April 28, 2014
Where To Invest
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Market Investing Strategies
Newsletter
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Covering High Return
Balanced Investing Strategies To
Make Money In Up Or Down Markets
Over 284% Gains In 2013
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Covering High Return
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
Market Strategies
$10,000 Trading Account
Traders Comments
There are three open positions:
BIIB May 270 Puts
SPY May 185 Puts
XLU May 43 Puts
Funds in Use $ 2732
In 2013 YTD gains were $28,479
Over 284% Returns
A $10,000 Portfolio would be worth $38,479
Back at the end of March I made the comment that “THEY DON’T RING A BELL” at tops and bottoms, but they may have done exactly that for April Fool’s Day this year. The internals of this market, noted in the two successive letters, have continued to erode.
While we did rally to new highs in the Dow and S & P 500 we have failed to maintain those levels for much more than a nanosecond. The reversals have been stunning in many of the momentum stocks. NFLX failed to hold its bounce off its 200 day MA after a fall from $460 to $312 and that bounce lasted only until the first area of resistance at $385. I tried to trade the rally on Wednesday / Thursday and it cost us 35% overnight. TSLA, AMZN, GOOG and others reacted in the same manner.Apple was the only survivor in this bloodbath adding $60 from its 4/15 low of $511, based on quarterly earning numbers. While MSFT also had good numbers, we barely eked out a gain. We remain long Apple.
There are no new trades tonight since I really need to see how we hold these levels. I believe we may get a small rally here, but the likelihood of a sustained move higher seems unlikely……but stranger things have happened.
…CAM
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Market Strategies
$10,000 Trading Account
Trade Table
| DATE | TRADES | PRICE | COST | PROCEEDS | RESULTS |
| 04/25 | Bought 6 SPY May 185 Puts | 1.82 | 1092 | ||
| 04/25 | Bought 2 BIIB May 270 Puts | 4.40 | 880 | ||
| 04/25 | Sold 6 TBT May 66 Calls | 1.02 | 612 | 60 Loss | |
| 04/25 | Sold 1 NFLX May 355 Call | 6.70 | 670 | 325 Loss | |
| 04/25 | Sold 8 MSFT May 40 Calls | 1.06 | 848 | 88 Gain | |
| 04/24 | Sold 10 KMP May 77.50 Calls | 0.28 | 270 Loss | ||
| 04/24 | Bought 1 NFLX May 355 Call | 9.95 | 995 | ||
| 04/22 | Sold 10 BAC May 16 Calls | 0.49 | 490 | 70 Gain | |
| 04/21 | Bought 8 XLU May 43 Puts | 0.95 | 760 | ||
| 04/21 | Bought 10 KMP May 77.50 Calls | 0.55 | 550 | ||
| 04/16 | Bought 10 BAC May 16 Calls | 0.42 | 420 | ||
| 04/15 | Bought 6 TBT May 66 Calls | 1.12 | 672 | ||
| 04/10 | Bought 8 MSFT May 40 Calls | 0.95 | 760 |
Remember, these trades are based on your participation in the
TEXTING SERVICE TO RECEIVE ALL UPDATES.
Previous closed out trades not listed here may be seen in previous market letters in the VIP Subscribers Members Area.
Options Trading Strategies Notes: In Texting we have a limited amount of words. In the interest of brevity: we use 8=August , 9=September . The Quantity and Strike Price for each trade is specific.
We may trade weekly options and they are noted: SPY 1/25 147 for SPY Jan 25th 147 calls or puts.
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Market Laboratory
Weekly Changes For Market Indicators
Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect
| Dow
16,361.46 -47.08 -0.29% |
Nasdaq
4075.56 -19.95 -0.49% |
S&P 500
1863.40 -1.45 -0.08% |
Transportation 7588.14 -48.28 -0.63% |
Russell 2000
1123.03 -14.87 -1.31% |
Nasdaq 100
3533.10 -1.44 -0.04% |
| Gold (spot)
1300.70 +7.30 +0.6% |
Silver (Dec )
1969.1 +9.5 +0.5% |
Crude
100.60 -3.70 -3.6% |
Heating Oil 298.09 -2.03 -0.7% |
Unleaded Gas
3.0266 +0.0038 +0.1% |
Natural Gas
4.647 -0.094 -2.0% |
| VIX
14.06 +0.70 +5.3% |
Put/Call Ratios
S&P 100 137/100’s +24/100’s |
Put/Call Ratios
CBOE Equity 60/100’s +3/100’s
|
Bonds 134-30 +1-01 3.445% -0.076% |
10 Yr Note
124-02 +10
2.66% -.07% |
Copper
312.45 +7.95 +2.6% |
| CRB Inflation
Index 310.69 -0.77 -0.2% |
Barron’s Confidence
71.9% -0.1% |
S&P100
825.56 -0.12 -0.01% |
5 Yr Note 119-057 +055 1.728% -0.007%
|
Dollar
79.76 -0.11 -0.1% |
DJ Utilities
551.66 +8.66 +1.59% |
| AAII
Confidence Index |
Bullish
34.5% +7.3% |
Bearish
26.0% -8.3% |
Neutral
39.5% +1.0% |
M1 Money Supply
+10.36% April14th |
M-2 Money
Supply +6.32% April14th |
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.
