– Stock Market Companion – Current Holdings –

(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 –

With the U.S. Memorial Day weekend upon us, there were fewer market participants and therefore the volume on the S&P 500 ETF (SPY $132.10) was relatively quiet.

Not only  were there not many investors stepping forward to buy stocks at perceived discount prices, more sellers emerged than buyers – resulting in a drop in the DOW (strongest drop), the SPY, and the NASDAQ.

The main culprits remain the same –

• Extremely negative news about Greece possibly leaving the Euro-zone and moderate to terrible projections about consequences and over-all costs.
• Concerns about global recession – stemming from Europe’s recessionary position currently.
• U.S. economic recovery WEAKNESS.
• Concerns raised this week about the U.S. moving closer to a fiscal crisis when, again, the U.S. bumps up against the government debt ceiling.

As has been the case over the last months, all eyes are glued to the euro / dollar exchange rate as the euro continues to fall.   You can view this also using the ticker: FXE  – which measures the euro against the U.S. dollar.

Typically, as the U.S. dollar increases in value – the prices of precious metals, like gold and silver, diminish – just to stay on par with the dollar denominated price of the metal.  You can see this using the ticker: “GLD” to see the development of the price of gold against the U.S. dollar.  The price of gold has been falling these last 3 months as the U.S. dollar has increased in value.  The ticker for a comparable silver fund is “SLV”.

– 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?)

We’ve stuck our “neck” out a bit with investments in Ford (F $10.60) and Alcoa (AA $8.63) as the market was possibly overextended in its short term negative movement almost two weeks ago.  So far, so good.  Our investment in Ford is UP a bit, and Alcoa could be putting in a bottom here.

The problem with the markets not attracting any particularly STRONG interest here is that it leaves us exposed to another ‘jolt” south (down) as bargain hunters like us get forced OUT, before buyers begin to show up in larger scale.  We’ll see.

Here’s our thoughts on Ford –

• Company continues to execute an excellent investment strategy in product development and manufacturing capacity.
• Company had its BEST month of sales in over a decade this past January.
• F-Series pick-up trucks = far and beyond the best selling truck in America.  Approx.  55,000 trucks sold per month.
• 2 sedan models in the top 6 cars sold in America.
• Well positioned for growth in China.
• CEO is excellent.

Here’s our thoughts on Alcoa –

• Company continues to execute a very aggressive cost cutting program.  Any increase in the price of aluminum will be positively reflected in the share price at the company.
• Company is expanding the end-product application of aluminum wherever they can.
• Alcoa is pulling smelting capacity, as are other aluminum producers.
• Demand for aluminum may exceed supply later this year.
• CEO has something to prove, after being at the company helm for approx. 4 years and not yet delivering on share price gains.

– Benchmarks “At a Glance” –

–Data Source : Financial Visualizations Inc.