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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: jtech who wrote (15933)	7/19/2002 12:56:21 PM
From: SliderOnTheBlack	Read Replies (3) \| Respond to of 36161

["Why the disconnect here? Weve got oil @25 and the oil stocks are where our last bottom started."] ...the last bottom - fall/winter of 1998 was a quadruple bottom of OSX 45 with 62ish being resistance...the OSX traded their over a couple of months - forming a firm bottom. Sub OSX 68-72 is traditional "value" imho...and we're going there... Why the disconnect ? Simple - because Crude has an EXAGGERATED risk premium for ME supply disruption built in here...AND because: A global economic downturn always trumps any supply disruption risk premium. The rig counts, dayrates & Cap Ex fundamentals are nothing even near the mo-mo environment of 2000-2001. Crude should be $16-$18 in this economic environment imho - and would be without IRAQ and the Israeli/Palestinian ME situation. The market refuses to give the OSX stocks the benefit of $27 Crude - as THEY SHOULD. It is, was and will always be a volatile cyclical sector... and the OSX is going to get sucked down witht the rest of the market here soon. We are seeing Drugs, Homebuilders and today - the beverage and DEFENSE Contractor sectors getting sold off ~ No more safe havens except GOLD/Silver stocks ! EVERYTHING is being sold to raise cash...this FED/PPT/ESF prop job failed... AND THAT changes EVERYTHING imho. This is the first REAL signal - that the FED has truly lost control...literally....as THIS is the first time they have failed to stop the bleeding. Buckle Up Boys ~ UGH-LY has arrived ~