– The Stock Market Companion –

15Minute Market Update

May 25, 2011

—— Stock Market Investing since the 1980’s ——

Published all Market Days
Monthly Subscription $29.95

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-Executive Summary-

  • Marginally higher.  The markets attempted to rally today, but volume was anemic and economic headwinds are obstacles.  See below.
  • Tomorrow evening at 7.00 PM PST, we are planning – FREE to our subscribers – our first Stock Market Companion – Market and Individual “Story-Stock” Briefing and Question and Answer Session (Live Webinar).  For those interested, please click on this link – https://freetrial.webex.com/freetrial/j.php?ED=148529552&UID=493594052&RT=MiM0 and click “join as a participant” in the upper left corner to register your name and email address to attend.  Be sure to bring whatever questions you have about stock investing and we will do our best to answer them.  See more below.
  • For those subscribers using their iPhones to access the web, our webinar will be available – BUT – you need to download an iPhone “App” that is free at the Apple App Store.  Please download the WEBEX free webinar “APP”.
  • For those who cannot make it tomorrow night, we hope to offer tomorrow evening’s session as a recorded session as an archive on our website soon after the session is complete .  We also hope to offer these session free to subscribers, once per month.
  • Cisco stock continues to sink.  Please see below.

– 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 -10%
2 Amarin Corp. PLC AMRN HOLDING 5-19-2011 +5%

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

1,320.47

Index

UP = +4.19 points

DOW-30

12,394.66

Index

UP = +38.45 points

NASDAQ

2,761.38

Index

UP =+15.22 points

NASDAQ 100

2,310.55

Index

UP = +7.40 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 –

The uncertainty that lies ahead, which we covered with a broad brush yesterday, is acting like a lead blanket on this market –

  1. American debt issues (At what point will the U.S. congress raise the debt limit?)
  2. Will there be meaningful change in fiscal policy in the USA (unlikely, but there is hope)?
  3. How will the economy respond when the Federal Reserve removes more stimulus or hikes rates just bit?
  4. Will inflation that has shown up in developing nations appear in the main industrial nations?
  5. The global economy does appear to be slowing down a bit, following April’s data.

Some more news today helped to keep the market in check, although there were buyers present –

  1. Goldman Sachs lowered it’s growth expectations for China’s economy.
  2. Japan’s April data revealed a trade Deficit for the first April since 1980.  That’s a long time ago.  Click here for a report. The cause for this are production and delivery set-backs resulting from the March 2011 earthquake and tsunami.  On a related note, Toyota (the car maker) announced that they would have production back up and running ahead of schedule.  Toyota stock was already sharply higher on this news before our markets opened, so there wasn’t an opportunity there for us.
  3. Last week’s U.S. initial jobless claims – reported today – remained above the psychologically important 400,000 level.  In this case, we would like to see a resumption of the downward trend BELOW 400,000.
  4. U.S. durable goods orders (think cars and refrigerators…) declined sharply last month vs. March.  HOWEVER, March’s numbers had a pronounced spike to them – so today’s numbers need to be taken in balance.

– Story-Stock Investing –

Let’s talk about some stocks that we like –

  1. Amarin Corp. PLC (Ticker: AMRN) – We’re on board and the stock looks good – so far.  Today is one of those days where – as investors – we simply have to shake our heads.  On the days that the market was down, the stock was UP.  Today, the market moves up and the stock moves down.   As we mentioned before, the greatest liability here is a set-back in timing or further requirements from the U.S. Food and Drug Admin. Unlike Merck, Pfizer, et al., ARMN does not have any current production or product liabilities.
  2. Soda Stream International (SODA) – Stock needs to build some form of lateral consolidation before a purchase is possible.
  3. Simple Tech, Inc. (STEC) – CEO purchased $3.5 million worth of the stock last week.  Earnings are strong.  Stock looks “buyable” here.
  4. HH Gregg, Inc. (HGG) – Sure this one will make you laugh when you hear that this is an electronics retailer.  Can anything good be happening in electronics retail?  This company is expanding in places left deserted by the Circuit City bankruptcy.  This one looks like it could recover some lost ground.
  5. Others … Omnivision Tech. (OVTI) – possible buy point arriving.  Company makes the optical sensor for Apple products, Netflix (NFLX) – a stock that is a hero – BUT everyone is hungry for a piece of Netflix’s lunch (Google and DISH just to name a few), Level 3 Comm. (LVLT) – too steep of curve … no suitable buy point.
  6. Hewlett Packard (HPQ) –  if it would push higher intra-day, we would get on board.
  7. Lululemon (LULU) … stock is building a possible pennant formation.  Management said that they can sell whatever they put on their shelves, BUT that supply is constrained.

