– The Stock Market Companion –
15Minute Market Update
February 29, 2012
—— Stock Market Investing since the 1980’s ——
Published 3 Days / Week
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2/17 Watchlist.
-Executive Summary-
- Today we have a possible GAP-UP DOWNSIDE REVERSAL for the markets – S&P 500 (-.47%); DOW (-0.41%); NASDAQ (-.67%). This means that a pull-back is possibly in store.
- 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. We mentioned on Wednesday, …”We are cautious now, with many stocks exhibiting over-bought patterns and raw material processing companies like Freeport McMoran (FCX) – Copper, Alcoa (AA) – Aluminum, and U.S. Steel (X) not finding any buyers over the last weeks.” Today brought further weakness in metals – Gold dropped -4.4% and Silver -7%. Many stocks look like they are forming possible intermediate tops. It would be natural and healthy for the market to pull-back and take a pause from the 5 month rally. See below.
- We sent out an SMC Intra-Day highlighting today’s possible Gap-Up REVERSAL, probable causes, and tools available for us to make money from short term changes in trend, after the market has made such a strong directional move, as it has over the last 5 months.
- Here is a short SMC Successful Investing Video that we made today for your review – Highlighting today’s market action and covering moves in gold, the U.S. dollar, Intel Corp, and Cirrus Logic, Inc. Please click here for the video. This video captures some of the classic inter-relationships between gold, the U.S. dollar, and the equities (stock) markets.
- Gross domestic product (GDP) growth for the fourth quarter was reported at a robust +3.0% (annualized).
- Stock Market Companion received this excellent review from CathyDuffyReviews.com as a teaching tool. Summary quote = “The Stock Market Companion is a great tool for parents and children to work together to learn about global and business finance, the stock market, and the characteristics of excellent companies and eventually develop their own investment portfolios.” We would like to extend a very special “Thank You!” to Cathy Duffy at CathyDuffyReviews. She is a leader in the home school community, a curriculum specialist, and has been providing families in the U.S. and internationally with extensive curriculum reviews and encouragement for decades (since 1984!) through her reviews, articles, books, and speaking engagements. www.CathyDuffyReviews.com
- Special “Thank You!” to SMC Member Chad. He reported these great results since becoming an SMC member – “I have been using your 15Minute Market Update Program on our Florida Stock Market Simulator and have moved from last place to first place among our 6 groups. Good information.” – Chad. B. Yulee, Fla. USA.
- Did you know that SMC members ALWAYS get 1 free month for each new paying member they recommend who joins our 15Minute Stocks Program? It’s a great way to help friends and gives everyone something new to talk about! NOW you can call 360-695-6985 or email support@stockmarketcompanion.com for a special, significant discount code to give them.
- 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 | Mitek, Inc. | MITK | Holding | 1/12/2012 | +23% |
| 2 | EBAY, Inc. | EBAY | Holding | 2/1/2012 | +10% |
| 3 | ZAGG, Inc. | ZAGG | Toe-In Yesterday | 2/28/2012 | -4.9% |
– Stock Market Companion – ADVANCED INVESTOR OPPORTUNITIES –
We will streamline this section with a link to a table in the days ahead.
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 | 2/29/2012 | Proshares Ultrashort SP 500 or QQQ |
SDS or QID | Capture short term retracement in the market. |
A stop just below today’s low. | 5%-15% | 6:1 | It may take more than one attempt to see this robust rally finally pullback. |
– 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 | 1,365.68 | Index | DOWN |
| DOW-30 | 12,952.06 | Index | DOWN |
| NASDAQ | 2,966.89 | Index | DOWN |
– Market Trends –
Trend |
SP-500 |
DJ-30 |
NASDAQ |
| Short Term | Flat | Flat | Down / Flat |
| 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 –
On Wednesday we wrote, …” The DOW however wasn’t able to hold all those gains and again attracted some sellers this late afternoon. For us, it appears that the markets are operating on “fumes” that require a pull-back to attract again real enthusiasm to push the DOW well above 13,000. It would be healthy for this market to pull-back some. We’ll simply have to see what this week brings.”
