Options Trading Strategies July 9, 2012 Market Strategies Newsletter

Options Trading Strategies

Where To Invest Now

Market Strategies Newsletter

 Options Trading Strategies

 Covering High Return Balanced Investing Success Strategies

For Where To Invest Now, Stocks To Buy And Options Trading

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

Contributing Staff: Michael King, Bill Chippas, Charles Moskowitz

 July 9, 2012 Market Strategies Newsletter

Where To Invest Now, Stocks To Buy And

Options Trading Strategies


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Options Trading Strategies

$10,000 Options Trading Portfolio

The $10,000 Options Trading Portfolio had a Gain last week of $32

increasing our gains for the year from $5,768 to $5,800.

 This Where to Invest Options Trading Portfolio has produced a

Year To Date Gain Of 58%.


Currently Approximately only $1,155 funds are in use.

A full $10,000 trading portfolio is not necessary since

only portions of the portfolio are used for each trade.


The Market Strategies Newsletter features

our balanced investing options trading strategies.

We enable our trade alert and newsletter subscribers to

avoid extreme moves in either direction.

We can produce high returns in up or down markets.


Traders Commentary

This was a holiday shortened week that saw very low volume and a lot of economic numbers. We had a coordinated effort from the ECB, the Bank of England and China to stimulate their economies, and much less than stellar data here at home.  An important point here is that there really wasn’t anything that should have surprised anyone.  Between all the crosscurrents and the political process here, we should be in for more of the same.

One of the major catalysts for the market this week will be the beginnings of quarterly earnings which will start with Alcoa (AA) Monday after the close.  The question for the market is “Have we lowered expectations enough that the actual numbers will look good or bad.”

The market remains dramatically driven by headlines and these are some of the biggest headlines that individual companies can release.  Certainly this is true of no one more than JPM on this coming Friday.  Everyone wants to see how they did in relation to “THE TRADE.”

We are going into the week with very limited risk, and will have to see if the market holds above the areas we moved up from June 29th.  These levels are 1330 S. & P. and 12,600 for the Dow. If not we can test 1310 and 12,450 respectively.

Although they were down Friday, several of the market leaders we mentioned here last week had renewed strength.  AAPL and NFLX had great weeks while IBM, PCLN, and CMG were turned back by overhead resistance. We will look for some defensive trades to balance our risk if the market doesn’t rally here…..CAM


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Market Laboratory – Weekly Changes

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









S&P 500








Russell 2000




Nasdaq 100
















Heating Oil




Unleaded Gas




Natural Gas






Put/Call Ratios

S&P 100



   Put/Call Ratios

    CBOE Equity




149-28 1-29

2.66% -0.10%

10 Yr Note

134-114 +0-314                                               1.54% -0.12%





CRB Inflation





Barron’s Confidence







5 Yr Note

124-127 +0-137                                                   0.64% -0.09%





DJ Utilities















+7.0 %

M1 Money  Supply


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.

New Stock Recommendations

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Market Strategies Newsletter Issues

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 Model Portfolio Comments/Changes

Earnings season arrives tomorrow and there is much at stake. While the EURO and China dominated the news prior to earnings season, now the proof of success will be right here at home as will see just how our companies have done in comparison to the rest of the world.

Forward problems such as the Fiscal “CLIFF” and the political uncertainties will most likely take a back seat to the reality of whether or not we are making any headway on the fundamental side of U. S. corporations. Earnings are the real proof.

The group that has the most guidance to give and in my opinion the most important heretofore unknown results to publish are the financials. The market can have rallies and declines from headlines but if the financials do not participate, we will not have a sustainable rally.

As mentioned in the Options account on page one, we have some of the bigger bell-weather stocks that have had good weeks and showed dramatic resiliency. This was especially prevalent in NASDAQ. We have a balanced portfolio, and have been (and will continue) writing calls against some of the positions. While JPM was lower, we had written a weekly call against the position and lowered our cost by $ .35 per share. We will do more of the same with FB, BMY, and possibly the FAZ positions this week…CAM



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

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Option and Overall Comments

We had a loss last week of $ 1401 in a down week.

Our gain for the year was $18,977.85 and

with last week’s loss has decreased to $17,576.85.

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 $ 1140 in the options position and $ 80,087 in the 15 long stock positions for a total of $ 81,227 with $ 18,773 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

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  • 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
  • Call  702 650 3000 for up to date information.


