Market Strategies Newsletter

High Return Options Trading

Covering High Return Balanced Investing Success Strategies For

Stocks ■ Bonds ■ Interest Rates ■ Natural Resources ■ Currencies ■ Venture Capital ■ Gold

 

A Publication of Princeton Research, Inc. (www.PrincetonResearch.com)

February 6, 2012

Market Strategies Guide To

Successful Trading

 

$10,000 OPTIONS ONLY ACCT:

New Trades for this week:

( 1 ) BUY 8 KRO 3/25 CALLS @ $1.00

( 2 ) BUY 10 VMED 3/25 CALLS @ $ .65

( 3 ) BUY 6 LUFK 2/80 CALLS @ $1.85

( 4 ) BUY 6 APOL 3/50 PUTS @ $1.25

The $10,000 Options Only account had a Gain last week of $1625, increasing our gains for the year to $4372.00.

Four positions remain:

the CALM February 35 Calls,

WFR March 5 Calls,

JAZZ February 48 Calls and

HSGI March 12 Calls.

The Open positions are highlighted in the options table below.  Approximately $ 3400 funds are in use.

 

The underlying strength of the market is undeniable and I have to go with “The trend is your friend,” but I am also wary of some of the outside influences.  The EU issues continue to go unsolved even though we hear “later today, or by the end of the week or after the weekend.”

 

The Iran /Israeli issue is very much a problem…and Syria is not to be discounted.  All that said,, we are climbing the Wall of worry…

I’m going to be a little bit cautious using smaller commitments to new positions, and looking at several short candidates…Use the texting service to get new trades based on the unexpected….CAM

Previous closed out trades not listed here may be seen in the January 30 and 2011 weekly newsletters.

DATE	TRADE	PRICE	COST	PROCEEDS	RESULTS
2/3	Bought 10 HSGI March 12 Calls	.64	640
2/3	Sold 3 AMZN February 185 Calls	5.10		1530	660 Gain
2/3	Sold  2 X February 30 CALLS	2.70		540	342 Gain
2/2	Bot  3 AMZN   February 185 Calls	2.90	870
2/2	Sold 5 CLNE February 14 Calls	1.70		850	550 Gain
2/1	Sold  2 X February 30 CALLS	1.98		396	198 Gain
2/1	Sold 4 TZA February 22 Calls	.70		280	280 Loss
1/30	Bought  4 X February 30 CALLS	.99	396
1/30	Sold 5 FXE February 130 Puts	1.38		690	155 Gain
1/27	Bought 5 JAZZ February 48 Calls	2.05	1025
1/27	Bought 5 FXE February 130 Puts	1.07	535
1/27	Bought 20 WFR March 5 Calls	.39	780
1/24	Sold 5 CLNE February 14 Calls 100% RULE	1.20		600	300 Gain
1/23	Bought 4 TZA February 22 Calls	1.40	560
1/23	Bought 10 CLNE February 14 Calls (5 Open)	.60	600
1/19	Bought 4 CALM February 35 Calls	2.40	960

 

MArket Laboratory – Weekly Changes

Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect

M1…all money in hands of the public, Time Deposits Traveler’s Checks, Demand Deposits

M2 adds Savings and Money market Accounts both compared with the previous year.

New Stock Recommendations

( 1 ) BUY 6000 ANX @ $ .67

( 2 ) BUY 1200 ABR @ $4.30

Last week we bought QUICK, CDTI, PRKR and Sold KAJMY and GMXR.
With a text alert we Sold CDTI.

 Each stock is allocated a theoretical $ 5,000 share of the portfolio unless otherwise indicated.

 

Note: Previous closed out stock and option positions can be found in the January 30 and newsletters dating back to July 20, 2009.  Some of the trades put are January Effect Trades. Stay alert on the free texting service for exits.

 

                                INDEX OPTION RECOMMENDATIONS

( 1 ) BUY 1200 DZZ @ MKT.

