-Executive Summary-

• Lower!  Market participants lured into quick action yesterday on the favorable ADP Employment report expressed their disappointment today at the U.S. Department of Labor’s own Non-Farm Payroll Report – by selling shares.
• Today’s Non-Farm Payroll Report shows a weak employment picture.  See more below.
• The Federal Reserve’s mandate includes “…promote maximum employment”.  So far the aggressive “quantitative easing” program by the Fed has not improved employment.  See more below.
• Apple, Inc. (AAPL $359.71) shares closed today within 1% of all time highs.  See more below.
• OCZ Technology Group (OCZ $9.67) shares recovered from early morning weakness to close a penny above yesterday’s close.  We are attentive.
• If we did not already own Research in Motion (RIMM $28.98) shares, we would consider purchasing some here.  If the shares begin pushing higher than $3.23 we may add-to our shares, if not before.
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– Stock Market Companion – Current Holdings –

– 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 Trends –

*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) –

SMC SP-500 ETF Daily Chart

Please click on the chart to view it in a larger size.

– Today’s Highlights –

A dear friend mentioned recently that much of the quality of our lives is dependent on how we each handle disappointment.  Today, market participants were faced with that reality as yesterday’s ADP Employment Report proved to be an INACCURATE representation of what the national employment picture for June looked like – as compared to the data released this morning from the U.S. Bureau of Labor in the Non-Farm Payroll Report.  This caused the markets to sell-off strongly today.  Click here for details directly from the U.S. Department of Labor’s report.

Here are the details to the labor report that gets our attention –

The number of unemployed persons (14.1 million) and the unemployment rate (9.2
percent) were essentially unchanged over the month. Since March, the number of
unemployed persons has increased by 545,000, and the unemployment rate has
risen by 0.4 percentage point. The labor force, at 153.4 million, changed
little over the month.

At Stock Market Companion, we keep an eye on “U-6” which is a measure of TOTAL unemployment from the U.S. Department of Labor that includes those workers who are employed only part-time due to economic reasons.  This number +16.7%, two tenths of a percentage point worse than last year.  It is this 16.7% number that we “feel” out on “Main Street”.  Click here is the link to the table that provides the “U-6” measure.

The Federal Reserve Act of 1913 established this mandate for the Federal Reserve – “Promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.”

We’d like to draw your attention to the idea that the recent and aggressive “quantitative easing” program from September 2010 through June 2011 has not – as of yet – positively impacted the unemployment rate.
We know from measures of economic activity from the Federal Reserve’s own Beige Book that manufacturing output has increased AND that U.S. exports are strong. Yet, there is simply very little hiring taking place. Why?
Primarily because indirect labor costs associated with health-care and the uncertainties surrounding indirect costs of labor have increased.  We know also – from Hewlett Packard Co. CEO Mr. Apotheker’s comments – that HPQ is restricting hiring due to uncertainty concerning near term economic conditions.  HPQ is probably very representative of other large corporations and their current posture toward hiring.

The equities market did fight back this late afternoon, closing some of the downside gap introduced this morning on release of the above mentioned labor report.

– Story-Stock Investing –

• 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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