Investment Strategies

April 29, 2013

Market Strategies Newsletter

Sample Issue

 Covering High Return Balanced Investing Strategies To

Make Money In Up Or Down Markets

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

Market Strategies

$10,000 Options Trading Account

Open Positions:

There are seven open positions:  

 

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Options Trading Strategies Comments

This week we made $733

bringing YTD totals to $16,336

Returns Of Over 163%

Total funds in use are $4021.

To clarify this performance I would like to explain that the performance is not levered to use all funds available, but rather is based on the starting investment of $10,000 per unit.  This enables us to continue to utilize our strict risk control and to avoid the “double or nothing” mentality so prevalent in options speculation.

The use of our two major rules (100% up rule–sell half and 50% down rule–liquidate position) help to assure that we will not lose our original stake and be able to take advantage of what opportunities the market presents.

The actual equity of the original $10,000 unit is currently $26,336 and the funds in use represent risk of $4,000. 

Using the 50% rule as a guide, this really equates to only $2,000 risk or under 10% of current equity.

While we continue to track higher in the markets we have no shortage of bad news being generated.  Syria is boiling just below the surface with very negative implications in an already troubled part of the world.  The farce of the FAA sequester results and the ability of Congress to find a solution when they were forced into an inconvenience for them heading out for a week off.

Lastly, while we continue to report “above expectation” earnings reports, those expectations have been dramatically lowered and the “top line” misses have caused extreme distress for those companies who have cut costs (read:”layoffs”) to be profitable.

The A.A.I.I. sentiment numbers below show that while we move higher we certainly haven’t become excessively bullish yet.  I do look for a further slowing of volume and a sloppy market in the near-term.

……CAM

 

Where To Invest Now

Options Trading Strategies Table

Remember, these trades are based on your participation in the

VIP Subscriber Members Only TEXTING SERVICE TO

RECEIVE ALL UPDATES.

DATE	Trade	PRICE	COST	PROCEEDS	RESULTS
4/26	This Information Is For Subscribers Only	0.65	650
4/25		0.10	60
4/24		0.40		240	234 Loss
4/24		0.68	680
4/23		1.20		600	300 Gain
4/23		1.55		775	600 Gain
4/23		1@4.20 1@3.45		420 345	188 Gain 113 Gain
4/23		0.79	474
4/23		1.15		690	222 Gain
4/22		0.76		456	456 Loss
4/22		2.32	464
4/19		1.00		1000	650 Gain
4/19		0.85		850	600 Gain
4/18		1.52	912
4/18		0.60	600
4/15		0.58	696
4/15		0.35	700
4/15		0.78	468
4/12		0.60		600	350 Gain
4/01		0.73	1460
3/11		0.25	500

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.

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 25^th 147 calls or puts.

For any questions please call (702) 650 3000.

 

Market Strategies Where To Invest Now

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

$100,000 account

Recommendations will be both listed in this letter and texted to members.

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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 past Market Strategies Newsletter issues available in the VIP Subscribers 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.

 

$100,000 Trading Portfolio

Options Trading Strategies

Recommendations And Overall Comments

We made $3,610 in closed out positions

last week mainly because

ARRY, CLDX and MSFT gains.

 

Our profits for the year gained

to a hypothetical $31,482

 

We have one long BAC warrant position and six long options positions:

The Stock table includes the following seventeen positions:

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

$ 100,000.00 and are using $ 8,042

for the BAC Warrants plus the six options positions, 

$ 63,836 in the 17 stock positions, 

a total of  $71,878 with $28,122 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 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

 

NOTE: This is a Sample Issue Only!

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Note: Previous closed out stock and option positions can be found in past Market Strategies Newsletter issues available in the VIP Subscribers Members Area.

 

This Weeks’ Market Strategies

Economic Numbers and Media Data

Market Strategies

Trading Fundamentals

 

Basic Materials and Oil and Gas made a recovery last week, both up 3.23%, and leading all 10 Dow Industry Groups. Cliffs Natural resources led the way ( CLF: $20.17 ) up $ 2.54 or 14.4%. Apache ( APA: $ 72.28 ) rose $ 3.43 or 5%. EOG resources ( EOG: $ 119.12 ) gained $ 5.68 also a 5% move after having reached its 200 day moving average a week ago (April 18^th ) and holding.

Technology stocks gained 3.10% led by Apple ( AAPL: $ 417.20 ) up $ 26.67 or 6.8%.

