-Executive Summary-

• Pause! Finally, the markets paused their upward march in their steady uptrend.  After the close, Cisco Systems (CSCO) reported earnings that are a disappointment.  The stock fell hard … over -9% to just below $20/share.  Today’s pause, overseas market weakness, and now Cisco’s disappointing earnings announcement will – with strong likelihood – impact the market negatively tomorrow.

• China Shen Zhou Mining and Resources, Inc. (SHZ) is improving … thanks for email from subscriber -“Nathan”.  See more below.

This Stock Market Companion 15MinuteStocks Market Update is a powerful tool designed to help you make money in the stock market.  It’s web-based, therefore available wherever and whenever you are.  It is your essential link to the markets, delivers a broad to narrow summary of important market and company specific conditions and events, 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 this chart of the broader market (Successful stock investors develop and start with a minds-eye view of the broader market and keep it clear) –

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

– Today’s Highlights –

Worldwide, markets reacted negatively overnight to yesterday’s increase in lending rates in China – in China’s bid to ratchet in inflationary pressures.  Our markets here in the U.S. flinched a bit, but still held on with the DOW (DJ-30) closing modestly higher and the NASDAQ pulling back slightly.  Today can be viewed as a pause in the current, steady march higher by our markets.

Crude oil and gasoline inventory data were released today for last week.  Everyone who has recently been to the gas pump has experienced a bit of sticker-shock as gasoline prices have reached higher.  Gasoline inventories increased almost twice as much as expected – a clear demonstration of demand diminishing as prices increase.  Crude oil inventories remained flat.

Federal Reserve Chairman Ben Bernanke was on Capital Hill and was asked about the Fed’s ability to detect inflation early enough to prevent problems.  Click here for his responses…

The Fed’s policies are leading to speculative buying of stocks.  We’ve been writing about this since last summer.  While we don’t want to chase the market, it may be wise for us to consider that – for instance – Apple Inc. (AAPL) stock is best in class – and purchase some with the understanding that we need to give it some room to breathe as it possibly makes a strong run higher.  There are other stocks to go along with it.  Fortunately, we don’t need to make that decision today – but soon.

Why not today?  Because the market paused in its uptrend and there was conspicuous lack of enthusiasm today.  After the close, Cisco Systems (CSCO) reported decent earnings but in a rather disappointing manner the market is again beating up the stock in after-hours trading.   The former tech-bellwether is down below our sell-point in the stock on 1/19/2011, when we captured a +4.7% move on the stock, following our entry on 12/13/2010.  Cisco is at this moment down -6.5% from it’s close today.

Tech stock leader Akamai Inc. (AKAM) also disappointed investors after the close today with disappointing future earnings guidance and is getting hit -10% off today’s closing price.

Due to tonight’s Cisco and Akamai performance – in combination with today’s pause in the markets enthusiasm- tomorrow the markets will in strong likelihood sell-off some – giving us time to think a bit more about Apple Inc. and others that we may want to hold if there is a continuation in the markets surge higher, resulting from the Fed’s stimulus policies.   We want to participate in this market, but want to do so without chasing it.

– Story-Stock Investing –

A subscriber-friend shot us a helpful email today concerning China Shen Zhou Mining and Resources, Inc. (SHZ).  Yesterday, we too saw a possibly favorable pattern forming in the stock.  Normally, such “Christmas-Momentum Runners” return to the dust from which they came when they flame-out so aggressively as SHZ has – BUT we have to say that we like how this one is looking here.  Our return during the Christmas rally on this “rare-earth” metal stock was +54%.   A market pull-back will help here also in determining the resolve of those investors getting on board today.  As opposed to others of this type of stock, SHZ has earnings and revenue growth that may be real.

Meanwhile as we write this afternoon, Cisco Systems has given up another -3% for a total drop of approximately -9.5%.  All our profits from holding the stock approximately 1 month would have been evaporated if we had held this stock going into today’s after-hours earnings report.

When we sell a stock and it keeps moving higher after we have sold our stock, as did Cisco Systems over the last two weeks, we naturally feel regret that we didn’t hold longer.  But we are reminded of what a wealthy friend told us long ago about a rich man who was asked about how he became so wealthy… His response was, “By selling too soon.”

Yesterday we directed your attention to the Federal Reserve Bank of Dallas and the speech from its CEO Mr. Fisher. We went hunting for their 1997 Annual Report, titled The Real Cost of Living in America – which long ago left ingrained in our minds the results of putting the costs of what we typically purchase into the measurable of number of hours worked  –

In 1908 a typical factory worker had to toil more than 2 years to buy Ford’s Model T, one of the nation’s first affordable cars.  A 1997 Ford Taurus costs today’s worker just 8 months.

For those of you who can spare a few minutes, here is the link to their very insightful and entertaining 1997 Annual Report … For those of you using our work additionally as a tool to train your children and grandchildren, this link is a very valuable resource and discussion item.

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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 counsel 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 may hold positions in the above mentioned securities.  Based on market related or personal events these positions may change without notice.

– Stock Market Companion – Current Holdings –

– Stock Market Companion – Performance –

Please click on this chart to see the Stock Market Companion 15MinuteStocks stock performance versus the SP-500.  It will open in a separate browser window.
* Gains (losses) do not include brokerage fees.   Our returns are very strong … BUT …  WE have to remind everyone just like all other financial sites in America – Past Performance is No Guarantee of Future Returns.  Unlike others however, our objective is to teach you to be able to make these types of strong returns On Your Own.

All of the investments – stocks, entries, and exits are listed on our Stock Market Companion Watchlist at the bottom of the spreadsheet, in the section labelled Former Holdings.

– Benchmarks “At a Glance” –

Data Source : Financial Visualizations Inc.

Signing-Off for Today,

Your -Stock Market Companion

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