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

To: Roebear who wrote (65352)	4/27/2000 11:41:00 AM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 95453

Roebear - re: 1998 - the crash started in June - bank on it (VBG). re:<<BTW, according to my charts, the big OSX drop did not begin until late October 98>> ...you must be blind imho ? I have no idea what chart you are looking at ? Mine clearly shows the ramp of 1997, a pullback at the end of 1997 - bottoming in Jan 1998; where the OSX rallied, then pulled back again in March 1998 - and rallied strongly into April & May of 1998. I dont need a chart to know that either - I remember it very clearly; value's on leaders like CAM (then RON) RIG ESV FGH etc - absolutely collapsed into freefall starting in June. They bottomed in October 1998 Roebear - the crash did NOT start in October - it bottomed in October - it STARTED in JUNE - I have no idea what you are looking at ?!?! The OSX had moved up strongly in April-May - it looked like another leg up was forming and possibly to new highs. Euphoria could not have been higher. We were getting rotation left & right. CDG - Cliffs Drilling was the MO-mo king... Companies were earning 2-3 times+ what they are reporting here - huge #'s. Go back and look at what HAL BHI SLB RIG DO ESV ESV (now WFT) were earning back in 1998 - they were at these same valuations here in some cases - and compare it to what they are earning today...it will scare you to how highly valued we are here historically. The OSX literally turned straight down in June (the June Swoon) and never looked back. Roebear - it did NOT start in October 1998 - it BOTTOMED in Oct 1998; there is absoltuely no question of where the "left hook - out of the blue" hit the Oilpatch investors - JUNE 1998 - period. Go look at the charts and do a layover of supply numbers and crude prices and that's all you'll ever need to know when the CYCLICAL sell signal comes... people seem to forget that we ARE a cyclical sector !?!?! We WILL crash folks - its a matter of when, not if... that seems to be a forgotten point to cyclicals. It may not happen untill 2002; but when it does - it will be violent and quick,literally will start with a rug pulled out - as people leave in mass exodus - that's the nature of cyclicals... I am not calling for a crash here - I am still very, very bullish - but; if you look at what these companies are actually earning here and the valuation multiples here - compared to the last time the OSX was at 115ish - it will bring you back to reality very quickly; as to what the downside can be.... The ONLY message I am trying to convey here is that there can be a collapse underneath the valuations here and it can and does happen very quickly. The prime indicator of that happening is storage levels... For anyone who was here in 1998 - the name of NOESIS & George Clemens - who called for basically a permanent collapse of Oil - $5ish for years etc... focused on SUPPLY, SUPPLY, SUPPPLY..... remember all the discussion about the misreporting on the storage domestically and the infamous missing barrels ? - supply unquestionably is THE EARLY WARNING INDICATOR to watch here - and not just watch, but to heed and FEAR imho. Anyone who poo-poo's the build as seasonal is not being logical - merely emotional. If OPEC complies well and we start getting a strong draw - we will be fine. BUT ! ~ if we do NOT; we have problems - if crude falls under $22-23 - all the analysts will need to adjust earnings & valuation models here - they all have $25ish crude here for the year... think about that. Earnings are no where near - not even close to where they were the last time the OSX was 115ish - we are trading on the expectations of crude remaining above $23-25 here. There is strong downside to a re-trace to OSX 85ish "IF" crude falls under $22 here folks - BECAUSE the earnings are NOT even close to historically supporting these levels here in the OSX. Again - stay the course, we have had a pretty easily defined trading range for a few months here - OSX 117ish has been resistance and 100ish support; those who have sold at resistance and bought at support have done very, very well... remember the old Oct- Dec OSX 45-70ish legs of old... the OSX tends to test resistance 2-3 times before earnings AND commodity prices support a break thru resistance. Earnings in the OSX do not quite yet support a break thru 117ish - the expectations "could" - but ONLY if we were over $25 Crude and we had STRONG expectations of the SUSTAINABILITY of crude staying over $25. IF we do break thru resistance with sub $25 crude and rising supply - I'd sell the rally and take profits and wait for a pullback. If you think I am wrong on the storage numbers being a bit more than just the normal seasonal build- then why is crude retracing and falling under The OPEC banded level of $25 here ? Watch the Supply #'s - fear them and you'll do very well here. Do not be afraid to take profits at resistance and on individual breakouts here and then re-buy the pullbacks. We have earnings beginning to turn, but they are NOT at levels to support a rally thru OSX 115+ without crude's sustainability over $25 being supported. We waffle here untill the SUSTAINABILITY issue gains more confidence - Supply must dip under 300 M boe - then we start moving again to any substantial new highs here. I don't think we crash here - but, a disturbing trend is forming - just an early warning. Not a sell signal - but perhaps a signal to "sell & take profits" on a run up here thru resistance that is not supported by either crude prices surging over $25, or the storage numbers. CAM & HAL reported some upside - but, they are sell on the move stocks here imo - rotate to the CXIPY SCSWF OII PGO laggards with the profits imo. Trade the drillers like ESV & FLC. This is still a trading range imo. If crude is falling and supply is rising - and the OSX rises - sell it imo. Not a Bear, just an unemotional Bull who see's a profit taking rally here . The big move is NOT going to be supported without supply turning back and crude rallying and being supported above $25 - and the jury is still out on that imo. We shall see... PS - how 'bout that WCOM ~