Subj : Market Action
To   : All
From : Paul Rogers
Date : Mon Jun 27 2005 06:36 pm

Content-type: text/plain

The Fed's meeting this week, so the markets are quiet.  Prices were down
about a point, and volume contracted to -2% below average.  No big deal.
Since we can't get away from the oil subject, let me comment on
something I found in the News on the Web this morning.

"Analysts said with $60 a barrel no longer a threshold and amid
continued concerns about refining capacities prices appeared set to go
even higher."

That's the same sort of action we see in the stock market.  Push prices
to penetrate a target level, then back-off until the shock wears off.
Then try it again when it's not so much of a shock.  Let 'em get used to
it.  Learn to recognize it in market action so you don't get on the
wrong side.

"'The psychology of the market is that once $60 is breached, then there
is tendency to test how much higher it can go, or how long $60 can be
sustained,' said Victor Shum, petroleum analyst at Texas-headquartered
energy consultants Purvin & Gertz in Singapore."

TEST?!  What is this "test"?  How are they going to know when it's too
high?  What is at risk of failure when oil prices get too high?  No,
it's not just their contracts, they're playing with the world economy!
"How long $60 can be sustained"?  Oh, so they're going to keep this up
until not just companies but countries one after the other collapse
under their energy bills?  Who's going to have to pick up the pieces
when the world economy fails?  Them?  Yeah, right.

"Much of the worry surrounding crude is demand-driven speculation,
analysts say, and it primarily surrounds how much supply there is
currently and how much spare there is in the event of a production
glitch."

I've been saying this is just rampant speculation for months.  Remember
the SE Asian currency speculation of '98?  It's the same thing, just a
different target.  It nearly drove several countries into bankruptcy
then.  Guess what?

What would an intelligent company do in this situation, having learned
what happened during the Enron SCAM to utility & transportation
companies who depended only on short term contracts on the "spot"
market?  They'd try to lock in prices with long term contracts before
prices go even higher.  We've been there too.  Remember when utilities
in the Pacific Northwest went to court to get contracts voided after the
scam collapsed and they were stuck paying higher than spot prices?

This is a train wreck happening in slow motion, and nobody in a position
to prevent it is doing anything.  What they're doing is positioning
themselves to profit AFTER the train wreck happens.  We'll sell you a
new train!  We'll rebuild your tracks.  We'll sell you insurance in case
this happens again.  Can't afford it?  Too bad for you.  Who's going to
get the short end of the stick?  The people who depended on the train to
deliver their products on time, in good order, and at the agreed price,
and can do nothing.  That would be you and me.

Yes, these are international "free" markets.  No, I'm not buying that
means there's nothing anybody can do to prevent scamming of these
markets.

Looking forward to being retired on a fixed income?  You'd better plan
your investing strategies to have some growth, allowing for these sorts
of things.  If it has happened twice, it can happen again.

 Price    Vola-    Momen-   Volume   Oscil-   Summ.
 Change   tility   tum               lator    Index
 -__+     -__+     -__+     -__+     -__+     -__+

 _|__     >___     __|_     _|__     __<_     ___>     06/21
 __|_     _>__     __|_     __|_     __<_     ___>     06/22
 _<__     >___     __|_     __|_     _<__     ___>     06/23
 _<__     |___     _|__     ___>     _<__     ___>     06/24
 _<__     _|__     _|__     _|__     _<__     ___>     06/27

Timing Signals:  I don't use or recommend timing signals, but they're
fun to watch.  If I did though, well, I might use something like this.
(Be warned!!  It tends to whipsaw around signal points!)

Last Signal: SELL       Date:  06/24/05 S&P:    1192
Winner or Loser:  Winner                By:     18

See my market tracking charts for '03-'04 and my investment strategy
study at my website(s):
http://www.xprt.net/~pgrogers/Pers.html
http://www.geocities.com/paulgrogers/Pers.html



Paul Rogers, paulgrogers@yahoo.com                       -o)
http://www.angelfire.com/or/paulrogers                   /\\
Rogers' Second Law: Everything you do communicates.     _\_V

.... Everyone is entitled to my opinion.
___ MultiMail/MS-DOS v0.35

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 * Origin: The Bare Bones BBS (1:105/360)

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