Stock Options Trading Strategies

Market Strategies Newsletter

Options Trading Alerts

Covering High Return Balanced Investing Strategies To

Make Money In Up Or Down Markets

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

 September 24, 2012

Market Strategies Newsletter

Make Money In Up Or Down Markets.

 

To Read The Market Strategies Options Trading Alerts

Sample Newsletter In Adobe PDF Version – Click Here

http://www.princetonresearch.com/9-24-2012-Market-Strategies.pdf

$10,000 OPTIONS Trading Account

New Trades for this week:

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This week we had a small gain of $495

bringing us up to $13,487 in our year to date performance.

We are long 2 positions:

NLY October 17 Calls and the

YELP October 27 Calls

We are using $ 1,215 of the $ 10,000.

Traders Commentary

We had profits on both the long and short sides of the market while the averages were in-decisive, another validation for our “balanced” approach to trading.

Some of the economic numbers were better than expected while others were disappointing.

My main concern with the current levels of the averages stems from the fact that the Transports (which normally lead the industrials) has fallen hard to levels that make it a major “non-confirmation” of the move higher.

The Dow 30 is at a recovery high along with the S.& P. 500 but the Transports are 10% below their highs of about 5390.

One side of this equation is sure to come back in line, but the question is which way??

We have new orders to buy puts on a rally and calls on a pullback.

Volatility, which I measure by the size and frequency of daily ranges and volume is getting greater while volatility as measured by the VIX and VXX and represents the “cost of protection”  (buying of puts) is at dramatic low levels.  To me this means that while the market continues be more volatile, complacency is very high.  This has generally led to putting in highs.  For this reason I am even more cautious than last week

…CAM

 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

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

(1)         Buy 1200 GNOM @ $ 1.89

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

NOTE: This is a Sample Issue Only!

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THE COMPLETE VIP MEMBERS ONLY

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INDEX OPTION RECOMMENDATIONS

Any recommendations will be 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.

 

New Stock Option Recommendations

NOTE: This is a Sample Issue Only!

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THE COMPLETE VIP MEMBERS ONLY

MARKET STRATEGIES NEWSLETTER ISSUES

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Option and overall Comments

We made $ 1,555 last week.

Our gain for the year was

increased to $ 53,971

We have three long options positions and fifteen stock positions remaining.

the CSCO Jan $20 Calls,

NLY Oct $17 Calls and the

Yelp Oct  $ 27 Calls

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 $ 2,670 in the  three options positions and $ 61,940  in the 15 stock positions for a total of $ 64,610.00 with $ 35,390.00 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
• 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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This Weeks’ Economic Numbers

and Media Data

Fundamentals

Telecommunications led all ten Dow Industrial Groups gaining 2.27% on the week. Health Care rose 1.75% and Consumer Goods 0.45%. The remaining seven ended the week lower.  Basic Materials fell the most, off 2.28% and Financials were not far behind off 2.36%. Oil and Gas lost 1.88% and Industrials 1.32%. Both Utilities and Technology fell 0.30% while Consumer Services was down the least, off 0.03%.

Telecomm outperformed led by Metro PCS ( PCS: $ 11.63 ) + 9.4% on the week. They announced the addition of ZTE’s Anthem 4G Smartphone. Sprint ( S: $ 5.65 ) + $ 0.39 added 7.4%; Verizon ( VZ: $ 45.64 ) + 2.5% and AT&T ( T: $ 38.08 ) + $ 0.82 gained 2.2%. They all made new yearly highs.

The Dow Jones Transportation Index continued its collapse. Eighteen of the twenty components of the index were lower. See the table below.

 

Economic Data

The Housing sector continued to perform well although not ebullient. Housing starts were a bit lower than expectations at 750K vs 770K consensus, but well above July’s 733K. Building permits were in line at 803K vs 800K expected. Existing Home Sales excelled reaching a 4.82 mln level vs 4.58 mln consensus and only 4.47 mln last month.

Initial Unemployment Claims were the same as the previous week at 382K while Continuing Claims were slightly lower at 3,272K vs 3304K last week.

The manufacturing The Housing sector continued to perform well although not ebullient. Housing starts were a bit lower than expectations at 750K vs 770K consensus, but well above July’s 733K. Building permits were in line at 803K vs 800K expected. Existing Home Sales excelled reaching a 4.82 mln level vs 4.58 mln consensus and only 4.47 mln last month. Sector remains subdued. Empire Manufacturing for September was -10.4 worse than the -5.9 in August while the Philadelphia Fed was -1.9 for September and although better than the -7.1 last month the manufacturing trend is not impressive.

Technical Information

Support Levels:   S&P 500           1427:1440

Resistance S&P 500      1468; 1489

 

Support Levels: DOW            13386: 13420

Resistance DOW        13,638; 13,710

 

Support Levels: QQQ             6790; 6860

Resistance QQQ           7070; 7152

 

Nasdaq          3040; 3085

Resistance Nasdaq       3310; 3435                                         

                                    

CYCLES

The failure of the Transportation Average to confirm the rally has been a negative for     Dow Theory and other trend followers.

Since 1950, September is the worst performing month of the year for DJIA, S&P 500, NASDAQ (since 1971), Russell 1000, and Russell 2000 (since 1979). September was creamed four years straight from 1999-2002 after four solid years from 1995-1998 during the dot.com bubble madness.

Bullish election-year forces do little to improve on September’s poor overall performance over the same timeframe. September’s performance does improve slightly in election years, but it is still negative nearly across the board.

Only the small caps of the Russell 2000 have been able to escape negative territory and post a modest 0.4% average gain in the last eight election year Septembers.

Stock Options Trading Strategies