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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Stoctrash who wrote (9554)	6/18/2008 11:58:30 AM
From: Oral Roberts	Respond to of 33421

I have a friend who is a Chevrolet dealer. Can't give pickups and SUV's away at this stage. SUV's that he was buying at auction 6 months ago for 16K can't be sold retail for 16K now. I mean GM just upped the rebate on trucks to 5K. That pretty much says it all. I see truck sales going back to the way they were when I entered the car business in the early 80's. Only people that bought trucks were people that HAD to have one.

To: Stoctrash who wrote (9554)	6/18/2008 2:14:01 PM
From: The Ox	Respond to of 33421

Hi Stoctrash, There are a lot of factors that are playing into the commodities boom. I try my best to view all the different variables before coming to a conclusion. Whether or not my conclusions are going to play out is a whole other story!! The boom in oil didn't happen overnight and it won't go bust in a hurry either. The factors that I am viewing at this stage, all point to reasons why the price of crude is high. I will list my major issues putting stress on crude oil and these are not listed in any order of priority: 1) Speculation 2) Pension funds investing enormous amounts of money into commodities (an area where they put very little $ until the past couple of years) 3) Weak Dollar 4) Global demand rising 5) Geopolitical uncertainty in producing countries 6) Refining capacity worldwide 7) Increased SPR allocation and other counties creating similar oil preserves 8) Peak oil theory (or, more simply, the fear of peak oil) I'm sure others can add a few more bullets to the list. It is my view that these have combined to inflate crude oil prices by nearly a factor of 2 ($140/bbl vs. $70/bbl). Add them all up and there has been an unusually large amount of buying of crude and crude futures. I still view this all as a perfect storm situation. I have no idea how high this "trend is your friend" push will go or when it will reverse? I don't subscribe to the "new world order" view that many keep spouting and pushing. Most times in the past, when market participants start shouting "new world order" or "its different this time" (with respect to an industry or the market in general)they are proved wrong in the end. One of the most telling aspects of this crude oil run has been the lack of a serious correction. I believe this is because of the perfect storm situation. However, once the trend turns down, my guess is that we will eventually overshoot on the bottom as more and more people come to the realization the "new world order" is just not going to happen. Whether this plays out in 4 weeks, 4 months, 4 quarters or 4 years is what make situations like this exciting for investors/traders. The more I hear views that oil will go up from here and never turn down again in our lifetime, the closer we are to a very real, blow off top. Take your pick. 4 years? 4 months? Good luck with your choice! jmo TO

To: Stoctrash who wrote (9554)	6/19/2008 9:27:55 AM
From: Hawkmoon	Read Replies (2) \| Respond to of 33421

My guess is that it will likely level off from another spike higher (150?) as the econ tanks ala FDX and the BKX's players. I think that's a good bet.. As I've stated previously, $150/bbl is a psychological resistance level for traders. What the oil shorts need is a double top at that level. Penetrate, and close above, that price (as the result of huge short squeeze?) and we'll likely see $175/bbl. But we may face problems even if our economy tanks. Because until those economic impacts effect Chinese and Indian growth, demand for petroleum will increase. Because there demand is unlikely to subside so long as they are willing to subsidize the price of fuel in their countries. And they probably aren't too interested in ending these subsidies given the social consequences. Hawk