– The Stock Market Companion –
15MinuteStocks
Market Update
April 28, 2010
——- Stock Market Investing since the 1980’s ——-
Published all Market Days
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 Today’s SMC Watchlist

– Executive Summary – 

Shake, Rattle, and Roll would be a good theme song for the markets the last two days.  The broader market (SP-500) and the DOW (DJ-30) put in a positive performance today, but the NASDAQ was only slightly positive.

Standard and Poor’s was again shaking things up with a downgrade of Spain’s credit rating.  (Source: Bloomberg Businessweek)

As the bond ratings of over-leveraged European nations continued to get sliced, the Greenback jumped to multi-month highs today against the Euro.  That is no surprise.  If this continues, there will be an increased flight to safety and the stock market will lose altitude.

SMC holding YRC Worldwide (YRCW) took a heavy hit today. (See below for possible catalysts)  If YRCW tags $0.58, we will take our profits.

(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	1,191.36	Index	UP = +7.65 points
DOW-30	11,045.27	Index	UP = +53.28 points
NASDAQ	2,471.73	Index	FLAT = +0.26 points
NASDAQ 100	2,007.59	Index	FLAT = +1.34 points

– Market Trends –

Trend	SP-500	DJ-30	NASDAQ	NASDAQ 100
Short Term	Down	Down	Down	Down
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.

– Today’s Highlights –

There were two major events today-

1. Standard and Poor’s downgraded the Kingdom of Spain’s debt rating.  Please click here for more details from Bloomberg Businessweek.  Financial stocks were strong this morning, but sold off in the afternoon. 

2. The Federal Reserve Board announced their decision to keep rates and their wording about rates unchanged.

– Stock Investing Specifics and Strategies –

SMC holding YRC Worldwide (YRCW) was hit hard, together with the other surface trucking companies today.  It may be this line from Old Dominion Freightlines press release – following their earnings report released today – that took the air out of the sails of the shipping companies, “The 5.8% increase in tonnage for the first quarter was driven by a 5.7% increase in weight per shipment and a 0.1% increase in the number of shipments. The increase in our weight per shipment, however, had a negative effect on our revenue per hundredweight. Revenue per hundredweight, excluding fuel surcharges, decreased 1.5% from the prior-year quarter, but we believe our overall pricing was relatively flat considering the changes in the weight, length of haul and other characteristics of our freight. The pricing environment remains very competitive in our industry; however, we have been encouraged by recent trends that suggest the overall pricing environment may improve this year.”  This is not the kind of wording that describes a strong recovery.

Many stocks are exhibiting what we call “jackknife” patterns.  These are abrupt sell-offs, retracing gains from several months of stock appreciation.  YRCW had one today.  AOL is another good example.  Please click the chart to have it open bigger in a separate browser tab-

AOL is a classic example of a type of story that at the SMC we are particularly keen on.  AOL was spun-off from Time Warner late last year.  It is a former bellwether tech stock that many people remember, many people dislike because they bought and held it for disastrous returns, and that everyone thinks is “dead”.  C’mon, who wants dial-up Internet access anymore, right?  Well, the truth is often different than what the public understands.

There is sometimes a rich silver lining in stocks like these.  The truth is that the cash flow from existing dial-up Internet accounts could be relatively stable.  If AOL demonstrated that dial-up subscriptions are stable and that advertising revenues are growing (which they confirmed today ARE NOT), this type of stock could rapidly double or triple while everyone shakes their head in disbelief.  A great example of this kind investment is the Kmart story.

Kmart went bankrupt in its failure to successfully compete with WalMart.  Kmart came out of bankruptcy in the low-teens price range in 2003.  Everyone was still thinking the old Kmart vs. WalMart story, knowing that Kmart couldn’t compete (just like AOL dial-up “can’t” compete with broadband).  But that was the OLD story.  The new story was Kmart had been absolved of its debt obligations and held a lot of valuable real estate.  The stock went from around $13/share to $191/share (that’s a 1,360% return) during the real estate boom. The Kmart stores were and are still often unpleasant to shop in, but the stock investment story was no longer about that.

The AOL chart that we included above shows rather loose and “whippy” conditions from December 2009 through March 2010, but the stock all of a sudden tightened up this month.  The prudent investor would keep this one on the dashboard and wait until after the facts are issued from the earnings release and the stock has shown its intentions.  If the story was good, there would most likely be a good entry in the days to come. This is a great example why wise investors DO NOT hold stocks into the day of the earnings release.

Right now, the AOL story IS dead.  This is confirmed today.  Dial-up cash flow is there, but not real stable and ad revenues are dropping.  Not good.  Even the platinum flagship stock Google (GOOG) took a hit on this revelation about ad revenue from AOL today.  If AOL can resolve these issues, then the story may be back “on”.  Right now it is not.

Today, Ford Motor Co. (F) was whacked by an investment bank (Credit Suisse) downgrade from “neutral” to “under-perform” and a $10/share price target.  Don’t miss our SMC Blog on the SMC homepage for the complete story and our assessment.  Click here for the link => SMC Blog 

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 15MinuteStocks 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	+40%
2	US Natural Gas ETF	UNG	Holding	4/9/2010	+4%
3	Ford Motor Co.	F	SOLD Yesterday at $13.84	4/14/2010	+5.4%  = Final

– 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	1.319 USD = 1 Euro	USD / EUR	Dollar = UP
Gold	$1,166.4	Ounce	Gold = Flat
Oil	$83.26	Barrel (West Texas Crude)	Oil = UP
30 Yr. Fixed Mortgage	5.15	Percent	Flat
30 Yr. Bond Yield	4.63	Percent	Up a bit
1 Yr. CD	1.36	Percent	Flat

(Data Source : Finviz.com Financial Visualizations)

It’s been raining hard here in Vancouver, WA the last two days.  This evening we are going to bundle the kids up in raincoats and head down to the Columbia River shore and run together along sandy shore. 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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