This Weeks’ Economic Numbers

and Media Data

Monday Investors will assess the domestic and overseas weekend comments and events.
15:00 hrs Consumer Credit May  (  $9.5B vs $6.5B )
Tuesday Investors will assess and prepare for the ‘earnings season’
Wednesday 07:00 hrs MBA Mortgage Index 07/07 ( NA vs -6.7% )

08:30 hrs Trade Balance May  ( -$48.9B vs -$50.1B )

10:00 hrs Wholesale Inventories May ( 0.3% vs 0.6% )

10:30 hrs Crude Inventories 07/07  ( NA  vs -4.270M )

14:00 hrs FOMC Minutes 6/20

Thursday 08:30 hrs Initial Claims 07/07  ( 375K vs 374K )

08:30 hrs Continuing Claims 06/30 ( 3300K vs 3306K )
08:30 hrs Export Prices ex-ag. Jun ( NA vs -0.5% )

08:30 hrs Import Prices ex-oil  Jun  ( NA vs -0.1% )

 Friday 08:30 hrs PPI Jun  ( -0.6% vs -1.0% )
08:30 hrs Core PPI Jun  ( 0.2% vs 0.2% )
09:55 hrs Mich Sentiment  Jul  ( 73.5 vs 73.2 )


The dollar surged following concerted efforts from British, European and China trading partners to either cut interest rates or make funds more available. The Greenback closed the week at 83.56 up 1.93 or 2.36%, a very substantial weekly move. It was the highest close in two years since July 2010. The Bank of England sharply raised their asset purchase program. The European Central Bank cut its benchmark rate 25 basis points to 0.75%. China cut interest rates a second time in the last three weeks. The combination of such concerted action was just too much for the markets to make any headway. Both Crude Oil -0.51 and Gold -25.30 were likewise pressured.

The rocketing dollar did not impede Apple shares which surged 35.83 points or 6.5%to 605.88 and helped Nasdaq at least buck the trend with a small winning week up 0.08%.

There was substantial M&A activity. Dell ( DELL: $ 12.56 ) announced they would pay $ 28 a share to acquire Quest Software ( QSFT: $ 27.86 ); Bristol Myers Squibb ( BMY: $ 34.61 ) is expected  to pay $ 31/share  for Amylin ( AMLN: $ 30.07 ); Ingram Micro ( IM: $ 17.01 ) will acquire Brightpoint Inc ( CELL:  $ 8.89 )@ $ 9.00/sh.  Germany’s Linde Group will acquire Lincare holdings ( LNCR:$ 41.36 ) for $ 41.50/share.

Major retailers reporting same-store sales for June were disappointing as out of the twenty, only six reported increases and fourteen missed expectations.

Earnings begins this week with Alcoa ( AA: 8.66 ) reporting after the close Monday. Expectations are dismal once again citing the weak aluminum market.


Economic Data

Nonfarm Payrolls increased 80,000 led by the private sector up 84,000 as states and municipalities continued their contraction. Hourly earnings grew 0.3% and the Average Workweek also expanded to 34.5 from 34.4 hours. May was revised higher with 8,000 more jobs reported. However, the private sector as forecasted by ADP just last Wednesday had projected a 179,000 increase in private payrolls well above the 84,000 by the government survey. The unemployment rate remained at 8.2% in June as both the amount of employed and the size of the civilian labor force grew concomitantly.

The media has put far too much emphasis on job numbers, while ignoring quality, increased hours and pay.  The real disturbing number was the negative ISM report ( 49.7 ) released last Monday. The index dropped from 53.5 in May to 49.7 in June. It was the first time since April 2009 that the expansion/contraction  threshold broke below the 50 level. The consensus had been looking for a smaller contraction to 52.2. The employment portion of the survey barely declined ( 56.9 to 56.6 ) while the new orders segment dropped from 60.1 to 47.8. Production fell from 55.6 to 51.0. The contraction in manufacturing will have more of a deteriorating effect on the bottom line of corporate earnings than employment.

Auto and Truck Sales held steady at about 11 mln units annualized. Initial Unemployment Claims fell 11k to 374K.  Factory Orders were better improving by 0.7% from a consensus of 0.4% and -0.7% in May. Crude Inventories fell 4.27 Mln bbls.

Technical Information

Support Levels:  

S&P 500           1346; 1322

Resistance S&P 500   1377; 1399

DOW            12,680; 12,530

Resistance DOW        12,890; 13,040

QQQ             6350; 6270

Resistance QQQ         6483; 6591                     

Nasdaq          2883; 2829

Resistance Nasdaq      2972; 3036                                          



Cycles suggest a steady to firm market early in the week, a mid-week high and a soft to weak end of week.


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                   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.


Please Direct All Inquiries To:

 Mike King

Princeton Research

3887 Pacific Street, Las Vegas, Nevada 89121

Phone: (702) 650-3000

Fax: (702) 697-8944


Visit: www.princetonresearch.com

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