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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: quehubo who wrote (18028)	2/9/2003 9:10:54 AM
From: GREENLAW4-7	Read Replies (2) of 206121

Reality check time for the room to consider. In the NG surge in winter of 2000 it went from 4 in Oct to roughly 9 in December. It hung at the top 8-9 for about 2 months Dec and jan of 2001, then it CRASHED to 4 by 6/2001 and then 2.4 by 9/2001. During this surge the OSX had a marginal gain from a low of about 100 in Dec of 2000 to a high of 130 by about march of 2001. ( osx did not make a new high as ng surged, high in 2000 was about 143 in OSX around sept of 2000) The important point to make is that Crude made a high of 37BBl in Sept 2000 which took the osx with it. During the period of the surge in NG the crude bounced in the 25-30 area. ( crude hit a low around around 18BBL in nov. of 2001 after 9/11) In the summer of 2001, the fear factor in the OSX from around 130 in June crashed to 80 by mid july. This was the largest crash on a percetage basis ever for the index the last 10 years. The strangest point about the crash was crude hung in the 25 area as osx tanked. Now here is the correlation and wake up call regarding current inventory levels of NG first. Around the time NG took off from 4 the inventory level was roughly 2700BPU. This time the inventory level was roughly 3150 area as NG hit 4 and started its rise. The rise took peak move was made from dec through feb area, today we are hitting 6 in February, as inventory level is roughly 1500. In 2001 rise inventory levels this week were at 1250 area. Some 250 BPU lower. Yes the draws are larger the last 3 weeks, but its coming too late in season to sustain a level much above 6 area. In March through early to late spring the draws were marginal but the shouder season took up the slack as storage went from 627 in early spring to 1200 3 months later. Conclusion this so called shortage here in NG is coming later in season then 2000 and also coming as we have more storage. It will not take long to replenish the stocks according to yearly stats, actually could replenish quicker then many on this board understand. The NG bubble was just that and it lasted a very short period of time. Those that bought even 2/3 from the top and held got crushed as the OSX crashed to earth that same summer. With all commodities touching 52 week highs here relating to energy it would be very prudent to say we are much closer to a top then to say we are beginning the move. I wish all much luck, but according to the charts the buyers are not biting this time. It could be the fact many remember how fast the surges crash in both Crude and NG in the past. If we get a terrorist attack and as crude and NG hangs in this area there is little doubt in my book we will revisit a recession down the road. There has never been a time in the OSX history when Crude was above 34 and the index was below 90. Is this telling us something of the future direction of both the index and the commodities? Something to ponder.

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