More predictions we hope to be wrong about

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How prepared are we for the permanent energy crisis ?
	More predictions we hope to be wrong about by Stephen Leeb Inside this weeks update *** Great expectations for the next few weeks, anyway. * More predictions we hope to be wrong about. * Sunspots, hurricanes, cold seas, and global warming. * A commodity that could triple this winter, and big cap stocks that could double. ------------------------------------- As expected, the highs keep rolling in these days. Last week was the third in a row that the Dow made an all-time high. Its now just 50 points away from the 12,000 mark. The S&P is climbing strongly too, setting new recovery highs each week. Is this the start of a new bull market, or just the last gasp before a renewed bear? Only time will tell for sure. In these updates, we only deal in probabilities, not certainties. And right now, according to our technical indicators, the most probable short-term action is higher share prices. This bodes especially well for the big cap, quality stocks weve been encouraging you to invest in. Most likely, they will lead for the remainder of this rally. However, lets reiterate we have not turned long-term bullish. The Transports continue to lag behind the DJIA, and unless they jump to new highs, we cannot believe a new long-term bull market has begun. Instead, we expect a correction will occur sometime after the election, most likely triggered by rising commodity prices and/or geopolitical upheaval. Incidentally, what sets us aside from most commentators today is that we hope we are wrong about almost all our predictions. We truly hope the transports catch up. We hope this current rally has another 15% to go on the upside. We even hope energy prices collapse. We just dont expect it. Thats why we continue to point out that oil service stocks offer you the most value in the market today. COLD SEAS AND COLDER WINTERS Todays low oil prices (at least compared to a year ago) are one good reason to be optimistic regarding stocks. Of course, last year we were experiencing a spike in oil resulting from the devastating hurricane season. But be that as it may. The question now is how long will oil stay this cheap? Not very long, we think. Sometime between Halloween and Christmas, we expect oil prices will resume climbing. The decline in oil and other commodities over the past few months is an aberration brought about in part by a hedge fund trader who made bad bets in natural gas, and in part by the rebalancing of a commodity index. But while the commodity indices dominated by traders sharply corrected, cash commodity prices recently made all-time highs. This tells us industrial demand for commodities remains strong, and that there is little chance of an economic recession for at least another year. (Unless of course a major geopolitical crisis arises, such as an oil embargo.) Regarding oil itself, we think OPEC may make good on its threat to keep oil prices from making a sustained retreat below $60. In fact, the cartel would probably prefer to see $70 oil again. But even if OPEC is bluffing, oil prices dont need its help to rise above $70 again. Old Man Winter may do the job just as easily. You see, the main reason oil prices have not climbed higher, and that natural gas retreated, was that last winter was unusually warm. January, you may recall, felt more like April. Naturally, natural gas demand falls when winter temperatures rise. To a lesser extent, the same is true for oil. By our calculation, last winters historically balmy weather reduced energy use by the equivalent of 120 million barrels of oil, or seven days of demand. For this reason, oil consumption for 2006 is not likely to be much higher than 2005. Last winters high temperatures followed a record number of strong hurricanes in the Gulf of Mexico including Wilma, the most intense hurricane of all time. These hurricanes arose from unusually warm gulf waters. Were not meteorologists. But given their poor record, we dare think that with a few key facts we can forecast temperatures at least as accurately as the average professional weatherman can. So here goes Our sense is that last years high temperatures in the Gulf waters caused not just the severe hurricane season that followed but also the mild winter and a lower demand for energy. This year, we expect the opposite. Gulf waters are much colder than last year. The hurricane season passed this year without trouble. Consequently, we expect winter will be much colder. We also note an article in the September 2006 issue of New Scientist which reports that sunspot activity, having been unusually high for some 70 years, is about to fall off, and may help reduce the earths temperature. This may not completely counteract global warming, but it may help mitigate it. The sun, we suspect, has even more of an influence on earths temperature than human activity. If sunspot activity is falling, resulting in colder ocean waters, the coming winter could be colder than many people expect. Right now, opinion among weather forecasters is divided. Accuweather is calling for a slightly colder winter than average. The National Weather Bureau says it will be average. Were more pessimistic than Accuweather, in light of the colder ocean temperatures being recorded, especially in the Gulf. If we, are right (and as usual, we would rather not be), energy demand will be considerably higher this winter. Natural gas prices, which closed last week at $5.66, could easily spike to last Decembers high of $15. Oil prices would also benefit from a cold winter. We cant say how much, but keep in mind there is virtually no production capacity in the oil industry. As we say, the recent decline in oil was an aberration. So even if winter temperatures are only average