– The Stock Market Companion –
15MinuteStocks
Market Update
May 14, 2010
——- Stock Market Investing since the 1980’s ——-
Published all Market Days
Monthly Subscription $29.95
 Today’s SMC Watchlist

– Executive Summary – 

Markets closed down – hard.  The broader index (SP-500) is down -1.9%, and the secondary indices performed similarly.  There was some buying in the minutes before the markets closed.

Yesterday we wrote, “We contend that the markets are at great risk for a major currency disruption involving the euro.  Because of their inherent liquidity, stock markets are at risk of losing capital as investors seek safety for their money.” 

That’s exactly what we have – and we didn’t have to wait long to see it.

(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	1,135.68	Index	Down = -21.76 points
DOW-30	10,620.16	Index	Down = -162.79 points
NASDAQ	2,346.85	Index	Down = -47.51 points
NASDAQ 100	1,907.10	Index	Down = -38.42 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 –

Yesterday we wrote, “When fear enters the market, no one cares about price justification.  People just want their money.”  Today, people simply took their money.  They are 2 weeks behind the SMC exit.

Here again are the destabilizing factors working on the market –

1. Euro => Greece, Spain, Portugal, and Ireland deficits are pulling the euro down.

2. U.S. budget deficits.  We reported yesterday that April’s deficit of $80 billion (approx.) was 4x last April’s amount.

3. Investors taking their profits first from the year+ rally and asking questions later.

4. Last week’s 980+ point drop (intra-day) in the DJ-30.

5. Inability to stop the oil leak in the Gulf of Mexico and fear of additional government regulation.

6. Fear of where the economy is going next, absent of real job growth.

7. Absent real job and economic growth, are we at a peak for property foreclosures or are there more to come?

– Stock Investing Specifics and Strategies –

Here is our chart of the SMC 15MinuteStocks Market Update Stock Performance since the inception of the the Stock Market Companion in September 2009.  Click on it to open it in a separate browser window.

In summary, $125K invested using SMC stock selections would be approximately worth $189K today (this doesn’t include cost of commissions).  That’s an approx. 51% return.  For 2010, the SMC Market Update stocks are up approx. 15.7%.

If you took $125K and invested it in an SP-500 exchange traded fund, your investment would be worth $140.5K today.  That’s a 15.5% return.  These returns were mostly made from October through December 2009.  For 2010, the SP-500 is up1.8%.

There will always be limitations in comparing the SMC Market Update stock returns with your own personal performance.  We have taken a strong step to close that gap by introducing our SMC Intra-Day Updates, which identify when we have executed a transaction in near real time, and are sent to you by email.  We introduced this as a pay-for service in April at a cost of $9.95/month.  Out of necessity, we created this service when we realized on Thursday, March 18th that we we could have informed all of you of our Ford Motor Co. (F) exit at $14.50/share in near real time, instead of waiting for the end of the day.

Some of you will have better returns than ours because you held certain stocks longer than we did.  Others will have worse returns for the same reason, but for holding different stocks.  We know of several subscribers who stayed longer in Apple and Dendreon than we did, and profited handsomely for it.

Everyone put different quantities of their investment accounts to work on the different stock ideas.  We are working in percentages from absolute gains or (losses), so the percentage return will be different based on the actual gains or (losses) achieved.

We believe that it would be a mistake to judge yourself too heavily in comparison to our performance.  Why should you feel like you have to take every investment that we take or at as close to the exact same time?  That may be a bit too much pressure.  Maybe there are some stocks that we enter that begin to show weakness and you decide to exit before we do.  That sounds like good judgement.

While making these statements, we don’t want to discourage you from very careful and decisive entry and exit decisions.  By now you know that we time our entries and exits very carefully, and you should too. 

Use the SMC Watchlist to find the stocks you like and watch them carefully and see when or if we make a move.  We’ve cleaned it up to make this easier.  There were several stocks in the SMC Watchlist that made some good moves that we did not participate in.  Hovnanian (HOV), Bank of America (BAC), Research in Motion (RIMM) and others (Home Depot …) from our watchlist had very good runs that we did not take for a variety of reasons, but you may have.

Besides picking the right stocks, getting excellent entries and exits, identifying the right share counts for varying degrees of risk tolerance and other variables associated with stock investing, there is something here that is staring at you when you look at our chart.  The flat lines in January and May of 2010 are declaring an essential part of our strategy.  The SMC is out of the market when it is in a downtrend.  This aspect alone should profit you immensely in the years ahead.  Your sleep will be better too.

Whenever you choose to work with something there is a learning curve associated with the subject itself and the tools that you have chosen to use for the job.  If you take a piece of wood and decide to make a coat rack out of it, you will find that both the wood itself and the router, hammer, fasteners … etc … will introduce variables that you would never have imagined before starting the project.  With near 100% certainty, there will be at least one broken coat rack, or pieces of one, in the scrap pile before the beautifully finished final furniture piece is functioning in its proper place.

With the stock market and using the Stock Market Companion it is no different.  Smaller share counts and discipline will keep the scrap pile in its proper proportion.  We do not underestimate the learning curve and personalization that takes place when attempting to manage your own money and grow a portion of it using stocks.  Tell us a form of excellent training that does not require some cost of tuition.  We know of none. 

Please give yourself time and a pat on the back on your way to investment success.

We are absolutely dedicated to helping all we can.  We pray for your success.

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 – Performance –

Please click on this chart to see the Stock Market Companion 15MinuteStocks stock performance verses the SP-500.

* Gains (losses) do not include brokerage fees

– Benchmarks “At a Glance” –

US Dollar	1.2357 USD = 1 Euro	USD / EUR	Dollar = UP BIG
Gold	$1,232.8	Ounce	Gold = Flat
Oil	$72.04	Barrel (West Texas Crude)	Oil = Down
30 Yr. Fixed Mortgage	4.99	Percent	Down
30 Yr. Bond Yield	4.31	Percent	DOWN
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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