Pamplona it ain't.
There are surprisingly few bulls still running in what continues to be a bull market, according to technical analyst Ron Meisels.
Even as the S&P/TSX composite index was working its way to a record close of 12,111.14 Friday, the na-marketletter.com contributor noted in a commentary that the latest Investors Intelligence poll shows that the proportion of bulls among investment advisers has plunged to 42.3 per cent from 60.4 per cent in the past 11 weeks.
By contrast, the bears are emerging from winter in greater strength, climbing to 33 per cent from 20.8 per cent.
All this even though markets in this period have been at worst in a trading range, and more often trending up, Mr. Meisels said.
"In sum, the bears are growing in confidence, and the bulls are wary," he wrote. "This leads us to two conclusions. First, the 'euphoria and greed' phase of the bull market has yet to appear. Second, the 'wall of worry' that bull markets traditionally climb is alive and well.
"Markets rarely top with so many visible doubters and skeptics."
We would like to assume that's no bull. John Partridge
Analysts turn cool on natural gas prices
Whissssssssssssssssss!
That high-pitched sound you hear is the hot air leaking out of price forecasts for natural gas this year following a mild winter that included the warmest January in more than 100 years.
One of the latest reductions comes from UBS Securities Canada Inc., which has slashed its expectations for 2006 prices on the New York Mercantile Exchange to $8 (U.S.) per million British thermal units (mmBtu) from $9.65. However, analyst Memet Kont figures that most of the 2006 weakness is "weather driven," and as a result is leaving his 2007 and "normalized" forecasts untouched at $9 and $6.15 per mmBtu, respectively.
One consequence of Mr. Kont's lower expectations for 2006 is that he also has cut his cash flow and profit estimates for Calgary-based international oil and gas junior TransGlobe Energy Corp. to 75 cents a share [U.S.] and 37 cents a share. This is because about 19 per cent of TransGlobe's gas production is in Canada, meaning it is substantially exposed to North American prices. The bulk of its producing properties are, however, in Yemen and Egypt.
Over at BMO Nesbitt Burns Inc., senior economist Bart Melek noted in a report that last year's summer oil price surge, followed by hurricanes Katrina and Rita — which temporarily put a cork in more than three-quarters of production in the Gulf of Mexico — drove gas to a record $15.38 per mmBtu on the Nymex in mid-December. But January's unseasonable record high temperatures have turned the market on its head, forcing buyers and sellers to deal with the possibility that the price could plummet to below $6 per mmBtu, when just a few months ago there were fears it could hit $20.
"Demand has eroded so much that prewinter expectations of a North American natural gas shortage have turned into a gas supply 'bubble' in recent weeks, where U.S. inventories will end the heating season 65 per cent above the five-year average," he said. John Partridge
