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

To: Wallace Rivers who wrote (27832)	8/16/1998 9:05:00 AM
From: tdl4138	Read Replies (4) \| Respond to of 95453

Just a thought... I'm hearing and reading that we are in for a strong rally...and then a severe meltdown. Not just the oil sector but the overall market. Trying to apply common sense and knowing that the "small investor" is usually wrong when "timing"...it would make sense that if we do have a rally, it would end up being called a "suckers" rally. The primary source for this thinking has been Jerry Favors...who has been extremely accurate with his market predictions over the last few weeks....His final comment during the last interview I watched was that a strong rally will be a great time to "short".... As to "timing"...it appears the first week in September is the best "target" for a meltdown. With the small investor getting nervous as we get closer to October...getting "caught" early would make sense. As to the oil sector...I would suggest that if this scenario is correct...in any "meltdown" nothing would be safe. I would hope that the market would acknowledge the already oversold valuations and the additional damage would be minimal. It might be the time to short the internets, etc...that are trading with no correlation to value.... If my "scenario" is correct...I would hold off buying any stocks in this sector...unless for short term "pops" in a rally...and sit back and wait...If the predictions are accurate, the bottom for everything..would be the middle of September...My guess is that a "meltdown" would be at the very least another 600-800 points on the Dow, probably a lot more. Once the damage has been done, I think this sector, producing "real" revenue, and being extremely oversold, would finally get some interest...as would the drugs and other sectors that offer some sort of stability and the "perception" to the overall market that they are a "value" at that point. I just can't see the market sustaining any rally at the level we're at today. To much nervousness...everywhere..and any day I expect something unexpected out of Asia...another aspect that gets me thinking is what effect earnings warnings for the 3rd quarter will have on the market. Remember, the quarter is already half over. I'm sure a lot of companies are already seeing some problems developing. When would they start to announce these "problems"...it all seems to logically come together..the first week of September... What would be great timing is if OPEC would cut back again, right after another leg down in this "correction" that would focus attention on this sector. That, in my opinion, would allow everything to finally come together for these stocks...and be the time to buy.. Just My Thoughts.. Dave