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Politics : High Tolerance Plasticity
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To: Wowzer who wrote (9150)10/8/2001 12:58:00 PM
From: jim_p  Read Replies (1) of 23153
 
Rory,

I covered mainly because:

1. The OSX is near historic lows and should be bought over the next 3 months on weakness,

2. The back months of the NG futures have continued to stay high. KWK can still sell forward for several years at prices which are profitable. If they don't and the back contracts come down and we still feel NG prices will stay low for 6-9 months from that date, we should re-enter shorts. Perception of the future for NG has not changed and is still very bullish. The market and the patch believe NG prices will be back above $3.50 in the next 6-9 months and are starting to buy NG stocks.

3. For the NG stocks to crater down to the next level, perception has to change. As a rule, it takes 3 or more months of low prices for the back months to come down once the forward months come down.

4. Even though NG stocks are priced high for the end of a cycle, when they rally it will most likely take all NG stocks up. EVG, KWK and PENG are grossly over priced, but if the sector turns up they will most likely go up
also.

5. PENG and EVG's stock prices have been supported by company stock buy backs at the same time insiders are selling out. While it pis%$# me off, I don't want
to stand in the way of the market.

The market is one place when you can be right/wrong and still loss/win.

If NG prices stay in the 2.00-1.80 range, oil comes down below 20.00 and the back months for NG come down it will make sense to short again.

I just don't see the risk reward being short right now with the OSX and XNG stocks starting to rise and the with the back months staying near 3.00.

As a rule a new up cycles starts when the forward months are higher then the back months. We aren't there yet.

Jim
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