For those of you who do not buy puts to protect your portfolio, there are many ETF’s that are the inverse of the DOW. The symbols are DOG, SDS and TZA, whichgo up when the DOW, S&P 500 and Russell 2000 go down and down when they go up. The DZZ goes up double when gold goes down.

 

New Stock Option Recommendations

 

( 1 ) BUY 15 KRO 3/25 CALLS @ $1.00

( 2 ) BUY 20 VMED 3/25 CALLS @ $ .65

( 3 ) BUY 12 LUFK 2/80 CALLS @ $1.85

( 4 ) BUY 12 APOL 3/50 PUTS @ $1.25

 

 

Option and Overall Comments

 

We had a gain last week of $ 2746 in an up week. Our gain for the year was $8,789 and with last week’s gain has increased to $11,535.  We have Four long options positions remaining, the WFR March 5 Calls, JAZZ Feb 48 Calls, CSCO Jan 20 Calls and HSGI March 12 Calls.

The stock table includes eleven long stock positions: PKRK, QUIK, CALM, AOI, DVR, WG, AEZS, LEI, LEOM, XBOR and SDS. The SDS is a double inverse SP500 ETF.

 

The options call for a $ 2,500 investment unless otherwise started, while each stock position requires $ 5,000 unless specifically stated.

 

We are basing money management on a hypothetical $ 100,000.00 and are using $5,150 in the
options positions and $ 49,000 in the 11 long stock positions for a total of $ 54,150 with $ 45,850 in cash. These figures are approximate. We do not count commission costs and there may be errors.

 

Executions that have occurred at or near the open or close of trading sometimes vary from our actual numbers.  For example, when something opens down and it is through our price, we take the next trade whether it is an uptick or continues lower.  This sometimes results in a 50% trade that is slightly above or below the exact number…

 

Previous Week’s Recommendations and Rules for the $ 100,000 account

 

• Text UPDATES to 69302.
• All options count for about $ 2,500.00 for model portfolio calculations unless otherwise stated.
• When the option has doubled sell half the position.
• Stop Loss protection is either half or offered with each trade.
• The cost of the option is the asking price (or the price between the bid and ask, whichever is more realistic)
• The options will be followed until closed out.
• Option Symbols are stock symbol with expiration month and strike price
• Subscribers can follow us on Twitter or call  702 650 3000 for up to date information.

 

Note: Previous closed out stock and option positions can be found in the January 30 and newsletters dating back to July 20, 2009.                                                                                                       

                                This Weeks’ Economic Numbers and Media Data

Economic Data

The Unemployment Report was unexpectedly bullish at 8.3% down from 8.5% last month and the consensus. Payrolls came in at 243K, while Private Payrolls were plus 257K, both well above expectations of 155K and 168K respectively. It was a pleasant  surprise, especially following the Challenger Job Cuts released the previous day, up 38.9%. The Underemployment rate edged down 0.1% to 15.1%. …  U6 to those who follow      ( counting those who have either stopped looking for work or have jobs part time only and looking for better. ) Hourly earnings were up a tick to 0.2% from last month and the Average Workweek for January rose a notch to 34.5 hours from 34.4 hours expected, but the same as in December.

The ISM Service Index rose to 56.8 in January from 52.6 in December, well above the 53.2 consensus.

Other reports were not impressive: December Factory orders were up a meager 1.1% below the 1.5% expected. The Chicago P.M was down to 60.2 from 62.2 last month and the 62.8 consensus. The nationwide ISM was just 54.1, below expectations of 54.5, but better than December’s 53.1. ADP Employment estimates were 30K below estimates at 170K vs 200K anticipated by most. Personal  Income at + 0.5% was a tick better than the consensus but  spending was flat 0.0% a tick below December estimates. Core PCE Prices were right in line, up 0.1% to the 0.2% expectations.

