– Stock Market Companion – Current Holdings –

Nr.	Co.	Ticker	Action	Entry Date	Current Gain (Loss)

(Please scroll down to the end of the report to see your favorite benchmarks – Dollar, Oil, Gold … closing prices and daily direction.)

– Market Trends –

*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 –

One definition of the German term “Schadenfreude” is finding satisfaction in the discomfort or in the unpleasant turn of events of another person.

The markets were in a bit of a turmoil today as news was released this morning that J.P. Morgan-Chase (JPM $36.79)  reported a $2 billion trading loss from a failed hedging strategy.   Jamie Dimon is the CEO at JPM and he has been a very outspoken critic of the Volcker rule reform, which – among other things – limit the trading that banks can do.

Whenever you become an outspoken critic of something, you place yourself immediately at risk of attracting attention when something goes wrong in the camp that you are defending.  That’s what has happened today for JPM and JPM’s CEO Dimon.  There are many in the political and financial world who are finding satisfaction in Mr. Dimon’s discomfort.

On a bit more weakness and then stabilization in the JPM share price, we may consider a purchase of the shares.  JPM is an excellent bank.  Our close banking friend in Tacoma reminds us however that there is striking difference between the style of New York based banks and their brethren outside of Manhattan.  The New York based banks have a much bigger hand in trading activities and today we are seeing that orientation work to JPM’s disadvantage.

The broader market as measured by the S&P 500 ETF the (SPY $135.61) is bouncing right at “support” of the $135 line.  Yesterday’s market behavior in light of Cisco System’s (CSCO $16.50) and today’s behavior on the revelation of JPM’s $2 billion problem is demonstrating that the market wants to at least bounce a little.  Both of these events were pretty strong hits against the market, yet yesterday and today, the markets have found support at mid-morning and attracted buyers.

In spite of Cisco’s disappointing economic forecast and today’s trouble at JPM, the market is attracting some buyers.  We’re watchful.

Europe – and more specifically – Greece’s ability to form a government that honors its most recent commitments to the European Monetary Union, is a unknown at this time.

Earlier this week, it appeared to us that the market is simply waiting for the next “shoe to drop” before it heads a bit more south (down).  We’ll see  There may be a bounce ahead.

– 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?)

This morning, the company Arena Pharmaceuticals (ARNA $6.35) received FDA “Panel” recommendation by a vote of 18 in favor to 4 against – that the FDA approve the company’s drug called Lorcaserin to assist in weight loss by reducing appetite.  One and a half years ago, Stock Market Companion members enjoyed strong gains in ARNA as the stock entered into the FDA approval process.  We sold on strength BEFORE the FDA Panel decision, taking our profits.  The FDA Panel at that time requested more safety evidence and more testing – so the shares immediately dropped from over $7/share down to $1.50/share.  The shares are – today –  over +50% higher on this favorable FDA Panel review and have received BUY ratings from at least one brokerage company.  We are alert for more opportunity ahead with this stock, but are interested in seeing some form of lateral consolidation built before we engage the stock.  Please see this Successful Investing Video on ARNA.

While I was in Oklahoma last week, some people asked me about beaten down Chesapeake Energy company (CHK $14.80).  I looked at the chart and called it a “wait and see”.   Yesterday, the shares appeared to be putting in some form of bottom, but today in the late afternoon there were further allegations of impropriety against the company – this time related to off-balance sheet debt!  Please see this Successful Investing Video on Chesapeake Energy.

Yesterday after the close, Nvidia Corporation (NVDA $13.21) came out with favorable earnings and the stock gapped up higher this morning, and sold off throughout the day.  We cover this also in the above video for Chesapeake Energy.  NVDA has received a broker upgrade to approx $20/ share in price.  That would be a +51% return.  We’ll have to see how the shares develop.

– Benchmarks “At a Glance” –

–Data Source : Financial Visualizations Inc.