-Executive Summary-

• Down Again! Continued unrest in the Arab world – particularly Libya – caused the market to continue to attract sellers.  Please use this opportunity to click on the SMC SP-500 ETF (SPY) Daily Chart below that we provide each day.  You will notice that the market came right down to near term support at 130 on the SPY, and bounced a bit.  We called out the SPY 130 point line yesterday on our chart as a likely first target for the market.
• Ford Motor Co. (Ticker: F) announced a significant recall on their F-Series trucks due to unexpected airbag deployment.  There are obviously varying degrees of significance on recalls. Accidental airbag deployment is a grave problem.  A multi-day over-reaction to such a problem in combination with a weak market would perhaps present a nice buying opportunity.  See more below.
• We sent out an SMC Intra-Day Alert concerning the markets this morning.  Please see more below.
• Many stocks have fallen significantly off their highs in the past days.  Ford Motor Co. (F) is now -18% lower than our +4.1% sell point on January 19th, and Intel Corp. (INTC) is -4.3% lower than our break-even sell-point on Friday.
• Crude oil tagged $100/barrel and pulled-back.  In evening trading crude is back above $99/barrel.
• During the Christmas season we were noticing an improvement in the Wet Seal Co. (Ticker: WTSLA) product offering and a new INTERNET SALES CHANNEL.  As the market has pulled back, WTSLA has been holding firm at the $4.02 level.  This stock is clearly an inexpensive stock-and they have lots of cash.  On further study today, we noticed a change in CEO at WTSLA in January.  WTSLA hired a seasoned veteran from American Eagle Outfitters – Susan McGalla CEO.  These are the kinds of changes that can bring significant upside to a stock – a focused internet based sales channel (NEW) and a NEW CEO with something to prove.  Stay tuned.
  
  Please see our short (2 minute) website videos for more information.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.

– 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 –

This morning, the stock futures were pointing higher before the open – suggesting a replay of the market’s response during the recent Egypt crisis – when the DOW sank approx. -180 points on Friday 1/28/2011 and began recovering the immediate following Monday.  By the next Friday the -180 point drop was a distant memory as the market continued surging higher.  Today however, those investors who had anticipated a replay of sorts were handed their hat.

There are considerable cross-currents today in the market.  Here are some –

1. A 2 year rally that has confounded doom and gloom investors and rewarded those (like Stock Market Companion subscribers) who have pursued growth and recovery stories in this climate.   However this 2 year rally is getting a bit “long in the tooth” in terms of extension without a pull-back.  On the other hand, from a current earnings standpoint the SP-500 and many individual stocks – whether Apple Inc. (Ticker: AAPL) selling at approx. $343/share or Intel Corp. (INTC) selling at approx. $21.21/share – are NOT OVER-PRICED.

But there is a balance between perceived and real value + DEMAND for the stock.  Without DEMAND for the stock, a stock can be as fairly or as under-valued as it may be – but it won’t go anywhere and investors will simply be exposed to the risk of of the market without the reward of a stock pushing higher.  This is yet another way of discussing the idea that we introduced yesterday as to why we would never want to simply be holding a stock like Wal-Mart (WMT) if there is no compelling reason to own it and it is not in an uptrend.

Under-valued stocks and under-valued market in terms of current earnings is BULLISH for the market.

2. Many investors who were burned during the 2008/2009 market destruction – and didn’t sell – are perhaps beginning to think, “OK, some of my stocks have recovered close to where they were before the market was wrecked.  I think that it’s time to take my money.”

3. The Federal Reserve has been doing all they can to encourage investments in higher yielding assets – instead of bonds and cash.

4. Several companies like Intel Corp. (INTC) have announced strong stock-buyback programs that should benefit the underlying stock.

5. Politically in the USA, the U.S. Congress is heading towards a budget fight that may introduce some strong, short term turbulence.  Financial leaders in our country – whether Treasury Secretary Geithner or Federal Reserve Chairman Bernanke have made it clear that it would be very unwise for the U.S. Congress not to raise the debt limit and threaten the perceived quality of U.S. Treasuries.  They HAVE NOT been making these statements simply to entertain themselves.  They are doing what they can to head-off what they see as a real risk.

6. Current events in the Arab world are justifiably causing fear to rise in the markets AND pushing up energy costs.  Although the U.S. is sitting on higher than average crude inventories, a partial or near complete shut-down in Middle-East oil would send the markets plunging. Even in the absence of a disruption in oil supplies, the perceived threat of disruption has increased oil prices significantly.  Consider that each $10/barrel rise in the price of oil knocks a half of percent off our U.S. GDP!

Under the shadow of today’s news coming from Libya, existing home sales data was released for January which suggested a 3rd straight month in monthly sales increases… BUT … foreclosures and short-sales accounted for 37% of all sales, with the median home price falling 3.7% to the lowest level since April 2002.  Click here for the details.

– Story-Stock Investing –

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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

** 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.