Investment Strategies – March 19, 2012 Market Strategies Newsletter

Market Strategies

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)

Contributing Staff: Michael King, Bill Chippas, Charles Moskowitz

 

March 19, 2012

Market Strategies Guide to

Successful Trading

 

To Read The Market Investing Strategies Newsletter In Adobe PDF Version – CLICK HERE 

http://www.princetonresearch.com/3-19-2012-Market-Strategies.pdf 

To subscribe to the Options Only Acct Trades simply TEXT the word UPDATES to 69302

and you will automatically be included.

 

$10,000 OPTIONS ONLY ACCT:

 

New Trades for this week:

Buy 6 IWM April 84 Calls @ $1.35 OB      

Buy 5 RCII April 35 Puts @ $2.00 OB         

 

The $10,000 Options Only account had a Loss last week of $1,086, decreasing our gains for the year from $5,193 to $4,107.

 

Four positions remain:

The LNG April 15 Puts, S April 2.5 Calls, OXY April 105 Calls and LMT April 90 Calls.

 

While I am still cautious, this weeks’ market has almost made me a TRUE believer in the Bull Market.  What I have observed in the past 2 or 3 weeks is that “they” seem to be willing to take any and every stock up at some time…I’ve constantly said (and after over a year or so you must be tired of hearing it) that you can’t have a bull market without the financials.  Well, now that piece of the puzzle fits into the picture.  And the best part of that is while BAC is up 60% this year, it’isever market s still 80% off its high.  With all of the new all-time highs in the market, you can see that this group has a lot of room to the upside even if it is temporarily overbought.

 

We will continue to take a balanced approach every week, but it becomes that much easier to look at the charts of anything with a base that may be breaking out.  This is why we bought S (Sprint) on Friday. 
Six months of basing followed by a break above its short-term moving average on good volume.

 

Now that I seem to have turned bullish you can almost be assured that something will come around the corner and hit me in the face with a pie…..The main thing to remember is to have a balanced approach, use stops and follow the 100% up and 50% down rules to make sure you don’t exceed your tolerance for risk.  The biggest problems are not the ones we hear about every-day.  They are the unknowable problems that bring a change in sentiment.  The numbers may look great, but when the selling begins it’s not time to fight the tape…CAM

The Open positions are highlighted in the options table below.  Approximately $ 2420 funds are in use.

 

Remember, these trades are based on your participation in the

TEXT MESSAGE TRADE ALERTS SERVICE TO RECEIVE ALL UPDATES.

TEXT the word UPDATES to 69302 To Get In Now

 Previous closed out trades not listed here may be seen in the March, February and January weekly newsletters. See past issues at http://www.princetonresearch.com/market-strategies-newsletter/

 

DATE

TRADE

PRICE

COST

PROCEEDS

RESULTS

3/16

Bought  5 LNG April 15 Puts

1.00

500

 

 

3/16

Bought 15 S April 2.5 Calls

.39

585

 

 

3/15

Sold 6 ALEX April 45 Puts 

.59

 

354

354 Loss

3/13

Sold 4 AMZN March 185 Calls

1.05

 

420

420 Loss

3/13

Sold  6 SPY March  137 PUTS

.55

 

330

312 Loss

3/12

Bought 5 OXY April 105 Calls 

1.11

555

 

 

3/12

Bought  6 LMT April 90 Calls

1.30

780

 

 

3/12

Bought 6 ALEX April 45 Puts 

1.18

708

 

 

3/12

Bought 4 AMZN March 185 Calls

2.10

840

 

 

3/9

Bought  6 SPY March  137 PUTS

1.07

642

 

 

New trades $ 10,000 account…In Texting we have a limited amount of words. In the interest of brevity: OPTIONS ONLY: 4 April, 5 May . The Quantity and Strike Price for each trade is specific.

For any questions please call 702 650 3000

 

MArket Laboratory – Weekly Changes

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

Dow

13232.62

  +310.60

+2.40%

Nasdaq

3055.26

+66.92

+2.24%

S&P 500

1404.17

+33.30

+2.43%

Transportation

5351.32

+189.39

+3.67%

Russell 2000

830.18

+13.18

+1.61%

Nasdaq 100

2646.85

+5.27

+0.20%

Gold

1655.80

 -55.70

-3.25%

Silver

3260.4

-160.8

   -4.7%

Crude

107.06

  -0.34

-0.31%

Heating Oil

328.19

+1.81

+0.55%

Unleaded Gas

3.3569

+.0245

+0.74%

Natural Gas

2.326
+0.002             
+0.01%

VIX

14.47

-2.64

-15.43%

Put/Call Ratios

S&P 100

105/100’s

-65/100’s

   Put/Call Ratios    CBOE Equity

          55/100’s

           -13/100’s

 

