June 16, 2009 (FinancialWire) — Dr. Joe Duarte (http://www.joe-duarte.com) recently noted: As gasoline prices rise, you’d expect the stocks of major refiners, such as Valero (NYSE: VLO) to rise as well. That is far from the truth at this point, though.

Duarte added: As we headed south down I-45 this weekend, headed for the Texas Grand Slam, the annual junior tennis championships for the state, we couldn’t help but to be amazed at the amount of traffic, and the prices for gasoline.

If truck and automobile traffic is a leading indicator of a strong economy, then three to six months from now we should have GDP growth above 3%. It was literally packed on the highway, with both lanes, north and south heavily populated by vehicles, especially semi-trailers, an indicator of commerce.

What makes it more interesting is that rising gasoline prices didn’t seem to make a dent in the traffic. Regular was averaging above $2.60 all along the main drag, and some of the side roads we took to get to College Station.

Regular readers of Tales of the Road know that over the past twelve months we’ve traveled to many smaller markets, such as Dothan, Alabama, Waco, and Wichita Falls, Texas, as well as larger cities, such as Austin, San Antonio, and Houston, Texas. We’ve driven through parts of Florida, and even been to the island of Maui.

Through our travels, one factor has remained true. Smaller towns with colleges at the center of their economy have fared the recession better than other places. Tourism has also been a lifesaver for communities, with Pensacola and Maui holding up fairly well, compared to cities in the rust belt and the Northeast U.S. where industry is the leading employer.

Aside from tourism, we also noted, that Houston, whose economy is heavily tilted toward oil, was doing well despite lower oil prices.

Which brings us back to Valero, a leading U.S. refiner, whose shares are on the verge of a nervous breakdown. With oil prices having fallen, feedstock for its refiners has been cheap. And with prices falling, but demand starting to pick up, Valero and the refiners are in their sweet spot for making money.

A cruise through the news shows that Valero just did a secondary offering, raising some $270 million, which in the process has diluted its shares, just as the market looks ready to roll over into the summer non-rally for 2009.

The company is investing heavily in alternative fuels as well, recently buying ethanol facilities from a bankrupt refiner of ethanol. It’s also getting more involved with renewable energy and is aggressively buying assets from the likes of Dow Chemicals.

Duarte’s conclusion: The short term may be a bit turbulent for Valero. But, we like what it’s doing. At some point, it’s likely that we’ll be able to pick up shares at lower prices with higher potential for appreciation. Traveling can be a thought-provoking proposition.

Make sense of today’s nonsense. Get Doctor Joe Duarte’s Market I.Q., at:

http://www.joe-duarte.com/free/order_choices.asp and subscribe to www.joe-duarte.com, for its daily energy review and stock picks.

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Duarte partners with the Investors Resource Center at Investrend Information (http://www.investrendinformation.com).

Duarte’s IntelligentForecasts.com (http://www.intelligentforecasts.com) provides free news coverage and analysis, and his daily articles and news summaries offer recommendations and analysis for ETFs, and individual stocks in the technology, health and biotechnology, and energy sectors. Duarte has combined expertise in health care, energy, and the effects of politics and global intelligence on the financial markets offer a unique blend of insight and information to thousands of active investors and political and intelligence aficionados around the world on a daily basis.

He is the author of: Futures And Options For Dummies, Successful Energy Sector Investing, Successful Biotech Investing and co-author of After-Hours Trading Made Easy. In early 2001, in Successful Energy Sector Investing, he correctly predicted that Venezuela’s political problems could lead to an energy crisis in the United States. He has also appeared as a weekly guest on Market Mavens Radio and has logged appearances on KNX radio in Los Angeles, Financial Sense.com radio, and Wall Street Radio.

One of CNBC’s original Market Mavens, Dr. Duarte has been writing about the financial markets since 1990. His articles and commentary have been featured on CBS Marketwatch, Barron’s, Smart Money, Medical Economics, and in Technical Analysis of Stocks and Commodities magazines. In 2003, Doctor Duarte received second place, in the professional section, of the Medical Economics Investment Challenge with a 12-month return of 42%.

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