– The Stock Market Companion –

15Minute Market Update

February 3, 2012

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

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-Executive Summary-

  • The markets closed Significantly HIGHER today! S&P 500 (+1.31%); DOW (1.14%); NASDAQ (+1.44%)
  • Market Overview = The market is in a confirmed uptrend since the October 4th pivot point that we identified at its inception and profited from. Click here for today’s SMC S&P 500 (ETF SPY) chart.
  • The broader market’s nice uptrend is presenting a SUITABLE environment to be considering individual stock investments, and we have been doing so since the October 4th “Upside Reversal Day”.
  • Today’s Non-Farm Payrolls Report from the U.S. Department of Labor was a pleasant surprise for the market.  Please see below.  This was today’s main catalyst behind the sunny weather on Wall Street.  U.S. Bureau of Labor Press Release
  • Many stocks are a bit too steep now in their uptrends to invest in without significant risk.  Alcoa may still offer a decent entry, but here too a wide stop must be allowed.  The nearest logical stop would be just below the 50 day moving average of price (50 MA) at $9.50.  If an investment was placed and the stop was triggered in an orderly fashion due to some spike down in the stock, the loss would be -11% or so.  Better may be to put a buy limit order at a much lower price, so that as the market navigates resistance at near July 2011 highs, a possible advantageous price is achieved and not today’s market price.
  • The broader market has come a long way pretty quickly and now is approaching significant resistance at the July 2011 highs.  We would be reluctant to initiate any orders at this time, besides advantageous shorts on gold or other instruments (like Qualcom) that are looking a bit overextended at this time.
  • Alcoa (AA $10.76) is +10% since we initiated our investment on 1/12/2012.  The SPY is +3.8% in the same period of time.  When the trend is UP and stocks are on the move, suitable individual stocks will move 2x-4x the same amount as the representative index.
  • SMC Watchlist Stock Zoltek jumped +39.92% today, on favorable earnings.  We were not holding these shares at SMC.
  • Micron Tech’s CEO died today in his experimental, single-engine aircraft.  He was 51 years old.  In 1994 he was the youngest CEO of a Fortune 500 co.  He worked his way UP inside the company, starting in 1983 at Micron working the night shift.  Here’s a link to what happened today and his story. (Reuters)
  • Today we presented two short SMC Successful Investing Video’s which we sent in our SMC Intra-Day Alert this early afternoon.  Please see them below.
  • SMC Holding Dendreon (DNDN $14.37) received an Upgrade (to Neutral) from Sell at Bank of America / Merrill Lynch.  The shares did NOT move much.
  • We introduce a NEW Feature to the SMC 15Minute Update Program = Advanced Investor Opportunities … Please see below for details.
  • 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

Alcoa, Inc.

AA

 Holding 1/3/2012

+10%

2 Dendreon, Inc. DNDN Holding 1/11/2012 -2%
3 Mitek, Inc. MITK Holding 1/12/2012 +3%
4 EBAY, Inc. EBAY Holding 2/1/2012 +2%
5 Cree, Inc. CREE Holding 1/18/2012 +18%
6 Apple, Inc. AAPL Holding 1/30/2012 +2%

With the broader market at a major resistance point (July 2011 highs) AND having traveled so far since the October 4th lows, we are not particularly in favor of initiating purchases without a pause in the market that may provide more advantageous entry prices on good investments.  On the other hand, there are still opportunities like Alcoa, which we give definition to above, in the Executive Summary.
We cannot and DO NOT provide investment advice to individuals. Please see our disclaimer below.
 

 

– Stock Market Companion – ADVANCED INVESTOR OPPORTUNITIES –

Our objectives are to teach principles of successful investing and to offer you as many real and excellent investment ideas and opportunities as possible.  When we launched Stock Market Companion in October 2009, we knew that we would eventually be faced with the situation where we had more ideas and more opportunities presenting themselves than we would be able to invest in ourselves.

We want to make sure that we present you excellent opportunities that are unfolding NOW, even when we do not engage them ourselves.  Many of you are already using our SMC Watchlist and monitoring it to see such opportunities unfolding, on your own.  But we don’t want to be confined with just what is in our SMC holdings and in our SMC Watchlist.

A recent, excellent example of this: On 1/13/2012 we presented the idea that Sears Holdings (SHLD) director Mr. Eddie Lampert  purchased approx. $140 million of SHLD shares on the open market between approx. $27.50 and $30 / share.  The stock jumped higher the next day and for us was “overextended” – but the shares roared on another +60% in a few days!  For some SMC members who are more risk tolerant, SHLD may not have appeared overextended and our thoughts on the investment may have kept them from participating or participating more fully.  We want to give ideas and offer valuable insights, but Get out of the Way!

