– The Stock Market Companion –
15MinuteStocks
Market Update
May 12, 2010
——- Stock Market Investing since the 1980’s ——-
Published all Market Days
Monthly Subscription $29.95

– Executive Summary – 

Markets are UP.  Volume was light.  The US Dollar is strong.  Gold is moving higher.  Uncertainty is very high.  Here is your SMC SP-500 Daily Chart.

(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	1,033.37	Index	UP = +7.98 points
DOW-30	10,896.91	Index	UP = +148.65 points
NASDAQ	2,425.02	Index	UP = +49.71 points
NASDAQ 100	1,975.58	Index	UP = +35.10 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 –

Many believe that the weak euro was “last week’s theme”.  We don’t think so.  If you throw 1 trillion dollars at a problem and the underlying currency valuation doesn’t markedly improve, then there is a tremendous amount of uncertainty that has the potential to derail the markets.  From Sunday night into Monday, approx. 1 trillion dollars was pledged to firm up the European monetary system – weakened from concerns centering on Greece, but also by other European rim countries like Portugal, Spain, and Ireland.  The currency markets have shown that the euro has not yet stabilized.  The price of gold too is now accelerating as investors seek safety.

Things could change dramatically and in short order if confidence was restored to the system.  Right now, we are suggesting that confidence HAS NOT been restored.

IBM posted excellent earnings today.  Their CEO said that IBM would double its earnings by 2015.  When we read these kinds of headlines, we can’t help but question if this information shouldn’t fall in the same category as the U.S. government saying that they are going to balance the budget … next term.  IBM is credible, but we like less bold statements concerning future events.

The U.S. government’s deficit for April was released today.  We hope you are sitting down as you read this… Our government posted an $82.69 billion deficit for the MONTH, nearly four times last April’s deficit of $20.91 billion!

Investor friends, tax receipts for April from individuals were $107 billion.  The U.S. full-year deficit this year is projected at $1.5 trillion, which comes on top of last years $1.4 trillion. (Source: Reuters.com)

The Stock Market Companion is not a political journal.  However, in the interest of our great nation we would like to remind everyone to do their part and vote in the upcoming mid-term elections.

– Stock Investing Specifics and Strategies –

If we were not in such a turbulent and controversial time with overseas concerns that could blow-up overnight and which could rapidly cause liquidity in the stock market to flee to safety, we would be going after these stocks –

AK Steel Holding Corp. (Ticker: AKS) –  This is a picture perfect bottoming pattern that under more predictable conditions would resolve in a nice upside resolution.

Nutri-Systems Inc. (Ticker: NTRI) – Another excellent pattern, based on revenues that were not nearly as bad as anticipated and may have the “shorts” (those who have borrowed shares at a higher price, in the hopes of buying them back lower) on the run.

Other stocks on our watchlist are looking very good for entries …

• RTK
• INTC
• SOMX
• ARNA
  

We cannot put money to work in this environment until there is more stability in the euro.  This could happen quickly, but – as of this moment – has not been done.  There is simply too much risk.

Think back for a minute.  At what point in recent history have we had such a convergence of negative market
conditions? –

• The euro has been destabilized and an approx. $1 trillion dollar strategy did not yet improve the situation in the minds of large market participants – who are in absolute control.
• The US posted its 19th consecutive month of huge deficits, with April being 4x last year’s amount!
• The stock market experienced its largest ever daily drop less than 1 week ago.
• US Treasury yields are at lows and gold is at all time highs (investors are seeking safety).
• The Federal Reserve has recently discontinued its asset backed mortgage purchases, which stabilized the US housing market.  The U.S. government just wrapped up its $8K first time home buyer’s credit stimulus.
• There was a recent failed car bomb attack in NY Times Square.
  

There is an appropriate saying concerning stock investing that applies here – “It’s a lot easier to make up for a lost opportunity, than a real loss.”

Friends of ours who have been out of work have either recently found jobs or have received offers.  At a recent event many participants were saying that business is improving.  We like what we hear.  Our main concern right now is the oversized risk of destabilized currency markets spreading rapidly to the stock market.

 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 = Flat
Gold	$1,236	Ounce	Gold = UP
Oil	$75.56	Barrel (West Texas Crude)	Oil = Flat
30 Yr. Fixed Mortgage	5.02	Percent	Flat
30 Yr. Bond Yield	4.47	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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