– The Stock Market Companion –

15Minute Market Update

June 27, 2011

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

Published all Market Days
Monthly Subscription $29.95

[Download not found]

-Executive Summary-

  • UP!  But with little enthusiasm – as measured by LOW volume.
  • The 2nd quarter ends this Friday, just in time for the 4th of July weekend.  Activity is going to continue to diminish as the week progresses and market participants head for vacation.
  • Activity will pick-up again when earnings results are released – starting officially with Alcoa, Inc. (Ticker: AA) on July 11th – after the close.
  • We cover the details of the unfolding drama in Greece in detail, below.
  • Nike, Inc. (Ticker: NKE) reported excellent earnings and revenue growth – today, after the market closed.  The stock is UP in after hours trading.
  • 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 +5.1%
1 Research in Motion, Inc. RIMM Holding 6/23/2011 -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.

– 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

1,280.1

Index

UP = +11.65 points

DOW-30

12,043.56

Index

UP= +108.98 points

NASDAQ

2,688.28

Index

UP = +35.39 points

NASDAQ 100

2,252.24

Index

UP = +35.18 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 –

On Friday we wrote … “The underlying fundamental* (*primarily corporate earnings, but also government measures of GDP, and acquisitions of companies at strong premiums to market prices) condition of the markets is very good.  Unfortunately the uncertainty that surrounds the markets is thick.  Greece and its troubles with carrying its debt (let alone reducing it), other European “rim” countries – such as Ireland with similar troubles, potential slowing in the global economy, impact of recent higher energy prices, ending of the quantitative easing program by the Federal Reserve, and political wrestling involving the U.S. debt ceiling is an extremely volatile mix…”

Underlying market uncertainty CAN change quickly.  In March of 2003, as the invasion of Baghdad was halted in order to re-align the supply chain, uncertainty was high.  But by the following Monday, victory appeared certain and the stock market here in the U.S. responded enthusiastically.  Uncertainty had lifted and the stock market rally was on.   Last September, when the FDIC (Federal Deposit Insurance Corporation) reported in their quarterly report that banks were needing to set-aside LESS for loan loss reserves, uncertainty lifted and the market began to gradually lift higher.

Now however, uncertainty has again descended on the markets – like a thick fog.  We simply do not know where this market is headed next.  So we are careful.  We do not believe that there is anyone who knows for sure where this market will head next.  Be careful of those who sound overly confident.  These are simply times of unprecedented stimulus and indebtedness.  A modern, robust currency (euro) could undergo major surgery, if Greece were to decide to exit the European Monetary Union, or if Germany decided that it would no longer fund debt of highly indebted nations.

The European Monetary Union (EMU) was a bold step by leading European nations to cut-through the cumbersome and expensive commercial problems of a highly fragmented market of nation states in close proximity to one another – which each had its own currency.  They united these nations in the EMU, which IS SEPARATE from the European Union.  The EMU became a unified market with similarities and scale comparable to the USA, with guidelines established by the Maastricht treaty.   The currency of the EMU is called the “Euro” and was introduced as the currency in the 12 original members of the EMU on January 2, 2002.  There are 300 million people in EMU countries vs. 307 million in the USA.

Greece was part of the 12 original EMU nations.  Why?  Ever since WWII, Greece has been courted politically and economically as a stabilizing force in the eastern Mediterranean – where the Arab world and former Soviet world geographically meets European democracies.   Even with the fall of the Soviet Union, this hasn’t changed.  Greece is an important stabilizing force.  Greece is also a member of NATO (North Atlantic Treaty Organization).  This reality of stabilization and the cost thereof is being put to the test.
The Maastricht criteria for the allowable national debt of individual nations within the EMU was set at a maximum of 60% of gross domestic product (of the individual nation).  Greece is way beyond this point now at +167% of GDP!

Last week, the Greek prime minister survived a no-confidence vote, which allows his coalition to continue its roll-out of austerity measures (austerity measures = intense budget cutting).  This week the Greek parliament must vote on these budget measures, which are very unpopular to the Greek general public.

In the past, when a nation like Greece – at that time, with its own currency and central bank – ran into troubles with having spent too much money and acquired too much debt, it could undercut the value of its own currency (print more money) and lower interest rates, thereby stimulating exports and investment – which increased local employment and business revenues, which would increase tax revenues, which could be directed at paying down the debt.  Now however, as a member of the EMU, Greece doesn’t have that ability.  All Greece can really do is cut their budget and gradually pay off debt.  As they cut their budget, private and public spending continues to decline, jobs are lost, tax revenues decline, costs of unemployment INCREASE and it becomes HARDER to pay off the debt.  The situation becomes even worse because the markets are requiring HIGHER rates for Greece to borrow to meet its current expenditures as it tries to pay down its debt.  It’s an almost impossible situation – and everyone knows it.  The public response is getting explosive – both in Greece – where the public justifiably wonders what the way out is and in countries like Germany – where the public doesn’t want to throw more good money after bad.

The markets are focused on the outcome in Greece,  the unfolding drama in the USA with the U.S. congress debating debt ceiling limits, and concerns about the slowing economy.   After 2+ years of the stock market rallying,  the stock market has become very narrow and volume is low.  There are opportunities that will unfold, but we have to be patient for them.

– Story-Stock Investing –

Our modest investment in Apple, Inc. (Ticker: AAPL) improved today, while our “toe-in” at Research in Motion (Ticker: RIMM) didn’t.
Some beaten down financial stocks – like Bank of America – and Ford Motor Co. looked better.

After the close today, Nike, Inc. (Ticker: NKE) issued EXCELLENT earnings and guidance!
Here is a SMC Daily Chart of Bank of America (Ticker: BAC) – to give you an idea of how things are looking for BAC.  Click on the chart and it will open in a separate browser window.

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 –

Here is a chart of the Stock Market Companion 15Minute Market Update stock performance versus the SP-500.  Click on it to 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

1.4314 USD = 1 Euro

USD / EUR

Dollar = Down

Gold

$1,499.20

Ounce

Gold = Down

Oil

$91.31

Barrel (West Texas Crude)

Oil = Flat

30 Yr. Fixed Mortgage

4.69%

Percent

Flat

10 Yr. Bond Yield

2.93

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.
  • Please click here to send us your feedback.  Let us know how we

Categories: Archives, Daily Updates
Tags:

Comments are closed.