Financials continued their bullish ways up 2.30% followed by Industrials, plus 2.22%.

Consumer Services gained 1.36% and Consumer Goods 0.88%.

The only two small losing groups were Health Care down 0.10% and Telecommunications minus 0.32%.

Market Strategies Economic Data

Most of the economic reports last week were negative. March Total Durable Goods orders were off 5.7%. Without transport orders namely Boeing, orders continued negative, down 1.4%.

Capital goods Orders were down 12%, Nondefense off 10.6%. Defense capital goods were down the most, 33.2%, influenced by the sequester. A glance at the Boeing chart will tell you that shipments of the beleaguered 787  will resume shortly.

The same situation goes for the March Housing reports. Existing Home Sales were just 4.92 Mln Units annualized, below expectations of 5.01 Mln Units and even below last month’s 4.95 Mln Units. Home prices are up 11.8% year-to-year and are expected to provide incentive for more supply of existing homes to hit the market. Inventory of used homes is at a 4.7 month supply down from a 6.2 month supply last year.

New Home Sales increased 1.7% in March to 417,000 units, down from the January peak of 445,000 units. The consensus expected sales to be around 415-420,000 units. The median sales price increased 3% year-to-year to $247,000. New Home prices have risen much faster than used homes and the higher prices have stalled sales. However, a glance at the daily prices of home builders’ stocks like Pulte Homes ( PHM: $ 21.35 ), KB Homes ( KBH: $ 23.04 ) and D.R. Horton ( DHI: 26.66 ) would indicate the overpowering influence of low interest rates and its bullish effect on the future of the Housing Industry.

A glance at the chart below shows that from 1997 to 2003 the Home Building level was 800,000 to 1,000,000 units. Then from 2004 through 2006 , 1.0 mln Units to 1.3 mln units. Major investment banks  and hedge funds like Blackrock ( BLK: $ 263.77 ) and KKR ( $ 21.05 ) have indicated they are preparing to invest aggressively in the housing sector. They would likely take more existing homes off the market.

 

Market Strategies

Technical Information

Support Levels S&P 500    1543 – 1547

Resistance S&P 500           1588 – 1597

 

Support Levels DOW          14,435 – 14,455

Resistance DOW                 14,790 – 14,860

 

Support Levels QQQ           67.80 – 68.30                  

Resistance QQQ                  69.95

                  

Support Levels Nasdaq      3240

Resistance Nasdaq             3308

 

Market Strategies Cycles

May has been a difficult month over the years. May 6^th 2010 had the flash crash. May generally is the time to be out. Sell in May and go away is the common slogan. However, in post-election years May ranks near the top.

May is the best performer for both the Nasdaq and Russell 2000 in post- election years. We always suggest insurance should the market break and we have such in our portfolios. Since 1952 according to the SMA the S&P 500 has been the second strongest index. DJIA has been 4^th best month. However, the Russell 2000 has been up 8 straight years with gains averaging 4.7%.

 

The Stock Trader’s Almanac issued a sell signal with a negative crossing of the MACD Index.

They believe the bull market has ended and the bear run has begun. IBM has accurately set the mood for the street most of the time ( almost 75% ) with its earnings reports, this time very negative.  In the event they are right, volatility will need to pick up and the markets will be choppy if a top is in.  Since mid-November of last year the market has enjoyed a solid run that has provided sizable gains.

The trend remains higher until the constructive patterns are broken.

Apple ( AAPL: $ 417.20 ) and can rally to the 50 day Moving Average ( 433-38 ) after being down 158.50 points or 28.9% this year turned around last week and helped all the averages. The stock appears technically improved while fundamentals can justify a higher price, it needs more technical basing. Apple remains 2x cheaper than Microsoft and 4x cheaper than Google. At this valuation the market is implying that net income will revert back to 2011 levels and that Apple has no new technology.

NOTE: This is a Sample Issue Only!

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TEXT MESSAGE AND

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Rule 17 B 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. When there is no movement in penny stocks, even though there is none or very small losses, we will liquidate if money is needed for better opportunities. We now believe the three small penny stocks we represent for a total outlay of $ 9,725 is well worth the risk.

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

Or

Charles Moskowitz (781) 826-8882

Princeton Research

3887 Pacific Street, Las Vegas, Nevada 89121

Phone: (702) 650-3000

Fax: (702) 697-8944

mike@princetonresearch.com

Visit: www.princetonresearch.com

Investment Strategies