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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (14237)	5/21/2004 1:02:46 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

that scenario could very well play out. i think it's a good idea to keep some powder dry, quite a bit. but being completely out doesn't exactly appeal to me either, since i expect much higher prices in the long run and with oil there's the possiblity that a punctuated event could override whatever spec liquidation might be called for under a gradual rise scenario. given the obvious vulnerability of Saudi facilities, and the obvious interest in suicide bombers in attacking facilities in SA and Iraq, i have to assign a non-zero probability to an event which would cause a temporary supply shock resulting in $100+ oil in the near term. if that happens, and even if it's only temporary, i think the market will tend to price in a higher risk premium resulting in secularly higher price levels over the long term. what that amount is, i don't know, but i assume it's larger to the upside than whatever the potential downside there is from a spec blowout. so i have a toehold position which i will add to with increasing aggressiveness if significantly lower prices indeed happen.

To: russwinter who wrote (14237)	5/21/2004 1:04:21 PM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 110194

russ, contrary to commodities - e.g. copper - copper mining stock are prices based on price of energy and interest rates. In this case both are mowing up and there is no guaranty that copper mining stocks will follow the red metal. ...... aside if energy prices move higher or stay were they are there will be an economic slowdown and copper will move lower

To: russwinter who wrote (14237)	5/21/2004 3:20:38 PM
From: Crimson Ghost	Respond to of 110194

A drop tp $34 crude likely would create a once in a lifetime buying opportunity for oil and oil service stocks IMHO.

To: russwinter who wrote (14237)	5/21/2004 5:27:13 PM
From: gregor_us	Read Replies (3) \| Respond to of 110194

Oil Stocks Never Responded to Higher Oil After DEC 2003. This is the key difference between the oil majors in their relation to the commodity itself, and, all the gold, iron ore, miners and other resource stocks in relation to their commodities. The contrarian position on oil, especially in the last 4 weeks, has been to be short oil--or to at least avoid the front month contract. The contrarian position on the oil stocks, remains, to be long. I mean the oil majors. Not the oil services--which did indeed bulge. I do smell rank speculation in the oil futures that is weak and vulnerable to flushing. But not ALOT of this do I smell. The real stink I get in my olfactories every day are large buyers in size panicked, who buy all the weakness. I can certainly see your point about Copper being the template for a smackdown in oil. The copper market freaks out at the possibility of not getting enough copper--very similar to oil. If the oil majors are going to continue to have problems dealing with the oil volatility, then I am going to cash in my Call options and move over to the Futures market. That said, the call options have been much, much better for me than trying to go long the shares. Here's to a happy weekend in Amsterdam for all OPEC members who should find the temptations of Hashish, pretty prostitutes, and Indonesian food lathered in peanut sauce more than overwhelming! And one final note: 3 cheers for Indonesia which has now admitted they've become a net IMPORTER of oil. This is simply too delicious!

To: russwinter who wrote (14237)	5/21/2004 11:31:33 PM
From: jimsioi	Respond to of 110194

Russwinter, add me to the list of those in agreement.. Energy the last group to crack in the sequence of commodity market correction runs down on OPEC supply news and long liquidation....to where?? to be determined....If the economy doesn't buckle under 50 basis points of FED raising, already discounted, and China cools, or if it doesn't, but doesn't do something worse, Energy stocks set up for a great buying opportunity. Being already pretty reasonably valued the upside could be explosive especially if the general equity market is stable to higher.... These are thoughts generally of Don Coxe this week, too....A little patience in here will be required....