Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: BigBull who wrote (65133)	4/23/2000 12:15:00 PM
From: double-plus-good	Read Replies (1) of 95453

bull, my observation of the technical conditions of the respective indices (XAL & OSX) is not necessarily to be construed as an expectation of continued economic strength with low oil prices. larry "lines" kudlow i am not -g-. personally my investments are positioned for an economic slow-down, my reasoning being that the evaporation of capital in the markets will have a much more significant impact on the economy than is widely thought. i took a lot off the osx table recently and am waiting until the smoke clears and the broader market picture clarifies. what the technical picture suggests to me is that oil prices could take a hit and with it the near-term performance of the osx. given the research and fundamentals contributed here on the drilling thread, such a development makes sense only in the event of significant broader market weakness and a significant slow-down in the economy. in the short-term, sentiment and spin will run oil prices ahead of fundamentals. if the market takes another hit, there may be a market impression that slower economic conditions will tank the demand side of the oil bull. even if that impression is incorrect in the medium to long term, it could play havoc with valuations in the short-term. also, severe market conditions could produce a liquidity crisis that could temporarily knock the wind out of the commodities. i have been looking at the osx chart over the last 5 years and the current run is not nearly as impulsive as the last run. we definitely have hit more snags along the way. this may be explained by the rather slow pace of Boom 2000. obviously we are at an inflection point and while i have leaned on the side of caution i am fully prepared to put the cash back to work if the resolution is bullish. personally i wouldn't touch the airlines here, but the chart pattern suggests possible near-term strength which would be unlikely unless we were to see a set back in the price of crude. ++

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