eeg is a no brainer for proactive investors, page-96

Here is this morning's Pre-Market climate of sentiment in which EEG shares will be traded today, 25 May 2012.

It looks like some degree of common sense (which is not always "common") has returned to the USA Market and to some degree, the European Market ...as they begin to come to grips with "Dracmageddon" and the Greek debacle.

So, EEG is once again sitting pretty for a bounce upwards in its SP, after weathering the downtrend pressures which other energy stocks have faced, in recent weeks.

With oil touching below $90 per barrel yesterday, EEG will be pleased with its Management, that it has locked in its hedged sales of oil for the next few years at $90 per barrel ...and is making excellent profits at this rate.

Positive news about Armour Energy's excellent Natural Gas 1st Exploratory Well yesterday, which is right next door to EEG's Northern Territory tenement, de-risks EEG in that area and heightens its very valuable prospects in the Northern Territory ...free of charge ...thanks to the expenditures by Armour Energy.

This is going to be a huge Natural Gas and Oil resource area in Australia as the months and years that roll by, will reveal ...and EEG is going to be ideally placed, once again, to capitalise on it.

News of EEG's 3rd successful oil well drill in Kansas is expected very soon.



Market wrap, courtesy of Highlandlad, Day Trader, HC, for 25 May 2012:

A positive start to Australian trade is likely after gains in commodity prices and another late recovery on Wall Street.

The June SPI 200 futures contract ended the night session 16 points or 0.4% stronger at 4068 as increased hopes for joint European bonds helped most US stocks turn positive in the final minutes of trade.

The S&P 500 languished for much of a mixed night of US economic news before closing 0.14% higher after Italy's Prime Minister revealed a majority of European leaders now want joint European bonds, widely seen as a solution to the euro-zone's sovereign debt crisis. The Dow turned a 76-point loss into a gain of 34 points or 0.27%. The Nasdaq lost 0.38% as recent tech earnings disappointments weighed on demand.

Buying in the US picked up after Italian Prime Minister Mario Monti told Italian TV that Greece will stay in the euro and "Europe can have euro bonds soon". Monti said Italy, France and Britain all support joint European bonds, ramping up the pressure on Germany to support an idea which would effectively allow weaker euro-zone nations to use their stronger partners' credit history to raise money. However, Monti said the bonds would not be introduced in the next few months - "nor, however, will it take five or ten years".

The night's US economic reports continued the recent run of mixed news, reflecting a patchy recovery. Durable-goods orders inched up 0.2% last month, ahead of expectations, but core capital-goods orders, which indicate export strength, fell 1.9%. The first-time jobless claims weekly report showed little change, easing 2,000 to 370,000 last week. US manufacturing slowed to a three-month low but held well above the level that indicates expansion.

"The US economic story is better than the stock market is reflecting, and that is only because it is being ignored while we watch Europe slowly melt into the Mediterranean," Art Hogan, market strategist at Lazard Capital in the US, told MarketWatch.

The major European markets shook off grim economic news, but Greece continued to slide as polling showed an anti-bailout party gaining support ahead of next month's election. The euro-zone purchasing managers' index contracted sharply in May, pointing to a drop in GDP of around 0.5%, according to economists. Germany's DAX rallied 0.48%, France's CAC 1.16% and Britain's FTSE 1.59%. The Athens General Index plunged 4.53%.

Oil and most metals rebounded despite another solid rise in the US dollar index that pushed the euro to a 22-month low. Oil benefitted from an inconclusive end to nuclear talks with Iran, which kept alive the prospect of further oil sanctions. West Texas crude for July delivery was recently up 90 cents or 1% at US$90.80 a barrel.

Most industrial metals rallied as traders interpreted yesterday's weak Chinese manufacturing report as bolstering the case for further monetary easing. In London, copper put on 0.45%, aluminium 0.1%, lead 1.1%, nickel 1.2% and tin 1.8%. Zinc lost less than 0.1%. US copper for July delivery was recently up four cents or 1.1% at $3.44 a pound.

"The [overnight economic] data has been poor, even Germany is starting to get dragged down, but we think we're going to get Chinese stimulus," the Natixis head of commodities research told Reuters. "If you're prepared to look at the second half these are good levels to be getting in at."

Gold recovered from yesterday's losses but pared gains as the session advanced. Gold for June delivery was lately up $9.10 or 0.6% at US$1,557.50 an ounce.

TRADING THEMES TODAY

BULLISH SIGNS: A second late reversal in a row in the US suggests that global markets may be starting to build a base at these levels. European markets played catch-up with the US after heavy falls on Wednesday but the economic news gave them plenty of reason to finish red, so the fact they finished higher is significant.

It seems to me that Wall Street is finding some pretty flimsy reasons for rallying this week, which in itself is a bullish sign that the worst of this downleg may be behind us.

Risk appetite appeared to improve, with biotechs among the pockets of strength and small caps matching gains in the S&P 500. That said, Fridays tend not to be days for heroics on the ASX, with end-of-week book balancing likely to cap any advance today.

ECONOMIC NEWS: No major scheduled domestic news today. A busy week in the US ends tonight with revised consumer sentiment, revised inflation expectations and the Treasury currency report.