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arthur
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PostPosted: Sun Aug 14, 2005 7:16 pm    Post subject: More Recent Letters to the Editor Reply with quote

Thanks for the responses. What I like about oil stocks at this point is money may be made two ways: Oil hitting at least a short-term top at $70 a barrel (with oil stocks also near a top) and the continued volatility. So, it may be a "double" winner. The oil inventory report at 10:30 AM ET each Wed moves oil stocks. I'm looking at AHC Sep puts at just over 130, OIH Sep puts at just over 120, and VLO may trade between 90 and 95 short-term (after a big run-up, closing at about 94 Fri). Of course, if oil stocks rise a little higher, the puts are cheaper. So, you may want to keep a lot in cash, just in case. However, I take advantage of volatility to lower average costs for buying too soon, and hopefully I won't lose too much money, or sell too many puts, before I make big money. Arthur

I'd like to agree with you , but am not sure
if 70 is the tipping point. I feel quite
strongly, though that eventually oil will take
a big correction, then have a very tough
time getting back up there. It's very very
difficult, though to make any calls.
Remember exactly 1 year ago when it became
obvious that oil would stay above 40 and might
even hit 50 ?? All of the analysts kept saying
that it shouldn't have any impact on US
economy unless it went much higher and / or
stayed high for a sustained period. To me,
we have seen it much higher than 49 AND the
period has been sustained AND the economy
keeps looking stonger, stocks are higher,
bonds are higher, I guess that "THEY " were
wrong. Very good chance that "THEY " are
wrong again now. What I fear is to see oil
go back down to lower 40's for a sustained
period and the market continue to be range
bound and not move higher. Strange things
happenin these days..... eh ? ...

Wasn't GS that made that $105 call on oil
about a month ago ?? I swear, those guys will
say anything.. evidence is how often they
do about faces on their calls, even with no
new news or earnings ....

Seems lots of speculators have the $70 number as some sort of target. Watch the selloff when oil hits $70 and then watch the sharp drop as stops are taken out on the way back down. The bubble is gonna burst soon.
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