Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: SliderOnTheBlack who wrote (48717)	8/2/1999 3:44:00 PM
From: BigBull	Read Replies (2) \| Respond to of 95453

Slider, Part 2 - Now comes the hard part! <g> Figuring out what "Wall Street" plus other investors will do in the relatively short term. I suppose a look at recent history may help us somewhat. The recent 60% run up in the OSX was accompanied with declining day and rig utilization rates. Asian economies (Japan especially) were not as strong as they are currently, and Europe was still mired in recession. This run up anticipated the beginning of a rise in the rig counts, which we are seeing now to some small decree. In essence, the Street began to "look over the valley" by approximately 4 months. The OSX then entered the current consolidation phase while waitng for those rig counts to start turning up. It seems to me that business in the patch has clearly troughed and is now on it's way up. "Wall Street" always plays the anticipation game with cyclical stocks such as these. In fact, the time to SELL is when business is booming, i.e. high drilling rates and rig utilization, big oil is falling all over itself to sign long term deep water contracts and earnings are great. The $64,000 questions before us are, when does the next "anticipation rally" for the osx begin, and from where? The price pattern forming before us suggests that the consolidation period is nearly over. The only true worry I have here is that incredible ratio of bulls to bears in the oil market. Bad API numbers could really induce substantial liquidation of those longs. This would probably give us $18 oil and an OSX to low 70's high 60's. Any decisive break below 77 OSX spells big trouble for this index. Imo the fundamentals would then quickly reassert themselves and the next rally (a formidable one) would commence rather rapidly from there. However, if oil holds and resumes it travel up to the OPEC ceiling I posted. The OSX should break out to the 90 - 100 range (not without the usuall profit taking small dips). You and everybody on the planet knows where the resistance level is 82.21. It seems to me that "inflationary expectations" are becoming stronger here. Witness the very weak dollar and bond prices. This will also be a factor in driving the OSX. Remember what that guy who was managing Quantum fund said. Lose your bonds and buy economically sensitve stocks and commodities. I believe that mindset will soon set in on the rest of the "Street". Also it will become so obvious that the world's economy is booming in the second half (which is upon us) that even a blind man could see it in a minute. I also think that mico E&P's are good for a trade here to make some quick bucks so that I can then pile into the pipe makers - MAVK, LSS, TBI, etc. then into the drillers - before December certainly. New pipe is necessary in BOTH the exploration AND production phases on the oil cycle. Bottom line - I'm 50 - 50 E&P - OS. During the last cycle MAVK rose at a 70 degree angle with only brief pullbacks, all the way to lofty heights of 50 dollars a share. My demographic cycle work tells me that the, in progress, global boom will last longer and travel further than the recent one that ended with the Asia crash. It also suggests the same for this, in progress, oil cycle. Lastly, "Wall Street" makes big money in investment banking. They like to glom onto a rising sector, bull it to the skies, then bring an avalanche of paper to the market, making big big money in the process. When not if OSX breaks 82.21 then this process will begin in earnest. Techs should remain moribund during the slow summer season, so the Street will probably have to whip up some kind frenzy in one sector or another. Why not OS and E&P's? Is TX's recent shelf registration for $1.5 billion the beginning? JMVVHO Bull