– The Stock Market Companion –
15MinuteStocks
Market Update
May 6, 2010
——- Stock Market Investing since the 1980’s ——-
Published all Market Days
Monthly Subscription $29.95
 Today’s SMC Watchlist

– Executive Summary – 

Some market investors were cuddling up to the market  today saying, “Here kitty, kitty…”  The market responded with, “R O A R …”…

There will be a lot of speculation presented on the evening news and radio talk shows about why the market melted down today.  Please take it all with a grain of salt.  No one really knows yet completely what triggered today’s vertical drop in the market.  One thing that we know is – selling begets more selling.

Today’s afternoon plunge in the DOW (click to open SMC chart) ranks as the biggest intra-day drop since Black Monday in 1987. (Some people are saying “Largest intra-day drop EVER”)  At its worse moment, it was down 998.50 points.  That’s -9.2% from yesterdays close.  Fortunately, the market recovered some – but still the DOW closed down -3.2% for the day.

Yesterday we wrote here in the 15MinuteStocks Market Update, “We can’t have a liquid market that – when the time and story is right – can multiply the value of an asset 100% or more in the matter of months, weeks, or in some cases days, and expect this same market to act like a purring kitten sleeping sweetly in our lap at all times.  This market can and regularly does destroy financial fortunes and doesn’t think twice about it.  It’s liquid and it is driven by the most basic human emotions = fear and greed.”  It doesn’t get any clearer than that.

Friends, no one can predict this type of event happening on a particular day.  BUT at the SMC we know when its wise to be out of the market.  Here are some observations –

1. The market did not just “fall” out of the sky today.  It was already in a short term downtrend.  The market peaked on 4/26. 
2. This is the 8th trading day since the market peaked.  As of yesterday, it was already down 3% in 8 days.
3. We already updated our SMC Trend Table days ago with Short Term Down ratings. 
4. We closed out all our positions last week.
5. There have been 3 large distribution days since the market peak.  These are strong signals of institutional selling.
6. The news about the European Union’s financial difficulties with Greece and other heavily indebted nations has been gradually getting louder.

The Stock Market Companion (SMC) in its role as a personable, focused stock market and investing guide available to the public at a very low cost, is in its infancy.  We try very hard to do our job well.  If today’s events have erased any of your doubts concerning the need and relevance of this SMC work, would you please consider telling your investor friends about considering signing up for their free 14 day trial here at our website.  If they don’t like it, they can cancel at any time.  No contracts and no hassle.

Those people who know you as an investor will undoubtedly – following today’s events – be asking you about how you are doing.  If the SMC has helped you avoid calamity, please share this good news.  At an absolute minimum, the SMC 15MinuteStocks Market Update is cheap insurance.  They will also enjoy tidbits like this –

* Investors learned from the SMC of our investment in Ford Motor Co.  1 1/2 months before famous investor George Soros invested in Ford.  Our returns on the Ford Motor Co. investment were approx. 77%.  We exited our shares days before the UAW declared that they were exiting, and re-entered on continued Toyota trouble for another approx. net 5% gain.
* The SMC told everyone to be OUT of the market on January 12th this year, a week before the market started its  -7.6% decline in mid January.
* The SMC invested in Dendreon Inc. in February at around $30.50, and reported in detail on the story and how to invest in a one drug wonder company prior to the FDA approval.  Our net gain was around 11%.
* The SMC was OUT of the market on 4/29, one week before today’s disaster.

 With every new subscriber, we get stronger at the SMC and can serve you better.  Friends, this work needs paying subscribers.

(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	1,128.15	Index	Down = -37.72 points
DOW-30	10,520.32	Index	Down = -347.8 points
NASDAQ	2,319.64	Index	Down = -82.65 points
NASDAQ 100	1,893.75	Index	Down = -64.51 points

 

– Market Trends –

Trend	SP-500	DJ-30	NASDAQ	NASDAQ 100
Short Term	Down	Down	Down	Down
Intermediate	*Down*	*Down*	*Down*	*Down*
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 market action clearly shows us how much respect the market had for its support line = none.  The market signalled today its entry into an intermediate downtrend.

– Today’s Highlights –

Please review our Executive Summary (above) concerning today’s significant movement in equities.

The European Central Bank (ECB) kept its accommodative rates steady today at 1%.  Unfortunately they did not have anything real clear to present about the situation in Greece.

The Greenback advanced strongly today.  As fear gripped the global finance markets, gold was up too – but not by much.  The Gold ETF (Ticker: GLD) was up $3.40/share = 2.9%.

