Options Trading Newsletter Where To Invest October 20, 2014

Options Trading Newsletter

October 20, 2014

Options Trading Newsletter

Where To Invest Now

 Options Investing Strategies Newsletter 

Market Strategies Newsletter

Sample Issue

 Read the Market Strategies Newsletter in .pdf format Click Here

Where To Invest Now Options Trading Newsletter Covering:

Options Trading Strategies

How To Trade Options

Stock Options Trading Alerts

Best Stocks To Buy October 2014

Where to Invest October 2014


2014 Total Gains $ 11,696

Over 116% Returns


Over 284% Gains In 2013


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In 2013 YTD gains were $28,479

Over 284% Returns

A $10,000 Portfolio would be worth $38,479


Options Trading Newsletter Options Trading Strategies

$10,000 Trading Account

There is 1 Open Position:

4 DD November 67.50 Calls

Funds in Use $ 404


Gain for the Week $ 376


2014 Total Gains $ 11,696


Over 116% Returns



After several weeks of being wary and cutting trades to half positions and less, we traded the long side of the market.  Unfortunately the first trade in the SPY calls was a loss, but the next several were day trades and while we didn’t make a ton of money, we were up on the week by $358 bringing YTD gains to a very respectable  $11,678.

We also had some orders under the market and bought some DD 11/67.50 calls on the decline.  Funds in use are still low @ $404.

I usually don’t discuss the big account here but it also was at the lowest funds in use coming into the week at only $39,000.  We repurchased AA, added to AAPL and JBLU. These opportunities presented themselves by being at or near their long term moving averages or near the “right or right out” levels.  I will consider the placement of stops just under recent lows as protection.

The market action was dominated by falling oil prices and the threat of Ebola while there was little in the way of geopolitical troubles.  So now we hear that ISIS now has the three fighter jets stolen from the Syrians and are being trained by Iraqi pilots. This doesn’t really scare me since they did so well against us in the two Desert Storm wars.

The markets pullback seems to have created at least a tradable bounce.  The only issue for me is that everyone is calling this the arrival of the long awaited correction. As we’ve stated here repeatedly, “Everyone is never right.”  But a look at what has transpired is in order…The S&P500 has come down from a high of 2019 to a low of 1820, just about 10%.  The Dow Industrials fell 1500 points from 17350, or 8.6%, and the index that many traders key off, the Transports, fell 972 or just over 11%. The Transports are especially significant since it is the only major index to move over 10% but not break the 200 day moving average.

I would like to see some sideways action in the market since it would help to define the risk for us.  Barring that, I will continue to use smaller positions to initiate new trades as the primary method of defining risk.



 Market Strategies $10,000 Trading Account Trade Table

New Trades:

1) Buy 6 TJX November 62.50 Calls @ $ 1.10

2) Buy 6 FAST November 42 Calls @ $ 0.65



10/17 Sold 6 SPY October 187 Calls 1.62 972        390 Gain
10/15 Bought 6 SPY October 187 Calls 0.97 582
10/15 Sold 6 SPY October 186.50 Calls 0.99 594          48 Gain
10/15 Bought 6 SPY October 186.50 Calls 0.91 546
10/15 Sold 5 SPY October 186 Calls 1.48 740        220 Gain
10/13 Bought 5 SPY October 186 Calls 1.04 520
10/13 Sold 6 SPY October 191 Calls( 50% Loss Rule ) 0.48 288        282 Loss
10/13 Bought 6 SPY October 191 Calls 0.95 570
10/13 Bought 4 DD November 67.50 Calls 1.01 404

Remember, these trades are based on your participation in the

Subscriber Members Only



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.

MARKET Laboratory – Weekly Changes

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








S&P 500








Russell 2000



Nasdaq 3815.47



Gold (spot)




Silver (July)








Heating Oil




Unleaded Gas




Natural Gas








Put/Call Ratios

S&P 100



Put/Call Ratios

CBOE Equity





142-29 + 1-20

2.96% -0.07%

10 Yr. Note

127-024 +1-03     2.17%-0.13%





CRB Inflation





Barron’s Confidence







5 Yr. Note

120-064 +24






DJ Utilities

















M1 Money  Supply


October 6th

M-2 Money




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.


