Strictly: Drilling II Message Board

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Strategies & Market Trends : Strictly: Drilling II

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To: yard_man who wrote (5798)	12/26/2001 4:31:56 PM
From: isopatch	Read Replies (2) of 36161

tippet. OK, day's over. Why Iso's a Bull on the NG stocks? 1st, the 3 most important things for NG - the commodity - this time of year are: 1. The Weather 2. The Weather and 3 The Weather The lower demand from the weaker post 9/11 economy was made much worse by several months very warm fall temperatures in the key mid-West NG consuming states. And until the past week the prospect of a price/market share war between OPEC and non-OPEC was a distinct possibility. This would have driven down the price of heating oil, the major competitor of NG in many markets, and pulled down gas prices in tandem. But that risk, FOR NOW, is gone. But we aren't buying NG! We are buying the NG stocks. And they don't move in tick for tick. Just like NG topped around 1/1/01 and declined significantly before the NG E&Ps suffered comparable %age declines this year? So spot NG likewise bottomed (sub $2.00 this fall and rallied to the upper $2s), well before the NG stocks were making their bottoms quite recently. To trade this sector successfully, you have to be alert to these divergences and adjust your entry and exit tactics accordingly. Always exit before the crowd as "a few" here did in Jan/Feb and enter before they return as in RIGHT NOW.<G> Talk about ringing the bell and pounding the table on a great buying opportunity. Seldom do you see so many important supply and demand factors change from very bearish to bullish in such a short period of time. *IMPORTANT: Again fwiw, IMHO this ISN'T a LT low in the patch sector OR the broad market indices. OTOH, some of the most powerful short to intermediate term rally opportunities I've ever played in my many years in this game have occurred under just these kinds of conditions. A word to the wise..... Isopatch

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