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

To: diana g who wrote (30819)	10/16/1998 10:18:00 PM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 95453

The buying was due to DEMAND being stimulated by the Fed Cuts. ie: ''Beating the crowd to the party !'' One can NOT easily make money in the oilpatch by buying when crude prices are strong ! One can not easily make money when crude prices are falling and weak either. But, one can make a whole lotta money, if one buys at the first glimmer of demand being stimulated (by The Fed Rate Cut) when crude has stabilized; as demand stimulation will obviously raise crude oil prices. The institutions and big money all ways make their moves based upon events they believe will exist approximately 6 months forward. This strong move here was not because of ''Rate Cuts'' per se, - but rather it was because of what the Rate Cuts will do ! The Rate Cuts will strongly stimulate demand and strong demand leads to higher Crude Oil prices ! The market merely moved on logical common sense. No big mystery. No technical Voodoo. No Insider knowledge; and most certainly - this didn't occur for ''no reason'' at all. The Big Money positioned themselves to be ahead of the Crude Oil price curve - plain & simple. They said - ''Thanks Mr. Greenspan for the freebie.'' The individual Investor waits to see crude go to $17-18 hoping to enter the oilpatch. When Oil hits $17-18 - you will have ''missed'' the move. Oilpatch stocks will not be cheap. They will be fairly priced; some overpriced, some a little underpriced, but few if any will be cheap.This is the typical cycle of Big Money allways entering first and exiting first leaving the little guy geting on late and expensively and getting off late and much poorer... The momenteum investor allmost by definition has to buy high and often sells low... Certainly commodity oriented cyclicals have been proven over time to be most profitably traded by bottom fishing - just ask Mr. Buffet about the Silver market. Do you see him buying Gold here on this Rally ? - No, of course not. The ultimate Suckers Rally is entering the Gold market right here imho. One was not imprudent buying Gold when the DOW was way overbought and at the first glimmer of weakness, or even on the first major blowoff, but to have not sold all allready is missing the entire concept of market sentiment and gold. Only the Y2K Loonies and End of the World charlatans are pumping Gold here... 'nuff said on Gold. People; HELLO ! This sector has been one of the most decimated in decades ! The only way the little guy can get ''revenge'' or make money, is to be ahead of the curve, not following the curve... Surely buying when the momenteum has been clearly established, or when Crude prices are $18 +/- will eliminate the appearance (keyword - appearance) of substantial downside risk. But, in actuality - quite the opposite is true. Is there more risk when RON was selling at $22 or when it's at $48-50 when crude is at $18 ? I think there is a lot more risk in buying RON during a "Mo-Mo'' move when everything from Crude prices, momenteum, analyst estimates & ratings, earnings and overall market sentiment is strongly positive; than it is after a retest of a double bottom and off of a Fed rate cut. Especially in light of a possible recession and given the International Economic climate; bottom fishing is allmost a necessity for survial. Momenteum Investing was great during the last 36 month Bull Run; but not here imho. Here, stock/company picking, along with value oriented bottom- fishing; is a prerequisite for survival. The patch right now, still offers 20-30-50%+ moves even in a recessionary enviroment or with $15-6 Crude Oil. However, if one waits for Crude Oil to reach $18; first of all - it may be a long wait and secondly, one will not be buying these stocks cheaply. You have to be ahead of the curve here. Greenspan has just committed to increase ''demand'' via stimulation/liquidity and the good part is that he's far from finished ! Everyone has argued that cutting supply; be it via OPEC cuts, natural attrition of E&P projects, Tropical Storms/Hurricanes shutting down refineries etc. will not ''fix'' the crude oil price problem. Everyone said ''it's a DEMAND'' problem - stupid !'' Well guess what people -- DEMAND just got a boost and it will again and again and again... untill it works !! So, what's the great mystery here ? If one doesn't buy here - I ask - then when ? T H I N K ! ...... a double bottom technically supported/established and this time the DEMAND part of the equation is being solved ! This is not like the Spring of 1998 and it's not like the bottom/blow off of Sept. 1st either; because the most important half of the equation was not yet addressed; -- now it has been. ...one has to be thinkin outside of the box here. PS; GO YANKEES ! PSS; George; I heard through the Grapevine that Teddy covered ''both'' of his Oilpatch shares he had shorted and as far as Diamnond; what is said is not allways what is done - ?<VBG> . The Bottomline; We are NOT going to new 52 week highs (or old ones either <VBG>) overnight. But, we do have a clear bottom established and to not be buying here when Mr. Greenspan has allmost ''insured'' us against lower lows - is like passing up free money imho. Good Luck all