Market Strategies Technical Information

Support Levels S&P 500        1858

Resistance S&P 500              1918


Support Levels DOW          16,470

Resistance DOW                16,582


Support Levels QQQ            91.80

Resistance QQQ                  95.70


Support Levels NASDAQ      4258

Resistance NASDAQ            4388


New Stock Recommendations $ 100,000

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)
AA  500 14.21      10/16
AAPL 20 97.68      10/15
UDOW  100 104.81      10/15 107.17stop
JBLU 200 9.90      10/15
MDBX  400 9.32      10/06
JBLU  300 10.32      09/30
FCX 150 34.99      09/09
NBG 300   2.95      05/19
XRGYF 5000* 0.407      03/14
RPTP 400 15.37      01/16
GSG 150 32.64 12/23 32.21 sco
NBG 300 4.08 8/12
TEXQY* 200 6.56 7/11
NBG 300 12.10 5/23
AAPL 35 76.85 11/08/12
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 VIP Subscribers Members Area.

What Should I Invest In

Get The Options Trading Strategies Subscriber Members


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


Buy 12 TJX November 62.50 Calls @ $ 1.10

Buy 12 FAST November 42 Calls @ $ 0.65     


There were five closed out option positions last week with a small gain of $ 936.00


There were three new stock positions added. Alcoa, AAPL and the UDOW, a triple ETF.

For the full year to date we have gains of $ 30,290.00.

There are more open stock positions with profits in volatile conditions:


The Stock table has the following 15 positions: AA, AAPL (2),  FCX,  GSG,  JBLU (2),  MDBX, NBG (3),  REPR, RPTP,  TEXQY,  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 $ 57,487.00 in 15 stock positions and one option the DD November 67.50 Calls requiring $ 808 totaling $ 58,295.00 with $ 41,705.00 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.



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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 Oct 187

12 lots



10/15/14 1.62 10/17/14 $ 744
SPY Oct186.50

12 lots



10/15/14 0.99 10/15/14 $ 96
AAPL Oct 100

2 lots covered



10/15/14 1.31 sold against long position 10/14/14 $ 184
DD  Nov 67.50

8 lots



SPY Oct 186

10 lots



10/13/14 1.48 10/15/14 $ 440
SPY Oct 191

12 lots



10/13/14 0.48 ( 50% Loss Rule ) 10/13/14 ( $ 564 )

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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High Return Investments Trade Alerts




This Weeks’ Economic Numbers and Media Data

Monday Before the Open Gannett ( GCI 0.55 vs 0.43 ) Halliburton ( HAL 1.10 vs 0.83 )

Peabody Energy ( BTU -0.56 vs 0.05 ) Valeant Pharma ( 1.98 vs 1.43 )

After the Close: AAPL ( 1.31 vs 8.26 ) Helix ( 0.50 vs 0.38 ) IBM ( 4.32 vs 3.99 )

Kaiser Alum ( 1.00 vs 1.34 ) Rent a Center ( RCII 0.47 vs 0.51 ) Steel Dynamics

( STLD ( 0.44 vs 0.25 ) Texas Instruments ( TXN 0.75 vs 0.56 ) ZION ( 0.44 vs0.44 )

Tuesday Can Pacific ( CP 2.39 vs 1.88 ) KO ( 0.53 vs Same ) Kimberly Clark ( KMB 1.54 vs 1.44 ) Lockheed ( LMT 2.72 vs 2.57 ) McDonalds ( MCD 1.38 vs 1.52 )

0:00 hrs Existing Home Sales Sept ( 5.11 vs 5.05 Mln Units )

Flagstar ( FBC 0.30 vs 0.16 ) Nabors ( NBR: 0.36 vs0.20 ) IBKR -0.08 vs 0.39 ) Robert Half ( RHI 0.58 vs 0.48 ) VM Ware ( 0.83 vs 0.84 ) Yahoo ( 0.31 vs 0.34 )

Wednesday Abbott ( ABT 0.59 vs 0.55 ) Boeing ( BA 1.95 vs 1.80 ) Dow Chemical 0.67 vs 0.50