Consider this : GLD is up 7.9% for the year.   The US Dollar is up approx. 8.3% for the year.

– Stock Investing Specifics and Strategies –

Institutional investors in Dendreon Inc. (DNDN) revealed today their immediate intentions of selling.  The stock was down -10% today into the close.  At the low point today during the market calamity, DNDN was priced at $42.45, a -19.7% haircut over yesterday’s close.  We mentioned yesterday that it was prudent for the insiders to sell their shares last week.  Today’s action sure validates that.   The stock has a lot of work to do to make up for the last three days of selling.  That is going to take time.

For new stock investment ideas, the most important outcome from today will be how they fare over the next days as shock waves move the markets.

At this time, fear is in control of this market.  The retail public investor’s response to today’s events and tonight’s news will perhaps be “sell”.  We will have a chance to see how institutional investors respond.  In the absence of a clear catalyst behind today’s awful market behavior, and the widening problems for the European Union, we simply need to take a “wait-and-see” approach.  One sure-fire way to lose money is to be in a big hurry.

Predictable, “odds stacked in our favor” kinds of investments will need to reveal themselves over time.  They will come.

 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)

If there was a company with a ticker labeled “100% CASH”, we would have to report our holdings in the above table.

– Stock Market Companion – Previous Holdings –

Nr	Co.	Ticker	Entry Date	Exit Date	Total Gain or (Loss)
1	YRC Worldwide	YRCW	2/26/2010	4/29/2010	+35%
2	US Natural Gas ETF	UNG	4/9/2010	4/29/2010	(-4%)
3	Ford Motor Co.	F	4/14/2010	4/27/2010	+5.4%
4	ProShares Ultra Short SP-500	SDS	4/7/2010	4/9/2010	(-1.8%)
5	US Natural Gas ETF	UNG	4/5/2010	4/8/2010	(-8.2%)
6	Apple Inc.	AAPL	3/23/2010	4/7/2010	+5.7%
7	Ford Motor Co.	F	3/31/2010	4/7/2010	(-2%)
8	Somaxon Pharmaceuticals	SOMX	3/23/2010	4/6/2010	(-15.9%)
9	Dendreon Inc.	DNDN	3/23/2010	3/31/2010	(-1.4%)
10	ProShares Ultra Short SP-500	SDS	3/19/2010 (1/2 Position)	3/23/2010	(-1.5%)
11	Dendreon, Inc.	DNDN	2/11/2010	3/19/2010	+14.5%
12	General Electric Co.	GE	3/16/2010	3/19/2010	+1.4%
13	Apple Inc.	AAPL	3/5/2010	3/19/2010	+1.3%
14	Ford Motor Co.	F	2/25/2010	3/18/2010	24%
15	RINO International	RINO	3/3/2010	3/17/2010	3.1%
16	Nutri-System Inc.	NTRI	10/16/2009	12/28/2009	+79.7%
17	Palm Inc.	PALM	11/11/2009	11/27/2009	-8.6%
18	Research In Motion	RIMM	12/8/2009	1/5/2010	+6.8%
19	Simple Tech, Inc.	STEC	12/15/2009	1/5/2010	+62.2%
20	US Natural Gas ETF	UNG	12/10/2009	1/8/2010	+6%
21	Human Genome Sci.	HGSI	12/22/2009	1/8/2010	(-0.2%)
22	Ford Motor Co.	F	11/9/2009	1/12/2010	+48.6%
23	Western Refining Inc.	WNR	1/5/2010 (1/2 Share Count)	1/12/2010	(-5.5%)
24	RINO International Corp.	RINO	1/8/2010 (1/4 Share Count)	1/12/2010	(-5.1%)
25	Bank of America Inc.	BAC	1/4/2010	1/12/2010	+4.7%
26	YRC Worldwide	YRCW	1/12/2010 (1% only)	2/4/2010	(-17.1%)
27	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	1.2621 USD = 1 Euro	USD / EUR	Dollar = UP (HOT)
Gold	$1,204.8	Ounce	Gold = UP
Oil	$76.74	Barrel (West Texas Crude)	Oil = Down
30 Yr. Fixed Mortgage	5.07	Percent	Down
30 Yr. Bond Yield	4.16	Percent	Down
1 Yr. CD	1.38	Percent	Flat

(Data Source : Finviz.com Financial Visualizations)
 

The weather is improving here in Vancouver on the shore of the great Columbia River, and tonight we are going to bicycle as a family to our local pizzeria – Little Italy’s.  It’s a comfortable place and we all like it.  Everyone is excited.

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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