-Executive Summary-

• The markets closed again a bit LOWER.  Today represents a FAILED bounce attempt by the markets.  The uncertainty that lies ahead is thick enough to cut with a knife.  Because the broader market is right at important support, the market could spike higher at any given time and put some of the late arriving shorts to the test.  See our SMC SP-500 ETF Daily Chart.
• Federal Reserve Chairman Mr. Ben Bernanke spoke today at 3:45 PM in Atlanta.   The market sank into the red as he identified his view of the U.S. economic outlook.  We cover his presentation in detail below.  Don’t miss it.
• Ford Motor Co. presented a very bright “Mid-Decade” Outlook.  See more below.
• The stock of SodaStream International (Ticker: SODA) cruised a bit higher today.  It reminds us a bit of Taser International’s (TASR) huge run in 2003.  We are however very careful with this background market.  For those with a high tolerance for risk, this one may “bubble” higher.  When TASR made its run, the chart was nice and tight.  SODA’s chart isn’t near as tight and predictable – it is prone to some hard down-spikes which we don’t like.  Additionally, TASR is a U.S. manufacturer.  SODA is Israeli and subject to additional risks and uncertainties.  When TASR made it’s run, the background market was on the RISE.

• 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)

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	1,300.16	Index	Down = -1.23 points
DOW-30	12,151.26	Index	Down = -19.15 points
NASDAQ	2,732.78	Index	Down =-1 points
NASDAQ 100	2,268.96	Index	Down = -5.52 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 –

From the open this morning,  the bounce that the market was undertaking felt “forced”.  There was no conviction behind it.  Shares of large and small corporations were getting little attention.  Instead of investors coming and rapidly pushing the shares of companies like Bank of America (Ticker: BAC $10.65) up higher from yesterday’s weak close, they were ignoring them.   The set-up for a strong bounce was perfect – BAC shares closed yesterday at $10.83, below last November 30th’s low of $10.91.   The last time that BAC was down in this territory was in January 2009.  At that time, the entire financial world was coming apart.   Today investors couldn’t be tempted, even though BAC shares are already down -30% from their January highs.   Why?  One reason is that there are big concerns as to whether the banks are capitalized enough.  In other words, we don’t know if the banks may need to raise more money if / when they must begin marking the distressed properties on their loan books to market.

Bank of America wasn’t the only one having trouble.  Look at Apple, Inc. (Ticker: AAPL $332.04).    Apple announced yesterday fantastic news about iPad sales, an important new service for customers called the iCloud, AND 85 million MAC users.  How are Apple shares doing?  Terrible.  They were down -$5/share by the time the market opened.   The shares are simply $8/share above their January 2011 breakout, yet no one is interested.  This is on top of at least two broker upgrades that we have seen this week in the high $400 and $500 range for Apple shares.

There were exceptions of course.  Intel (INTC $22.06) shares gapped up strongly, but began selling-off starting at 11:00 am.  SodaStream International (SODA $61.07) – the maker of consumer water carbonation and flavoring systems – bubbled higher.  SODA held its ground.

At 15:45 Federal Reserve Chairman Ben Bernanke presented a speech at the International Monetary Conference in Atlanta, Georgia.  His presentation began with an outlook for the U.S. economy.  His frank and transparent assessment was all that was needed to send the market further south and eliminate the possibilities even for a tepid bounce.  Within minutes, the market erased its gains and closed again negative for the day.   Click here for the easy to read transcript of his speech, direct from the Federal Reserve website. Please read this document when you can.  Mr. Bernanke is clear and his message is very readable.

Those using this 15Minute Market Update as a teaching tool for their families will find many excellent discussion topics in Mr. Bernanke’s speech.  He covers every aspect vital to our economy – Outlook, growth, household spending, jobs, construction, commodity pricing, monetary policy, state and local government spending, and U.S fiscal policy – each segment short and concise.

At Stock Market Companion, we are hugely disappointed by the destruction in the buying power of the U.S. dollar since the 1950’s brought about to no small degree by monetary and U.S. fiscal policy.  At the same time, we realize that we have to work with what we have.  Today we have a Federal Reserve system.  As far as we are concerned, Mr. Bernanke is the most transparent and pro-active Federal Reserve Chairman since Mr. Paul Volcker.

If Mr. Bernanke can influence our politicians to stimulate the economy by investing in it through lower taxation, fiscal RESTRAINT and smart policies that lead to real job creation, and not more pork and spending – our nation has a good chance.  So far, he has been unsuccessful in that department.  Unfortunately, when the U.S. government hear’s the words “stimulate” they think “SPEND”.   We cannot spend our way out of this problem.

Here’s Mr. Bernanke’s summary of the U.S. fiscal dilemna –

“…The prospect of increasing fiscal drag on the recovery highlights one of the many difficult tradeoffs faced by fiscal policymakers: If the nation is to have a healthy economic future, policymakers urgently need to put the federal government’s finances on a sustainable trajectory. But, on the other hand, a sharp fiscal consolidation focused on the very near term could be self-defeating if it were to undercut the still-fragile recovery. The solution to this dilemma, I believe, lies in recognizing that our nation’s fiscal problems are inherently long-term in nature. Consequently, the appropriate response is to move quickly to enact a credible, long-term plan for fiscal consolidation. By taking decisions today that lead to fiscal consolidation over a longer horizon, policymakers can avoid a sudden fiscal contraction that could put the recovery at risk. At the same time, establishing a credible plan for reducing future deficits now would not only enhance economic performance in the long run, but could also yield near-term benefits by leading to lower long-term interest rates and increased consumer and business confidence.”

Unfortunately, for at least two generations a “credible” plan for future deficits and U.S. politics hasn’t existed.   There is a big danger of giving politicians another  chance to “kick the can down the road” – when we offer the words “long-term solutions” and “sustainable trajectories”.  This language most often leads to UNACCOUNTABILITY.

– Story-Stock Investing –

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	1.4689 USD = 1 Euro	USD / EUR	Dollar = UP a bit.
Gold	$1,544.00	Ounce	Gold = Flat
Oil	$99.73	Barrel (West Texas Crude)	Oil = Flat
30 Yr. Fixed Mortgage	4.69%	Percent	Flat
10 Yr. Bond Yield	3	Percent	Flat at lows.
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.

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