a 30,000-horsepower piston might as well have been discharged directly into the sea. British Petroleum is facing criminal and civil charges as a result of the disaster, and it’s possible the company will not even be around in a year or two other than to pay claims.  Although the world will undoubtedly get along just fine if that happens, the loss of Louisiana’s wetlands and the catastrophic damage to the Gulf ecosystem will not be so easy to bear. An estimated 20 million gallons of crude have poured into the Gulf so far, but that number could go much higher if the leakage continues until August, when it is expected that a second and third well will be operating to take the pressure off the existing well. Alaska, 21 Years Later In the meantime, environmental reports from Louisiana have been heartbreaking. The slick has

‘Top Kill’ Effort Must Succeed or Else…

– Posted in: Commentary for the Week of March 8 Free

We may all be breathing a sigh of relief by the time you read this, but it remained uncertain at press time whether British Petroleum’s efforts to plug a massive oil leak in the Gulf of Mexico would succeed. Earlier in the day, the company began pumping a heavy fluid called “mud” into the damaged well, but the process was temporarily halted because the high-powered flow of oil and gas from the well was causing too much of the mud to escape.  BP said such delays had been expected but that they hoped to resume the sealing operation by late tonight.  The effort came amidst reports that oil has been gushing from the well at a rate much greater than what BP had first estimated. The company originally said that about 5,000 barrels of oil were escaping per day, but the latest estimates suggest that the true number is somewhere between 12,000 and 19,000 barrels. Converted into gallons, that implies that as much as 760,000 gallons of oil per day are flowing into the Gulf. Last week, we linked at Rick’s Picks a very scary article from rense.com that said the “top kill” procedure being used to plug the well was the world’s last hope to get the disaster under control.  The author, who sounded like he knew a thing or two about drilling platforms, explained that abrasive material contained in the gushing oil could eventually widen the well-hole so that virtually unlimited quantities of oil and explosive methane would be released into the water and atmosphere. We would strongly suggest that you read the article to understand what is at stake if BP’s effort fails. The only alternative at that point would be to drill an additional well to relieve the pressure.  This procedure is already under way, but