• As hard as the markets fell yesterday morning, they pushed HIGHER today.  Assisting the markets today were favorable new housing starts as well as excellent corporate earnings.  See below.
• Bank of America (BAC $9.57) reported terrible earnings this morning, before the market opened.  Some are hoping that this is the “Kitchen Sink Quarter”.  See more below.
• Gold and silver pulled back quickly from their highs as President Obama announced possible progress in the U.S. debt ceiling negotiations.
• At Stock Market Companion, we purchased shares in the ProShares Ultra-Short Silver ETF (ZSL $14.22) and issued and SMC Intra-Day Alert.  Our entry was at $13.83/share and our stop at just below $13.  We stated that we would not add-to our shares much above $14.32.  Maybe $14.50 would be our absolute limit.  See below.
• SMC holding, Apple, Inc. (AAPL $376.85) announces stellar earnings after the close today.  Shares GAP above $400 in after hours trading.  See below.
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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 –

Under the steady “drip” of heightened concern of pending disaster due to sovereign debt issues both here in the U.S. and in Europe, the markets rose today due to –

1. Better than expected new housing starts 629,000 (annualized) units.  The chart we shared yesterday from the U.S. Census Bureau showed the 3 month average on housing starts from 1999 at roughly 1.2 million.  If this current rate was sustainable, U.S. residential construction would be running currently at half its level – BEFORE – the housing boom really took off from 2003 to 2006.  We’ve included this interesting chart again today, below.
2. Excellent earnings released from U.S. corporations – IBM (IBM $185.21); Johnson and Johnson (JNJ $66.72), and Coca-Cola (KO $69.32)
3. Improvements in the banking sector for Wells Fargo and Company (WFC $28.41)

Later, in the course of today’s trading President Obama held a surprise press conference announcing that there may be progress made in the debt ceiling and budget negotiations – which strengthened the markets further and sent gold and silver down in value.

After the close, Apple, Inc. reported INCREDIBLE earnings – more below.

Here again is the very insightful chart from the U.S. Census Bureau showing new housing “starts”.

“Kitchen-Sink Quarter” is a term that stock analysts from time to time use to describe quarterly earnings announcements at companies that are having a terrible time with their businesses, when “everything” possibly negative is hopefully revealed and accounted for by the company and the only path left for the company and its future earnings is UP.  There is hope by some that Bank of America (BAC $9.57) has had such a quarter.

Bank of America announced grim stats for in terms of its operations –

• Revenues fell -50.2% year over year.
• Net loss of $8.8 billion
• Consumer Real Estate Services lost -$14.5 billion.

These are big losses and during the question and answer session analysts were wondering how the company had gone “full-circle” from discussing the possibilities some time ago of increasing the dividend to now seeing numbers that may suggest that the company needs to raise more capital in order to meet its equity ratios required for lending.

In any case, it’s not clear to us if an investment in Bank of America is wise at this time.  Remember however, stocks are “on-sale” when their numbers are at their worst.  We should see soon enough if investors are more hopeful or simply remain disinterested in the company.

• 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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