07:00 hrs MBA Mortgage Index 10/18 ( NA vs 5.6% )

08:30 hrs CPI Sept ( 0.0% vs -0.2% )

CORE CPI ( 0.2% vs 0.0% )

10:30 hrs Crude Inventories 10/18 ( NA vs 8.923Mln Bbls )

ATT 0.64 vs 0.66 Sketchers ( SKX 0.91 vs 0.53 ) Tractor Supply ( TSCO .50 vs .46 )

Thursday 3M ( 1.96 vs 1.78 ) Amer Airlines 1.64 ; Diamond Offshore  DO 0.79 vs 0.68  GM ( 0.95 vs 0.96 ) Southwest Air LUV ( 0.53 vs 0.34 ) UAL 2.67 vs 1.41

08:30 hrs  Initial Claims 10/18 ( 283K vs 264K )

08:30 hrs Continuing Claims 10/11  ( 2390K vs 2389K )

09:00 hrs FHFA Housing Price Index  ( NA vs +0.1% )

Capacity Utilization ( 79.0% vs 78.8% )

10:00 hrs Leading Indicators Sept ( 0.6% vs 0.2% )

10:00 hrs NAHB Housing Market Index Oct ( 59 vs Same )

10:30 hrs Natural Gas Inventories 10/11 ( NA vs 94 bcf )

Amazon ( -0.76 vs -0.09 ) DECK  1.02 vs 0.94 ) MSFT ( 0.54 vs 0.62 )

Friday Before the Open: Bristol Myers ( BMY 0.42 vs 0.46 ) Ford ( 0.20 vs 0.45 ) Immunogen ( IMGN -0.14 vs -0.13 ) Procter and Gamble ( PG 1.08 vs 1.05 )

10:00 hrs New Home Sales Sept ( 473K vs 504K )




Market Strategies Fundamentals


The possibility of QE from the European Central Bank ( ECB ) has slowed down the bear and maybe caused equities to make a bottom. No-one benefited from embargoes. Layoffs and the resulting effects are economic anomalies that cause economic malaise. NATO has been an expense and lackluster to America. Such is the effect of the European policies, in part responsible for the steep declines in equities, which in our opinion is temporary. The market was calmed by the excellent U.S. economic reports Thursday and Friday. The CBOE Volatility Index had catapulted to 28.06 the highest level since August 2011, its largest weekly move in many years before closing the week at 22.


The stock indexes were all under siege. The Dow fell 153.69 points for the week or just 0.99%. However, at one point Thursday it was down 4.2% to 15,855.12, which was 689.08 points lower in just a week. From the Dow high in September to the low point last Wednesday, it had plummeted 8.6%. The S&P 500 had dropped to 1820.66, off 9.5% down from the all-time closing high of 2011.36, prior to a recovery at1886.76 a fall of 1.02%. The Nasdaq Composite ended the week off a modest 0.42%. At its worst it had been 59.64 points lower or 1.4%, not much compared to the Dow and S&P.  The DJ Transportation Index was certainly affected negatively by Ebola, but was far more stable falling just 2.4% at its worst before a recovery to profitability, leading all indexes up 3.23% for the week and the only index closing above its 200-day moving average. The second strongest index all week was the beleaguered Russell Index which ended the week higher by 2.75%. Watch the Tranny for leadership as it has called the direction all year.

how to invest $10000


Market Strategies Economic Data

Industrial Production increased 3.5% in the third quarter without help from the auto sector, which  actually declined  for the month. Manufacturing production did a full 180 degree turnaround. After falling 0.5% in August, production rose 0.5% in September. That gain came on the heels of the dismal Retail Sales Report last Tuesday which showed a decline of 0.3% for September.  Manufacturing increased 3.5% in the third quarter. Capacity Utilization increased to 79.3, its highest level of the year.



Industrial production increased 1.0% in September after falling a downwardly revised 0.2% (from -0.1%) in August without the benefit of motor vehicle production which was actually lower, falling from 11.88 mln units to 11.56. The expectations index increased to 78.4 from 75.4, which is the highest level since October 2012.


