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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: t4texas who wrote (34786)	8/30/2004 5:16:29 AM
From: Tomas	Read Replies (1) \| Respond to of 206092

Will oil stocks start gushing? The Globe & Mail, Monday, August 30 By Angela Barnes So why are oil and gas stocks acting so poorly even though crude oil prices are unusually high? That is the question Ross Healy, president of Strategic Analysis Corp., set out to answer in a recent edition of the SAC Strategic Review. He turned to history for the answer -- the period around the "last real commodity mania that we could recall" -- gold bullion in 1980. Early that year, bullion jumped to slightly more than $800 (U.S.) an ounce, before falling back sharply. It rallied again, but not to the same level as in the first runup. Gold stocks indicated only a tepid response to the sharp jump in bullion prices to $800 an ounce from a low under $200 just a year earlier. But after bullion prices fell back, the situation changed. By then, "the thought of high bullion pricing had seeped into the collective perceptive psyche of the market," Mr. Healy said. Once the setback ended, and bullion found a temporary solid footing and was clearly headed higher, possibly much higher, "gold stocks went berserk, and the gold and silver index more than doubled" in a very short time, he said. "The market did not 'believe' the amazing gold price the first time around," he said. Could the oil-and-gas sector exhibit a similar pattern? While cautioning that history does not necessarily repeat itself, Mr. Healy said he suspects it could. "It certainly is not only possible, but, indeed, would help make some sense out of what is otherwise a most peculiar phenomenon, and it would also fit the 'facts,' " he said. As he sees it, oil and gas stocks are "very, very cheap." In a separate SAC Strategic Review article, Mr. Healy addressed another oil-related question: Does the trend of oil prices affect the stock market? The answer to the question is: "It depends." The trends in oil prices and the market sometimes are correlated positively and other times, negatively, statistics from Elliott Wave International indicate. "In other words, falling oil prices right now would -- or should -- have no lasting effect on the market, except insofar as investors in the extreme short term think that it should," Mr. Healy said. theglobeandmail.com