– The Stock Market Companion –
15MinuteStocks
Market Update
April 19, 2010
——- Stock Market Investing since the 1980’s ——-
Published all Market Days
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 Today’s SMC Watchlist

– Executive Summary –

The markets finished strong in the face of adversity.  Asian markets were down hard overnight and the concerns surrounding Goldman Sachs Group Inc. (GS) were spreading fear around the globe.  Nations – such as Germany and Britain – were expressing their own dissatisfaction in “Goldilocks” (an affectionate term a German investor friend of ours uses for Goldman).  In fact many are expressing themselves as if their financial “furniture” too has been used a bit hard by GS. For us, things have begun to appear as if the year long rally has begun to lose its luster, and Friday’s event surrounding GS is a catalyst to head to the sidelines… (see more below).

The broader market (SP-500) and DOW (DJ-30) finished strong this afternoon as a rumor emerged that the SEC was perhaps split on its decision on whether to pursue legal action against Goldman Sachs. (Source: Business Insider)  The NASDAQ closed negative for the day by a hair.  We’ll call it flat for the day.

(For our concise market assessments, market details, stock ideas, and SMC return on investments – see below)  

– Markets “At a Glance” –

(Please scroll down to the end of the report to see your favorite benchmarks – Dollar, Oil, Gold … closing prices and daily direction.)

Market	Price (Today’s Close)	Unit of Measure	Today’s Direction
SP-500	1,197.52	Index	UP = +5.39 points
DOW-30	11,092.05	Index	UP = +73.39 points
NASDAQ	2,480.11	Index	Flat = -1.15 points
NASDAQ 100	2013.53	Index	Flat = +.69 points

– Market Trends –

Trend	SP-500	DJ-30	NASDAQ	NASDAQ 100
Short Term	Lateral	Lateral	Lateral	Lateral
Intermediate	Lateral	Lateral	Lateral	Lateral
Long Term	DOWN	DOWN	DOWN	DOWN

*Summary of terms from Trader Vic II-Principles of Professional Speculation (pg. 140-141)
*_________* Represents a change in trend rating.

Friday we wrote, “The financials have been a major driver in the recent advance off the February lows.  Today probably marks at least a pause in their advance and a possible diminishing value in some financials.  This will be a drag on the broader market.”   Friday, we re-classified the short term trend as lateral.

– Today’s Highlights –

Today was mostly a day of investors trying to weigh out the inter-relationship of Goldman Sachs troubles with the rest of the market.  Two things played out to cause Goldman stock to close positive for the day –

1.  A rumor that the SEC was not unanimous in their decision to sue Goldman. (Source: Business Insider)

2. Goldman announced that they are pulling forward their earnings report and subsequent earnings call to tomorrow AM. (Source: Briefing.com)

Consumer sentiment numbers on Friday last week were a disappointment, but today March leading indicators were above consensus estimates. (Source: Marketwatch.com)

 

– Stock Investing Specifics and Strategies –

For those stock investors who have been enjoying this rally since the market bottom last March, and own “diversified” mutual funds, this may be a good time to learn how to move to the sidelines with the purchase of money market funds within the fund organization.  We are not saying that you have to move to cash now, but it is always good to know your options and understand the process of how to move to cash when you need to.  Some of you may find it desirable to make that move now.  Some fund families only allow a certain number of such moves / quarter, so it’s wise to understand the fund specific characteristics of moving into cash.

At the SMC we don’t own “diversified” mutual funds.  For us, we want to own stocks that are moving up or highly probable of moving up based on changing conditions within the company (management, focus…), it’s products, its industry – AND – because of a favorable background market.  We learn what’s going on at the companies of the stocks we are interested it, determine excellent entry points for share purchase, and place our investments.  When we don’t have a good idea of a specific stock story, we are in cash.

This is a time to be either heading to the sidelines by selling stocks that have made strong runs or – in certain RARE circumstances – allowing the market to show you how the stocks that you have selected handle the heat. We also are interested in seeing how Intel Corporation (INTC) handles this market turbulence.  Their earnings were great.