Today brought an early morning gap UP in the market, a brief rally, and then a sell-off into the close – resulting in today being a GAP-UP REVERSAL. The “Reversal” is the negative close vs. the gap UP open.
Some market commentators are identifying today’s remarks from Fed. Chairman Ben Bernanke – during which he did not emphasize the Fed’s commitment to stance of being ready to offer more monetary stimulus – as a reason for the sudden strength in the U.S. dollar and subsequent major sell-off in gold (-4.4%) and silver (-7%). We believe that there is a combination of factors working together to arrive at today’s possible pause in the immediate uplift in the markets.
In our SMC Intra-Day Alert from today, we identify these reasons for a market pullback –
Here are the reasons for this possible pull-back developing –
- Natural profit-taking after 5 months of a strong rally.
- Sell-the-news behavior quickly emerging as first “big seller” make their moves and now that “everyone” knows that the market is improving.
- Europe still wrestling with the realities of their weak euro system and the U.S. dollar benefiting.
- Steady uncertainty related to Iran
- Impact of higher fuel prices in the U.S.
- Federal Reserve Chairman Alan Greenspan announcement today did NOT include any more signals of further monetary easing (thankfully).
– S.I.M.P.L.E. Stock Investing Method tm –
– (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?)
Markets don’t go UP forever without pullbacks. When strong gains are on the table, investors begin to take profits. Early investors want to be paid for the risks that they have taken, and late-comers who are buying when the stocks are in patterns that have led to almost vertical gains in 5 months, realize their precarious entries and often sell quickly as the shares prices begin to drop precipitously and they find themselves in a losing position. When aggressive selling subsides and the forward looking economy continues to look reasonable and stocks of companies that have guided for higher sales and earnings are “for sale” at discounts compared to recent enthusiastic highs, then bargain hunters again step in and “put a bid” under prices. It’s a natural cycle.
The markets may be beginning such a pull-back. We will see.
We sent this SMC Intra-Day Alert out today –
Dear Member-Friend,
The broader market gapped-up HIGHER this morning and has met a wall of sellers. Gold is down approx. -4%, the U.S. dollar is shooting higher, and companies that posted really good earnings are getting sold on strength.
Those members who are satisfied with their strong returns on Ebay and Mitek may wish to take their profits. We are holding our positions in each.
Those with a desire to explore how to make money when the market retraces can find very useful tools in the “SDS” = Ultrashort S&P 500 ETF or the “QID” = Ultrashort Nasdaq 100 ETF. Both of these instruments are geared to move 2x the move of the underlying market. So – for instance – if the S&P 500 pulls back -5%, then the SDS should move approx. +10%.
These Ultrashort products are particularly useful when considering making money on short term trend changes after strong directional moves like we have had in the markets, and perhaps purchased as “insurance” to balance out losses in long positions that an investor may wish to consider holding. These ETF’s can be purchased in any IRA or non-IRA investment account.
Here are the reasons for this possible pull-back developing –
- Natural profit-taking after 5 months of a strong rally.
- Sell-the-news behavior quickly emerging as first “big seller” make their moves and now that “everyone” knows that the market is improving.
- Europe still wrestling with the realities of their weak euro system and the U.S. dollar benefiting.
- Steady uncertainty related to Iran
- Impact of higher fuel prices in the U.S.
- Federal Reserve Chairman Alan Greenspan announcement today did NOT include any more signals of further monetary easing (thankfully).
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 |
1.333 USD = 1 Euro |
USD / EUR |
Dollar = UP
|
Gold |
$1,708.60 |
Ounce |
Gold = DOWN
|
Oil |
$107.02 |
Barrel (West Texas Crude) |
Oil = Down a buck.
|
30 Yr. Fixed Mortgage |
3.91% |
Percent |
Flat |
10 Yr. Bond Yield |
1.99% |
Percent |
Flat |
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.
- Please click here to send us your feedback. Let us know how we
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