Hi, Bob
I think we will push
through $100 a barrel on oil not so much because of demand but simply to have
done it and I also believe that the actual supply and demand of the product
puts a price of around $75 per barrel on it with the rest being
speculation. The Arabs are planning on oil settling at around $60 short
term and $40 long term and have built these numbers into their economic
models.
My two cents: I have talked recently to the
guy who is professional in regards to oil. His opinion is that there are two
edge targets for the oil: 1) the min. oil price is defined by oil extraction/transportation/maintenance
expenses (it differs in different countries, and is about $30 per barrel); 2)
the max. oil price is defined by costs of alternative ways of oil extraction
(deep drilled wells, oil sands in Canada; it is about $100 per barrel). IMHO
these are fundamental edges.
Sergey
-----Original
Message-----
From: realtraders@xxxxxxxxxxxxxxx
[mailto:realtraders@xxxxxxxxxxxxxxx]On Behalf
Of BobsKC
Sent: Wednesday, November 07, 2007
4:53 PM
To: realtraders@xxxxxxxxxxxxxxx
Subject: Re: [RT] weekly analysis
Jim, I'm not debating you but simply
playing devil's advocate to the pessimism.
I think we will push through $100 a barrel on oil not so much because of demand
but simply to have done it and I also believe that the actual supply and demand
of the product puts a price of around $75 per barrel on it with the rest being
speculation. The Arabs are planning on oil settling at around $60 short
term and $40 long term and have built these numbers into their economic
models.
Housing is a problem certainly but it's not a crash in real value. It is
simply a bubble bursting and for all of us who didn't borrow against the equity
in our homes and if we are not planning a move, the drop is of little to no
importance. Secondly, the correction will begin to slow soon and prices
will stabilize just as they always do with every bubble that finally
bursts. Those who did borrow heavily against inflated equity are having
problems .. there is no doubt about that but people who use temporary gains in
value to buy toys and live a higher standard of life than they could otherwise
afford, should expect there to be a day of reckoning. However, this too,
will pass just as the 5200 NAS did and we all survived and have made nice
returns from the equity markets. Financial institutions who loaned money
in the sub-prime area were operating on pure greed and with little to no common
sense. Heads are now rolling for that lunacy and will continue to roll as
the depth of the problem unravels.
Inflation has probably been very falsely represented to us by the U.S.
government but this isn't necessarily a bad thing for the market since once
people find out what goods are really costing them in terms of real percentage
increases, they will also realize there is no place to earn that much return
anywhere other than the stock market. (Mutual funds for the average
American).
I do think it possible and even likely we will test the 12,600 area which
represents a 10% retracement from the highs but for I am positive on the market
over-all at least until Hillary fear sets in later next year. I am
holding 80% cash now but as of the close today, I am looking to begin putting
that to work.
Bob
At 01:52 PM 11/7/2007, you wrote:
Rising energy prices act as a tax on the
economy - all elements of the economy- and it is one we cannot lower by
congressional action. The impact will be on lowered earnings and eventually
higher unemployment world wide.
Here in the US the real estate correction will hurt all the downstream
businesses.
As more of the credit crises comes visible, underlying confidence will
deteriorate and a rising market depends on confidence.
Inflation in this country has only been kept low by improved productivity by
out sourcing manufacturing to low wage economies. As money supply increases to
counteract the credit bubble, inflation must rise, usually with a six month
lag. Add to this the continued lack of faith in the Dollar and in holding US
debt and I would say we could be on the verge of a major down turn. And,
if the world economy is truly on fire, you can rest assured there will be
better places to put money than the US.
Admittedly this is a very pessimistic analysis but the facts are the facts.
Jim White
Pivot Research & Trading Co.
PivotTrader.com
-----
Original Message -----
From: BobsKC
To: realtraders@yahoogroups.com
Sent:
Wednesday, November 07, 2007 10:26 AM
Subject: Re: [RT] weekly analysis
At 10:39 AM
11/7/2007, you wrote:
Please
forgive my last post - I posted the wrong chart.
My work
suggests we are in the period for a weekly pivot on major indexes.11/16 is the
Near Impulse forecast for DOW, S&P and Russell.This should be a low pivot
and start a year-end rally.
This is what
the methodology says yet when I consider all the external influences( the
Dollar, Oil, Near East Uncertainty, Credit correction, etc.) I see no basis for
bullish behavior.
Jim White
Pivot Research
& Trading Co.
PivotTrader.com
What about full employment, rising wages,
strong S&P performance, reasonable PE's, a world economy on fire and no
other choices for returns exceeding inflation?
Bob