|Written by Rob Goldman|
The Moment(s) You Have Been Waiting For
Well, here we are. Summer is over. The kids are back to school. One political convention is down, and one more is just starting. Unemployment results for August are due out on Friday. End of quarter attempts to slam in revenue will be starting as companies scramble to meet expectations. Investors will start to return to the market, building volume beyond the 4 billion share mark each day with those stocks that comprise the S&P 500 Index. And if that isn’t enough, we are entering the traditionally weakest period of the year where bargains can be had if you hit it just right. Or, stocks just tank for weeks on end. At least the 2012 NFL football season begins in earnest on Wednesday.
The Presidential election is exactly 2 months away and it is likely that the market will swing in the negative if the incumbent Democratic President appears to obtain a lead in swing states while it may rise in anticipation of a leadership status for the Republican challenger. The geopolitical situation in the Middle East may also play a role in the market direction. These two factors make the September period very difficult to predict, but we can feel comfortable saying that a return to volatility should be expected.
While understanding what the big picture holds, the keys to success will be targeting and projecting the interim market moves. For example, since this is a short week, it is jam-packed with no fewer than 18 items on the economic calendar which will impact trading. Bear in mind that big volume is going to return this month as portfolio managers try to position their holdings for Q4 and the outcome of the elections. Therefore, the sentiment could shift based upon the economic calendar results, along with Q3 earnings pre-announcements, and other factors.
The key reports on unemployment and nonfarm payrolls for August will be released on Friday at 8:30 AM, and are preceded by Thursday’s initial jobless claims figures. Other important news will be the release of auto and truck sales, later today. Strong numbers could help rally the sobering market.
The key indices had a strong month, with returns ranging from 2-4%. Looking ahead, we expect to see gold and other commodities continue their modest upward trajectories while the market turns in a small decline, along with more pronounced volatility. Given the inherent up-and-down nature of September, it may be wise to engage in an opposite day habit, i.e. sell on up days and buy on down days. We get the sense that microcaps are about to make a run in the not too distant future but would buy those that are primed for real change in the near term, rather than those with potential further down the road, as it still may be a trader’s market.
On the bigger stock side of the aisle we recommend buying E&P provider such as Double Eagle Petroleum (NASDAQ – DBLE - $4.45), which we highlighted in these pages last week, and is up 15%.
On the Opportunity Research side, we are reiterating our recommendation on Liberty Gold (OTCBB—LBGO—$0.56) this morning, to take advantage of the gold surge. We would also urge investors to review a pick from late June. We identified Mantra Venture Group (OTCBB—MVTG—$0.15) as having the most disruptive energy technology in years. The stock is up 50% and seems to be trending higher on strong volume just in the past week. It looks like additional milestones may be around the corner.
Here is a link to a recent interview with management from the Small Cap Voice website, along with a link to our initiation report.
Okay, I recognize these NFL playoff picks aren’t exactly what you are looking for. But, we all have to have some fun too, right? Besides, perhaps I might be a negative barometer? Feel free to email me your picks too.
2012 NFL Playoff Selections:
AFC East: New England Patriots
AFC South: Houston Texans
AFC North: Pittsburgh Steelers
AFC West: Kansas City Chiefs
Wild-cards: Buffalo Bills, Denver Broncos
AFC Champs: Houston Texans
NFC East: New York Giants
NFC South: Atlanta Falcons
NFC North: Green Bay Packers
NFC West: San Francisco 49ers
Wild cards: Chicago Bears, Seattle Seahawks
NFC Champs: Green Bay Packers
Super Bowl Champs: Green Bay Packers
Until next week…
Analyst: Robert Goldman
It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.
The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.
This report or newsletter does not take into account the investment objectives, financial situation, or particular needs of any particular person. This report or newsletter does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with the FINRA or with any state securities regulatory authority.
ALL INFORMATION IN THIS REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.
For more information, visit our Disclaimer: www.goldmanresearch.com.