• DOWN! The markets continue to respond negatively to the stand-off in Washington.
• Revised Gross Domestic Product (GDP) numbers were released for the first quarter and the years from 2007 – 2010, which are much WEAKER than expected.  In spite of extreme government spending, our economy is NOT better off.  Stimulus does not mean simply blindly spending – something that our U.S. congress has not understood.  The numbers released today regarding GDP was a strong disappointment.  See below.
• Shares of solid state hard drive manufacturer Simple Tech, Inc. (STEC $10.17) are down -39% today on a forecast for weak earnings ahead.  We have been watching both STEC and OCZ Technologies, Inc. (OCZ $7.56) for opportunities in the growth market of solid state hard drives for networks.  STEC Chief Executive Officer (CEO) had purchased $3.5 million of shares at approx. $14.80 – which had our attention, BUT NOT our immediate purchase.  WE are glad that we held off.  The shares are now -31% cheaper and looking terrible.  See below.
• Don’t forget – we are testing our Monday / Wednesday / Friday schedule for the 15Minute Market Update through the end of August.   Webinars are coming in August. So far the feedback we have received = “Great idea”.
• Please click here to send us your feedback.  Let us know how we are doing – We are here to serve you. Support@Stockmarketcompanion.com

• Here is a video interview of a father and son using the Stock Market Companion successfully together – as a teaching and investing tool.
  

– Stock Market Companion – Current Holdings –

Nr.	Co.	Ticker	Action	Entry Date	Current Gain (Loss)
1	Apple, Inc.	AAPL	Sold Wednesday	6/20/2011	+24.5% (Final)
2	Bank of America	BAC	Holding	7/20/2011	-1.3
4	Ford Motor Co.	F	Holding	7/21/2011	-7.4%

– 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	1,292.28	Index	Down = -8.39 points
DOW-30	12,143.24	Index	Down = -96.87 points
NASDAQ	2,756.38	Index	Down = -9.87 points

– Market Trends –

Trend	SP-500	DJ-30	NASDAQ
Short Term	Flat/Down	Flat/Down	Flat/Down
Intermediate	Flat	Flat	Flat
Long Term	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) –

SMC SP-500 ETF Daily Chart

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

– Today’s Highlights –

The following points – released TODAY directly from the U.S. BEA – are indicating that economic activity during the period from 2007 through 2010 was much weaker than previously thought by the government.  (On Main Street, we all know that things are tough.) –

 

• For 2007-2010, real GDP decreased at an average annual rate of 0.3 percent; in the previously published estimates, real GDP had increased at an average annual rate of less than 0.1 percent. From the fourth quarter of 2007 to the first quarter of 2011, real GDP decreased at an average annual rate of 0.2 percent; in the previously published estimates, real GDP had increased at an average annual rate of 0.2 percent.
• For 2007-2010, the average annual rate of growth of real disposable personal income was revised down 0.6 percentage point from 1.2 percent to 0.6 percent.

Keep in mind, these results have taken place in the context of extreme government spending to stimulate the economy.  It’s not good.

The second subject is the on-going debate in Washington concerning what to do about the debt-ceiling and immediate spending.

Here’s a paradox –

In spite of the severe dis-function in Washington regarding the understanding of just how indebted our country is and an inability to cut spending meaningfully, U.S. Treasuries INCREASED in value today and are at near highs for the year.

 

– Story-Stock Investing –

Simple Tech, Inc. (Ticker: STEC $10.17) is down -39% today alone, after the company reported earnings last night that were a major disappointment.  On May 25th, we reported that the CEO of Simple Tech had purchased $3.5 million worth of common stock at the open market price of approx. $14.80.  The shares proceeded to move higher, with investors hopeful that the market had misunderstood the company’s recent earnings report and forecast for the future.  Simple Tech participates in the strong growth market of solid state hard drives for networks.  Today the company reported good earnings, but then forecast future earnings that were 2/3 LESS than previously forecast.  We will report more about this next week.  The solid state hard drive business is still in its early innings – so there may be opportunities ahead.  This earnings forecast for STEC has also taken away the enthusiasm for growth stock OCZ Technologies, Inc. (Ticker: OCZ $7.56).

It pays NOT to blindly follow what “insiders” like a CEO is doing with stock purchases, and PAYS to watch the action of the stock before purchasing.

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.

• 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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