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July 10, 2017 – Where To Invest Now Newsletter
July 3, 2017 – Where To Invest Now Newsletter
July 10, 2017
Market Strategies Newsletter
Subscriber Members Issue
Balanced Investing Strategies To
Make Money In Up Or Down Markets
A Publication of Princeton Research, Inc. (www.PrincetonResearch.com)
Contributing Staff: Michael King, Charles Moskowitz
Proven Trading Success
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Information Our Members Get Follows
Investing Trade Alerts
Charles Moskowitz Discussion
Open Positions:
Long 6 FAST July 125 Calls
Funds in Use $ 620
There are really at least 2 different markets for investors these days; the DJIA/S&P500/ Russell, and the NASDAQ. The latter is actually two markets by itself with the QQQ (NASDAQ 100) and the NASDAQ Composite. Both are heavily weighted by the big names but the composite is has 3207 companies while the QQQ is only 100. For the last several months the QQQ has been the “tail wagging the dog” and I have mentioned the problem with such a narrow group driving the market higher. This is because the QQQ is market cap weighted, so a large cap stock has much more effect than a mid or small cap stock.
However, the problem is that it works in both directions. So for the last 3 weeks the QQQ has declined just under 6% while the Comp. was only 3.3% lower. Some of the declines in the “big names” were much greater, with GOOGL -9.4%, AMZN- 6.4%, AAPL -9%, NFLX -13%, and while it held up and made new highs until just 8 days ago, TSLA fell just over 20%.
Most investors are too small to be trading these high-priced names and think they’re immune from these losses because they don’t own any of them, but these names are in every family of funds and any ETF that tracks the indexes. Many of the ETFs are just “large-cap” or growth, or some other name that sounds neutral and the
Investors aren’t concerned because their level of sophistication ends at the “choose from the following funds for your 401K” or other equally important promotional information that comes from the HR department.
This is a tough market for even the most knowledgeable traders and investors, and that’s one of the reasons we continue to be a little less active during the summer months when volume is low and many professionals take off.
This was an important weekend for the geopolitical status of the US and its allies, and I will be traveling this weekend so I can’t give you any insight from the Sunday morning shows, but I’d bet that Ivanka Trump sitting at the adults table while daddy was in a meeting elsewhere will be on all the shows.
The rise in interest rates around the globe was a problem in every market and frankly, the argument of it’s going up for the right reason. In my experience, that holds up for a very short time before the taper tantrum type problems grip small business and sentiment goes south.
To me, with over 45 years in the markets, “This time it’s different” has never ended well. CAM
Investing Trade Alerts Summary
$10,000 Trading Account Trade Table
DATE |
TRADES |
PRICE |
COST |
PROCEEDS |
RESULTS |
07/05 |
Bought 6 FAST July $ 43 Puts |
0.80 |
480 |
3rd Week expiration when the month is listed without a date
Previous closed out trades not listed here may be seen in previous market letters in the
VIP Subscribers Members Area.
Remember, these trades are based on your participation in the
Subscriber Members Only
TEXTING SERVICE TO RECEIVE ALL UPDATES.
NOTE: In texting we have a limited amount of words. In the interest of brevity:
The Quantity and Strike Price for each trade is specific. 1=January, 2=February
Trading is hypothetical. We may trade weekly options and they are noted: SPY 1/25 147 for
SPY Jan 25th 147 Calls or Puts.
New Trades Will Be TEXTED To MEMBERS
MARKET Laboratory – Weekly Changes
Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect.
| Dow
21,414.34 +64.71 +0.30% |
Nasdaq
6153.08 +12.66 +0.21% |
S&P 500
2425.18 +1.77 +0.07% |
Transportation
9694.94 +131.21 +1.37% |
Russell 2000
1415.84 +0.46 +0.03% |
Nasdaq100
5656.47 9.55 +0.17% |
| Gold (spot)
1208.60 -32.10 -2.6% |
Silver Sept
15.425 -1.202 -7.2% |
Crude July
44.23 -1.81 -3.9% |
Heating Oil
144-62 -3.69 -2.5% |
Unleaded Gas
149.84 -1.53 -1.0% |
Natural Gas
2.864 -0.171 -5.6% |
| VIX
11.19 +0.01 +0.1% |
Put/Call Ratios
S&P 100 119/100’s +51/100’s |
Put/Call Ratios
CBOE Equity 63/100’s -3/100’s
|
Bonds
151-21 -2-01 2.93% -0-02% |
10 Yr. Note
124-27 -0-22 2.39%+0-05%
|
Copper
264.70 -7.00 -2.6% |
| CRB Inflation
Index 172.56. -2.22 -1.3% |
Barron’s* Confidence
75.7 +0.2 |
S&P100
1068.65 +0.94 +0.09% |
5 YR Note
117-16 -0-10 1.95%-0.015%
|
Dollar
96.00 +0.37 +0.4% |
DJ Utilities
702.04 -4.87 -0.69% |
| AAII
Confidence Index
Average |
Bullish
29.6% -0.1%
38.4% |
Bearish
29.9% +3.0%
30.30% |
Neutral
40.5% -2.9%
30.96% |
M1 Money
Supply +8.47%
June 26th
|
M2 Money
Supply +5.42%
June 26th
|
* Component Change in the Confidence Index
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.
