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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: SliderOnTheBlack who wrote (71579)8/24/2000 11:09:41 AM
From: ItsAllCyclical  Read Replies (1) of 95453
 
>> I guess we won't have to worry about the OSX returning to 85 anytime soon <<

Actually I agree with that statement. Yes you can always come up with scenarios for taking us back to OSX 85 in the near term, but they're pretty damn unlikely to me. I respect that it's possible, but I won't put my money there.

There are quite a few investors who would love to be in the energy sector if it pulled back 15-20% and oil prices dropped below $30 again.

I don't see any (likely) mechanism that take us back below $25 oil anytime soon. Yes we could have a wave of profit taking etc, but I think many analyst are waking up to the fact that oil prices and NG are going to be tight for much of 2001 (especially with an average winter). Most of their forecasts originally called oil in the low 20's for most of 2001. Also if you listened to the radiowallstreet interview about day rates he talked about NBR's estimates for 2001 being around $1.50. He also said they are capable of earning that in one quarter if rates hit replacement rates. Is the OSX cheap now as a group? Not really. But it's possible it will look cheap within less than 6 months imho.

I think the biggest danger (near term) is trading sideways.

As always I don't trade the index. I'm not in the leaders. I would be taking profits in the leaders and rotating into laggards.

If we see OSX 110 again (possible) it will not happen overnight. There will be plenty of time to take more profits imho. I do not recommend using any margin here.
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