this year, oil prices should bounce back. Meanwhile, until oil makes a new high, stocks have clear sailing ahead. Continue to hold all those high quality stocks mentioned above. But own some oil service stocks as well. They are the one group of large cap stocks that could easily double within the year. Until next week, Stephen Leeb Editor, The Complete Investor P.S. A recent article in the New York Times notes that U.S. electricity prices are expected to rise over the next few years, in addition to any increase in the prices of fossil fuels and uranium. The reasons are numerous, including an end to rate protections in many states and the need to rebuild infrastructure. So if natural gas, electricity, and heating oil rise, what do you do? Care to buy a woodstove? http://www.completeinvestor.com/mf/ Emerging Investments --------------------------------------------------------------------- U.S. & CHINDIAN EQUITY MARKETS CONTINUE TO RALLY Employment Remains Strong Inflation is Still A Concern --------------------------------------------------------------------- U.S. & CHINDIAN EQUITY MARKETS U.S. equity prices continued to gain steam this week, as the Dow Jones Industrial Average rose to a new all-time high today and the other major U.S. stock market indices broke up through price-resistance levels on increased trading volume. In addition to rallying to multi-year highs, U.S. equity indices are now trading comfortably above both their long-term (200-day) and short-term (50-day moving averages). Meanwhile, the advance/decline line has also risen to an all-time high. Chindian stocks have also continued to rally, with both the Hang Seng (Hong Kong) and BSE Sensex (India) indices continuing to trade near all-time highs. This weeks market rally came in response to last Fridays strong employment report and the continued decline in energy prices. Although non-farm payrolls grew modesty during September, the governments revision to payroll growth statistics for prior months show that, overall, the employment situation has been stronger in 2006 than originally estimated. Meanwhile, the unemployment rate has fallen during each of the past two months, coming in at 4.6% for the month of September. Initial claims for unemployment benefits a key leading economic indicator remained at very low levels. Tomorrow morning, retail sales for the month of September will be released. Based on reports earlier this week from the nations major chain-store sales, we expect September retail sales to come in strong. Meanwhile, inflationary pressures continue to remain a concern, as the core personal consumption expenditures price index the primary measure of inflation used by the Fed in setting monetary policy rose to its highest level during September since January 1995. Most commodity prices have also continued to rise. We are closely monitoring inflation statistics for signs on what the Fed is likely to do with interest rates going forward. ENERGY In regards to energy prices, crude oil futures fell today to their weakest closing since August 2005. However, as we have stated in previous Weekly Updates, we continue to expect oil and gas prices to rise significantly once the winter heating season sets in. Energy prices could begin to rise sooner than expected if OPEC follows through with recent discussions to cut its oil output by 1 million barrels per day. Until Next Time, Your Emerging Investments Team http://www.emerginginvestments.net/mf/ TCI Enterprises LLC 500 5th Ave., 57th Floor New York, NY 10110 ©2006 TCI Enterprises. All rights reserved. Dr. Stephen Leeb. Dr. Leeb is the editor of The Complete Investor www.complete investor.com. Before starting The Complete Investor, Dr. Leeb was the editor of Personal Finance, a publication that was read by more than 120,000 subscribers. The Complete Investor newsletter has earned awards for Editorial Excellence for 2004 and 2005 by the Newsletter & Electronic Publishers Association. Dr. Leeb is the author of six books on investments and financial trends. His newest book The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel** (Warner Books, 2006), co-written with Glen Strathy, was released in February 2006. It outlines the biggest challenges facing the American economy, and the steps individuals and government can take to forestall them. newsletter	Peak Oil Glance at World's oil Simmons Presentations Hirsch Report (pdf) US Army report (pdf) 4 Biggest Fields Declining Kuwait's Burgan Peaks Cantarell is Dying North Sea in Decline Trouble in Ghawar Ghawar is dying Daqing Peaked Russian Peak I Russian Peak II Iran is The next Target Dick Cheney (pdf) Shell cuts reserves 5th time Rainwater Prophecy Abiotic Oil I Abiotic Oil II Petrodollar Warfare (pdf) This Week in Petroleum Petroleum Monthly Mega Projects 2004 (pdf) Price Quotes/Charts Oil Chart Crude Real Time Quotes CNN Commodities Energy Price Quote Live Gold/Silver Quotes Alternatives or Fantasy? Ethanol (pdf) Ethanol II Oil Shale Oil Shale II Hydrogen Fantasy The Breaking Point EROEI for alternatives Alternative Fuel Data Center Alternative For Farms Uranium Links Uranium Spot Price Uranium Info Center Uranium Fundamentals (pdf) World Nuclear Association North of the Border USA today - Tar sands CIBC World Markets Report Oil Sands Discovery Center Oil sands report Raymond James Report Suncor Energy Canadian Natural Resource Canadian Oil Sands Trust Syncrude Canada Ltd. Western Oil Sands UTS Energy Opti Canada Petrobank Canadian Royalty trusts Central Fund of Canada Cameco Corporation Other Opps Independent Oil & Gas Drilling & Exploration Equipment & Services Oil & Gas Majors Refining & Marketing Streetracks Gold Prudent Bear Fund Clean Energy ETF Investing for Apocalypse Dollar/Precious Metals Dollar at Risk Secret of Gold Yield Curve & Recession Straight Talk on Mining Crude Thoughts About Us