Manufacturing production increased 0.6% in September Overall, manufacturing production increased Housing Starts increased 6.3% in September to 1,017 Mln Units on an annualized basis. Single family construction increased 1.1% to 646,000 from 639,000 in August. Multifamily housing starts rebounded 15.6% to 371,000 in September after falling 28% in August.  The August numbers were poor, the worst since August 2011, but rebounded sharply in September.


Construction levels increased 0.4% to 790,000 from 787,000, which will have a positive effect on the whole economy.  Permits grew 1018K in September, a nice rebound from August and a continuation of a powerful up-trend. Third Qtr GDP will be enhanced by the increase in units permitted and under construction.


Starts 1017K 957K 1098K 909K 984K
  1 Unit 646K 639K 652K 593K 634K
  Multi Units 371K 318K 446K 316K 350K
Permits 1018K 1003K 1057K 973K 1005K


The University of Michigan preliminary October Consumer Sentiment Index jumped to 86.4 from 84.6 in September. The number was well above expectations where were for a lower reading around the 84 level.


Over the past couple of weeks, severe volatility in the equity market resulted in a sharp drop in stock market prices. The effect on the consumer, however, was negligible. Improvements in the labor market, which featured the lowest initial claims reading in 14 years, and a general downward trend in gasoline prices kept sentiment levels moving higher.

Sentiment 86.4 84.6 82.5 81.8 82.5
  Outlook 78.4 75.4 71.3 71.8 73.5
  Present conditions 98.9 98.9 99.8 97.4 96.6


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Undervalued Small Cap Stocks


We have bought positions in each of these companies.
Target Energy* ( TEX.AX  0.05  Australia ), In the USA, ( TEXQY: $ 5.50 ) a new ADR.

This company trading at a nickel could earn more than where it is now trading. Perhaps 7 to 10 cents is in the Cards. Their business valuation exceeds market cap.




Leo Motors ( LEOM $ 0.07 )*


Has merged with LGM, a potential to be the Tesla of Asia. We like it now, above its 13-day moving average. Please go to www.leomotors.com ( English Version ) Risk is 2 cents. You will be hearing about a new short-circuit technology very soon. Many new breakthroughs in electric energy  are coming! Look at their most recent 8K.




RMS Medical Systems, Inc ( REPR 0.39 )*


Freedom 60 designs, markets, manufactures infusion devices portable, including needles and easy to handle by patients. The RescueVac is also used in ambulances and planes for emergency suction.




Cleveland BioLabs, Inc ( CBLI $ 0.41 )*.


CBLI has done much research on cancer as well as developing a prevention for radiation sickness. Just imagine the catastrophe if radioactive material falls into the wrong hands. The Russian Medical Federation has invested heavily in this.  Entolimod is being developed as a radiation treatment. Please go to www.cbiolabs.com for more pertinent information.



Labor Smart, Inc. ( LTNC: $ 0.048 )* 


Top line sales growth is significant. They deliver labor solutions at assigned jobsites ready for work while other services are still sending candidates to be interviewed.  Labor Smart delivers people-power to small and medium sized businesses in warehousing, freight handling, light industrial services, manufacturing, social events, and retail industries. They also support commercial construction and demolition industries with general labor and skilled trades people. Labor Smart was founded in 2011, is based in Hiram, Georgia and currently operates 30 branch locations in the Southeast and Central States. Their growth model includes both new office establishments in addition to acquisitions.

Best Investments August 2014

Market Strategies Economic Cycles

Just half-way through October and the month is certainly living up to its scary reputation. Last week, the Dow fell 902.58 points or 5.38% on the week or 9.8% from the highs to the low point before recovering. For the first time since November 16, 2012 and DJIA suffered its first Down Friday/Down Monday (DF/DM) since April 7 of this year. The down Friday-Monday pattern lived up to its reputation and volatility soared. The S&P finally had its overdue correction falling to an intraday low of 1820.66, which was a fall of 9.8% from the all-time high 2019.26 September 19th. It was over 1100 days since there had been a 10% correction.


However, as you can see in the updated table below, the current S&P 500 streak without a correction is still well short of the 2553 days it went from October 1990 to October 1997.

