Options Trading Strategies

Market Strategies Newsletter

October 22, 2012

Covering High Return

Balanced Investing Strategies To

Make Money In Up Or Down Markets

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

NOTE: This is a Sample Issue Only!

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MARKET STRATEGIES NEWSLETTER ISSUES

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NOTE: There may not be a market letter next week due to travelling schedules.

Please rely on the text message trade alerts for updates.

 

In the $100,000 account we have had 3 short positions; The DXD,RMA and SCO.

We continue to be balanced.

 

$10,000 OPTIONS Trading Account

We had no new trades this week, and so we stand at

year to date performance of up $12,301 or 123%.

 

We have one position, the LNG Nov 15 Calls.

New trade recommendations will be texted to you.

 

Options Trading Strategies

Traders Comments

This was a week that started out stronger than expected but turned weaker erasing gains on big name earnings misses. We had orders under the market in the consumer staple stock section using Clorox (CLX) which gapped up to our detriment missing our buy at support strategy.

From my prospective, the ease of movement on earnings (specifically misses) is to dramatically punish the lack not of the earnings, but of lower revenues and a poor view of the next two quarters growth potential.

Among the biggest losers were IBM, GOOGLE, CMG, and GOLD.  The financials, while having mixed performance held up very well with BAC and JPM making new recovery highs and closing up on the week while PNC and WFC were lower.

Political ads and the debates continue to be at the forefront and thankfully that should be over soon, and we can get back to the other issues like Eurozone, Mideast warring factions and riots.

Since the markets are so indecisive, I will be looking for strong stocks that are at or near support, and over-valued stocks of companies like MCD that seem “priced for perfection” to be short.

—CAM

Closed out positions may be seen in past issues found in the VIP subscribers members area.

 

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 and Options Trading

Recommendations for the $ 100,000 account

NOTE: This is a Sample Issue Only!

 TO GET OUR TRADE ALERTS BY TEXT MESSAGE AND

 THE COMPLETE VIP MEMBERS ONLY

MARKET STRATEGIES NEWSLETTER ISSUES

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Previous liquidated positions may be found in past newsletter issues issues found in the

VIP subscribers members area.

 

INDEX OPTION RECOMMENDATIONS

( Recommendations will be both listed in this letter and texted to 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, SDS,TZA 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.

 

$100,000 Trading Portfolio

Overall comments

We lost $ 2,648 last week.

Our gain for the year was reduced to a hypothetical $ 47,691.

 

We have two long options positions plus thirteen stock positions remaining:

CSCO Jan $20 Calls, LNG Nov 15 Calls.

 

The Stock table includes fourteen positions:

AAPL(2), DXD, JPM (2), LCC, LNG, TXGE, AIVN, LEI, RWM, SCO, XCO, WPRT.

 

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 $ 840 in the two options positions and $ 52,862 in the 14 stock positions for a total of $ 53,702.00 with $ 46,298.00 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…

 

Previous Week’s Recommendations and

Rules for the $ 100,000 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
• Subscribers can call  702 650 3000 for up to date information.

 

NOTE: This is a Sample Issue Only!

TO GET OUR TRADE ALERTS BY TEXT MESSAGE AND

THE COMPLETE VIP MEMBERS ONLY

MARKET STRATEGIES NEWSLETTER ISSUES

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Note: Previous closed out stock and option positions can be found previous weekly newsletters available for paid subscriber VIP Members.

This Weeks’ Economic Numbers and Media Data

Fundamentals

Disappointing earnings from high profile tech stocks initiated a huge unexpected sell-off. In a surprise announcement during market hours, Google ( GOOG: $ 681.79 ) – 9.2% collapsed falling 63 points. This phenomenon helped push Apple ( AAPL: $ 609.84 ) off 3.2% to new lows not seen since early August.

Apple does not announce earnings until Thursday night. The 200 day moving average on Apple around 580 might be tested next week. Intel ( INTC: $ 21.26 ) – 1% reported much better-than-expected sales and earnings but the influence from Google was overwhelming inhibiting any advance. IBM, however, was very negative ( IBM: $ 193.36 ) lost 14.44 or 7% of its value. The biggest percentage loser of the group was Advanced Micro Devices ( AMD: $ 2.17 ) – 20.44%.

Restaurant old favorite popular quick-service type stocks like:

Chipotle Mexican Grill ( CMG: $ 243 ) – 16%,

Panera Bread ( PNRA: $ 161.85 ) – 3.6%,

McDonalds ( MCD: $ 88.72 ) and

Starbuck ( SBUX: $ 45.19 ) -3.2% were also hammered.

Chipotle missed on both sales and earnings again.

 

Eight of the 10 Dow Industrial groups were higher led by Basic Materials up 2.33%; Utilities added 1.88%; Oil and Gas 1.83%; Financials 1.66%; Industrials gained 0.82%; Consumer services added 0.54%; Health Care rose 0.44% and rounding out the winners Consumer Goods was plus 0.25%. Technology was by far the biggest loser off 2.74%. Telecommunications fell 0.07%.

Next week 3^rd Qtr sales and earnings reports will continue for about 700 companies, 150 in the S&P.

 

Economic Data

An abundance of excellent economic reports could not save the markets from a devastating decline. Housing Starts were out of sight bullish. Retail Sales; Business Inventories; Net Long term TIC Flows; Industrial Production; Existing Home Sales; Philadelphia Fed and Leading Indicators all beat expectations.

 

Housing Starts were 872K for September exceeding the consensus which called for 768K and August’s 758K. The lone negative report was Initial Unemployment Claims for the week of October 13^th,which came in at 388K, 28K above expectations and 46K above the previous week.

 

Single Family Home Starts increased from 543,000 in August to 603,000 in September which was the first time single family construction topped 600K in four years. The number if homes currently under construction increased 2.6% to 507,000 in September from494,000 in August. This all bodes well for third quarter GDP.

 

Technical Information

Support Levels S&P 500    1407: 1412

Resistance S&P 500          1433; 1444

 

Support Levels DOW         13190; 13320

Resistance DOW               13418; 13440

 

Support Levels QQQ            6490; 6560

Resistance QQQ                  6780; 6850

 

Support Levels Nasdaq        2975; 3025

Resistance Nasdaq              3080; 3130

 

CYCLES

October Volatility

Market action over the past few days has reinforced the existence and usefulness of market cycles and seasonality. Average monthly percent changes and the record of up and down months does not illustrate the true nature of October. So to compare the market’s behavior in October to other months… bull market tops; bear market bottoms; number of top 50 daily gains and losses; biggest daily, weekly and monthly DJIA percent gains and losses; and monthly ranges.

October is the clear winner. To further underscore October’s volatile nature we have included a chart of the Market Volatility Index (VIX) and the VIX seasonal Trend. VIX is historically highest in October.

 NOTE: This is a Sample Issue Only!

 TO GET OUR TRADE ALERTS BY TEXT MESSAGE AND

THE COMPLETE VIP MEMBERS ONLY

MARKET STRATEGIES NEWSLETTER ISSUES

USE THE SUBSCRIBE OFFER BUTTON On YOUR RIGHT

 

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 $ 2500 per month from Lucas Energy. Princeton is paid $ 1,500 per month from RMS Medical Products.

 

When there is no movement in penny stocks, even though there is no or very small losses, we will liquidate when money is needed for other opportunities.

 

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:

 Charles Moskowitz

(781) 826 8882

or

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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