We are introducing this section so that at SMC, we can “get out of the way” and let you decide for yourselves and not influence members so greatly with our own risk-tolerances and objectives at the time.  We WILL point out key characteristics that we think are important to consider, or logical areas to place stops or offer realistic targets based on our over two decades of investing experience, but we will be less inclined to judge these opportunities beyond that.  What we list in this section will be cover many dimensions:

  • Growth stories following our successful S.I.M.P.L.E. investing method
  • Unusual opportunities arising from oversold or overbought conditions
  • Opportunities presenting themselves due to key technical developments in the shares (key support and resistance line engagement, high volume clues…)
  • Stocks that offer excellent dividend yields and measurable risk
  • Covered Call ideas
  • Higher risk but possibly quite unique investment opportunties
  • Excellent mutual funds and ETF ideas (including off-shore)

At this time, we are including this section in the SMC Basic Membership.  Our advisors may determine that these insights should be offered outside of the basic membership for a modest additional fee. That decision is for sometime later.  Let’s proceed …

Nr. Introduction
Date		 % Gain or (Loss)
(Introduction)		 Co. Ticker Possible Opportunity NOW STOP Level or Other Considerations Possible TARGET REWARD / Risk
Ratio 		S.I.M.P.L.E. Notes +
1 2/3/2012 Micron Tech. MU Later … LONG only AFTER the shares tumble and stabilize on tragic news today
of CEO’s  sudden death in experimental single-passenger aircraft.		 NA NA NA Stocks often lose approx. 10% (sometimes more) of their value on the sudden loss of their CEO.  Depending on quality of succession planning at the co. the shares can bounce back rapidly.

For S.E.C. compliance, here too we must  identify clearly whether we have a position.  We may introduce lightly traded stocks for ideas for you, but we will not be able participate in them.  We will maintain a wide margin of compliance with the S.E.C.
All investments involve RISK.  Please remember, at SMC there is no way that we can match our ideas with the suitability or risk tolerance of each member – We therefore cannot and DO NOT provide investment advice to individuals. Please see our disclaimer below.

 

 

 

– 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 1,342.86 Index UP = +17.32 points
DOW-30 12,850.46 Index UP  = +145.05 points
NASDAQ 2,900.95 Index UP  = +41.27 points

 

– Market Trends –

 

Trend

SP-500

DJ-30

NASDAQ
Short Term Flat / UP Flat / UP Flat / UP
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 see a bigger, easy to read chart on a separate browser tab window).

 

– Today’s Highlights –

Today is the first Friday of the month and this brings with it the U.S. Bureau of Labor’s Non-Farm Payroll Report.  Today’s report was a huge surprise!

Here is the summary of the details (Please click here for the details directly from the Bureau of Labor’s Report!) –

  • Unemployment rate DROPPED -0.2% to +8.3%
  • Non-farm payrolls +243,000
  • Number of unemployed persons = 12.8 million (that’s a huge number)
  • Average hourly earnings for all employees on private payrolls = $23.29 / hour (the median earnings would be a more interesting number).
  • Previously reported payroll numbers for November and December were each adjusted HIGHER

Remember, at Stock Market Companion we keep an eye on “U6” = Total Unemployed + total employed part time for economic reasons.  Last January the percentage of the labor force that fell into this category was +17.3%!  Last month, this number dropped to +15.1% = a significant improvement.  This U6 number is the number that no one talks about, but that we all feel the results of in our families, circle of friends, and on Main Street.

Please click here for the table that shows “U6”.

Of significance today = The NASDAQ, as measured by the Nasdaq ETF (QQQ $62.02) moved to 11 year high’s.  Keep in mind that SMC holding Apple, Inc. represents approx. 12% of the NASDAQ 100.

– S.I.M.P.L.E.  Stock Investingtm –

– (Where each investment begins with a Story and ends with Earnings) –

S.I.M.P.L.E. Stock Investing is built upon these core concepts –

S = Story (What is / are the key catalyst(s) behind the company of interest?)

I = Investor Interest (Is the stock chart showing investor interest = buying or share accumulation?)

M = Market (Is the background market favorable for investing at this time?  Don’t Fight the Market! We know the vast majority of stocks move in the direction of the overall market).

P = Person or Product (Is there a particular person or product that makes the story work for this investment?)

L = Leader (Is the company a leader in its industry group or is its product a leader in its market?)

E = Earnings (Are current quarterly earnings and annual earnings growing?)

 

Today we sent out this SMC Intra-Day Alert – It say’s it all concerning the favorable nature of this current market environment.

Dear Subscriber-Friend,

It’s been a long time since we’ve had this kind of excellent market behavior for investing.  This morning the markets are UP again – in step with a very favorable U.S. Department of Labor “Jobs Report” (Non-Farm Payrolls).  We will report more about this and provide you a link to this report this afternoon.  We’ve made two short SMC Successful Investing Videos this morning to give you a picture of what is happening and to take a look at a few of our holdings. These are designed to be quick and to the point at 5 minutes each… Here they are –

  1. SMC Successful Investing Video – Market and Alcoa (AA)
  2. SMC Successful Investing Video – Cree (CREE) and Ebay (EBAY)

To avoid any misunderstandings, please remember that we do NOT make any investment recommendations for any individual.  We cannot know the investment suitability and risk tolerance of each member.  Each investor is on their own.  Please see our disclaimer below.

Your – Stock Market Companion

 


– Benchmarks “At a Glance” –

 

US Dollar

1.3149USD = 1 Euro

USD / EUR

Dollar = Flat

Gold

$1,740.30

Ounce

Gold = Down (after a good, strong multi-week run higher)

Oil

$97.77

Barrel (West Texas Crude)

Oil = Flat (But down for the week)

30 Yr. Fixed Mortgage

3.91%

Percent

Flat

10 Yr. Bond Yield

1.93%

Percent

Up for the week.

1 Yr. CD

1.00

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.  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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