As we mentioned on Friday, we like the Ford Motor Co. (F) and YRC Worldwide (YRCW) situations so much, that we are willing to give these stocks some time to show us their intentions in light of the existing change of events with the background market.

But Ford and YRCW are very unusual stocks.  In the case of Ford, how often does it happen that the dominant player in a particular industry – in this case, Toyota – suddenly stumbles so gravely and offers such big opportunities for market share gains to competitors?  Toyota has absolutely self-destructed.  It wasn’t but a month ago that their CEO was in Washington offering sincere apologies, and last week their premier SUV was rated as “unsafe” by Consumer Reports.  And at the same time, Ford has played it’s hand of cards absolutely flawlessly – including turning down a big hand-out from the government, coming to the market with 80%+ new models, and hiring proactively – before the financial crisis – outside management that knows how to execute.  This is a “perfect storm” in Fords favor – and still the market values it at a 40% discount to the market average (we hope to debut our SMC Blog with “Ford Math” yet this week).  We don’t want to sell this one since Toyota announced more troubles last week.  At the same time we do need to be aware that Ford’s earnings report is on 4/22/2010 and we would like to see a meaningful advance in the stock prior to earnings.

And in the case of YRCW, it is 3X the size of some of its competition (Werner Trucking), was a $60/share stock, came to the absolute threshold of bankruptcy, convinced its bondholders to take common stock, paid down a big portion of their debt, convinced their drivers to take pay cuts, has made dramatic indirect labor cuts, says that its shipping volumes are improving and that it might be EBITDA positive in the second quarter, other players in the industry (read: UPS) have pre-announced incredible earnings that confirm that the industry may be turning around, and YRCW stock is selling for 0.64/share all day long!  We don’t want to sell that one unless it shows real weakness.

US Natural Gas ETF (UNG) “stock” is down about 90% from its 2008 highs, sells in the mid-single digits and the government came out over a week ago saying that it has miscalculated natural gas production.  We don’t want to sell that one yet.  But we may need to if it doesn’t firm up here.

Please remember – at the Stock Market Companion we do not and cannot give individual investment advice. According to the State of Washington RCW 21.20.005 the Stock Market Companion is not a Registered Financial Advisor and we do not render any advice on the basis of the specific investment situation of a particular individual. This information is for a wide readership and is not intended for any particular individual,  and under no circumstances should our SMC Intraday Update, SMC 30MinuteStocks Market Update or Watchlist be considered an investment recommendation or plan for any specific individual.  By accessing this material, you agree that the Stock Market Companion will not be held liable for any actions taken by a subscriber or other parties.  Please seek the council of a broker or other licensed investment professional for accurate pricing and concerning the suitability of all investments that you may be considering. Disclosure : Please understand that the Stock Market Companion holds positions in the above mentioned securities.  Based on market related or personal events these positions may change without notice.      

– Stock Market Companion – Current Holdings –

Nr.	Co.	Ticker	Action	Entry Date	Current Gain (Loss)
1	YRC Worldwide	YRCW	Holding	2/26/2010	+46%
2	US Natural Gas ETF	UNG	Holding	4/9/2010	-3%
3	Ford Motor Co.	F	Holding	4/14/2010	+4%

