-Executive Summary-

• The markets moved initially strongly LOWER again as the U.S. dollar surged higher.  Commodity related stocks (metals, oil and agriculture) all fell hard this morning on the U.S dollar’s ADVANCE – BUT THEN – The market surged higher, with the greenback pulling back sharply from its intra-day highs and the markets closed higher for the day.  A real roller-coaster.
• Stock Market Companion holding Cisco Systems Inc. (Ticker: CSCO) took it in the chops today – BUT attracted huge volume at today’s lows.  Read more about our plan, below.
• Would you please feel free to give us feedback at support@stockmarketcompanion.com for insights of what you like about our work and where you would like to see improvements.  We are here to serve you.  We are planning on introducing 1x / month live webinars SOON for market and idea assessments and to offer a broad and specific Q&A session about stock investing.
• On another favorable UP day for the different markets, we will change the current short term trend in our trend table for the markets to “Flat” from “Down”.
• Here is a video interview of a father and son using the Stock Market Companion successfully together – as a teaching and investing tool.
  

– Stock Market Companion – Current Holdings –

Nr.	Co.	Ticker	Action	Entry Date	Current Gain (Loss)
1	Cisco Systems,Inc.	CSCO	Holding (Reduced size)	5-10-2011	-6%
2	Amarin Corp. PLC	ARMN	Holding (small investment)	5-10-2011	+3%

If the above “Current Holdings” table is empty it means that we are not holding ANY stocks at this time and that we are therefore 100% in cash.

– 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	1,314.52	Index	UP = +6.57 points
DOW-30	12,695.92	Index	UP = +65.89 points
NASDAQ	2,863.04	Index	UP =+17.98 points
NASDAQ 100	2,407.89	Index	UP = +14.81 points

– Market Trends –

Trend	SP-500	DJ-30	NASDAQ	NASDAQ 100
Short Term	Down	Down	Down	Down
Intermediate	UP	UP	UP	UP
Long Term	Lateral	Lateral	Lateral	Lateral

*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 –

The central bank of China increased again the amount of cash that their banks must have on their balance sheets before making loans.  This is called the “reserve requirement ratio”.  By increasing this reserve ratio, the central bank is continuing its efforts to slow down growth and inflation.  This put pressure on the markets early this morning.  The U.S. dollar continued its surge higher early this morning, putting commodity based stocks and commodities back in a brief free-fall.  At one point this morning, silver was -32% off it’s recent highs from 4/28!

Cisco’s earnings report last night also had a negative effect on tech stocks this morning.  More below.

The U.S. dollar pulled back in the afternoon and significant buying took place at this morning’s lows in stocks and commodities.  The market is behaving choppy to say the least!

Data released today put initial jobless claims for last week again above the important 400,000 mark.

– Story-Stock Investing –

Let’s start out with the good news …  Amarin Corp. Plc (Ticker: AMRN) pushed nicely above the $17.00/share line today after some investors were shaken out on this morning’s drop in the market.  The stock however CLOSED right at the April 18th high of $17.44/share.  The stock needs to break above this area – and preferably with fervor – for us to get a bit more sure of its intentions.  So far, so good.

Other good news … a SMC subscriber informed me of selling last week’s position in the Pro-Shares Silver Ultra-Short Fund (Ticker: ZSL) today at approx. $22/share.  That was a +45% return for that subscriber.  We’ve had others giving us periodic “hi-5’s” on that one.  Nice – Keep it coming.

Cisco (Ticker: CSCO).  Phooey.  It played out as we feared, hence our reduced share holding and yesterday’s SMC Intra-Day Alert.  Initially after the quarterly earnings BEAT was released, Cisco shares surged to $18.59/share and things looked great, BUT then came the earnings conference call – which we were concerned about.  Remember, we mentioned that this was the first chance that institutional money managers had to probe management about upcoming restructuring plans at the company.  Cisco CEO John Chambers dished out the bad news of forward looking REDUCED quarterly earnings expectations as well as costs associated with eliminating 4,000 jobs.  The stock sank, but there was a lot of volume pushing the stock momentarily back above $17/share.  The stock closed today at $16.93/share.  We are DOWN -5.5% on this investment.   Here’s what we are thinking now –

Let’s look at today’s facts.  CSCO is expecting to post earnings for this quarter in July at 0.37-0.39/share.  Let’s say that CSCO can hold that level of earnings for the next 4 quarters as they attempt to “right-size” their business to the new marketplace.   $0.37 x 4 = $1.48/share annual earnings.  Divide today’s approx. $16.90/share by $1.48 in annual earnings and you get a forward price earnings ratio (forward P/E) of approx. 11.4.   That’s pretty cheap for a world-class company.  Some brokerage companies today were suggesting that value investors consider accumulating Cisco shares at these prices.  O.K.  Still, no one really knows what the forward earnings are going to be.  We are going to give this one some breathing room since we had a very small share count.  If the stock begins to look like it is going to roll-over and challenge $15.80/share we’ll take our losses.

This Cisco situation reminds us of when things looked ugly for Starbucks (SBUX) and the stock was down at around $7/share in 2008.  Customers were saying that McDonald’s was brewing coffee that tasted better and was cheaper.  Starbucks had allowed certain shortcuts in their processes to save money and had other troubles, BUT ACKNOWLEDGED these problems and promised to right the ship.  The stock recovered and is now at around $36/share. That’s a big 400% gain for investors who decided to step on board and stick with the king of retail coffee. We think its wise to keep an open mind about Cisco.  If it holds ground here and we get favorable quarterly results in July, this may be an add-to.  When you have a high-quality company that is on the ropes, which recognizes publicly its failures and pledges a “drop the gloves” approach – it may be time to load up on the shares.  We first need to see that the stock holds these lows before we decide to add more shares.

Here are two interesting articles associated with Cisco –

1. Cisco layoffs +

2. Cisco Growth Targets and Retrenchment

In separate news, here is an important update from Ford Motor Co.’s annual meeting today.

Here is a Reuters Special report on a investment scam. The continued high number of investment scams described in this article is very disturbing.  One of our many educational objectives with Stock Market Companion is to level the playing field between individuals and investment professionals – by providing an independent view of the markets and a clear understanding of how markets and individual stock investing works.

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 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 : 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.

– 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” –

US Dollar	1.42223 USD = 1 Euro	USD / EUR	Dollar = Higher, then flat for day.
Gold	$1,504.70	Ounce	Gold = Lower, then flat for day.
Oil	$98.57	Barrel (West Texas Crude)	Oil = Lower
30 Yr. Fixed Mortgage	4.69%	Percent	Flat
10 Yr. Bond Yield	3.23	Percent	UP a bit.
1 Yr. CD	1.16	Percent	Flat

Data Source : Financial Visualizations Inc.

Please help us by sending your valuable feedback to – Support@stockmarketcompanion.com

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.