• Today the markets charged higher with events in Europe looking more favorable with regards to funding sovereign debt.
• We are in the thick of corporate earnings season in the U.S..  See below.
• Our SMC short in silver has now “lost its edge” as the opportunity for a surprise agreement between the U.S. congress and President Obama begins to diminish.  This reduces our investment to a 50/50 proposition.  We may liquidate our position tomorrow.
• At SMC we PURCHASED shares in Ford Motor Co. (F $13.27) at $13.30 just before the close today – putting about 7% of our portfolio to work here.  Our stop is down below the $12 area at $11.95.  There wasn’t time for an Intra-Day Alert on this one.
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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 –

The U.S. markets are in the thickof corporate “earnings season”.  This means that U.S. corporations are coming forward during this time with their earnings results from this last quarter.  The last quarter was wrapped up on June 30th, which counts the operational results for the months of April, May, and June.  The lions-share of the earnings are reported in the 3 to 4 weeks AFTER Alcoa (AA $15.77) reports on the second Monday of the new quarter.

Measuring corporate results on a quarterly basis is a modern phenomenon.  The advent of the information age initiated by relatively and increasingly inexpensive computing power has made quarterly reporting a reality – but not mandatory.   In the ’90’s,  I was involved in an acquisition of a medium size German corporation employing several thousand people where the operating results were clear only 1x year.

Right now, corporate earnings are strong.  Today’s move in the market is a reflection of this – but not completely.  Intel, Corp. (INTC $22.73) reported excellent earnings last night after the close of the regular market session, and the shares sold-off.

Today, market participants are weighing out the relative risks of investing in stocks with excellent earnings verses the UNCERTAINTY of the government being able to make a GOOD decision about the upcoming debt-ceiling and future spending.

What we are seeing today is a willingness of institutional investors to purchase beaten-down, out-of-favor stocks and while taking profits on stocks that have already made strong moves.  Hence yesterday’s sell-off of Apple, Inc. (AAPL $387.50) and today’s -37% sell-off of Travelzoo, Inc. (TZOO $56) and Netflix (NFLX $275.81).  Out of favor stocks that were aggressively purchased this morning include our SMC holding of Bank of America (BAC  $10.23).  O.K.   If we didn’t already own shares of BAC, based on today’s performance in the shares of stock we would consider purchasing shares anywhere from $9.90 – $10.30.

Here’s today’s chart of BAC –

• 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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