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New Stock Recommendations
$ 100,000 account
1) Buy 15,000 shares AIVN* at $ 0.03
Each stock is allocated a theoretical $ 5,000 share of the portfolio unless otherwise indicated.
| Stock | Purchase Price | Purchase Date | Stop/Loss | Price/Date Sold | Profit/(Loss) | ||||
| SPXU 200
Leaves 100 |
54.74 | 04/22 | 04/25 sold 100 only@ 56.33 | $ 159 | |||||
| XRGYF 5000* | 0.407 | 03/14 | |||||||
| OSIR 300 | 15.94 | 02/13 | |||||||
| INSM 300 | 15.37 | 01/29 | |||||||
| GRPN 500 | 10.40 | 01/28 | |||||||
| AA 300 | 11.79 | 01/28 | 04/24 13.66 | $ 561 | |||||
| RPTP 400 | 15.37 | 01/16 | |||||||
| AA 500 | 10.06 | 01/10 | |||||||
| WLT 300 | 16.22 | 12/23 | |||||||
| GSG 150 | 32.64 | 12/23 | 32.21sco | ||||||
| NBG 300 | 4.08 | 8/12 | |||||||
| TEXQY* 200 | 6.56 | 7/11 | |||||||
| NBG 300 | 12.10 | 5/23 | |||||||
| HL 1000 | 4.10 | 3/04 | 2.64sco | ||||||
| AAPL 10 | 538 | 11/08/12 | |||||||
| AAPL 5 | 636 | 10/9/12 | |||||||
| REPR* 5000 | 0.22 | 10/22/12 | .12 sco | ||||||
Recommendations will be both listed in this letter and texted to members.
Previous closed out stock and option positions can be found in past Market Strategies Newsletter issues available in the Subscriber Members Area.
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, DXD, SDS,TZA and RWM, which go 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.
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Market Strategies
$100,000 Trading Portfolio
Recommendations And Overall Comments
We had five closed out positions last week and lost $ 274
Losses for the new year grew to $ 6,550
For the full year 2013 we had realized gains of $ 53,556.
We have open position losses now of about $ 11,960 most of which are in small cap bio-med stocks held over from last year.
We also have not counted dividends received on stocks like Apple, Nordic American ( NAT ) and JP Morgan.
We have three long options positions:
BIIB May 270 Puts; SPY May 185 Puts and XLU May 43 Puts
The Stock table has the following 15 positions:
AA, AAPL (2), DSX, GRPN, GSG, HL, INSM, NBG (2),
REPR, RPTP, TEXQY, WLT, XRGYF
The options call for a $ 2,500 investment unless otherwise stated; each stock position requires $5,000 unless specifically stated.
We are basing money management on a hypothetical
$ 100,000 and are using
$ 6,355 in three options positions and
$ 64,330 in 16 stock positions
totaling $ 70,685 with
$ 29,315 in cash.
These figures are approximate. We do not count commission costs and there may be errors.
We were unable to buy the AIVN* last week at $0.03. I was able to buy 10,000 shares at $ 0.04 the previous week adding to my speculative position.
The options call for a $ 2,500 investment unless otherwise stated; each stock position requires $5,000 unless specifically stated.
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 ouractual 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 Market Strategies
$100,000 Portfolio Trading Account
- 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
| Option | Cost | Date | Sold | Date | Profit/(Loss) |
| SPY May 185
12 lots |
Puts 1.82 | 04/25/14 | |||
| BIIB May 270
6 lots |
Puts 4.40 | 04/25/14 | |||
| NFLX May 355
2 lots |
Calls 9.95 | 04/24/14 | 6.70 | 04/25/14 | ( $ 650 ) |
| XLU May 43
16 lots |
Puts 0.95 | 04/21/14 | |||
| KMP May 77.50
20 lots |
Calls 0.55 | 04/21/14 | 0.28 | 04/24/14 | ( $ 540 ) |
| BAC May 16
20 lots |
Calls 0.42 | 04/16/14 | 0.49 | 04/22/14 | $ 140 |
| TBT May 66
12 lots |
Calls 1.12 | 04/15/14 | 1.02 | 04/25/14 | ( $ 120 ) |
| MSFT May 40
16 lots |
Calls 0.95 | 04/10/14 | 1.06 | 04/25/14 | $ 176 |
Note: Previous closed out stock and option positions can be found in past Market Strategies Newsletter issues available in the VIP Subscribers Members Area.
