– The Stock Market Companion –
15MinuteStocks
Market Update
May 11, 2010
——- Stock Market Investing since the 1980’s ——-
Published all Market Days
Monthly Subscription $29.95
 Today’s SMC Watchlist

– Executive Summary – 

Down, then UP, and then … Down.  Today, the broader market (SP-500) was able to recover the entire amount lost during the sell-off last Thursday, BUT it was not able to hold onto these gains.  This performance is impressive, but the market has quite a bit of work to do to rebuild investor confidence.

212 stocks for the SP-500 were positive for the day… a little less than half.  The SP-500 lies below its 50 day moving average, and above its 200 day moving average.

There are no immediately compelling reasons to get involved with this market, but this may change soon.  The SMC is adding another stock to its watchlist that will complete a 10 for 1 split after the close today.  It closed today at all time highs of $714.7/share and will open tomorrow somewhere in the neighborhood of $71/share (unless it gets bid significantly higher before the open).  Read more below.

(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	1,155.79	Index	Down = -3.94 points
DOW-30	10,748.26	Index	Down = -36.88 points
NASDAQ	2,375.31	Index	Flat = +0.64 points
NASDAQ 100	1,940.48	Index	Down = -2.13 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 Highlights –

There are plenty of opinions about the markets.  Let’s focus on fewer opinions and more on facts. 

Facts (given in basic terms that we can all understand) –

• The Euro is weak due to an overly inclusive monetary union of nation states with poor fiscal habits.  The link given is a very well written article from the NY Times identifying how the EU decided to include Greece in the Euro.  Read it later if you don’t have time now.
  
• For the 1st time, the European Union (EU) has acknowledged the severity of the problem.  The EU, together with the IMF and the USA have tremendously expanded liquidity available in order to prevent monetary system failure.  This plan was implemented Sunday night in order to establish a “beach-head” for the Euro.
  
• Some people are talking about problems related to economic growth.  This is ridiculous.  Lack of economic growth is not the problem.  Chronic over-spending and liberal democratic bureaucracy (no one is accountable or able to say “no” to spending).  The USA is heading down the same road.
  
• The currency markets are saying that the enormous liquidity presented over the weekend has not changed their posture towards the Euro.  The Euro has made very little progress against the US Dollar the past two days.  (This is very dangerous in our opinion).
• No one knows the final outcome of the current troubles.
• This is the first real test of the Euro, and the Euro could fail or simply fall significantly in value against the US Dollar.  It could also stabilize.  Swiss and British (Norwegians too…) citizens should be proud to have not given-in to the wave of Euro-centric fervor, back when they were being pressured to join the European MONETARY Union.
• Treasury yields are back at significant lows, because investors are seeking safety and buying treasury notes.  When the notes go up in price, % yields go down.
• Gold is advancing now as fear has increased.  Inflation concerns in China is adding fuel to the fire.
  
• Last night the Asian markets were down. China’s inflation numbers are showing that the Chinese government may need to take stronger action to slow things down.
  

– Stock Investing Specifics and Strategies –

Baidu, Inc. (Ticker: BIDU) – the Chinese search engine competitor to Google Inc., will complete a 10 for 1 stock split today after the close.  It closed at all time highs.  We will put this stock on the SMC watchlist and provide some metrics soon.  The stock has momentum, but isn’t our favorite.  We can’t ignore the momentum.  If we think that there is a predictable environment for making money with the stock we will get on board.  When the music stops on this one, you want to make sure you have a seat.

We have been quiet about YRC Worldwide (YRCW) since selling our shares almost 2 weeks ago now.  Today we have made two charts with notes that you can click on to show you our understanding of the stock and the actions we took –

YRCW I (Chart) describes the technical nature of the SMC’s actions.  Suitable buy points are identified.

YRCW II (Chart) provides a broader overview of the stock without all the details.

If you have any questions about stock investing, this is a good time to present them to the SMC.  Please send your questions to AskSMC@stockmarketcompanion.com.  We will post answers on the ASK SMC menu of our homepage.  We use first names only, or – if you are uncomfortable with that – you may tell us to use a different first name.  Under no circumstances will your identity be revealed.  This free service is for investors who have an immediate question or a question that they have always had and would like to get it answered.  Of course we don’t give specific investment advice, but we are here to answer all kinds of questions about stocks and stock investing.

 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	1.2627 USD = 1 Euro	USD / EUR	Dollar = UP
Gold	$1,232	Ounce	Gold = UP Big
Oil	$75.88	Barrel (West Texas Crude)	Oil = Down
30 Yr. Fixed Mortgage	5.02	Percent	Flat
30 Yr. Bond Yield	4.42	Percent	Flat
1 Yr. CD	1.38	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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