The View From The Peak

Home Multimedia Forum Books Articles^New! News/Updates^New!

How prepared are we for the permanent energy crisis ?

More predictions we hope to be wrong about

by Stephen Leeb

Inside this weeks update

***** Great expectations for the next few weeks, anyway.

***** More predictions we hope to be wrong about.

***** Sunspots, hurricanes, cold seas, and global warming.

***** A commodity that could triple this winter, and big cap stocks that could double.

-------------------------------------

As expected, the highs keep rolling in these days. Last week was the third in a row that the Dow made an all-time high. Its now just 50 points away from the 12,000 mark. The S&P is climbing strongly too, setting new recovery highs each week. Is this the start of a new bull market, or just the last gasp before a renewed bear?

Only time will tell for sure. In these updates, we only deal in probabilities, not certainties. And right now, according to our technical indicators, the most probable short-term action is higher share prices. This bodes especially well for the big cap, quality stocks weve been encouraging you to invest in. Most likely, they will lead for the remainder of this rally.

However, lets reiterate we have not turned long-term bullish. The Transports continue to lag behind the DJIA, and unless they jump to new highs, we cannot believe a new long-term bull market has begun. Instead, we expect a correction will occur sometime after the election, most likely triggered by rising commodity prices and/or geopolitical upheaval. Incidentally, what sets us aside from most commentators today is that we hope we are wrong about almost all our predictions.

We truly hope the transports catch up. We hope this current rally has another 15% to go on the upside. We even hope energy prices collapse. We just dont expect it. Thats why we continue to point out that oil service stocks offer you the most value in the market today.

COLD SEAS AND COLDER WINTERS

Todays low oil prices (at least compared to a year ago) are one good reason to be optimistic regarding stocks. Of course, last year we were experiencing a spike in oil resulting from the devastating hurricane season. But be that as it may. The question now is how long will oil stay this cheap? Not very long, we think.