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This Weeks’ Market Strategies
Economic Numbers and Media Data
| Monday | Corning ( GLW 0.30 vs Same ) Lab Corp ( LH: 1.59 vs 1.74 )
Haemonics ( HAE: 0.58 vs 0.48 ) National Oilwell Varco ( NOV 1.39 vs 1.29 ) Precision Drilling ( PDS 0.35 vs 0.33 ) 10:00 hrs Pending Home Sales Mar ( 1.0% vs -0.8% ) Crane ( CR:1.03 vs 1.04 ) Jacobs ( JEC: 0.89 vs 0.80 ) Range Resources ( RRC: 0.51 vs 0.33 ) |
| Tuesday | 3D Systems DDD 0.15 vs 0.21 ) BP ( 0.19 vs 1.32 ) Bristol Myers BMY ( 0.43 vs 0.41 ) Coach ( COH 0.62 vs 0.84 )
09:00 hrs Case-Shiller 20-city Index Feb ( 13.0% vs 13.2% ) 10:00 hrs Consumer Confidence Apr ( 83.6 vs 82.3 ) Boston Properties ( BXP: 1.23 vs 1.06 ) CRAY -.43 vs -.23 Dynamic Materials ( BOOM: 0.10 vs 0.02 ) ROG .73 vs .44 Panera Bread ( PNRA 1.52 vs 1.64 )SM Energy 1.50 vs 0.82 |
| Wednesday | Before the Open earnings are always at the top of the column
Barrick Gold (ABX: 0.18 vs 0.92 ) Garmin ( 0.44 vs 0.40 ) 07:00 hrs MBA Mortgage Index 04/26 ( NA vs -3.3% ) 08:15 hrs ADP Employment Change Apr ( 215K vs 191K ) 08:30 hrs GDP-Adv 1st Qtr ( 1.0% vs 2.6% ) Implicit Price Deflator ( 1.8% vs 1.6% ) 09:45 hrs Chicago PMI Apr ( 56.5 vs 55.9 ) 10:30 hrs Crude Inventories 04/26 ( NA vs 3.542 Mln bbls ) 14:00 hrs FOMC Rate Decision Apr ( 0.25% plus Discussion ) Cabot ( CBT: 0.85 vs 0.63 )Boston Beer (SAM: .66 vs .51 ) |
| Thursday | BZH: -0.19 vs -0.78 Bunge ( 1.45 vs 1.15 ) XOM 1.87 vs 2.12
07:30 hrs Challenger Job Cuts Apr ( NA vs -30.2% ) 08:30 hrs Initial Claims 04/26 ( 315K vs 329K ) Continuing Claims 04/19 ( 2725K vs 2680K ) 08:30 hrs Personal Income Mar ( 0.4% vs 0.3% ) Personal Spending ( 0.6% vs 0.3% ) CORE PCE Expenses ( 0.2% vs 0.1% ) 10:00 hrs ISM Index Apr ( 54.5 vs 53.7 ) 10:00 hrs Construction Spending Mar ( 0.4% vs 0.1% ) 10:30 hrs Natural Gas Inventories ( NA vs 49BCF 14:00 hrs Auto Sales for Apr ( NA vs 5.5Mln in March ) Truck Sales ( NA vs 7.6 Mln in March ) AEM ( 0.18 vs 0.31 ) AKAM 0.53 vs 0.43 Linkedin 0.35 vs 0.45 |
| Friday | Chevron ( CVX: 2.45 vs 3.18 ) Estee Lauder EL: 0.55 vs 0.45 NWN ( 1.46 vs 1.40 ) Wisdom Tree ( WETF: 0.11 vs 0.06 )
08:30 hrs Nonfarm Payrolls Apr ( 210K vs 192K ) Private Payrolls ( 205K vs 192K ) Unemployment Rate ( 6.6% vs 6.7% ) Hourly Earnings ( +0.2% vs 0.0% ) Ave Workweek ( 34.5 vs Same ) 10:00 hrs Factory Orders Mar ( 1.6% vs 1.6% ) After the close always at the bottom of the column: Freightcar America ( RAIL: -0.07 vs -0.18 ) VOLC: -.11 vs -0.02 |
Market Strategies Economic Data
New Home sales declined 14.5% in March. March sales were the lowest since 373,000 new homes were sold in July 2013. Regulations to the banking industry are overwhelming and they are of little help to prospective borrowers that need to show the ability to put down 20% of the cost out of net income. The reality in the housing market is that affordability conditions have weakened considerably over the past several months.
