-Executive Summary-

• DOWN … THEN UP! But the market’s couldn’t take out yesterday morning’s high.  See more below.
  
• The U.S. dollar strengthened a bit more, resulting in a further pull-back in gold, other precious metals, and oil.

Do you know someone who has a Roth IRA or traditional IRA that needs some real growth, or someone unhappy with their over-diversified mutual funds which get them nowhere yet keep them continuously at risk to the overall market? Share the great story of the Stock Market Companion with them.

– 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 Trends –

*Summary of terms from Trader Vic II-Principles of Professional Speculation (pg. 140-141)
*_________* Represents a change in trend rating.

– Market Perspectives –

For your added perspective, we’ve included these two different views of the broader market –

1. SMC SP-500 ETF Daily Chart (Click to open helpful chart in a separate browser window).

2. SMC SP-500 Weekly Chart (Spanning back through 2007)

– Today’s Highlights –

Uncertainty has again entered the marketplace with market participants unwilling to take the indices higher above yesterday morning’s high.

U.S. Treasuries have continued to be sold off, in the face of the investor dissatisfaction with decisions in Washington concerning spending.  This flies in direct opposition to the desire of the Federal Reserve to make bond yields so unattractive that money is put to work in investments – beyond bonds.  Bond yields have jumped higher this week.

– Story-Stock Investing –

The financials today were out ahead of the pack today, which is good.  For our markets to gain real traction over the next six months, we need better performance out of the banks and other financial stocks.

Here’s our Intra-Day Alert that we sent concerning the Bank of Ireland (IRE) today –

Dear Subscriber-Friend –

Here are a few observations today concerning the Bank of Ireland (Ticker: IRE) –

The stock gapped higher again today and tagged $3/share, before investors stepped in to take their profits – and in the process pushed the stock price all the way down to $2.47/share.  That was a -17% pull-back from the $3/share highs in a little over an hour.   Keep in mind that there were buyers at around $1.40/share in the stock from November 24, 2010 who already had a “doubler” on their hands and wanted to take their profits.  OK.

What we like is the fact that buyers stepped in to purchase shares following this sell-off this morning and pushed the stock back higher to currently approx. $2.82/share.

We would have of course preferred that sellers and buyers would have exchanged shares without such a strong pull-back, but we are encouraged at this point with what appears to be fresh buyers purchasing the stock this late morning.

We are continually weighing out the risks that we face as common stock shareholders in the face of the uncertainty that surrounds the Bank of Ireland’s ability to restructure their balance sheet  AND raise capital to meet the Tier 1 capital ratio that the Irish government has required above the 8% Basel agreement levels.  For the Bank of Ireland, this means an additional 2.2 billion euro needs to be raised by the end of Q1, 2011.  We are weighing these risks against the hope of having a solid investment in Ireland’s leading bank – which we have established during Ireland’s darkest hours commercially in recent history.

If our investment pays-off, the reward may be very considerable.  From a technical (chart based) price standpoint, we have no problem visualizing the Bank of Ireland stock rising to $8 to $10/share within a relatively short period of time.  It is not unreasonable to target the recent March 2010 lows of approx. $5.55/share or the April 2010 highs of approx. $10.50/share – now that the Irish government has passed its first vote for the 2011 budget and is in the process of meeting its requirements for further access to European Central Bank funding.

There is a lot of uncertainty yet in the air.  The U.S. Federal Reserve’s actions to bolster the economy AND the European Central Bank’s recent realization that they too must work to keep investors from becoming fearful, may bode well for financial stocks such as the Bank of Ireland which are coming off recent very distressed levels.

Your – Stock Market Companion

We are thankful for subscribers letting us know that they are enjoying their investment in the U.S. Natural Gas ETF (UNG) and used a stop instead of simply getting out as we at the SMC did yesterday.    Obviously, we were simply too impatient with that one.

We continue to maintain the opinion that Ford Motor Co. (F) is a must own stock, in light of the Federal Reserve’s desire to see an increase in asset prices.  There are simply very few companies with the kind of market share performance and earnings performance that Ford is currently exhibiting.  We will most likely resume our investment in Ford soon!  Today, Ford sold off a bit, but investors showed up to buy into this weakness and took the stock a bit higher on volume.

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