Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: diana g who wrote (31154)	10/26/1998 11:51:00 PM
From: SliderOnTheBlack	Read Replies (3) of 95453

The ''M'' word - anyone else baffled by the behavior of Crude Prices recently ? Has anyone wondered how Crude Oil prices seemed to defy the fundamentals of late or wondered why this Rally started here and now, absent any apparant fundamentals ? Not surprisingly; this chart directly shadows the Oilpatch Stocks during this recent double bottom and current Rally. The interesting thing, is why did Crude abruptly crash in the first of Oct. off of strong fundamentals ? And why didn't this massive Rally here; start off of positive Crude numbers & fundamentals when Crude broke through $16 ? Given the confusion of conflicting AEI/API numbers not withstanding. In September we had a rally in both the stockprices in the Oilpatch and the price of Crude - in unison; as it should be. Both rallying through late Sept. Then inexplicably, with no supporting fundamental supply #'s or negative OPEC compliance #'s; in fact - directly into strong fundamentals; crude suddenly took a dive...(see chart) tfc-charts.w2d.com and took a ''DIVE" is the appropriate word. ''Dive'' as in a Punch Drunk Chicago Club Fighter- '' taking some canvas'' a little early. At the beginning of October, Crude Oil mysteriously (into the face of great fundamentals) gets massively shorted; the oilpatch stocks get massively shorted - in unison... the sector crashes again. The infamous ''double bottom'' ? Maybe ? But, why a double bottom now ? Crude is rising, we had great supply draw, OPEC was in 95% compliance - why now ? Investors panic - sell out cheaper than cheap... everyones selling, can't get a bid to save your life... .. and then; totally out of the blue - lacking ANY positive fundamental change in the Crude Oil arena; let alone lacking in any positive fundamentals from the Oilpatch companies themselves; - no growing earnings, no increasing Rig utilization #'s, or increasing dayrates; actually quite the opposite... Then; Shorts Cover. Off of absolutely no change in fundamentals in Crude Oil or in the Oilpatch companies at all. Just a turn on a freekin dime; driven by nothing more than ''traders'' changing direction. The Street allmost seemed to turn in unison - going long the Oilpatch Companies to a degree than surprised even the most "Brahmanian'' of Oilpatch Bulls ! Off of absolutely no fundamental strength what so ever ! A Rally that only exists in the Dreams of Permabulls....why ? ...why here & now ? The nasty ''M'' word has been used here. As in - manipulation. While the "M" word smacks of sourgrapes or paranoia; when commodity prices take right turns off of absolutely no fundamental change; and shake out investors from an entire sector; and then the commodity turns on another dime - this time; in the opposite direction; when it seems that EVERY Institutional trader in the market went long simultaneously on the same day at the same time ? Is the ''M'' word valid ? Coincidence ? The lemming factor ? Traders see who's moving and just jump on board, irregardless of why ? - ( ...a Rhetorical question). Didn't see anyone on Wall Street screaming ''stop'' this is insane - there aren't any fundamentals to support this Rally ! - Doesn't matter; Traders rule this market ! When Commodities drive markets, and when Traders Drive Commodities; the Fundamentals no longer matter... only ''Traders'' matter. Don't watch the "Fundamentals'' - when in ''Rome'' do as the Romans do; - watch ''THE TRADERS'' ! If you can't beat 'em - Join 'em ? - just had better be watching all those exits signs quickly approaching; as this screaming Bullet Train pulls nearer and nearer to the next - ''turn on a dime'' stop here... "Beating the Crowd to the Party'' - has allways been my mantra; but this time - not being the last one to leave; not getting caught when the lights get turned out - may be the key...

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