The key to oil hitting bottom is the need for a catalyst to trigger the highly anticipated reversal. The global oil glut continues to build – most recently with Iran adding 500k barrels/day to an already saturated market. Iran plans to increase production another 500k barrels/day in 6 months. I anticipate oil will continue its free-fall until bankruptcies decimate the energy sector. This will be the catalyst, in my judgement for a fall-off in production and a true basis for oil prices turning up. At present, producers are pumping their way to the bottom as they struggle to meet overly leveraged debt obligations. Anecdotal evidence suggests $20/barrel represents maximum pain, ie bankruptcy for many of the drillers. That said, we have seen a trading cycle in oil over the last three months; three weeks down, one up, three weeks down, one up. Last week was up. If the pattern continues oil will fall this week. Don’t expect a final conclusion to this generational collapse in oil prices for at least another six-nine months. Until then, world stock markets should continue to deteriorate, especially in China and its peripheral trading partners.