Options Trading Success Strategies

 

Market Strategies

Newsletter For

Options Trading Success 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)

 May 29, 2012

Options Trading Success

 Market Strategies Newsletter

To subscribe to the Options Only Acct Trades simply

TEXT the word UPDATES to 69302

and you will automatically be included.

 

To Read This Market Strategies Newsletter In Adobe PDF Version:

http://www.princetonresearch.com/5-29-2012-Market-Strategies.pdf

 

 

$10,000 OPTIONS Trading

Strategies Account

New Trades for this week:

BUY 10 RCII JUNE 35 CALLS @ $ .50 OB

BUY 4 SPY JUNE 133 CALLS @ $1.55

BUY 2 AMZN JUNE 215 CALLS @ $4.00 OB

The $10,000 Options Only account had a Gain last week of $1315 increasing our gains for the year from $2,419 to $3,734.

Four positions remain:

The PRGO June 105 Calls,

FXE June 125 Calls,

FXE June 124 Puts and the

BAC warrants.

The Open positions are highlighted in the options table below.

Approximately $ 1745 funds are in use.
This was a good week for trading.  We started with several positions that were purchased at or near support and the spread in TLT that had protected us against the flight from stocks to the safety of the treasuries.  It proved to be a solid gain for the account and the continuing Volatility allowed us to take gains, repurchase calls and trade out of the LNG position before the end of the week.

As mentioned here MANY times in the last 6 months, Euro issues are still the “tail wagging the dog.”  The most crowded play in the currency markets is to be short the Euro.  As also noted here, “everyone is never right,” and in that vein we bought a small straddle in the FXE.  We are long only 5 contracts of the FXE 125 calls and also long the 124 puts.  This way, if over the long weekend there is any bad news, or good news, that makes the Euro rise or fall 1% or more, we will profit.  If not, we have very little at risk.

The markets still look higher to me and the SPY is well supported at the lows of this week around 130.

It has a rising 200 day Moving average at 128 and has not yet worked off the oversold condition from the grind lower since 141 back on May 1st.

You will need to use the UPDATE service this week for new trades since the long holiday means we will be playing catch-up to both Europe and Asia on Tuesday morning….CAM

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
5/25	Sold 4 IBM June 200 Calls	1.16		464	460 Loss
5/25	Bought 5 FXE June 124 Puts	.58	290
5/25	Bought 5 FXE June 125 Calls	.55	275
5/25	Sold 2 NFLX June 70 Calls	5.75		1150	310 Gain
5/25	Sold 10 LNG June 15 Calls	1.00		1000	370 Gain
5/23	Bought 1000 BAC.WS.B	.705	705
5/23	Bought 6 LNG June 15 Calls	.55	330
5/23	Sold 5 JPM June 34 Calls	1.52		760	265 Gain
5/22	Bought 4 IBM June 200 Calls	2.31	924
5/22	Sold 4 LNG June 15 Calls	1.15		460	160 Gain
5/21	Sold 10 TLT June 120 Calls ( call spread)	4.42		4420	670 Gain
5/21	Bought 10  TLT June 122 Calls  (call spread )	3.07		(3070)
5/21	Bought 5 JPM June 34 Calls	.99	495
5/21	Bought 2 NFLX June 70 Calls	4.20	840
5/18	Bought 8 LNG June 15 Calls	.75	600
5/11	Sold 10  TLT June 122 Calls  (call spread )	1.00	(1000)
5/11	Bought 10 TLT June 120 Call ( call spread)	1.68	1680
5/8	Bought 5 PRGO June 105 Calls	.95	475

New trades $ 10,000 account…In Texting we have a limited amount of words. In the interest of brevity: OPTIONS ONLY: 6 June, 7 July . 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

M2 adds Savings and Money market Accounts both compared with the previous year.

 

New Stock Recommendations

 Last week with the Texts we bought AGQ and BAC warrants and Sold GMCR, LULU, FAZ and RWM.

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 the  May 21 and newsletters dating back to July 20, 2009.  Stay alert on the free texting service for new trades and exits.

 

Model Portfolio Comments/Changes:
This week gave us the opportunity to take profits on the “reverse index” ETFs that were purchased in April during the Bear Flag that we had identified in this letter.  The S & P 500 pulled back from 1415 to 1291 for an 8.7% decline.  We retested that level on Wednesday with a low of 1296 and turned up to close 1318.  Now it remains to be seen whether we can break back to the upside or just languish between 1300 and 1330.40.  There are many stocks that are at or near their 200 day Moving Average, and any good news could push us higher.  The dramatically low treasury rates and good dividend yield on many of our best big-cap companies make a strong argument for a shift to stocks. The Euro issues and the approaching summer doldrums make it hard to make the outright judgment to pile in…We will continue to take a balanced approach and buy support and follow with close stops…..CAM

 

INDEX OPTION RECOMMENDATIONS

BUY 8 SPY JUNE 133 CALLS @ $1.55

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 RWM, 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

BUY 20 RCII JUNE 35 CALLS @ $ .50 OB

BUY 4 AMZN JUNE 215 CALLS @ $4.00 OB

 

Option and overall Comments

We had a Gain last week of $ 4800.80 in a up week. Our gain for the year was $9,909.05 and with last week’s Gain has increased to $14,709.85. We have Four long options positions remaining, the FXE June 125 Calls, FXE June 124 Puts, FAZ June 22 Puts, CSCO Jan 20 Calls. The Stock table includes Fourteen long stock positions: AGQ, MTOR, SSNS, SIRI, AAPL (a double), TXGE, CWTR, IYT, AIVN, CISG, LEI, LEOM, XBOR (a double) and BAC warrants. The AGQ is a double long silver 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 $1,013 in the four options positions and $ 72,525 in the 14 long stock positions for a total of $ 73,538  with $ 26,462 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.

