Not Too Hot, Not Too Cold

The parallels between the current recovery and the “jobless
recovery” of 2003-2004 just keep coming.

Readers may remember the period, marked by investors’ “not
too hot, not too cold” bias. Stocks would sell-off if economic data was too
good, because it implied the Greenspan Fed would reverse its interest rate

Conversely, data that hugged the flat line, came in slightly
positive, or even slightly negative, would rally stocks because it meant
there was no danger of an end to the low interest rate environment.

I would contend that it’s the best possible news for today’s
new jobless claims and 2Q
GDP revision to come in slightly better than expected.

As we know, the Bernanke Fed has stated it stands at the
ready to pump more liquidity into the system if growth remains weak. Today’s
data does nothing to undermine that promise. And at the same time, the slight
improvement reinforces the notion that the economy is recovering, just not
fast enough. Perfect!

Today is the last
day of the Third Quarter. And September has been a great month for stocks,
the best since 1939. As you know, I got bullish in the final days of August.
And the S&P 500 jumped 95 points.

Unfortunately, the stock I chose to ride was Bank of America
BAC). It jumped out
strongly to start the month, but has seriously lagged over the last couple of
weeks. The stock still looks attractive to me, and I have a hard time seeing
it drop back to tangible book value, which is around $12.60.

Despite this morning’s bullish bias, I would expect to see a
pretty sharp move lower for stocks, either today or tomorrow.

The S&P 500 is up against resistance at 1,150 for the
umpteenth time in the last 8 sessions. And after such a great run, it would
seem likely that mutual funds will take some gains on either the last day of
the third quarter or the first day of the fourth quarter.

Also, 3Q earnings kick off next week with Alcoa (NYSE:AA) on
Friday, October 7.

Such a move would very likely be a dip to buy…

Oil prices have
been on fire lately. Crude is pushing $80 a barrel. But this time, oil and
other energy stocks are responding with some solid gains.

Oil stocks were virtually ignored during the summer. It’s
about time oil and energy stocks started moving.

My favorite oil stock from the
Energy World Profits
portfolio is up
better than 16% in the last 5 trading days. All told,

Energy World Profits
subscribers are up
29% on the stock since May.

If you’re interested, the company is Bakken shale oil
producer Brigham Exploration (Nasdaq:
BEXP). It’s got one of the best land positions
in the Bakken, and it’s also executing one of the most aggressive drilling
programs. And, it’s produced several of the top-producing wells in this
exciting region.

I’m not sure I’d run out and buy the stock at current
levels. But on a pullback, it would be very attractive. Brigham is just one
of 3 Bakken oil stocks in the
Energy World Profits

If you don’t know about the Bakken, you should. It’s now the
second largest land-based oil reserve in the
U.S., after Alaska. It’s now estimated that the Bakken could
add as much as 1 million barrels a day to
oil supply.

You can learn more about the Bakken and how to profit
America‘s last great oil

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