SCALING TIME?

Good news is like yin and yang, almost always good for some and bad for others.

The International Energy Agency's latest report released today is a case in point. Crude oil prices hover near four year lows as demand seems to be drying up faster than the Los Angeles River in  mid-July.

The debate rages whether the price of oil has to hit $80 or even $70 a barrel to crimp U.S. shale producers enough to cut production. Much of the concern centers on a slowing global economy from China to Europe to Russia 

Of recent concern is OPEC members cutting prices rather than the expected move of cutting back production. Two days ago Iraq joined Saudi Arabia and Iran in cutting prices as other OPEC members like Venezuela are feeling the pain.

Meanwhile, stories like these,"Growth Fears Pushing Fund Managers From Risky Positions, Survey Finds," "Growth Jitters Topple Stocks Again" and "What Can Be Done To Revive Global Economic Growth?" abound.

Germany's announcement today about expected growth weakness for the rest of this year and into 2015 didn't help the situation. Officials there cut forecasts to 1.2% for this year down from a previous 1.8% and only 1.3% for 2015 off from a previously expected 2%.

One can depend on MSM doing what they do best, spreading gloom disguised as their brand of truth. Are these troubling times? Yes. Could things possibly get worse? Always a posibility. But it's just that possibility that creates opportunity.

Risk and opportunity go together like Siamese twins despite regulators' best efforts to outlaw any and all risk.

What this situation ought to be saying to you is what if these dire predictions are incorrect? Even the IEA report suggested demand will increase and might already be underway.

“Recent data suggest that may already have started to happen. Record-high refinery throughputs in August and improved margins worldwide suggest demand is perhaps not as dismal as it might appear,” citing big changes in trade flow were masking demand perception as oil producers descend on Asian markets.

As the U.S. imports less oil producers like Nigeria, Angola and others look elsewhere. The cost of producing oil in the U.S. ranges between $76-$77 a barrel, according to some observers.

Another headline we spotted today went something like this: The global recovery is a long way off. Maybe so. But our mood smells a scaling into position opportunity here. With the risk-reward figures growing in our favor daily with each nasty headline.

Like we said, good news is like yin and yang. Lower energy prices up to a point may help the economy, but what they ultimately bring with them may turned into one of those be careful what you wish for situations.

In the interim we will be going scaling. 
t. man hatter