– Stock Market Companion – Previous Holdings –

Nr	Co.	Ticker	Entry Date	Exit Date	Total Gain or (Loss)
1	ProShares Ultra Short SP-500	SDS	4/7/2010	4/9/2010	(-1.8%)
2	US Natural Gas ETF	UNG	4/5/2010	4/8/2010	(-8.2%)
3	Apple Inc.	AAPL	3/23/2010	4/7/2010	+5.7%
4	Ford Motor Co.	F	3/31/2010	4/7/2010	(-2%)
5	Somaxon Pharmaceuticals	SOMX	3/23/2010	4/6/2010	(-15.9%)
6	Dendreon Inc.	DNDN	3/23/2010	3/31/2010	(-1.4%)
7	ProShares Ultra Short SP-500	SDS	3/19/2010 (1/2 Position)	3/23/2010	(-1.5%)
8	Dendreon, Inc.	DNDN	2/11/2010	3/19/2010	+14.5%
9	General Electric Co.	GE	3/16/2010	3/19/2010	+1.4%
10	Apple Inc.	AAPL	3/5/2010	3/19/2010	+1.3%
11	Ford Motor Co.	F	2/25/2010	3/18/2010	24%
12	RINO International	RINO	3/3/2010	3/17/2010	3.1%
13	Nutri-System Inc.	NTRI	10/16/2009	12/28/2009	+79.7%
14	Palm Inc.	PALM	11/11/2009	11/27/2009	-8.6%
15	Research In Motion	RIMM	12/8/2009	1/5/2010	+6.8%
16	Simple Tech, Inc.	STEC	12/15/2009	1/5/2010	+62.2%
17	US Natural Gas ETF	UNG	12/10/2009	1/8/2010	+6%
18	Human Genome Sci.	HGSI	12/22/2009	1/8/2010	(-0.2%)
19	Ford Motor Co.	F	11/9/2009	1/12/2010	+48.6%
20	Western Refining Inc.	WNR	1/5/2010 (1/2 Share Count)	1/12/2010	(-5.5%)
21	RINO International Corp.	RINO	1/8/2010 (1/4 Share Count)	1/12/2010	(-5.1%)
22	Bank of America Inc.	BAC	1/4/2010	1/12/2010	+4.7%
23	YRC Worldwide	YRCW	1/12/2010 (1% only)	2/4/2010	(-17.1%)
24	Dendreon Inc.	DNDN	2/3/2010 (1/4 Share Count)	2/4/2010	(-2.7%)

* Gains (losses) do not include brokerage fees

– Benchmarks “At a Glance” –

US Dollar	1.3487 USD = 1 Euro	USD / EUR	Dollar = Flat
Gold	1,136.9	Ounce	Gold = Flat
Oil	$82.17	Barrel (West Texas Crude)	Oil = Down
30 Yr. Fixed Mortgage	5.17	Percent	Flat
30 Yr. Bond Yield	4.7	Percent	Flat
1 Yr. CD	1.36	Percent	Flat

(Data Source : Finviz.com Financial Visualizations)

We wish you all a fine evening.

Remember to invest on your own, but not alone.

Signing off for today, your –

Stock Market Companion

** Stock Market Companion Disclaimer **

The Stock Market Companion (SMC) Market Update and Watchlist are published documents to subscribers that show how we (SMC) are viewing the markets and what we are watching, investing in or selling today.  This information is for a wide readership and is not intended for any particular individual,  and under no circumstances should this Market Update or Watchlist be considered an investment recommendation or plan for any specific individual.  By accessing this material, you agree that the Stock Market Companion will not be held liable for any actions taken by a subscriber or other parties.  You understand that the Stock Market Companion holds positions in the above mentioned securities.  Based on market related or personal events these positions may change without notice.

Furthermore, the Stock Market Companion, Inc. is a content provider and publisher and not a registered broker-dealer or licensed investment professional.  Our intent is to publish very accurate market information for an audience of subscribers (1000+ subscribers).  By accessing the Stock Market Companion website and/or using the Stock Market Companion products and services such as this Market Update and accompanying Watchlist, you understand and agree that the material provided in the Stock Market Companion products and services is for informational and educational purposes only, and that no mention of a particular security in a Stock Market Companion product or service constitutes a recommendation to buy, sell, or hold that or any other security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.  To the extent any of the information contained in any Stock Market Companion product or service may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.  Before selling or buying any stock or other investment you should consult with a qualified broker or other financial professional to verify pricing information and to solicit advice as to the appropriateness of a given transaction or investment.<

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