 

Fundamentals

(Previous letters may be seen at http://www.princetonresearch.com)

Financials jumped impressively up 4.21% and easily outdistancing all nine other Dow Industrial Groups. Technology was second best up 3.23%, followed by Industrials + 2.43%; Basic Materials and Telecomm both gained 2.40%. 

The Dow made its best close since June 2008.Nasdaq had its best close since Feb 2001.

Earnings were two-sided. Amazon reported poorer results but the stock rallied and our followers of the text service did well.  MasterCard, Dow and Qualcomm had good numbers and their share responded well. Volatility continued lower ( 17 ) reflecting more confidence-less worry.

Equities continue to push up on light volume. It is notable that volume increases when stocks decline.

Distribution days (indicative of days of institutional selling) are days when the market declines on higher volume than that of the previous day. Over the last two weeks, there were three distribution days for the S&P 500, two for the NYSE Composite, and one for the NASDAQ.

 

Technical Information

      Support Levels:   S&P 500          1334; 1322                   Resistance S&P 500   1361; 1377

                                        DOW           12,740; 12,680             Resistance DOW        12,890; 13,040

                                        QQQ            6165; 6035                   Resistance QQQ        6270 6337                     

                                       Nasdaq         2874; 2829                   Resistance Nasdaq     2937; 2990

                                         

CYCLES

In the February Almanac, it was noted that February is typically the weak link in the Best Six Months ranking no better than ninth out of twelve months on the major U.S. indices we track. Even bullish election year forces have failed to lift February’s standings with no large-cap index ranked better than ninth (DJIA and S&P 500 since 1952, Russell 1000 since 1980) in election years since 1950. NASDAQ and Russell 2000 have better election year records largely due to a 19.2% and 16.4% gains, respectively in 2000. But, January finished with the best gain since 1997 and February began in typically bullish fashion. So what does history suggest about the rest of February?

Every S&P 500 January gain of 4% or more since 1930 is presented with the subsequent performance over the next 1-month, 3-months, 6-months and full-year. Even with three Depression-era years and post-WWII 1946 in the list, strong Januarys have been especially bullish indicators with average full-year gains of 15.0%. But, February was still a weak link in 9 of the previous 24 big Januarys.

After January’s typically strong finish February opens well for large cap stocks. The first trading day is bullish and it has traded higher in 15 of the past 21 years with an average S&P 500 gain of 0.5%, Strength fades after that until the stronger eighth, ninth and eleventh trading days. Expiration week is marred by two bearish days and begins an often weak second half of the month. Neither small caps nor technology shares completely escape mid-month weakness.

Presidents’ Day is the lone holiday that exhibits weakness the day before and after. (Stock Trader’s Almanac 2012, page 86). The Friday before this mid-winter three-day break is exceptionally treacherous and average declines persist for three trading days after the holiday. (From Stock Trader’s Almanac must reading )

 

             Rule 17B requires disclosure of payment for investor relations*

 

Princeton Research has received about $ 2,500 per month from Lucas ( LEI ) marked with an asterisk.    Princeton has been paid for investor relations in the past and has negotiated a contract to be paid 100,000 restricted shares from Leo Motors. In addition Princeton has bought shares. Princeton is paid by Baron Energy ( BROE ) to do investor relations in the amount of 300,000 shares. Princeton has also bought separate shares about 327,600 and owns the shares for its own account. USPR paid us 200,000 restricted shares. Cross Border paid us 25,000 restricted shares and we bought and own another 25,000 purchased at higher prices.

 

Pursuant to the provisions of Rule 206 (4) of the Investment Advisers Act of 1940, readers should recognize that not all recommendations made in the future will be profitable or will equal the performance of any recommendations referred to in this Email issue. Princeton may buy or sell shares in companies it represents at ant time.

 

 

CONTACT

Please Direct All Inquiries To:

 

Mike King

Princeton Research

3887 Pacific Street, Las Vegas, Nevada 89121

 

Phone: (702) 650-3000

Fax: (702) 697-8944

 

mike@princetonresearch.com

Visit: www.princetonresearch.com