Tag - Kog

Stocks extended their gains for a second day in a row with all major indices closing up, though below a one percent gain.

The Dow finished the session at 9,398, up 37 points; the Nasdaq closed today at 2,009, up 11 points; and the S&P 500 finished at 1,012, up 7 points.

The Russell 2000 index, a composite of the leading small-cap stocks, closed at 575, up 4 points.

Small-cap price movers were lead by Kodiak Oil (Amex:KOG), up 30%. Following KOG were Dot Hill Systems (Nasdaq:HILL), up 22%; Pacer International (Nasdaq:PACR), up 16%; BioSante Pharmaceuticals (Nasdaq:BPAX), up 16%; and ACADIA Pharmaceuticals (Nasdaq:ACAD), up 16%.

*****Last week's better-than-expected payroll data is being offset by new jobless claims today. 558,000 people filed new claims for unemployment benefits. That was more than the median estimate of 545,000.

The number of people collecting unemployment fell by 141,000 and that lowers the unemployment rate. That sounds good, but I don't think it is. Most likely, benefits for these 141,000 have run out. So what little money they had coming in is now gone and they've just stopped asking. 

*****The most direct effect of massive unemployment is less spending and less revenues for America's retailers. Wal-Mart (NYSE:WMT) beat earnings but missed on revenue. That basically means Wal-Mart fired a bunch of people to cut costs, then those people spent less at the store.

Overall, retail sales were down 1% in July after a 0.8% rise in June. With the unemployment rate still expected to rise to over 10%, and likely to stay at high levels for a few years, there's not a lot of upside for the retail sector.

*****SmallCapInvestor PRO members are just a few pennies away from knocking down another 100% winner. This time, it's a Chinese organic fertilizer company. The stock has been on a tear for the last month. And despite the fact that it's nearly doubled, the forward P/E is 17 and the PEG ratio is .45. In other words, there are more gains to come.

I have a new special situations report with detailed research on my 100% China winner plus two other high flying Chinese stocks. Click here to get this report now.

And speaking of SmallCapInvestor, we're open for voting for the t-shirt slogan for my first book, The Small Cap Investor: Secrets to Winning Big with Small Cap Stocks. There are some excellent slogan ideas, and if you'd like to help pick a winner, you can cast your vote for the best slogan at the SmallCapInvestor Facebook page.

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I'd like to thank SCI Daily readers for helping with the marketing of my first book. You're helping make it a success and I really appreciate it.

*****I probably shouldn't do this, but TradeMaster Daily Stock Alerts technical analyst Jason Cimpl is alerting his readers to breakouts in the biotech sector. A couple names he's watching are Orexigen (Nasdaq:OREX) and Jazz Pharmaceuticals (Nasdaq:JAZZ).

Jason thinks Jazz is good for a 21% move from current levels, so if you're looking for a short-term trade from TradeMaster, this might be a good one.

Be on the look-out for tomorrow's SCI Daily as Jason will once again provide readers with video charting of the week's movements and most importantly, his outlook for how to trade for profits in the coming week. Look for this in tomorrow's issue of SCI Daily.

*****Investors are ignoring short-term weakness in oil demand and focusing on the long-term fundamentals. Oil prices are back over $71 a barrel today despite the highest reserve levels since 1991.

Barclay's expects oil prices to average $76 a barrel in the third quarter. And don't forget, hurricane season is looming. Oil stocks should be bought on dips.

Ian Wyatt
Editor
SCI Daily

Today was options expiration and it made for dull trading. The S&P 500 finished up 2.74 at 921, the Dow Industrials finished down 16.85 at 8,538XXX. The Nasdaq was the strong index, it finished the day up 19.75 at 1,827 on a Goldman Sachs (NYSE:GS) upgrade of Microsoft (Nasdaq:MSFT). 

Oil prices fell below $70. But even better, gasoline futures dropped below $2 after inventory data showed a huge surplus. That suggests prices at the pump may start to head lower.

Large cap oil stocks like Exxon-Mobil (NYSE:XOM) and Chevron (NYSE:CVX) were down in the 1% range, but several micro-cap oil & gas exploration stocks were up. Brigham Exploration (Nasdaq:BEXP) was up 4.36%, Kodiak Oil (AMEX:KOG) was up 7% and Cano Petroleum (AMEX:CFW) was up 3.5%.

The Russell 2000 finished much like its large-cap brethren, with a minimal 3.16 point gain.

Top small cap winners for the day included TerreStar (Nasdaq:TSTR) up 30%, Sealy (NYSE:ZZ) up 20.5% and Smith and Wesson (Nasdaq:SWHC) up 21.9%.

Small cap decliners of note include A-Power Energy (Nasdaq:APWR) down 12%, E*Trade (Nasdaq:ETFC) down 11% and Cost Plus (Nasdaq:CPWM) down 13%.

So now the government is actually going to subsidize car sales with up to $4,500 in incentives for car buyers who get rid of cars that get 18 mpg or less.  

I understand that the auto industry is hurting. And I also get that more efficient cars help reduce our dependence on foreign oil. But is it appropriate to use tax payer dollars to fund auto purchases?  

Perhaps if we were talking about something that is a necessity, like farming, subsidies make some sense. After all, we need farmers. I think we have to consider cars a luxury, or at least a discretionary purchase.  

Not only that, but a car subsidy can only create temporary demand. And given the precipitous drop in car sales (10 million vehicles will be sold this year as opposed to 16 million in 2007), it's highly unlikely any momentum can be created. Not with unemployment on the rise. And not with home values still falling.  

*****Increasing demand based on stimulus spending is a temporary fix. The government is just buying time hoping that the economy will recover. But many of the signs of recovery are based in stimulus spending.  

*****Analysts are now acknowledging that oil has been rallying on a falling dollar and on expectations of price inflation. Of course, the potential for price inflation is, once again, directly related to government stimulus spending.  

The massive amounts of Treasury bonds that have been and will be sold are boosting interest rates and driving the value of the U.S. dollar down. So any asset priced in dollars is rising in price. Like oil. Mind you, that doesn't mean its value is rising, just its price.
 
At some point, higher oil prices will affect the prices of other goods. But as I've noted before, it's likely to be a while before producers are able to raise prices in the current economic environment. Remember, it wasn't until 2007 that inflation really started to become an issue.  

*****Another catalyst for commodity prices in general is supply. Global demand is down, credit has been difficult to get, and miners and producers have not been investing in increasing supply.  

That sets the stage for supply/demand imbalances when economic growth returns.  
We'll be discussing these topics and our bullish outlook for commodity stocks in next Wednesday's Video Conference. It's titled Inflation Busters: Discover the Stocks to Grow and Protect Your Wealth and will air on Wednesday, June 24 at 6 pm. It's free to attend, you can sign up HERE.  

*****Jason Cimpl, technical analyst at TradeMaster Daily Stock Alerts, has his latest video chart analysis ready for you. Last Friday, Jason absolutely nailed this week's trading. I hope you find this week's analysis just as useful. Here's the LINK.