– The Stock Market Companion –

15Minute Market Update

August 29, 2011

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

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-Executive Summary-

  • The markets moved significantly higher, and the financials were “out in front” – which is what we like to see.   See more below.
  • On a little bit of weakness in the markets, we would like to deploy more of our capital in Ford Motor Co. (F) and others.
  • At SMC we re-purchased our shares of Bank of America (BAC $8.38) shares.  See our SMC Intra-Day Alert, below.
  • 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 Bank of America BAC Re-purchased  Today 8/24/2011 +2.4%
2 MEMC WFR Holding 8/23/2011 +4.1%
3 Apple Inc. AAPL Holding 8/25/2011 +2.4%



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 1,210.08 Index UP = +33.28 points
DOW-30 11,539.25 Index UP = +254.71 points
NASDAQ 2,562.11 Index UP = +82.26 points

– Market Trends –

Trend

SP-500

DJ-30

NASDAQ
Short Term UP UP UP
Intermediate Down/Bounce Down/Bounce Down/Bounce
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 –

 

Relief in Europe came from a rather unconvincing event =  some banking consolidation activities in Greece helping to shore-up investor sentiment.  OK.   Here’s the link to the story. The markets in Europe were up strongly and some of this enthusiasm carried over to the U.S.

On their own however, we believe that the U.S. equity (stock) markets are a bit oversold and due therefore for at least a strong bounce – or a complete recovery!

Bank of America (BAC $8.38) has apparently been able to secure buyers of their portion of the China Construction Bank Corp. that they wish to sell.   Here’s a link to this story. Early today we caught wind of this development and the market was favoring Bank of America shares this morning.  The brief news-blip that we first say, identified the possible buyer of this Bank of America asset to be Middle East sovereign banking funds.   Here’s what we are thinking about this at Stock Market Companion –

  • Good news for Bank of America.  Two rapid injections of significant cash help BAC not only improve its balance sheet but also – in the case of Mr. Buffett’s investment – give investors the idea that the shares may be priced at a discount here.
  • Good news for Bank of America is good news for the financial sector in America.  We saw today the financial sector leading the markets higher.  That’s exactly what we want to see.
  • Middle East sovereign banking money coming into play is no surprise.  They and China have the money to put to work right now.  Middle East sovereign banking money however isn’t always invested so wisely.  We remember when Middle East money purchased lots of Citibank shares at around $25/share, back in 2008.  The stock went down to a $1/share approx. 1 year later.  The stock has undergone a reverse stock split of 10/1, so the stock looks great here at $30.92 right?  Well, take into account the reverse split and the shares are really selling for $3.09/share from the perspective of the Middle East money that was invested in 2008 at approx. $25.

Overall, the markets are performing very well today and validating CEO and other executive level purchases at recent market lows – which we have reported about frequently over the last weeks.

– Story-Stock Investing –

We re-entered our Bank of America (BAC $8.38) investment today with this SMC Intra-Day Alert –

 

Dear Subscriber-Friend –

One day can make a BIG difference in the market.  Last week, we called the bottom accurately on the market, engaging a gold short and Bank of America (BAC) , MEMC Material (WFR), and Apple, Inc. (AAPL) long.

We didn’t like the behavior of Bank of America’s stock last week on Friday after their announcement that they would sell a portion of their Development Bank of China stock – which combined with Mr. Buffett’s recent investment, amounts to an infusion of approx. $13 billion in capital for the bank.  The bank stock met sellers every step of the way.  Maybe it was the combined uncertainty of BAC being able to find a buyer for its Development Bank of China stock AND hurricane Irene bearing down on the East Coast causing investors to lighten their shares.

Fast forward now to Monday, and today appears to be a confirmation day for the markets desire to climb out of this recent abyss.  Bank of America appears to have found a ready buyer for its “China bank” shares AND hurricane Irene was weaker than expected.

We said that if BAC was able to climb above $8, we would be interested.  Well, BAC did so today and we are back on board the stock at $8.18 this afternoon.  We are going to give this one plenty of room to maneuver and put our stop down at around $7.10.  We’ve made this one a +15% holding.

For your protection and our own, we would like to remind everyone that this is not an investment recommendation for any particular individual.  We cannot possibly know the risk tolerance and investment suitability of such investments for any particular subscriber. Successful investors know their own objectives, purposes, and risks associated with any investment – whether in stocks, real estate or other investments.  Each investor is on their own.

We are simply reporting the SMC actions in the market place.


Your – Stock Market Companion


We are going to report more on Wednesday about Apple, Inc. and other ideas to come!

– Benchmarks “At a Glance” –

US Dollar

1.4508 USD = 1 Euro

USD / EUR

Dollar = Down

Gold

$1,789.10

Ounce

Gold = Down a bit.

Oil

$87.54

Barrel (West Texas Crude)

Oil = Up some.

30 Yr. Fixed Mortgage

4.33%

Percent

Down

10 Yr. Bond Yield

2.27

Percent

UP

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.
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