-Executive Summary-

• Markets were flat on low volume as investors digested news of interest rate increases out of China – AND dealt with blizzard conditions in the northeast.
• American International Group (Ticker: AIG) advanced strongly today on news of the establishment of a significant line of credit from non-government financial sources.  This provides us at the SMC with a clearer opportunity for a stock investment.  See more below.
• More story stock news … See below.

This Stock Market Companion 15MinuteStocks Market Update is a powerful tool designed to help you make money in the stock market.  It requires just a few minutes a day, provides an essential link to the markets, and prepares you to be ready for actionable ideas.  We show you when/where we put our own money to work… and when/where we take our profits/losses.  Please see our short (2 minute) website videos for more information.

– 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 –

Each year on the days between Christmas Eve and New Year’s Eve, trading on the stock exchange is mostly marked by very low volume.  Today is no exception.  Compounding this absence of investors and traders is the blizzard that has significantly impacted the northeast.

That being said, the lack of participants does not mean that certain important events are not taken place.

On the contrary, Asian and European markets were down on news from Christmas day that the People’s Bank of China will increase lending rates by 25 basis points to 5.81%.  Stocks of European car manufacturers who have been making a lot of money selling cars in China were strongly impacted by this news.

Our markets here in America were pointing south at the open on this news – but were able to contain losses to a minimum as stocks from the financial sector here did more than there share to push the markets higher.

The primary catalyst today for the financials was American International Group’s (Ticker: AIG) announcement that they have  been able to establish a $4.3 billion credit line from non-government sources!

This AIG news is possibly BIG.  At the Stock Market Companion, we have had our eyes on AIG stock and have been reporting about AIG over the past weeks. Today marks an important follow-through advance.  Last Thursday’s action had seen the recent resistance of $55-$56 HOLD and sellers emerge to push the stock firmly south.  Today was a different story as buyers emerged after the gap up at the open to push the stock well above $60/share, before it settled back down at $59.38/share. Up until last Thursday, AIG stock had been on a vertical climb from $41/share without much of a pause, which did not provide a good entry for prudent investors. Thursday’s “backing-and-filling” combined with today’s follow-through higher – on huge volume gives the SMC a better place to begin considering an entry.    Please see this attached SMC chart for a clearer picture.

Of course, we do not believe that any retail investors nor many institutional investors have much of an understanding of what is really happening at AIG.  BUT this is for certain – No one wants to miss out on a big multiplier.  So many appear at least today to be willing to take a position on the idea that the banks wouldn’t be cobbling together an equity line if things weren’t turning favorable at the company.

– Story-Stock Investing –

Stock Market Companion holding Cisco Systems Inc. (CSCO) made a strong advance today on no real news.  AS far as we can tell this advance is taking place mostly due to a possible oversold condition AND an understanding that internet infrastructure investment is going to have to continue to take place in order to support the vast bandwidth required to support video and smart phone adoption.  We are glad to be on board.

Sure would have liked the Bank of Ireland stock to hold in the high 2.30’s and not drop down today.

With American financial institutions making a comeback of sorts, we would like to see some of that popularity flow into IRE.  This however wasn’t the case today.

Stock Market Companion watchlist stock China Shen Zhou Mining (SHZ) advanced nicely today, making a possible set-up that we at the SMC will consider tomorrow.

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