– The Stock Market Companion –

15Minute Market Update

April 16, 2012

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

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-Executive Summary-

  • DIVERGENCE… Today the broader market (S&P 500) held FLAT, while the DOW surged HIGHER, and the NASDAQ sold-off.  S&P 500 (-.05%), DOW (+.56%), NASDAQ (–.76%)

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  • 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. As wrote on Friday, the U.S. broader equity market (S&P 500) is bouncing around near its 50 day moving average in price.  The S&P 500 ETF chart that we show below, shows strong support for the markets at 135.  The markets may test that level before market participants decide what to do next.

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  • U.S. corporate quarterly earnings reporting season continues this week, with Goldman Sachs reporting tomorrow morning before the open. 

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  • Shares of Coinstar (CSTR $66.35) found buyers below $65/share, but it is way to early for us to make any predictions yet as to what the overall market response will be to the company’s excellent earnings from last Thursday night.   On Friday, we presented these two Successful Investing videos on this development. Video 1 Video 2

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  • There is a dramatic shift taking place in near Earth space development as NASA retires the shuttle fleet and encourages private enterprise to step-up with vehicles for near Earth orbit activities.  These two articles highlight this development.  We will be on the look out for investment opportunities.  At the moment we are NOT aware of any.  Current participation in these activities is being bankrolled by extremely wealthy individuals and private capital.  For those families with young adults looking for a starting point for a career, these private corporations may be an important place to look for work.  $1.6 billion from NASA for the 12 supply mission contract for SpaceX, puts a $133 million on each flight.  Compare the $450 million cost of one space shuttle flight to what appears to be the $133 million / flight cost of this contract and it appears that private enterprise is alive and well.  We all are proud of the Space Shuttle program.  For near earth work however, it appears time for private industry and publicly owned corporations  to step forward.  Change is hard, but necessary.

    SpaceX Launch April 30th. (MSNBC)      

    Space shuttle Discovery ready for voyage to museum (Detroit Free Press)

– Stock Market Companion – Current Holdings –

Nr. Co. Ticker Action Entry Date Current Gain (Loss)
1 ZAGG, Inc. ZAGG Holding 2/28/2012 -1%
2 Eight by Eight EGHT “Toe-In” Holding
 3/9/2012 -15%
3 EBAY EBAY Holding 3/14/2012 -4%

4

 Ford Motor Co. F Holding 3/15/2012

-8%
5 Linked-In LNKD Holding 3/26/2012 -1%
6 Molycorp MCP Holding 3/29/2012 -5%
7 Alcoa AA Holding 4/11/2012 -1%


We cannot and DO NOT provide investment advice to individuals. Please see our disclaimer below.

 

 

– Stock Market Companion – ADVANCED INVESTOR OPPORTUNITIES –

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 3/7/2012 +/- 0% Vermillion VRML WAIT for break above 3/6 highs for entry ($2.95) With 12 Million shares outstanding, this company could possibly really run on news that its OVA1 test becomes a standard.

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 1,369.57 Index FLAT
DOW-30 12,921.41 Index UP!
NASDAQ 2988.40 Index Down

 

– Market Trends –

 

Trend

SP-500

DJ-30

NASDAQ
Short Term DOWN/FLAT DOWN/FLAT DOWN/FLAT
Intermediate Flat/UP Flat/UP Flat/UP
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 –

Market leading NASDAQ stocks were strikingly and sharply NEGATIVELY divergent to the broader market = S&P 500 and the DOW 30.  The daily stock charts of the stocks that had the most significant pullbacks today warranted profit taking.  Many have surged very significantly over the past few months – like former SMC holding Apple, Inc.

Today’s strong down-thrust in market leading stocks is a cause for modest concern.  Our SMC holdings of eBay and Linked-In both participated in this down-move.  Linked-In is everything its name implies in terms of its one to one relationship with technology stocks.

Materials stocks like Alcoa (AA $9.86) held on well, although Molycorp also swooned with weakness in technology shares.  Molycorps end-products are used heavily in the technology industry – particularly as super magnets.

Favorable retail sales information for March released today allowed the broader market and the DOW to LIFT higher.


 – 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 = Institutional 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?)

 

On Friday, we reported on the company Coinstar (CSTR $66.35).  Today, the shares were snapped up by buyers just below $65.00.  Thus begins what may become a nice lateral consolidation after last week’s excellent earnings report- we need to wait and see.  There is no need to run after this one.

 

(From Friday) Last night –  after the markets closed – the company Coinstar (CSTR $65.78) reported excellent earnings.  Coinstar is the owner / operator of the Redbox movie rental kiosks that you see in many places across the USA.

Until this year, the shares have been very turbulent at Coinstar – gapping-up from $30 to $60 and then down to $39 and so on …  The movements have been unpredictable, and so we have stayed clear at Stock Market Companion.

Things may be changing now for Coinstar so we share a closer look with these two Successful Investing videos –

Video 1

Video 2

 

– Benchmarks “At a Glance” –

US Dollar

1.3118 USD = 1 Euro

USD / EUR

Dollar = Flat to slightly weaker against the Euro

Gold

$1,653.20

Ounce

Gold = Flat

Oil

$103.17

Barrel (West Texas Crude)

Oil = Flat

30 Yr. Fixed Mortgage

4.03%

Percent

Flat

10 Yr. Bond Yield

1.98%

Percent

Down more as risk appetite for equities diminishes.

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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