Dwight; now you're talking ''bidness'' - ie: API report...
Good, now we can get back on subject Dwight <VBG> Without going into a 3 page diatribe; the big story here is 3 keywords:
(1). TREND: they key here is that the ''trend'' for supply is down; the key is that demand is no longer free falling in any major sector, but in fact has at least bottomed and in most cases has gradually turned upward. In some subsectors - there is actually exciting growth demand such as the Phillipines being an especially bright spot within Asia.
(2). EXPECTATIONS: the Street's expectations are very, very low. We have virtually no upside expectations of OPEC doing anything here; in actuallity the expectations are totally discounted. Any upside surprises are totally to the upside - no future upside is priced in these stocks here on an expectation basis. Anyone paying attention here on anything other than a cursory basis and who has done their homework has noticed that we are no longer automatically selling off on bad news. The bad news has been fully factored in here on a ''forward looking basis.'' <VBG>.
(3). LOGIC vs. EMOTION - aka (it's the numbers stupid). Once again, anyone who has done their homework, or who has been paying attention here; is NOT living, or dying (not hopefully trading) based upon week to week API, or IEA numbers. These numbers have shown substantial inconsistancy; again the overall ''trend'' is what is important, not week to week anomalies. Crude Oil Traders haven't reacted as they have in the past, Crude has actually rallied on poor API/IEA numbers - gee, wonder why ? Perhaps Crude Oil Traders are also ''looking a little forward'' ? - naaaaa <VBG>.
...just not that difficult here; We are now at storage levels below where we were last year, the trend in supply is down vs. last year, Domestically and Internationally we still have year over year demand growth Globally; albeit slight and yet crude prices are how much lower here ? - can you say ''anomaly'' ? - what a concept here; perhaps ''emotion may ultimately catch up with logic'' - takes time; called ''market sentiment.'' The surplus Globally today in the Street's opinion is about 3 million bpd; in perspective folks - in the 1986 crash that number was 14.5 million bpd ....not much more needs to be said now does it ? Now, if someone actually bucks the ''Mensa'' trend; and actually takes their head out of the sand here and does ''look a little forward'' - even a few of us ''inbreds'' can pretty much cipher how many days untill this supply glut no longer exists...<VBG>.
As the trend becomes recognized, one of the single most important conditions for future price movement in the Oilpatch disapates here - that being the elimination of the dreaded ''deadmoney'' factor; we will get that 'ole time Sector Rotation soon, as we are seeing a market repositioning itself and sector rotation is once again rearing her ugly head... this will only benfit us here.
We do not need any major fundamental shift in total market consensus here; just a 10-15% correction in tech/nasdq stocks, or the total market will inject some cash into the Oilpatch. There is also a tremendous amount of Cash on the sidelines here - actually a staggering amount. If we get a positive surprise from OPEC - it's ''to the Moon Alice'' ! If not, we get another slow steady rolling trading range of another 20-30-50% upward movement in many stocks.Again, the ''trend'' will soon become the mantra of the Street and when it does - cash will flow...
Now since we seen this ''movie'' 3 times here of late - now starting our 4th ''re-run'' here - think that most of us can figure this one out; or do we need the return of our ''benevolant Mensa-Angel'' who obviously has only altruistic intentions at heart ... just trying to keep us ''inbreds'' from losing our hard earned cash - right ? Just doing a little good work for mankind I'd assume ... That's what most ''Bears'' intentions are anyway aren't they <VBG> ; surely it ''aint about the money'' ?
ciao |