Bonds

136-14 -3-28

3.41% +0.22%

10 Yr Note

128-194 -2-036                                                2.30% +0.26%

Copper

387.80

+1.95

+0.51%

CRB Inflation

Index

317.93

+0.32

+0.10%

Barron’s Confidence

68.9.%

+1.3%

S&P100

637.85

16.55

2.66%

5 Yr Note

121-31 -1-017                                                   1.12% +0.22%

 

Dollar

80.08

         +0.00

+0.00%

DJ Utilities

453.60

-1.35

-0.30%

AAII

Confidence

Index

Bullish

45.6

+3.2%

Bearish

27.2

-1.8%

Neutral

27.2%

-1.4 %

 

M1 Money Supply

+18.8%March5th

 

M-2 Money

Supply

+9.9%March5th

 

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

 Last week we bought AIVN, SNTS and LVLT and we were stopped on ANX.
With text alerts we bought S and sold PRKR and DZZ. We remain long a good number of small cap stocks most of which have nice gains.

 

 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)

S 1500

2.85

3/16/12

2.69x

 

 

AIVN* 10000
          * 5000

.25
.225

3/12/12
3/12/12

.10 sco
.10 sco

 

 

SNTS 1000

4.80

3/12/12

4.65x

 

 

LVLT 200

24.12

3/12/12

23.30x

 

 

CLWR 1000

2.17

3/5/12

 

 

 

PDLI 700

6.44

3/5/12

5.99x

 

 

XBOR* 2000

2.25

2/24/12

 

 

 

CISG 600

8.50

2/10/12

 

 

 

DZZ 1200

4.35

2/6/12

4.04sco

4.72 3/14/12

$ 444

ANX 6000

.67

2/6/12

0.59sco

.59 3/13/12

 ( $ 480 )

ABR 1200

4.30

2/6/12

4.49x

 

 

PRKR 2000

.83

1/30/12

0.78sco

1.14 3/13/12

$ 740

DVR 2000

2.77

1/17/12

2.86x

 

 

AEZS  2500

1.65

12/15/11

1.55x

 

 

SDS 100

25.55

10/5/11

 

 

 

XBOR*3570

1.40

8/12/11

0.70sco

 

 

LEI* 2425

2.06

8/10/11

1.03x

 

 

LEOM*16650

0.30

12/17/10

0.03 sco

 

 

Note: Previous closed out stock and option positions can be found in the March 12 and newsletters dating back to July 20, 2009.  Stay alert on the free texting service for new trades and exits.

 

 

Model Portfolio Comments/Changes:

 

                                    INDEX OPTION RECOMMENDATIONS

 

 ( 1 ) Buy 12  IWM   April  84 Calls  @1.35 OB       

 

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 5 April AAPL  575  Puts  @  $ 7.10

(2) Buy 10 April WMT 62.50  Puts  @ $ 1.55
(3)  Buy 10  April RCII  35  Puts @ $2.00 OB 

 

 

Option and overall Comments

We had a Loss last week of $1,114 in an up week. Our gain for the year was $13,107 and with last week’s Loss has decreased to $11,993.  We have Five long options positions remaining, the CSCO Jan 20 Calls and LNG April 15 Puts, OXY 105 Calls, S 2.5 Calls and LMT 90 Calls. The stock table includes Fourteen long stock positions: AIVN, SNTS, S, LVLT, CLWR, PDLI, CISG, ABR, PKRK, DVR, AEZS, LEI, LEOM, XBOR (a double) and SDS. The SDS is a double inverse SP500 ETF, DZZ is a double inverse Gold 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 $5,080 in the
options positions and $ 66,080 in the 14 long stock positions for a total of $ 71,160 with $ 28,840 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.

