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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (14237)5/21/2004 5:27:13 PM
From: gregor_us  Read Replies (3) of 110194
 
Oil Stocks Never Responded to Higher Oil After DEC 2003.

This is the key difference between the oil majors in their relation to the commodity itself, and, all the gold, iron ore, miners and other resource stocks in relation to their commodities.

The contrarian position on oil, especially in the last 4 weeks, has been to be short oil--or to at least avoid the front month contract. The contrarian position on the oil stocks, remains, to be long. I mean the oil majors. Not the oil services--which did indeed bulge.

I do smell rank speculation in the oil futures that is weak and vulnerable to flushing. But not ALOT of this do I smell. The real stink I get in my olfactories every day are large buyers in size panicked, who buy all the weakness.

I can certainly see your point about Copper being the template for a smackdown in oil. The copper market freaks out at the possibility of not getting enough copper--very similar to oil.

If the oil majors are going to continue to have problems dealing with the oil volatility, then I am going to cash in my Call options and move over to the Futures market. That said, the call options have been much, much better for me than trying to go long the shares.

Here's to a happy weekend in Amsterdam for all OPEC members who should find the temptations of Hashish, pretty prostitutes, and Indonesian food lathered in peanut sauce more than overwhelming!

And one final note: 3 cheers for Indonesia which has now admitted they've become a net IMPORTER of oil. This is simply too delicious!
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