Options Trading Strategies

October 8, 2012

Market Strategies Newsletter

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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$10,000 Options Trading Account

New Trades for this week:

NOTE: This is a Sample Issue Only!

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THE COMPLETE VIP MEMBERS ONLY

MARKET STRATEGIES NEWSLETTER ISSUES

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This week we had loss of $963 reducing our yearly gains to

$13,770 before commissions.

 

This is a TYD return of over 137%

on the $10,000 options trading portfolio.

 

This return is even larger considering that

not all of the $10,000 portfolio has been used.

Most Trades use less than $1000

We have 4 option positions.

Funds in use = $ 2,260

Options Trader’s Comments

Often markets will exhibit a redundant formation at or near tops and in areas of support.

This market has continued to exhibit two such formations; a “head and shoulders” continuation pattern at support and “bear flag” calling intermediate tops.  This week we are approaching important highs in several major indexes, and there are many with the bear flag bent. We also had “reversal days” in both NDX and QQQ indexes causing some concern.

The continuing building of the bear flags caused us to get stopped out of several positions on our “50% down” rule. All of our losses were generated via this rule.

We will continue to seek out longs at support, and shorts near highs in case this market turns lower.  One disturbing development is the failure of AAPL and a close not only at the low for the week, but also below its 25 and 50-day MAs.

— CAM

 

Remember these trades are sent to our subscribers by Text Message Alerts.

Previous closed out trades not listed here may be seen in previous market letters.

 

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

NOTE: This is a Sample Issue Only!

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THE COMPLETE VIP MEMBERS ONLY

MARKET STRATEGIES NEWSLETTER ISSUES

USE THE SUBSCRIBE OFFER BUTTON On YOUR RIGHT

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

INDEX OPTION RECOMMENDATIONS

Any recommendations will be texted to VIP 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, 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.

 

Option Trading and Overall Comments

We lost  $ 2,288 last week.

Our gain for the year was reduced to a hypothetical $ 54,653.

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 $ 4,760 in the five options positions and $ 69,524  in the 16 stock positions for a total of $ 74,284.00 with $ 25,716.00 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 – Susbcribe to get all trade alert recommendations.

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
• Call  702 650 3000 for up to date information. 

Note: Previous closed out stock and option positions can be found in previous weekly newsletters.

This Weeks’ Economic Numbers

and Media Data

Fundamentals

Transports roared back up 3.14% on the week, leading all stock indexes.

Truckers JB Hunt ( JBHT: $55.20 ) + 6.1% and Landstar Systems ( LSTR: $ 48.96 ) + 3.3% reversed to the upside passing critical moving averages. JB Hunt surged past both the 50 and 200 day moving averages while Landstar closed above its 50 day m.a. Airlines were impressive led by  United ( UAL: 21.07 ) +8.1% and Alaska ( ALK: $ 36.52 ) + 4.2%. United surpassed its 50 but could not close above the 200 day m.a. while Alaska passed both. Southwest Air ( LUV: $ 8.97 ) made a double bottom at   $ 8.75, closed above support in a position to rally above 9.10, which would be a major buy signal. The IYT, the DJ Transportation ETF ( IYT: 89.73 ) rebounded 3% but needs a close above 90.40 to reverse its losing ways.

Eight of the Ten Dow Industrial groups were higher led by Financials up 2.72%; Health Care rose 2.48% and Consumer Goods 2.09%; Consumer Services added 1.63%; Industrials 1.62% and then Telecommunications 1.09%. Utilities made a complete rebound and had nice gains for the second week of 0.99%. Basic Materials rounded out the winners with a 0.86% gain. There were two losing groups: Oil and Gas -0.02% and Technology led by the Apple decline falling 0.56%.

Financials were the strongest industrial group. Bank of America ( BAC: $9.32 ) rose 5.5%; JP Morgan ( JPM: $ 41.71 ) gained 3% and U.S. Bank ( USB: $ 34.92 ) added 1.8% to make its best close ever.

 

Economic Data

The week began with a huge surprise. The September ISM Index forecasted to be below 50, which prognosticates a declining economy, was 51.5, 1.9 points above August.

Auto and Truck Sales for September continued robust at 11.6 mln units defying expectations of a setback.

Other reports continued bullish: Challenger job cuts at -70.8% was the largest decline in layoff expectations in three years. The ADP Employment change 162K was well above 133K expected although below August’s 189K. ISM Services were 55.1 above 53.0 consensus.

Nonfarm Payrolls at 114K  were below expectations of 120K but the Unemployment rate of 7.8% was well below the 8.1% consensus.

Manufacturing was the weakest continuing to disappoint with Factory Orders -5.2%.

 

Technical Information

Support Levels S&P 500 = 1435:1447

Resistance S&P 500 =       1474; 1494

 

Support Levels DOW =  13386: 13450

Resistance DOW =        13,618; 13,680

 

Support Levels QQQ =        6750; 6810

Resistance QQQ =              6980; 7050

 

Support Levels Nasdaq =    3060; 3085

Resistance Nasdaq =          3180; 3230

                                    

CYCLES

Alcoa on Tuesday – $10.28 Trefis price estimate , +13% above the market price of $9.09 Download the PDF Report
Recent analysis: Alcoa Q3 Earnings Tuesday: Aluminum Prices Will Weigh On Results 10/5/12 Add AA to portfolio

Costco on Wednesday – $101 Trefis price estimate , -1% below the market price of $102
Download the PDF Report
Recent analysis: Rising Food Prices And Razer Thin Margins Are A Bad Combination For Costco 10/1/12
Add COST to portfolio

Google on Thursday – $661 Trefis price estimate , -14% below the market price of $768
Download the PDF Report
Recent analysis: Google Signs Deal With Fox To Boost Google Play Content 9/21/12
Add GOOG to portfolio

JPMorgan Chase on Friday – $45.42 Trefis price estimate , +9% above the market price of $41.71
Download the PDF Report
Recent analysis: Financials Weekly Notes: BofA, JPMorgan And Barclays 10/5/12
Add JPM to portfolio

Wells Fargo & Co. on Friday – $37.81 Trefis price estimate , +5% above the market price of $35.84
Download the PDF Report
Recent analysis: Banks Shift Focus On Cyber Security After Recent Attacks 10/4/12
Add WFC to portfolio

 

 Rule 17 B Attestations:

Cross Border paid us 25,000 restricted shares over a year ago. We do not currently represent

Cross Border but we like the company. We own about 3,000 shares. Princeton has approximately 2,581,578 shares of AIVN both free and restricted and represents them for I.R.. Princeton also has about 60,000 shares of TXGE. Princeton is paid $ 2500 per month from Lucas Energy.

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:

 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

 

Options Trading Strategies