In the following table, each bull market has been broken down and includes the corrections (defined as a market decline of 10% to 19.9%) that occurred within it. The bull markets beginning and end dates and closing prices are included and are used to calculate the “Days Between Corrections.” In each row labeled “Bull End,” that bull market’s duration and gain is calculated. Past corrections that did not manifest into full-blown bear markets lasted an average of 135 calendar days and S&P shed 14.2%. If the current bull market did end on September 18, its 197.3% gain in 2019 calendar days is above average.
Looking for Signs of a Bottom

Last week we were anticipating that the market would find support somewhere around its 200-day moving average or its early August lows. Although DJIA, S&P 500 and NASDAQ are currently trading below those levels, they are not substantially lower and the DJ Transportation is above the number.

Earlier this year bullish sentiment reached levels not seen in years or even decades depending upon data source. Market volatility had also fallen to levels not seen in years as the market was steadily making new all-times highs. S&P 500 actually went 63 trading days without a 1% percent daily move higher or lower. A feat last accomplished in 1995. And it has been more than three years without a 10% or greater S&P 500 correction. This is four times the average duration of time between corrections. Not to mention the market shrugged off tensions in Ukraine, Ebola, the rise of ISIS in the Middle East, slowing global growth concerns and the Fed slowly easing up on stimulus. There are geopolitical problems everywhere and there is an old saying, “ when the President is in trouble so are the markets.”  Risk tolerance is needed as volatility is back. The market had gotten ahead of itself and was in need of a cool-off period. The Dow has to trade above 17,350.64; the S&P 500 needs to exceed 2019.26 for the bear to be ended.


Economic data out of Asia is not bad. China still grows at 7%.  Europe’s economic concerns sparked a sell-off in 2010 and 2011 just as concerns are sending tremors through the markets today. Their weakness has not yet materialized in U.S. manufacturing reports. Industrial Production was reported to have climbed 1% in September. This was better than twice the consensus estimate of 0.4%. This report was further supported by the Philadelphia Fed Manufacturing index climbing to 20.7, again besting expectations. Furthermore, weekly initial jobless claims fell to 264,000 last week, the lowest reading since 2000. If business activity was slowing, it would stand to reason that weekly claims would be rising, not falling as employers began cutting employees.



Stocks to buy on a October dip:


Symbol Name Business Description PE P/S MV mln Price Buy Limit Stop Loss
APT Alpha Pro Tech Medical  Disposables 18 1.1 5.1 7.43  4.42 3.21
IIIN Insteel industries Metal fabrication 29 0.7 411 20.82 21.22 18.50
KR Kroger Retail Food 17 0.24 24.6K 53.92 48.90 46
XOM Exxon Mobil Energy 13.4 1.1 420K 91.60 90.50 88
UAL United Cont Hld Transportation 16 1.2 18.1K 48.28 46 43
UDOW Ultra Pro Dow 30 ETF 109.49 104.81
DE John Deere Farm Equipment 9.4 0.80 29.0K 83.29 80 77
BELFB Bell Fuse Inc B Electronics 9.5 0.74 276 24.70 23 21.50
SPXU Ultra Short S&P Hedge purposes 45.62 43.20 41
DD DuPont Chemicals 21 1.71 61.3K 66.98 64.80 63
VXX VIX Volatility Hedge Portfolio 29.62 27.10 26
MOS Mosaic Company Agriculture Chemicals 70 2.10 15.3K 40.76 42.28 38.70

Highlighted numbers indicate execution



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Rule 17B Attestations and Disclaimers


Princeton Research, Inc. has approximately 2,581,578 shares of AIVN both free and restricted and represents them for Investor relations. 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 was paid $ 2,500 to write a report on Xinergy. Princeton has signed a contract with CBLI to be paid $ 2500 for July and August for investor relations. Princeton has been engaged by Target Energy. No contract is currently in place. Princeton was paid about 500,000 restricted shares of Leo Motors. 

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 0.05 in Australia. Princeton owns 400,000 Australia shares and about 900 U.S. ADR’s.


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 e-mail issue. Princeton may buy or sell its free-trading shares in companies it represents at any time.




Please Direct All Inquiries To:

Mike King

(702) 650-3000



Princeton Research

3887 Pacific Street,

Las Vegas, Nevada 89121


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