Sometime between Halloween and Christmas, we expect oil prices will resume climbing. The decline in oil and other commodities over the past few months is an aberration brought about in part by a hedge fund trader who made bad bets in natural gas, and in part by the rebalancing of a commodity index. But while the commodity indices dominated by traders sharply corrected, cash commodity prices recently made all-time highs.

This tells us industrial demand for commodities remains strong, and that there is little chance of an economic recession for at least another year. (Unless of course a major geopolitical crisis arises, such as an oil embargo.)

Regarding oil itself, we think OPEC may make good on its threat to keep oil prices from making a sustained retreat below $60. In fact, the cartel would probably prefer to see $70 oil again. But even if OPEC is bluffing, oil prices dont need its help to rise above $70 again.

Old Man Winter may do the job just as easily. You see, the main reason oil prices have not climbed higher, and that natural gas retreated, was that last winter was unusually warm. January, you may recall, felt more like April. Naturally, natural gas demand falls when winter temperatures rise. To a lesser extent, the same is true for oil.

By our calculation, last winters historically balmy weather reduced energy use by the equivalent of 120 million barrels of oil, or seven days of demand. For this reason, oil consumption for 2006 is not likely to be much higher than 2005. Last winters high temperatures followed a record number of strong hurricanes in the Gulf of Mexico including Wilma, the most intense hurricane of all time.

These hurricanes arose from unusually warm gulf waters. Were not meteorologists. But given their poor record, we dare think that with a few key facts we can forecast temperatures at least as accurately as the average professional weatherman can. So here goes Our sense is that last years high temperatures in the Gulf waters caused not just the severe hurricane season that followed but also the mild winter and a lower demand for energy.

This year, we expect the opposite. Gulf waters are much colder than last year. The hurricane season passed this year without trouble. Consequently, we expect winter will be much colder. We also note an article in the September 2006 issue of New Scientist which reports that sunspot activity, having been unusually high for some 70 years, is about to fall off, and may help reduce the earths temperature.

This may not completely counteract global warming, but it may help mitigate it. The sun, we suspect, has even more of an influence on earths temperature than human activity. If sunspot activity is falling, resulting in colder ocean waters, the coming winter could be colder than many people expect.

Right now, opinion among weather forecasters is divided. Accuweather is calling for a slightly colder winter than average. The National Weather Bureau says it will be average. Were more pessimistic than Accuweather, in light of the colder ocean temperatures being recorded, especially in the Gulf.

If we, are right (and as usual, we would rather not be), energy demand will be considerably higher this winter. Natural gas prices, which closed last week at $5.66, could easily spike to last Decembers high of $15. Oil prices would also benefit from a cold winter. We cant say how much, but keep in mind there is virtually no production capacity in the oil industry.

As we say, the recent decline in oil was an aberration. So even if winter temperatures are only average this year, oil prices should bounce back. Meanwhile, until oil makes a new high, stocks have clear sailing ahead. Continue to hold all those high quality stocks mentioned above. But own some oil service stocks as well. They are the one group of large cap stocks that could easily double within the year.

Until next week,

Stephen Leeb

Editor,

The Complete Investor

P.S. A recent article in the New York Times notes that U.S. electricity prices are expected to rise over the next few years, in addition to any increase in the prices of fossil fuels and uranium. The reasons are numerous, including an end to rate protections in many states and the need to rebuild infrastructure. So if natural gas, electricity, and heating oil rise, what do you do? Care to buy a woodstove?

http://www.completeinvestor.com/mf/

Emerging Investments

---------------------------------------------------------------------

U.S. & CHINDIAN EQUITY MARKETS CONTINUE TO RALLY

***Employment Remains Strong

*** Inflation is Still A Concern

---------------------------------------------------------------------

U.S. & CHINDIAN EQUITY MARKETS

U.S. equity prices continued to gain steam this week, as the Dow Jones Industrial Average rose to a new all-time high today and the other major U.S. stock market indices broke up through price-resistance levels on increased trading volume. In addition to rallying to multi-year highs,

U.S. equity indices are now trading comfortably above both their long-term (200-day) and short-term (50-day moving averages). Meanwhile, the advance/decline line has also risen to an all-time high. Chindian stocks have also continued to rally, with both the Hang Seng (Hong Kong) and BSE Sensex (India) indices continuing to trade near all-time highs.

