The Dow Jones Industrial Average closed below 10,000 today for the first time in four years. The sell-off has been particularly brutal among stocks levered to commodities and the global growth story, with most names down over 60% since oil peaked in July, and many hitting multi-year lows. This summer’s surge in resources was mainly fueled by the thesis that the ranks of the world’s middle class are swelling in the developing world, and that these newly affluent people will hunger for materials. If you believe that this macro long-term trend remains intact, and that the current financial crisis amounts to little more than a speed bump, then it is a good idea to compile a shopping list of cyclical stocks that could bounce back hard during a broader market turnaround.

There were several indications that today’s intraday lows could mark at least a short-term bottom. The

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No one knows where oil is heading. Only four months ago (May ’08), oil cleared $120 a barrel on its way to $145. Within a month, analysts were calling for $150, even $200 oil. Countless graphs and charts surfaced showing how demand was outpacing supplies. Pundit after pundit commented that emerging markets like China and India were fueling an unstoppable mega-boom for black gold. Then Russia invaded Georgia, and oil took a nose dive falling more than 20 consecutive days from $145 down to $115 a barrel. Hurricane Gustav gave it a brief shot in the arm, but the damage was less than expected and oil rolled over the next day. Now analysts are predicting oil will fall to $100 or even $85 a barrel. Again the charts and graphs are surfacing, this time showing that both international and domestic demand for oil is ...

To say that trading energy stocks has been difficult in recent months is a major understatement. When you see that even an industry giant like Chesapeake Energy Corp. (NYSE: CHK) lost money in its hedging activities, you know that trading activity during that quarter was extremely wild. At Friday’s closing price of $48.40, Chesapeake Energy shares are down 35% from their 12-month high of $74. But the cause is clear. When crude oil shot up from about $100 per barrel to $135 per barrel a few months ago - and natural gas skyrocketed from $10 per billion cubic feet (bcf) to $13.50 per billion cubic feet at the same time, prompting all sorts of investigations into speculative activities by the Commodity Futures Trading Commission, and in turn prompting calls for Congress to make it harder for financial investors to buy energy ...

A year ago, the prevailing forecast was for oil prices to decline to the mid-50’s for more than a year. Opinions have changed in the face of the reality of high current prices.

Natural gas, which was at historic highs, was used as justification for utility companies to obtain rate increases for their electricity and natural gas customers. Gas has managed do come down considerably since then. We won’t hold our breath expecting those same utility companies to request rate decreases now that gas prices have declined.