Market Strategies $100,000 Trading Account
There were no closed out options positions last week. There was one closing stock trade: the sale of 400 shares of OILU at $ 19.84 gaining $ 1,344.
There are three long options positions, the SJM July $125 Calls costing $600.00, the FAST Puts needing $ 960 and the QQQ’s requiring $ 720, which are listed on page five.
The total requirement for options is $ 2,280.
The options expire on the third Friday of each Month unless otherwise posted.
The Stock table has the following 20 positions:
AGQ, AMBA, BBRY,EYES ( 2 ), GLYC, GSAT,HL( 2 ), MOS ( 2 ), NUGT, REPR, RWM, SAN, SCO,SLV, SPXU, TEXQY, TWTR
The options call for a $ 2,280 investment unless otherwise stated; each stock position requires $5,000 unless otherwise mentioned specifically.
Money management is based on a hypothetical $ 100,000.
The 20 stock positions would cost $ 89,958.
The open long options position; the SJM July 125 Calls, require $ 600
The 8 QQQ’s and 12 FAST Puts require $ 720 totaling $2280
when combined with the stock requirement of $ 89,958
equals $92,238 which leaves excess cash of $ 7,762
YEAR TO DATE SUMMARY
The $100,000 Account has had 139 closed out trades between stocks, options and covered writes versus stock positions. Of those, 93 were gains and 46 were losses.
Gains to date equal $46,586, and losses equal $18, 689, for a net gain of $27,987.
This number does not take into consideration commissions or open gains or losses.
These figures are approximate and there might be errors.
The trading is hypothetical and we do not count commission costs.
The trading is hypothetical and we do not count commission costs.
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.
Market Strategies Fundamentals
The Dow Jones Transportation Average kicked into gear making a new all-time high at $ 9694.94, gaining 131 points or up 1.4% for the week. The Tranny had been lagging before it shot up 175 points the previous week and when added to the 131 points last week made a total of a 306 point gain for the last two weeks, now plus 7.2% for the year, a good start for the new quarter and the final six months.
The Dow Jones Industrials had a better day Friday gaining back 94 points out of the 158 point loss Thursday and forming a mirror-image reversal pattern closing on its highs following the previous day close on the lows. The market had not received well the Fed minutes released late Wednesday. The Fed members were very upbeat about economic activity and although uncertain as to when to begin the unwinding of their huge balance sheet, there became no question that they would soon be selling the almost $ 4.5 trillion worth of Treasuries. Some members wanted to begin selling immediately; others looking for the end of the year. Yields have risen sharply over the past two weeks: The CBOE 10 Yr treasury Yield Index has posted a gain of 12%, while the CBOE 30 Yr Treasury is up almost 9% both over the past two weeks.
GE led the Dow selling ( GE: $ 26.15 ) – $ 0.86 with a 3.2% loss followed by Walt Disney ( DIS: $ 103.32 ) – $ 2.93 off 2.8%; Verizon ( VZ: $ 43.48 ) – $ 1.18 down 2.6% and Merck ( MRK: $ 63.16 ) – $ 0.93, or off 1.5%. The winners were Boeing ( BA: $ 202.37 ) + $ 4.62 or + 2.3%; McDonalds ( MCD: $ 156.27 ) + $ 3.11 or +2%; United Health Group, Inc ( UNH $ 187.96 ) + $ 2.54 or + 1.4%; United Technologies ( UTX: $ 122.61 ) + $ 0.50 or + 0.4% reaching or exceeding their all-time highs.
| Index | Started Week | Ended Week | Change | % Change | YTD % |
| DJIA | 21349.63 | 21414.34 | 64.71 | 0.3% | 8.4 |
| Nasdaq | 6140.42 | 6153.08 | 12.66 | 0.2% | 14.3 |
| S&P 500 | 2423.41 | 2425.18 | 1.77 | 0.1% | 8.3 |
| Russell 2000 | 1415.36 | 1415.84 | 0.48 | 0.0% | 4.3 |
| DJT | 9563.73 | 9694.94 | +131.21 | +1.4% | 7.2
|
US Dollar ( DXYO: 96.00 ) +$ 0.35 or +0.4% The dollar has been holding in a listless fashion waiting for a decision from the Fed.
