– The Stock Market Companion –
15Minute Market Update
May 23, 2011
—— Stock Market Investing since the 1980’s ——
Published all Market Days
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-Executive Summary-
- The markets continue to sink as concern and confusion about European sovereign debt cause investors to RAISE CASH. One of their preferred methods of doing so is to purchase U.S. Treasuries. Treasury yields decrease as the cost of the underlying U.S. Treasuries increase. Today, the yield on the 10 Year U.S. Treasury dropped to its lows for the year. See below.
- Stock Market Companion holding Amarin Corp. PLC (AMRN) continued to push higher in the face of a difficult market. We are cautiously optimistic. See below.
- At Stock Market Companion, we are mostly in cash. Our modest holdings in Cisco Systems, Inc. (CSCO) and Amarin Corp. PLC (AMRN) are exceptions. We may soon need to let go of our Cisco and simply raise as much cash as possible, while still participating in such outliers as Amarin Corp.
- 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 | -9% |
| 2 | Amarin Corp. PLC | AMRN | HOLDING | 5-19-2011 | +7% |
– 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 |
1,317.37 |
Index |
DOWN = -15.90 points |
DOW-30 |
12,381.26 |
Index |
DOWN = -130.78 points |
NASDAQ |
2,758.90 |
Index |
DOWN =-44.42 points |
NASDAQ 100 |
2,316.78 |
Index |
DOWN = -34.65 points |
– Market Trends –
Trend |
SP-500 |
DJ-30 |
NASDAQ |
NASDAQ 100 |
Short Term |
Down |
Down |
Down |
Down |
Intermediate |
Flat |
Flat |
Flat |
Flat |
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 –
April? We are at the end of May, but market participants are seeing that there was a slowing in global manufacturing output in April. To some, this is clearly a reflection of the supply disruptions resulting from the earthquake and tsunami in Japan. Several weeks ago, Ford Motor Co. did say that the next few quarters would be impacted by the events in Japan.
Recently, the Philadelphia Federal Reserve Bank – which continually surveys manufacturing and service firms in their region – announced a substantial reduction in their broader index. Today, the Federal Reserve Bank of Chicago reported more of the same. The Chicago Fed National Activity Index (CFNAI) for April was reported today at -0.45. This measure is a weighted average of 85 monthly indicators! Importantly, this activity index is giving an indication that things are slowing down. Click here for the report straight from the Chicago Fed.
Market participants are not just looking at national economic indicators today and then pressing the “sell” button. They are looking overseas at the complete confusion in European sovereign debt issues – and associated risks – and then hitting the “sell” button on equities and buying U.S. Treasuries. Yields on U.S. Treasuries moved to their lows for the year, meaning that treasury prices are moving strongly higher as risk is being avoided.
The U.S. dollar was again higher today.
– Story-Stock Investing –
Today, the markets were down hard. The DOW (DJ-30) at one point was down approx. -170 points. When the market heads south its best to raise 100% or near 100% cash – because 9 out of 10 stocks go down with the market. We have a very modest holding in Cisco Systems, Inc. (Ticker: CSCO) and a modest holding of Amarin Corp Plc (Ticker: AMRN).
Throughout the day, AMRN was able to buck the overall negative trend in the market and move higher. It gradually lost its resilience as this strongly negative market day progressed.
When you invest in a development level pharmaceutical company which has passed its major drug testing hurdles as AMRN has, what you are susceptible to are –
- Profit takers, once the stock has made a big run. AMRN has certainly made a strong run, and profit takers did emerge. The stock however has been holding its own 24 days now after it’s large gap-up in April, and has proceeded higher in the face of a difficult market. That’s a good sign. Nonetheless, profit takers could still come in and take their money off the table if the market continues to erode.
- Price swings due to emerging news about the TIMING of their drug application. Last Thursday, May 19th – AMRN presented its results from its AMR101 drug to another U.S. group of medical professionals. The recent move in the stock appears to be due to this further exposure of positive news of this AMR101 performance. We don’t know yet the company’s final plans for FDA filing on this drug. As investors, we remain at risk to developments with their FDA application and the ability to get this drug to the market in a timely manner.
- FDA demands for further testing or FDA reluctance to authorize drug usage. Any news emerging in these areas would torpedo the stock.
The clear advantage of investing in a development level pharmaceutical company is that all investors understand that it is all about the FUTURE. There are no current earnings, or changes in earnings, or production or marketing setbacks with existing products that can cause the company to stumble. So when the the future is bright for the drug – and uncertainties related to timing of the drug application and the FDA application remain far away – and preferably – satisfactorily addressed, then the stock can continue to attract longer term investors who are willing to engage in the risks that are there.
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 15Minute Market Update 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 |
1.4051 USD = 1 Euro |
USD / EUR |
Dollar = UP |
Gold |
$1,514.90 |
Ounce |
Gold = Flat/UP |
Oil |
$97.28 |
Barrel (West Texas Crude) |
Oil = DOWN |
30 Yr. Fixed Mortgage |
4.69% |
Percent |
Flat |
10 Yr. Bond Yield |
3.11 |
Percent |
Down |
1 Yr. CD |
1.16 |
Percent |
Flat |
Data Source : Financial Visualizations Inc.
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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.
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