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

To: ldo79 who wrote (41815)	4/8/1999 7:24:00 AM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 95453

One last bite at the apple ? Entering the sweet spot ...? Well, have we we once again learned another lesson in the Oilpatch ? This time that the Street will only look so far forward ? or,for those who have traded the now 5 cycles in 7 months of OSX 45-72 -- is this old news ? Crude rises 40% and even with this retracement, is still $1-2 above virtually all of the optimistic forecasts of mere months ago. Nearly all of the Oilpatch would have loved to have locked in $15 Oil for 1999 mere months ago and here we find ourselves at $16 and have been rewarded with a 20%+ retracement in the OSX off of our highs ? Are we headed for another major selloff back to OSX 45-50ish, new lows, or are we in merely a normal retracement and experiencing profit taking prior to the upcoming earnings reporting period ? I think the later. As the now 5th OSX trading cycle and its allmost predictable trading range of late, has not been lost on many individual traders here, it has not gone un-noticed by the Street either. With another surge in the overall market and especially in tech and internet stocks; the issue of deadmoney has once again come into play. It is hardly a secret that the OSX stocks will not see ''any'' financial benefit from the surge in Crude prices for many months to come, as the Oil Producers are waiting to see OPEC's degree of compliance and the stability of crude prices, before unleashing cap ex spending. Given this gap in time untill these stocks actually realize any financial benefits and the upcoming earnings reporting period, which preceeds OPEC's initial compliance #'s for the new production cuts; it should not come as any surpise that the OSX endures a strong retracement. Only the degree of the retracement remains unanswered. However; does the darkness not allways preceed the light ? Are we getting another bite at the apple, the last bite ? Perhaps... If nothing else; we are being presented with perhaps the best risk vs. reward opportunity of late, especially when measured against a timeliness factor. If indeed, the Street wants a ''sure thing bet'' prior to re-entering the OSX for more than a brief visit, then this earnings reporting period and the initial OPEC compliance reporting, indeed hold the key to closing the door on an ugly chapter in OSX history. By any measure, this upcoming cycle potentially looks to perhaps be the one that sticks. Pending no sector wide, unforseen negatives and the expected postive compliance from OPEC; we may just be posied in the 'sweet spot'' for the first solid leg of recovery. The primary ''bet'' remains on OPEC's compliance. OPEC has its total credibility and perhaps even its existance riding on the initial compliance numbers. Any failure by OPEC here, will be fatalistic. Too much is riding on these intitial reporting periods for common sense not to dictate a high probability in strong compliance. While this still remains a ''bet'' on OPEC; the odds of compliance will never, and have never been better. Every investor must select the individual stocks and subsectors within the Oilpatch that they feel comfortable with; be that the drillers, fab companies, the marine industry, service companies, independant E&P's, gas vs. crude Oil, integrateds, or the major international Oil companies themselves... The street has allready shown us not once not twice, but actually now 5 times in 7 months where they will value the various companies in an uncertain marketplace. Should we hobble through this upcoming earnings period without any major surprises and if OPEC complies with production cuts; we may finally emerge from the ''uncertainy'' to an actual bullish recovery period. With the prior resistance of OSX 72ish of late, a new target of OSX 85 to even 100 is not unrealistic; especially since the last time we had $17 Oil, we had OSX 104. Only time will tell if this is the ''real deal.'' The good news is the wait will not be a long one. The earnings reporting starts now and the initial OPEC compliance numbers will soon follow. Given the positive news coming out of Asian and Japan (see links below); averaging back into this selloff for those who have been playing the trading range game; looks to be potentially, perhaps the last ''sweet spot'' bite at the OSX apple. All we need is for OPEC to do the right thing. The ''bet'' is just that simple... The Street is waiting to see what OPEC does, as well as the Crude Oil Traders and the Major Oil companies. OPEC has the keys to not only the ''vault'', but to the Cap Ex spending of the Oil majors and coorespondingly the stockprices of the Oilpatch. The ''bet'' has never looked better to me... ******************************************************************************* .. from the link below; a short, definitive piece on the imminent Japanese recovery. The Sun Will Rise Again After eight years of devastating economic policies, Japan finally has the right ideas. by Lawrence Kudlow iionline.com ...also, from an iionline article on semiconductor stocks - the following comments on the unexpected surge in Asian semiconductor sales is also an early indicator of Asian recovery: <<Paine Webber reported last week that semiconductor shipments rose 7% in January, on a year-over-year basis, to $10.2 billion, with particular strength coming out of the Asia/Pacific region where sales surged 22% in dollar terms. >> ******************************************************************************* ....plan your trades and trade your plan (now who said that ?).... One last thought; it's up to each individual investor to select what individual companies, or subsectors and the cooresponding risk/rewardprofiles of each, that they feel comfortable with. However in calling a bottom here, or choosing entry points; averaging in with 2-3 buy ins to establish positions may be the most prudent move. A widening of the buy in levels may also be prudent here. Instead of chasing $1-2 moves, perhaps widening those buy ins to either 15% moves, or for example $3-4 moves in stocks priced in the $20's to $30's, or $1-2 moves for lower priced stocks may be advisable. Good luck...