Hi Ray, you could be very right about catching a falling
knife. I guess I've been looking at the Natural Gas futures
and it looks like they had bottomed and would rally for
a several weeks. And this is not reflected in any of the
stocks as they are all sitting on their lows for the move.
Stocks like EOG,BR, APC, APA etc are creating some
momentum buy divergences on the MACD's and other Rate of
change oscillators. Also we've seen quite a few news bits in
the media and on cnbc talking about the sell off in the
stocks, and I was thinking that most people who wanted to
sell have had a chance and the proper media motivation.
Even in the WSJ there is this news item saying that
Venezuala is budgeting for $18 crude for 2002:
Meanwhile, Venezuela, the No. 3 producer within the Organization of Petroleum Exporting Countries after Saudi Arabia and Iran, sees oil prices falling next year and may calculate its 2002 budget on an average national basket price of $18 a barrel, Oil Minister Alvaro Silva said.
I was also thinking that the comments on Yardeni's website
was what I was seeing in the price action of NG the past 3 weeks.
Of all the energy commodities we follow, this market requires the closest monitoring now. Our latest readings show that Commercials continue to support of this market, even as weak-hand liquidation impacts prices. With prices lower by almost 70% from our most recent sell signal, the last several months have washed away all bullish Speculator sentiment. While still weak, prices appear to be setting the stage for a final washout followed by the consolidation period that we have suggested would be needed after the volatile price action witnessed over the last year and a half. As noted in previous editions, further liquidation of weak hands may be possible (as well as necessary for future advances), so we continue to caution that pullbacks may remain volatile. However, we also continue to emphasize that Commercials are once again aggressive buyers during this correction and consolidation period, which implies higher prices in the long term. Await new support levels at the Mega Trades channel as this phase continues to unfold. (7/2/01)
yardeni.com
SSB moved their target average for last week from 3.75 to
3.25 and moved EOG's price target from 62 to 42. we're
obviously 30% below that. my thought process was that
NG would hold above 3.25 and maybe work it's way
back towards 4.00 in the fall.
there is even a weather item.. since you like those so much -vbg-
As mentioned this morning, the weather outlook is more
bullish than previous forecasts and the development of the second tropical
depression combined to continue the short covering. It is not believed
these two events will dramatically shift the supply/demand balance.
anyway, consumption is down from a year ago, and production
is up so I'm pretty neutral overall, it just seems like
sentiment is right for a rally.
Speaking of falling knives.... please keep reminding me
about that when it comes to silver.... That has absolutely
NOT made a technical bottom. But think it's starting to
look interesting.
John |