 

 

Option

          COST

Date

Sold

 

Date

Profit/(Loss)

LNG April 1510 Lots Puts              1.00

3/16/12

 

 

 

 

S April 2.5
30 Lots
Calls               .39

3/16/12

 

 

 

 

OXY Apr 10510 Lots Calls             1.11

3/12/12

 

 

 

 

ALEX Apr
6 lots
Puts             1.18

3/12/12

.59

 

3/15

( 354 )

AMZN Mar 185     8 lots Calls             2.10

3/12/12

1.05

 

3/13/12

( 840 )

LMT Apr 90
12 lots
Calls            1.30

3/12/12

 

 

 

 

SPY Mar 13712 Lots Puts              1.07

3/9/12

.55

 

3/13/12

( 624 )

CSCO Jan 20   3 lots Calls              .80

2/14/11

     

 

Note: Previous closed out stock and option positions can be found in the March 12 and newsletters dating back to July 20, 2009.                                                                                                       

                                                                     

                                This Weeks’ Economic Numbers and Media Data

Monday 10:00 hrs NAHB Housing Market Index Mar  (31 vs 29 )
Tuesday 08:30 hrs Housing Starts Feb ( 705K vs 699K )
08:30 hrs Building Permits Feb ( 695K vs 676K )
Wednesday 07:00 hrs MBA Mortgage Index 03/17 ( NA vs -2.4% )
10;00 hrs Existing Home Sales Feb  (4.61M vs 4.57M )
10:30 hrs Crude Inventories 03/17 ( NA vs 1.750M )

 

Thursday 08:30 hrs Initial Claims 03/17 ( 355K vs 351K )08:30 hrs Continuing Claims 03/10 ( 3363K vs 3343K ))
10:00 hrs  FHFA Housing Price Index  Jan ( NA vs 0.7% )

10:00 hrs Leading Indicators Feb ( 0.6% vs 0.4% )

 Friday 10:00 hrs New Home Sales Feb ( 321K vs 321K )

 

Economic Data

 

The FOMC maintained its fed funds target at 0.00% to 0.25% and expressed an outlook that the economy would warrant exceptionally low rates through calendar 2014.

 

Retail Sales in February increased by 1.1% much greater than the 0.6% increase last month. The use of credit cards has been great showing increased consumer confidence. The 4th Qtr current account deficit totaled         $ 124.1 billion well above the expected red ink of $ 113.8 billion.

 

Initial Jobless claims were down again for the week ended March 10th to 351,000 better than the 355,000 claims expected. The continued improvement in stats is encouraging.

 

Fundamentals (previous letters may be seen at www.princetonresearch.com)

 

Another great week.  Even the Transports recovered leading all indexes with a tidy 3.67% gain. The greenback was also higher, +0.56% without a trace of impeding equities while Gold, Silver and Bonds were notably lower.

Stocks are plodding along near their multi-year highs while volatility keeps on going lower at a time known for its high volatility. There is no reason to fight the trend.

 

After twelve consecutive higher closing weeks in the S&P 500 and ten of the last twelve up weeks, the S&P 500 now trades at 14.3x trailing 12-month earnings and 13.0x forward earnings. The 5-year historical average price-to-trailing earnings  average is about 16.5 and the historical price-to-forward earnings is about 13.2. ( an up-week is a higher high and higher low ) Nasdaq likewise has had 10 higher closes along with 10 of the last twelve up-weeks. The action of the previous week making a lower low during the week taking out the lows of the previous two weeks indicates the bearish sentiment is well-absorbed.

 

Technical Information

 

      Support Levels:   S&P 500           1399; 1383                  Resistance S&P 500   1415; 1421

                                        DOW            13,100 13,040              Resistance DOW        13,340; 13,460

                                        QQQ             6577; 6483                  Resistance QQQ          6673; 6755                     

                                       Nasdaq          3036; 2972                   Resistance Nasdaq     3092; 3157                                          

                                    

CYCLES

The positive February performance followed January’s gains and added a new twist to analysis that begun last week in a blog titled Top 10 S&P 500 New Year Starts that was subsequently followed by the Top 15 DJIA New Year Starts. If Apple (AAPL) was a DJIA component, undoubtedly, the DJIA would be performing much better than its current lagging 6.0% year-to-date performance as of the close of February trading.

The Russell 2000 has been the laggard closing at 830.18, up 1.61. it needs to close above 868.57, the high May 3, 2011 to confirm. It is comprised of smaller local type companies in contrast to the Apple’s of the world that have dominated the large caps. By the same token, the Russell stopped its decline at the 50 day M.A. and has had two days up closing at the highest levels since July 2011. The IWM, the Russell 2000 ETF Fund,  closed at 83.00 and is closer to its highest levels ( 86.81 ) established on May 2011.

         

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. AIVN is merging with Placer Gold of which Princeton or its principal owns shares and is a director. Cross Border paid us 25,000 restricted shares several months ago and we bought and own another 25,000 purchased at higher prices. We do not currently represent Cross Border.

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 any 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

 

 

 

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