This weeks market rally came in response to last Fridays strong employment report and the continued decline in energy prices. Although non-farm payrolls grew modesty during September, the governments revision to payroll growth statistics for prior months show that, overall, the employment situation has been stronger in 2006 than originally estimated.

Meanwhile, the unemployment rate has fallen during each of the past two months, coming in at 4.6% for the month of September. Initial claims for unemployment benefits a key leading economic indicator remained at very low levels. Tomorrow morning, retail sales for the month of September will be released. Based on reports earlier this week from the nations major chain-store sales, we expect September retail sales to come in strong.

Meanwhile, inflationary pressures continue to remain a concern, as the core personal consumption expenditures price index the primary measure of inflation used by the Fed in setting monetary policy rose to its highest level during September since January 1995.

Most commodity prices have also continued to rise. We are closely monitoring inflation statistics for signs on what the Fed is likely to do with interest rates going forward. ENERGY In regards to energy prices, crude oil futures fell today to their weakest closing since August 2005.

However, as we have stated in previous Weekly Updates, we continue to expect oil and gas prices to rise significantly once the winter heating season sets in. Energy prices could begin to rise sooner than expected if OPEC follows through with recent discussions to cut its oil output by 1 million barrels per day.

Until Next Time,

Your Emerging Investments Team

http://www.emerginginvestments.net/mf/

TCI Enterprises LLC
500 5th Ave., 57th Floor
New York, NY 10110

©2006 TCI Enterprises. All rights reserved.

Dr. Stephen Leeb. Dr. Leeb is the editor of The Complete Investor www.complete investor.com. Before starting The Complete Investor, Dr. Leeb was the editor of Personal Finance, a publication that was read by more than 120,000 subscribers. The Complete Investor newsletter has earned awards for Editorial Excellence for 2004 and 2005 by the Newsletter & Electronic Publishers Association.

Dr. Leeb is the author of six books on investments and financial trends. His newest book The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel (Warner Books, 2006), co-written with Glen Strathy, was released in February 2006. It outlines the biggest challenges facing the American economy, and the steps individuals and government can take to forestall them. newsletter

Peak Oil
Glance at World's oil
Simmons Presentations
Hirsch Report (pdf)
US Army report (pdf)
4 Biggest Fields Declining
Kuwait's Burgan Peaks
Cantarell is Dying
North Sea in Decline
Trouble in Ghawar
Ghawar is dying
Daqing Peaked
Russian Peak I
Russian Peak II
Iran is The next Target
Dick Cheney (pdf)
Shell cuts reserves 5th time
Rainwater Prophecy
Abiotic Oil I
Abiotic Oil II
Petrodollar Warfare (pdf)
This Week in Petroleum
Petroleum Monthly
Mega Projects 2004 (pdf)

Price Quotes/Charts
Oil Chart
Crude Real Time Quotes
CNN Commodities
Energy Price Quote
Live Gold/Silver Quotes

Alternatives or Fantasy?
Ethanol (pdf)
Ethanol II
Oil Shale
Oil Shale II
Hydrogen Fantasy
The Breaking Point
EROEI for alternatives
Alternative Fuel Data Center
Alternative For Farms

Uranium Links
Uranium Spot Price
Uranium Info Center
Uranium Fundamentals (pdf)
World Nuclear Association

North of the Border

USA today - Tar sands
CIBC World Markets Report
Oil Sands Discovery Center
Oil sands report
Raymond James Report
Suncor Energy
Canadian Natural Resource
Canadian Oil Sands Trust
Syncrude Canada Ltd.
Western Oil Sands
UTS Energy
Opti Canada
Petrobank
Canadian Royalty trusts
Central Fund of Canada
Cameco Corporation

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