Mortgage rates have bounced off their lows and have made financing more difficult. At the same time, home prices have surged and income levels have stagnated. New home prices in March were up 12.6% from the year-ago period. Altogether, homes are much less affordable. Winter weather conditions were less of an issue.
Market Strategies Trading Fundamentals
The loose central bank policy is the biggest single driver of asset prices and remains extremely accommodative for the foreseeable future. Stock earnings have been decent but not ebullient as might be expected to support current high prices. Market prices have held current levels on the basis of “bullish expectations.”
The U.S. Federal Reserve has purchased $1.58 trillion in U.S. Treasuries over the last five plus years and will likely tack on at least another $100 billion in the coming months before the latest program is over. Viewing this differently, the Federal Reserve has printed into existence an amount in U.S. dollars that is equivalent to the annual GDP of Australia, which is the 15th largest economy in the world. In short, this is A LOT of money that the Fed has pumped into the system, and the effects are still to come.
Market Strategies Technical Information
Support Levels S&P 500 1818
Resistance S&P 500 1877
Support Levels DOW 16,180
Resistance DOW 16,480
Support Levels QQQ 83.90
Resistance QQQ 87.10
Support Levels NASDAQ 3920 – 4040
Resistance NASDAQ 4175
Market Strategies Cycles
The S&P 500 13 day moving average penetrated the 50 day m.a. on Friday causing alarm and suggest the likelihood that the recent technical support levels will again be challenged. This includes its upward sloping 50-day moving average at 1857, its upward sloping 100-day moving average at 1834, its upward sloping 150-day moving average that provided the support level for the most recent bounce in early February at 1803, and perhaps most importantly, its upward sloping 200-day moving average at 1772. The markets could easily test the 200 day m.a. and should in the upcoming months. Of course, everyone has the same charts and most are already short in some fashion. It is a good time to have quality micro-cap stocks relatively unaffected by the volatility.
The Ukraine situation has put a damper on the market as the suggestions of any retaliation, either economic sanctions or military threats create a bearish dilemma for the markets., and that is that Crimea gets its gas and electricity from mainland Ukraine. I imagine Putin would like to acquire eastern Ukraine to eliminate this obstacle and also provide an access to Crimea by road through Western Russia. The market does not like unknowns, and Putin’s army creeping further westward will probably spook the markets. The former Secretary of State Clinton ash likened Putin to Hitler before WWII, It’s very possible we don’t know Putin really at all or the lengths he will go to achieve his goals.
If the market continues to track past midterm years reasonably closely, as they have done for the past three months, then a mid-April top and a rough, down May and June are likely. Earnings (real and Q2 estimates), economic data and monetary policy will need to remain extremely supportive ( unlikely ) in order to stave off typical Q2 & Q3 midterm year weakness. Economic data has been improving and will need to continue to support the high stock market prices. Continued good economic numbers will help ameliorate the usual summer decline.
Data is improving which supports the Fed policy to be less supportive each month as the Fed continues to trim QE at each meeting. The chart below shows a trend for the second and third quarters of the second presidential year. In the event of the usual down market for this period, October has often begun a resumption of a bull trend as in the chart below.
Technology-heavy S&P 500 has been pulled lower, but is still well above its February closing low of 1741.89. DJIA, with the lightest tech exposure is also well above its February closing low of 15372.80. Confirmation remains the key. So far this year there have been numerous times when this or that index made a new all-time high (or recovery high) on a particular day by itself, only to fail to continue higher absent the support of other major indices. Multiple indices closing below their respective February lows could prove to be the demise of the bull market.
After gold peaked in mid-March, its steady decline through month-end also pulled down mining ETFs. The worst was Market Vectors Jr Gold Miners (GLDX), off 13.4% through April. However, GLDX is up 27.2% year-to-date. If gold holds support in the $1280-1300 per ounce price range, new long positions in gold-related ETFs should be considered.
Margin debt had climbed to a new all-time high well over $ 450Billions. The chart below illustrates the relationship between prices and debt. There is an uncertain relationship between high prices and margin debt.
The only certainty is that high margin debt contributes to high volatility and that tax time may be having an effect. The following chart shows the failure of the market to make new highs at a time when the dollar is weak.
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Rule 17B Attestations
Princeton has approximately 2,581,578 shares of AIVN both free and restricted and represents them for I.R.. 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 Research has been paid $ 2,500 to write a report on Xinergy.
Princeton has been engaged by Target Energy. No contract is currently in place. 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 0.045 in Australia. Princeton owns 400,000 Australia shares and about 500 U.S. ADR’s. Princeton is paid about 500,000 shares of Leo Motors.
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 its free-trading shares in companies it represents at any time.
CONTACT
Please Direct All Inquiries To:
Mike King
(702) 650-3000
Princeton Research
3887 Pacific Street, Las Vegas, Nevada 89121
Investing Strategies Newsletter