Market Strategies Newsletter – Options Trading Success

April 1, 2013

Market Strategies Newsletter

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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)

 

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Market Strategies

$10,000 Options Trading Account

There are six open positions:

Funds in Use $ 4,210.00

 

Options Trading Strategies Commentary

 

This week we generated a nominal gain of $100

 bringing YTD performance

up to another new high of $13,620

While balanced, we are still favoring the long side of this market.  The A.A.I.I. numbers are still within the long-term averages with the bearish numbers slightly lower and posing no real influence over the markets.

While we move higher there is still plenty to continue to worry about.  Egypt, Syria, North Korea and Cyprus are being steadfastly ignored as noise of no consequence.  At some point we will be shown that the noise is indeed really a problem, or something else becomes a bigger problem.

There are many stocks that are running out of steam and need a consolidation or pullback to work off their overbought conditions.  With the markets meting out some extreme punishment for missed earnings or soft guidance the path of least resistance seems to be gaps to the downside.  A look at one of the publics’ favorites, FDX, and you can see that after closing near another all- time high

At $109.07 it reported less than expected profits and in 3 days fell to $95.  CAT and DE have suffered the same fate.

While we won’t try to pick a top, we will continue to remain vigilant and avoid stocks with extended or parabolic rises.

….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.

 

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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.

 

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

Market Strategies $100,000 Trading Portfolio

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

No New Stock Trades for the coming Week unless they are Texted to you.

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

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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.

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 gained $ 628 in closed out

positions last week.

Our profits for the year increased to

a hypothetical $ 31,069

 

We have five options positions:

The Stock table includes the following sixteen 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 and are using $ 7,420 in five options positions, $ 68,484 in the16 stock positions, a total of

$ 75,904 with $24,096 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

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

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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

( 54.0 vs 54.2 )

 

10:00 hrs Construction Spending

Feb( 0.9% vs -2.1% )

 

Federal Government will publish rules

for Medicare and Medicaid Services

for 2014.

 

Humana ( HUM: $ 69.11 ) had more than

50% of its 2012 revenue coming from

Medicare Advantage.Tuesday10:00 hrs Factory Orders Feb

( 2.5% vs – 2.0% )

 

14:00 hrs Auto Sales Mar

( NA vs 5.5Mln Units )

Truck Sales

( NA vs 6.7 Mln )

Wednesday07:00 hrs MBA Mortgage Index for 03/30

 

08:15 hrs ADP Employment Guesstimate

( 197K vs 198K )

 

10:00 hrs ISM Services Mar

( 55.3 vs 56.0 )

 

10:30 hrs Crude Inventories 03/30

( NA vs 3.256 mln Bbls )

Thursday07:30 hrs Challenger Job Cuts Mar

( NA vs 7.0% )

 

08:30 hrs Initial Claims 03/30

( 343K vs 357K )

 

Continuing Claims 03/09

( 3045K vs 3050K )

 

08:30 hrs GDP – 3^rd Estimate 4^th Qtr

( 0.4% vs 0.1% )

Implicit Price Deflator 4^th Qtr

( 0.9% vs SAME )

 

10:30 hrs Natural Gas Inventories 3/30

( NA vs -95BCF )Friday08:30 hrs Nonfarm Payrolls Mar

( 178K vs 236K )

Private Payrolls

( 198K vs 246K )

Hourly Earnings Mar

( 0.2% vs Same )

Average Workweek …34.5

 

08:30 hrs Trade Balance Feb

( -$44.6B vs -$44.4B )

 

15:00 hrs Consumer credit Feb

( $ 12.9B vs $ 16.2B )

 

Market Strategies Trading Fundamentals

Basic Material Shares continued to fall, down 0.31%, the only group to be minus on the week.

Health Care was the leader, up 2.41%. Utilities followed gaining 2.33%; Consumer Goods added 1.06%; Consumer services 0.99%; Oil and Gas gained 0.74%; Financials 0.52%; Industrials 0.46% Telecommunications 0.40% and technology just barely ahead by 0.02%.

Users, fabricators of basic materials  and chemical companies have benefitted immensely. Fabricators such as Sleelcase, Inc ( SCS: $ 14.75 ) have improved their earnings as the result of lower raw material costs. Other similar companies such as Herman Miller ( MLHR: $ 27.67 ) + $ 5.41 or 29% this year and HNI Corporation ( HNI: $ 35.49 ) + $ 5.41 or 18% continue to benefit from Fed policies with lower basic material costs and little damage from inflation in sight. Chemical companies like Monsanto and Balchem are exploding.

 

Market Strategies Economic Data

A large increase of orders from Boeing led Durable Goods Orders, jumping 5.7% ( consensus calling for an increase of just 3.8% ) after January had seen a decline of almost 5%. The improvement was paced by a 95.3% gain in nondefense aircraft and parts that flowed from a large pickup in orders at Boeing. Taking away the resurgence of Boeing orders the outlook is stable but dot overwhelming by any means to justify any more than a stable but non-inflationary economic environment.

 

Market Strategies Technical Information

Support Levels S&P 500    15.33-15.37                     

Resistance S&P 500           15.72-15.87

 

Support Levels DOW        14.385-14.145                

Resistance DOW               14.570-14.630

 

Support Levels QQQ           67.60-68.00                   

Resistance QQQ                  69.59-70.70

 

Support Levels Nasdaq      31.50                             

Resistance Nasdaq             34.78

 

Market Strategies Cycles

March came in like a lion, with momentum uninterrupted at the end of the first quarter.  Failing to participate in the rally in which many stocks rose to new all-time highs, cyclical Basic Material Stocks continued to fall with very little support. Arcelor Mittal ( MT: $ 13.55 ); Cliffs Natural Resources ( CLF: $ 20.76 ); BHP Billiton ( BHP: $ 69.64 ); Vale SAADR ( VALE: $ 17.16 ); U.S. Steel Corp ( X: $ 19.81 ); Freeport Mcmoran ( FCX: $ 33.00 );  Rio Tinto ( RIO: $ 47.45 ); Posco ( PKX:$ 72.41 ) and even AK Steel ( AKS: $ 3.31 ) are either at a low point or they are going to inevitably pull the rest of the markets down.

 

Users, fabricators of metals and chemical companies benefitted from lower costs to improve bottom lines. We would use their weakness when the general market pulls back to buy both fabricators and chemicals, often the beneficiary of low prices among heavy duty basic material producers: Monsanto Chemical ( MON: $ 105.63 ), Balchem Corp  (BCPC:  $ 43.94 ), DuPont ( DD: $ 49.16 ); Westlake Chemical Corp ( WLK: $ 93.50 )

 

Both Good Friday and Easter have landed in the month of March 12 times in the last 63 years like they did this year. On the day before Good Friday S&P 500 has logged gains averaging 0.2% in the previous twelve March Easters. Because the holidays are near month-end, the two trading days after Easter have been traditionally weak. The Dow has been lower 16 of the last 25 years and frequently down sharply for an average drop of 0.5%. Notable exceptions to the rule–gains during the week after for DJIA of 4.9% in 2000, 3.1% in 2007, 6.8% in 2009, and 3.1% in 2011 are the rare exceptions to this historically poor performing time-frame.

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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 Or Charles Moskowitz

 

Princeton Research

 

Phone: (781) 826 8882

 

3887 Pacific Street, Las Vegas, Nevada 89121

 

Phone: (702) 650-3000

 

Fax: (702) 697-8944

 

mike@princetonresearch.com or cam@princetonresearch.com

 

Visit: www.princetonresearch.com