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

To: Crimson Ghost who wrote (27249)	8/6/1998 8:32:00 PM
From: Intel Trader	Read Replies (1) \| Respond to of 95453

Ok. You guys are setting yourselves up for a disappointment if you believe that we are on the up elevator because of today. Before I feel comfortable with an overnight hold to average up, I at least want to see some sort of capitulation, or failing capitulation, a retest of the recent lows. In my judgement, the retest is what we are set up for now. I think that today's action was a result of generally positive market conditions. Had things been as lousy as they were yesterday, we would not have seen our beloved (?) oil stocks move. In a few short words: Nothing has changed. humbly, it PS VLAD I like your excellent thought of finding the companies (small floats that tend to recover with a sector upturn) that are buy prospects. If you have a short list somewhere I'd like to see it. TIA

To: Crimson Ghost who wrote (27249)	8/7/1998 1:38:00 AM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

OSX - ''Up on bad news'' - good points George Cole ! <<If the OSX can continue to ignore bad news for a week or so, the bear will be dead and buried. Not to be replaced immediately by a roaring bull, but more likely a protracted base building process.>> George - excellent points and observation. I agree, but do not think we are seeing what we think we are... allthough I pray we are. I could not believe that institutions were not stepping in at these levels in the last 2 weeks. We have lower dayrates and lower Rig utilization rates, but Oil is slowly inching upward and earnings are still decent and not deserving of selloffs to these levels. E&P budgets will still rise 6% at last report and even if they were off 10% - we are still over sold at these levels fundamentally . We currently do not have the realistic risk of $10 Oil, allthough we may not see $18 as soon as we would like. Earnings will be reduced for most drillers, other than those with new deepwater projects that are all ready under contract coming online like NE & FLC or like RIG who has a high percentage of revenues all ready guaranteed via long term contracts. These companies will show nice increases in earnings in 1999 - in some cases 30-50% increases; yet these stocks are sold off to 52 week lows all most accross the board. Service stocks will be soft in many cases, yet some companies like HLX who have a backlog greater than last years sales; are still selling off ? SCSWF & OMNI have had substantial recent earnings ''upgrades'' ! These are 2 dynamic, excellent niche players with outstanding fundamentals and growth, yet they have sold off and the list goes on... What I can not understand; is what happened today to trigger the institutional buyers to jump in ? I expected to see institutional sector rotation if indeed we saw a 15% overall market correction 'ala Acampora; but we didn't and this again was viewed as a buying opportunity. Without any sector rotation from a market blow off; we had many OSX stocks with strong 2+ million share volume and a 4% + gain in the OSX off of no positive news of any type ? We allready have all the earnings reports in now - most sold off of good reports. We have all the DOE, API and crude oil numbers. Was there some sort of margin interest - covering level that the brokerage houses read ? or a buy program based on the number of OSX or sector stocks hitting 52 week lows or a predeterminded OSX buy level ? Were the funds following each other ? We just had a couple of funds completely dump a few days ago - and now in 48-72 hours we have funds jumping back in - why ? Two major Oil analyst appear on CNBC and paint a much more negative picture of crude prices returning to ''normal'' levels than they were espousing prior. They additionally ''took out'' and completely discounted the potential immediate good news ''trigger'' of positive OPEC production cuts numbers - saying even if OPEC cuts are positive - it no longer matters ! - Asian demand which is not only weaker than we thought, but also will stay weaker longer than we thought; will create a very soft 1999 with no substantial turnaround in sight... Asian demand is no longer 30 or even 50% of the crude oil price equation - it is 99% ! The only slight positive was that there might be some M&A action in E&P companies(Gheit - touted SGO as buyout candidate) as some companies with greatly undervalued assets, could not afford to explore or produce with crude at these levels; $15 was the breakeven point for most companies. I am very happy to see todays action; however - there was ''no reason'' for it to have happened. If we would have based over a few days, or sold off another 5-6% in a day, but saw a volume reversal with buyers either stepping in at the end of a day or at the open the following day - I might be a believer. Or, if we had some good news like very positive OPEC numbers, API figures or if crude moved up .75 cents with the trading news leading the CNBC oilpatch highlights - then I would be a believer... Personally; I'm only trading individual stocks here; I don't like that queasy feeling in my stomach and my brain can't accept todays market action... Why today ? Head Fake or the real McCoy ? ...time will tell, but ''something's rotten in Denmark''...? The only conclusion that I can draw is that the Institutions finally believe that we are at an ''oversold'' level; actually substantially below ''fair value'' for these stocks - even in the current crude price enviroment. And as conspiracy theorists (like myself) believe - they once again are ''crying wolf'' - telling us that yes indeed the ''sky is falling''; while they were simultaneously buying ! ....this after all the table pounding and buy upgrades of the analysts on CNBC & other media sources telling us what great buys the oil patch was, while they were obviously selling & shorting ! ....hmmm - maybe time for me to crawl back into my contrarion thinking - conspiracy theory believing, bottom fishing, fundamental buying - trust the numbers - ignore the analyst hype, hole... and stick to buying when they are saying sell; and selling when they start saying buy ! ...damn; I think I got it !