Volatility ( VIX: $11.19 +0.01 or Unchanged: Volatility is looking for direction. The minor levitation that has occurred is the result of uncertainty and some bearish future expectations.
CBOE OEX Volatility Index (VXO-X : 9.97 ) -0.16 or -1.6% followed the VIX sideways in a trendless fashion.
The UVXY, ( $ 10.21 +0.32 ) or +4.9% rebounded from new lows made the previous week. The UVXY is more volatile than the other measures of volatility and is levitating better as the markets are entering a period of slow trading and huge uncertainty.
The U.S. Oil Fund ( USO : $9.10 ) -$ 0.40 or -4.2%; Has entered a free fall following a GANN type 4-legged top pattern.
Semiconductors ( SMH: $ 81.86 ) – $ 3.81 or -4.4% : Continued selling until support was found at the 81 level , the breakout level from May 9th.The Philadelphia Semiconductor Index had a decent week rallying 20 points or + 1.9%, but unable to get above critical moving averages.
Gold ( GLD: $ 115.28 -$ 2.74 or -2.3% continued on a free fall below the May lows and looking at the January-March lows at $ $ 113-114 level for possible support.
The GDX, the VanEck Gold Miners ETF ( GDX: 21.21) -0.87or -4.1%: Continued following lower Gold prices as mining requires a premium which means the GDX will trend lower than the GLD in a bear market.
Alibaba Group Holding Limited (NYSE:BABA: $ 142.43 ) +1.53 OR +1.1% Rebounded nicely from oversold conditions remaining solidly bullish.
Amazon ( AMZN: $ 978.76 ) + $ 10.76 or +1.1%: Followed general market weakness after reaching a possible double top resistance area at $ 1001- $1017.
Crude OIL ( $44.23 ) -$ 1.81 or -3.9%: Trading Range from $ 42.50 to $ 48.50. The XLE ( $ 64.01 ) – $ 0.91 or – 1.4% has declined every month of the year. The price was at $ 75.32 on December 30th; there is no technical or fundamental sign of a bottom. We have seen a consistent picture of lower lows and lower highs while rig usage keeps climbing in the U.S. as producers have little regard to price. The present price action on WTI Crude is also very similar to that seen in October/November of last year and in that instance, we saw a rally of nearly 23% in the 3 weeks after the low was posted. The worst performing industries were Silver, down 10.44%; Oil and Gas drilling down 4.59%; Oil and Gas E&P down 3.44%; Gold down 3.17%; Lumber and Wood off 3.14% and Apparel Stores off 3.09%.
The NASDAQ Composite Index ( NASDAQ: 6153.08 ) + $ 12.66 or + 0.2% rose 1% for the day Friday, but on the entire week, underperformed, continuing to lag other markets, but managed to close at its highs for the week. However during the past six trading sessions, prices have all been negative, mostly below their 13 and 50 day price moving averages. The index remains well below its June 9th high at 6341.70.The week’s top performers were American Airlines Group ( AAL: $ 53.03 ) + $ 2.71 or + 5.4%; Applied Materials ( AMAT: $ 43.54 ) + $ 2.23 or + 5.4%; Lam Research Corp ( LRCX: $ 148.13 ) + $ 6.70 or + 4.7%; Skyworks Solutions ( SWKS: $ 99/70 ) + $ 3.75 or + 3.8%; Incyte Corp ( INCY: $ 130.84) + $ 4.93 or + 3.9%; and Kla-Tencor ( KLAC: $ 94.57 ) + $ 3.06 or + 3.3%.
Fundamental Analysis Stocks To Buy with Stops
Using fundamentals the following are stocks to trade hypothetically. They have done well. We have taken numerous profits as indicated on the table below. In addition many have been stopped out with small losses. As indicated on the table below, balance is critical. And we have exited most positions.
