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Strategies & Market Trends : Z Best Place to Talk Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Larry S. who wrote (22560)	3/18/2000 10:22:00 AM
From: pz	Read Replies (1) \| Respond to of 53068

Food for thought.... JOHN BOLLINGER'S CAPITAL GROWTH LETTER 3/17/00 Capital Growth Topics #317: Energy Only now that virtually the entire price gain for crude oil is already in place is attention is finally being turned toward energy. The bottom was put in for crude oil in what has to be the greatest contrarian event in many years. Three weeks after a successful retest of the lows, with support between $10 and $11 firmly established, the Economist--the British weekly newspaper that is published as a magazine in this country--predicted an oil glut of unprecedented proportions driving crude to $5 a barrel. This prediction appeared in the March 6th issue. It wasn't hidden in the back pages either; it was trumpeted from the cover with the headline "Drowning in oil." The price of crude oil promptly tripled, but get this--it is the important part; no one believes yet. Gasoline prices are nearing $2.00 a gallon, the diesel oil price is crippling the trucking industry, heating-oil prices are driving thermostats down, politicians are talking about repealing an excise tax and/or releasing the strategic oil reserve, but no one seems to believe that OPEC got its house in order in a time of horrendous stress and is now firmly in control. Why do I say no one believes? Because the oil stocks are on their butts! To wit, the panic lows for the energy stocks occurred at the retest of support last March for crude at $12 and the Oil Index trading 380. Last week with crude north of $30, the Oil Index traded at 410. Obviously everyone is aware of the crisis, but no one believes. If they believed, the oil stocks would be through the roof. As awareness turns to belief, stocks will price the advance in crude oil. Until then, the way to spell oil-stocks is opportunity. But, there are few believers yet. John Bollinger, CFA, CMT 17 March 2000 Entire contents copyright 2000