 

 

Note: Previous closed out stock and option positions can be found in the May 21 and newsletters dating back to July 20, 2009.                                                                                                    

 

                    This Weeks’ Economic Numbers

and Media Data

08:30 hrs GDP – Second Estimate Q1( 1.9% vs 2.2% )
08:30 hrs GDP Deflator – Second Estimate Q1 ( 1.5% vs 1.5% )
09:45 hrs Chicago PMI May ( 57.5 vs 56.2 )

11:00 hrs Crude Inventories  05/26 ( NA vs  0.883M )
Retail chains reports May sales figures. Friday08:30 hrs Nonfarm Payrolls May  (  155K vs  115K )

08:30 hrs Nonfarm Private Payrolls  May ( 172K vs  130K )
08:30 hrs Unemployment Rate  May (  8.1% vs  8.1% )

08:30 hrs Hourly Earnings May (  0.2% vs  0.0%)
08:30 hrs Average Workweek May  ( 34.5 vs 34.5 )
08:30 hrs Personal Income  Apr  ( 0.3% vs 0.4%)

08:30 hrs Personal Spending Apr ( 0.3% vs 0.3% )

08:30 hrs PCE Prices –Core  April ( 0.2% vs 0.2% )

10:00 hrs ISM Index May ( 54.0 vs 54.8 )

10:00 hrs Construction Spending  Apr ( 0.5% vs 0.1% )\
14:00 hrs Auto Sales May  (  NA vs 5.0M)
14:00 hrs Truck Sales May ( NA vs 6.0 )

 

Fundamentals

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

The dollar made its third consecutive up-week and fourth weekly higher close at 82.09 following a new weekly high of 82.36. It was its best showing since September 2010. Stocks surprisingly held very well despite the greenback headwinds. The Euro was very weak  and influenced the market all week. Its gyrations came amid concerns about the possibility and implications of a breakup of Euro nations. Those concerns were aroused by a former Greece prime minister, who indicated that the country may be considering an exit from the euro. Subsequent calls by Eurozone officials for contingency plans and the need for the creation of Eurozone bonds were aimed at addressing the issue. There was also some chatter about coordinated central bank actions regarding swap line fees.

The Dow Transportation Index led all indexes with a 4.23% gain followed by the Russell plus 2.57%; Nasdaq + 2.11%; S&P 500 + 1.74% and lastly the Dow gaining 0.69%. Volatility fell 3.34 as indicated by the VIX to 21.76 a decline of 13.3% but still above the 20 threshold, a sort of dividing line from bullish to bearish.

 

 

Economic Data

 

Basic Materials led all ten Dow Industry Groups with a 3.72% gain followed by Consumer Services plus 3.01% and then Industrials up 2.58%. Financials reversed their losing ways adding 2.16%. Oil and Gas rose 1.87%; Consumer Goods added 1.72%; Technology 1.42%; Health Care 1.19%; Utilities 0.97% and Telecommunications 0.54%.

 

Consumers continue to display confidence as the University of Michigan Sentiment Survey surprised improving to 79.3 which stands at a four-year high. This confirms the confidence consumers have shown with March  credit card usage growing to a record $ 21.3B.

 

Other Economic Indicators reflected little change from expectations but continued to reflect the current economic malaise. Durable Goods for April rose 0.2%, one notch below expectations but off 0.6% without Transportation. Defense Capital Goods fell 21.5% Shipments of nondefense core capital goods excluding aircraft dropped by 1.9% following a 2.2% decrease in March. This decline will reduce 2^nd Qtr GDP expectations.

April Existing Home Sales reached an annualized rate of 4.62 million while New Home Sales made an annualized rate of 343,000. Respective rates of 4.65 million and 339,000 had been broadly expected.

Category	APR	MAR	FEB	JAN	DEC
Total Durable Orders	0.2%	-3.7%	2.0%	-3.5%	3.3%
Less Defense	1.2%	-3.9%	1.4%	-4.0%	3.9%
Less Transport	-0.6%	-0.8%	1.8%	-2.8%	2.3%
Transportation	2.1%	-10.5%	2.6%	-5.2%	6.3%
Capital Goods	-2.5%	-10.6%	3.1%	-3.4%	5.2%
Nondefense	-0.2%	-12.1%	1.9%	-5.0%	6.9%
Nondefense/nonaircraft (core cap gds)	-1.9%	-2.2%	2.9%	-3.4%	3.5%
Defense Cap Goods	-21.5%	4.0%	16.2%	23.1%	-16.4%

 

 

 

Technical Information

Support Levels:   S&P 500           1304; 1289                 Resistance S&P 500   1334; 1346

                                        DOW            12,320; 12,175           Resistance DOW         12,530; 12,740

                                        QQQ             6113; 6035                 Resistance QQQ         6270; 6350                     

                                       Nasdaq          2820; 2758                 Resistance Nasdaq      2883; 2937                                 

 

CYCLES

 

Cycles suggest a firmer tone early middle of the week and a leveling off with weakness towards end of week. 

 

 

                    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 ( LEOM ). In addition Princeton has bought shares. Cross Border paid us 25,000 restricted shares several months ago. We do not currently represent Cross Border but we like the company. We own about 3,000 shares. Princeton has 2,281,578 shares of AIVN.

 

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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