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

To: Big Dog who wrote (4423)	12/4/1997 8:37:00 AM
From: Big Dog	Read Replies (1) \| Respond to of 95453

Snippit from Rightline Report of last night. rightline.net This rebound has just started and will continued to be fueled by put and short covering especially as options expiration draw closer.ÿ This move no doubt will have jiggles and hiccups along the way, but as we draw closer to earnings season that begins in January, the powerful earnings that were reported last quarter and that are due to be reported for the fourth quarter will again become a driving force.ÿ This group has the numbers. Tomorrow could go either way.ÿ Friday is employment report Friday.ÿ It has the potential to dramatically move the markets - especially if it comes in on the inflationary side.ÿ If it were to do so, the markets will tank.ÿ That is why many traders are reluctant to establish new positions tomorrow leading into the report.ÿ Additionally, traders who have big profits in positions may be inclined to pull some of it off the table.ÿ I am inclined to believe that the Oil Drillers will open up tomorrow and flatten out as the day progresses.ÿ Friday, depending on the employment report, they should continued to show strength. My note: He goes on to talk about the OSX and then writes: As you can see, a lot of options in the OSX expire in two weeks.ÿ Also, there is a lot of short (put) interest in the Oil Drillers.ÿ These were good plays when the selloff in the Drillers was going on, but they are less so now that the sector is moving up.ÿ As traders and of even greater impact, the hedge funds, close out their short positions, it creates sudden and often powerful buying pressure because to close a short position, you have to buy to cover.ÿ All of a sudden, the hedge funds are giving up and closing out the puts or buying common stock against these puts.ÿ Soon any profit the put holder had vanishes in the ensuing rally in the stocks propelled by the very shorts that pulled them down in the first place.ÿ All of a sudden, even though nothing has changed fundamentally, the stocks are moving sharply.ÿ Just as they did when they were selling off.