Alibaba has made a few points. We are raising the stop loss price. We have no position in Alcoa AA. If long use a close below $32 as a risk point.
Flushing Financial FFIC fell to and held the 50 day price moving average on March 3rd, which was a buying opportunity. We would stay long the Flushing Financial.
We are not involved with Bristol Myers.
Hecla Mining is a buy as long as it is above the 13 day price moving average.
We took profits on ENZ but still want to buy at lower prices.
The HDGE may finally be oversold and relevant at this time. It is a decent long or offset against portfolio positions as long as it holds above $ 8.63.
| Symbol | Name | Business Description | PE | P/S | MV mln | Price | Buy or Sell Limit | Stop Loss
Or offset |
| BABA | Alibaba | Largest on-line book in China; more of a retailer than Amazon | 50.67 | 13.21 | 275.5B | 140.90 | Bought @ $ 111 on 4/7/17 opening | 126x |
| AMZN | Amazon | Catalog & Mail Order | 189 | 2.90 | 394B | 968 stopped out | Sell on stop | 976x |
| SIMO | Silicon Motion | Semiconductor solutions for mobile storage and communications | 9.7 | 2.5 | 1.39B | 48.23
Stopped out 49.40 |
Bought
39.10 01/28/17 |
49.40x |
| CIO | City Office
REIT |
Real Estate Investment Trust high quality Offices | 292 | 5.8 | 396Mln | 12.70 | Re Bought at 12.12 | 11.50x |
| TPC | Tutor Perini | Construction | 12 | 0.25 | 1.3B | 28.75
Stopped out28.90 05/04 |
19.40
10/31/16 |
Looking for place to buy |
| SAVE | Spirit Airlines | Discount Airline | 13 | 1.6 | 3.6B | 51.65 | 52.00 | Bought on a dip to $ 52 |
| BMY | Bristol Myers | Biopharmaceutical Products | 28 | 5.1 | 94.9B | 55.72
No position
|
Looking for place to buy
|
If bought sell at 53.90x |
| BA | Boeing | Aerospace, commercial jetliners, military systems | 14 | 0.85 | 81B | 197.75 | Long at
132 10/04/16 |
We would raise stops to $195 07/3 |
| HL | Hecla Mining | Basic Materials | 44 | 3.61 | 1.7B | 5.10
Look for re-entry |
Long at 5.30
5/5/17
|
A good long |
| FFIC | Flushing Financial | Bank Holding company Savings and loans | 13 | 3,5 | 592Mln | 28.19 | 19.10
06/27 |
50 day m.a. at 27.45 |
| AA | Alcoa | Aluminum Processing and Technology | N/A | 0.4 | 9.5B | 32.65
|
21.15 originally bought 2/8/16 | $ 28.90-29.10 support |
| ENZ | Enzo Biochem | Life Sciences | NA | 1.35 | 134M | 11.04 | Bought
at 5.13 10/7/16 |
Sold on Opening Monday 4/3/17
Sold 8.43 |
| BAC | Bank of America | Commercial Bank | 10 | 2.02 | 165.3B | 24.26
|
Bought at 15.42
9/30/16 |
23.60x stopped out on 3/21/17 |
| HDGE | Advisor Shares | Ranger Bear ETF | 8.56
|
Sell stop at 8.44 | Must close above 8.68 to be long |
Rule 17B Attestations and Disclaimers
Princeton Research, Inc. has approximately 2,581,578 shares of AIVN both free and restricted and represents them for Investor relations. Princeton also has about 40,000 shares of TXGE. Princeton is paid $ 1,500 per month from RMS Medical Products. Princeton has bought 81,100 shares of RMS Medical Products. Princeton was paid $ 2,500 to write a report on Xinergy. Princeton has signed a contract with CBLI to be paid $ 2500 for July and August for investor relations. Princeton has been engaged by Target Energy. No contract is currently in place. Princeton was paid about 500,000 restricted shares of Leo Motors.
When there is no movement in penny stocks, even though there is none or very small losses, we will liquidate ( sold AIVN on stop ) even though we like the company, if money is needed for better opportunities.
We now believe REPR represents upside opportunity. The Target ADR trades at about $ 4.50 in U.S. vs 0.05 in Australia. Princeton owns 400,000 Australia shares and about 900 U.S. ADR’s.
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 e-mail issue. Princeton may buy or sell its free-trading shares in companies it represents at any time.
CONTACT
Please Direct All Inquiries To:
Mike King
(702) 650-3000