– The Stock Market Companion –

15Minute Market Update

June 22, 2011

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

Published all Market Days
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-Executive Summary-

  • Down – UP – … then DOWN.  The markets were not able to hold onto gains today and closed negative after Federal Reserve Chairman Ben Bernanke’s press conference following today’s Federal Open Market Committee release of immediate monetary policy.
  • Greece prime minister George Papandreou survived the No-Confidence vote placed last night.  This stabilized the euro and gave an early, favorable nudge to equity markets – which did not hold into the close.
  • For those thinking that there is no hope for curbing the appetite for spending of our federal government, please read this article from Bloomberg Businessweek profiling British prime minister Mr. Cameron’s efforts to cut 40% of British government spending.  Click here for the article. If the U.S. could make this type of move, the future would look better for our nation.
  • We summarize our overview of the markets – with 7 points, below.
  • Please click here to send us your feedback.  Let us know how we are doing – We are here to serve you. Support@Stockmarketcompanion.com

– Stock Market Companion – Current Holdings –

Nr. Co. Ticker Action Entry Date Current Gain (Loss)
1 Apple, Inc. AAPL Holding 6/20/2011 +2.1%
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.

Click below to expand the SMC Apple, Inc. Daily Chart from today.

– 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

1,287.14

Index

DOWN = -8.38 points

DOW-30

12,109.67

Index

DOWN= -80.34 points

NASDAQ

2,669.19

Index

DOWN = -18.07 points

NASDAQ 100

2,235.75

Index

DOWN = -16.07 points

– Market Trends –

Trend

SP-500

DJ-30

NASDAQ

NASDAQ 100

Short Term

*UP*

*UP*

*UP*

*UP*

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 chart in a separate browser window).

– Today’s Highlights –

Here are the 3 MAJOR highlights from today –
  1. Last night the legislature in Greece gave prime minister George Papandreou a new lease on his political life to pursue budget tightening measures aimed at fulfilling IMF and European Central Bank requirements for new funding of Greece’s debt.This stabilized the euro and brought the U.S. dollar down a bit and supported an early favorable environment for the equities markets.

  2. This afternoon, the U.S. Federal Reserve released its June Federal Open Market Committee (FOMC) monetary policy decision.  The FOMC decided unanimously to maintain rates at close to zero (+0.25%) – for an “extended period of time” and to wrap-up its $600 billion long term treasury purchases by the end of this month.  Later this afternoon, Federal Reserve Chairman Ben Bernanke held his second press conference following the FOMC meeting to discuss the Fed’s views of the economy.   Importantly, he said that the first sign of monetary tightening will be the discontinuation of the reinvestment of bond proceeds into further bond purchases.  There is no indication of when this will take place.
  3. Federal Express, Inc. (Ticker: FDX) reported EXCELLENT quarterly earnings and a favorable 2012 forecast.  Co. said that we are unquestionably in a “soft-patch” for the economy.

– Story-Stock Investing –

There are market climates that are very suitable for buying “break-outs” and there are other climates when buying break-outs leads to losses.  Investors have not been rewarded for buying breakouts lately and so we have been more interested in keeping our “powder dry” and buying deeply, oversold companies with strong earnings and cash – hence our purchase of Apple, Inc. shares at recent lows.

This strategy however has led to us missing two good investments lately  – Oncothyreon, Inc. (Ticker: ONTY) and Zagg, Inc. (Ticker: ZAGG)

Last night, Zagg, Inc. reported an aggressive acquisition ($150 million) for iFrogz – a competitor in the iPad, and smart phone accessory market with products sold at WalMart and other large retailers.  The market rewarded ZAGG with a gap higher today on this news of the acquisition, pushing the stock above $15/share – before settling down below $15.  At this point, there is NO ENTRY for us to purchase ZAGG shares.  We had a chance yesterday in the $12.50/share range but passed on it – the stock was quiet all day, but then suddenly raced higher.  It felt forced.  When we heard of the acquisition after hours, we were glad NOT to be in the stock.  Often, small / micro cap companies like ZAGG can get hit hard when acquisitions are announced.  Not this time.

Here are our thoughts at this time about the markets –

  1. These are highly unusual and unprecedented times for the market.  At no other point in history has there been such enormous stimulus and government involvement influencing (some would say “supporting”) the markets.  When QEII is complete, the resulting impact on the markets is unknown.
  2. The economy is at a minimum in a “soft-patch”.  Today the Federal Reserve guided this year’s GDP forecast LOWER 2.7 – 2.9% vs. 3.1-3.3%.  Due to this weak economic environment, the markets have sold-off.
  3. The broader market (SP 500) is just below its 50 day moving average and just above its 200 day moving average.
  4. The market is behaving predictably – in light of the current weak economy.  It is very narrowly rewarding some companies for growth – ZAGG, Inc. ; GMCR…; Lululemon (LULU) + others.   Many stocks are being shunned.
  5. By and large, earnings are excellent at U.S. corporations – but the market is not paying any PREMIUM for excellent earnings or growth – in general.  There are exceptions.
  6. At any time, a sovereign nation default – such as Greece – could take place and torpedo the markets.  The late afternoon sell-off in the markets today can perhaps be attributed to Federal Reserve Chairman Ben Bernanke’s acknowledgement of this fact.
  7. Following a 2+ year rally off the severe market bottoms, we are being cautious with the markets.  Early buyers are taking their profits and others are NOT stepping forward in the face of the above noted intense uncertainty that exists globally at this time.

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

1.4337 USD = 1 Euro

USD / EUR

Dollar = Flat

Gold

$1,553.40

Ounce

Gold = Up a bit more – again near all time highs.

Oil

$94.45

Barrel (West Texas Crude)

Oil = Up a bit.

30 Yr. Fixed Mortgage

4.69%

Percent

Flat

10 Yr. Bond Yield

2.97

Percent

Flat

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.

  • The markets were AGAIN divergent today, just as yesterday revealing further weakness in the technology sector while the broader market (S&P 500) and the DOW (DJ-30) held POSITIVE.
  • Research in Motion (Ticker: RIMM $27.75) reported earnings last night that were a major disappointment.  We go through the details below.  The company received 2 broker upgrades going into earnings.  The stock then lost -21.45% from yesterday’s close into today.  We go through our steps in handling our brief investment in the stock this last week – AND WHY, below.
  • Crude oil continued to descend today, reflecting a drop in value of the U.S. dollar – BUT also  concern of future demand as the global economy slows down.
  • The S&P 500 is finding support at its 200 day exponential moving average.  If the broader market doesn’t find strength here and begins to sink further, the next near point of support is the low it plumbed during the recent nuclear crisis in Japan.  If it fails that point, then the intermediate term trend will be DOWN.
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