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: SliderOnTheBlack who wrote (88426)	3/8/2001 10:00:22 PM
From: isopatch	Read Replies (2) of 95453

Slider. Right on! Japan's THE weak link and actually as much the key swing factor in the macro demand equation for crude in Asia, as SA is the swing factor in supply. What "the trees grow to the sky" O&G perma bulls fail to realize is that Japan is not only the worlds 2nd largest economy; they also import ALL their oil! Unlike us, they have no significant domestic crude production. On top of that, the oft mentioned high demand growth for crude and products from smaller Asian nations is due to demand from Japan and the USA for their exports. With the 2 big locomotives slowing down where does that leave crude demand in those Tiger nations as demand for their exports slow drastically? Although our domestic NG market is, to a large extent, independent of OPEC and supported by the powerful secular trend in power generation...NG still trades in tandem with the crude and products complex and my guess is that it will only slowly decouple from them over the next year or two. My read on how this all falls out is a more pronounced cyclical downward slope in the crude oriented plays both in OS and E&Ps. NG has already fallen by nearly 50% from the call we made in early January (which was politely received with a hail of bricks and broken bottles tossed by a few of the more bilious la la land, plastic & concrete bunkerite NG perma bulls, ggg). The current TA looks like we've got a good counter-trend rally that could be the 1st step in developing a trading range environment in the NG stocks between now & Sept. I've always found Short/Intermediate trading ranges to work well with my market style so you won't hear any complains from this direction IF this is how it plays out. Your point the other day is very well taken and should be in the front of every traders play book who wants to work in this market environment. BE NIMBLE, don't be married to your stocks, don't be a max margin, pom pom waiving kamikazie pilot(lol), and don't be a perma bull OR a perma bear. And be ready to pull the rip cord when the rally shows signs of rolling over. For those who feel their skills, temperment and risk profile aren't up to those requirements? They should continue to keep above average cash reserves. Then if we do get ambushed with a sudden market meltdown the cheese is there to do some big time bargain hunting. All JMVHO. Gold sure looks great! Understand lease rates took another pop. BTW, my Golden Retriever...ELVIS!!...just came in and volunteered to be our mascot for the new Bull Market in gold(G). Best Isopatch

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