Over 2 decades of stock investing has shown us to be extremely cautious when the market is in a correction.  Currently, the market is in a correction – but it sure looked like it wanted to bounce higher today.

How about our very modest holding in Cisco (Ticker: CSCO)?  Today we received this email from a SMC subscriber-friend –

“Wow. What a dog!!  Even on up days (as anemic as they are) CSCO can’t manage to break even.  So, my question for you is, being a ‘story stock’, how do you keep from falling in love with a stinker? Sure we’d all love to see CSCO turn around, but all the technicals I look at are down down down.  Was it their earnings in Feb that was the game-changer? Clearly something dramatic took place back then and it has been diving ever since?

To be clear, I’m not driving the SMC boat and I don’t want to sway your decision one way or other.  But, I remember reading from someone that we often more from our losers than our winners.  I’d be interested to hear your perspective and what you’re learning.  I think you originally set a stop of $16 so we’re not quite there yet, but it sure is trying hard to get there.  How did you arrive at that stop?

And not to be totally negative, but these Irish eyes are smiling….AMRN. Nice.“

SMC responds … Cisco definitely falls in the Big-Dog category.  They have to right-size their enormous enterprise to changing conditions of the marketplace.  This is not an easy job.  Their management however is taking it on.  They reported earnings on May 11th, and the stock initially shot higher because they beat on earnings.  The stock proceeded to sink as institutional investors had a chance to drill-down on management to find out what happens next.  Earnings forecasts for the next quarters were REDUCED.  Not good.  Today, CSCO reported to the SEC in a 10-Q filing that next quarter’s revenues are going to be flat.  We’ve set our stop at approx. $15.80.  The March 30th, 2009 lows were $16.08/share.  In March 2009, it looked like the entire financial world was not going to survive.  If CSCO heads back into that territory by breaking through $16.00 and heads to $15.80, we are going to take our lumps and move on.

We believe CSCO is moving quickly to get things under control.  So far, big investors are not impressed.  We may have to simply move on.

Attention – FREE to Subscribers – Tomorrow Night at 7.00 PM – our first Stock Market Companion – Market and Individual Stock Briefing and Question and Answer session (Live Webinar).  We will be using Cisco System’s WEBEX conferencing tool (free-trial mode).

For those interested, please click on this link – https://freetrial.webex.com/freetrial/j.php?ED=148529552&UID=493594052&RT=MiM0 and register your name and email address to attend.   Our intent is to quickly go through how we are seeing the market and individual stocks, and give lots of time for question and answers that you can communicate by typing your questions in the chat window as we go along.  Barring any unforeseen technical difficulties, my voice will be audible for you – so for those attending you will want to test your PC speakers to make sure things are “on” and functioning.  Since this is our first such Webinar event, please be prepared to be patient.  Technical issues may arise.  We talked with WEBEX customer service and asked what the number 1 problem is with such events.  Their answer = Participants not understanding how to join the meeting.  You will need to follow your screen directions slowly and carefully.  We will be doing the same on our side to make this a success!  Our hope is to be able to post the recorded session on the website soon after completing the event.  Those who cannot attend or whose time zone is simply not compatible with our scheduled live event will be able to enjoy the recorded session.   Things will get better as we do more of these.  It is our hope to offer 1 such event free/month for subscribers.

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

1.4095 USD = 1 Euro

USD / EUR

Dollar = Down

Gold

$1,525.20

Ounce

Gold = UP

Oil

$99.26

Barrel (West Texas Crude)

Oil = UP

30 Yr. Fixed Mortgage

4.69%

Percent

Flat

10 Yr. Bond Yield

3.12

Percent

UP just 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.

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