March 31, 2014

Market Strategies Newsletter

Options Trading

Success Strategies

Sample Issue 

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Options Trading Success Strategies

Newsletter in .pdf format:

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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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Options Trading Success Strategies

$10,000 Trading Account

Traders Comments

 

In 2013 YTD gains were $28,479

Over 284% Returns

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

 

There are two open positions:

MNST April 70 Puts

TLT April Calls

Funds in Use $ 1,079

 

This week we had a gain of $548

bringing our YTD performance back to

($1464) while having $1,079 of funds in use.

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While the S & P 500 and the Dow had essentially “inside ranges” the NASDAQ had a high of barely unchanged and finished the week down almost 3%.  This was largely due to the near collapse of Biotech, down almost 17% from the highs of only 5 weeks ago. Add to that the big NASDAQ momentum plays like NFLX (-21%), GOOG (-9%) and TSLA (-23%) in the last month and we have market performance that is decidedly lopsided.  If the Transports break the close of 7181 from early February, things can get ugly very fast.

As stated above, they don’t ring a bell at the top or the bottom. Most professional traders will tell you that the stock market is actually the smallest market we observe. FOREX (currencies) is the biggest, bonds are second, and stocks are third.  I’ll discard FOREX because it is dominated by the pros, but bonds are in almost all accounts.

They tend to represent safety and liquidity worldwide. When stocks and bonds are at odds, it is usually the bond market that is “right.”  Last week we had a position of long the TLT.

This is the ETF for bond YIELDS….Bonds up, yields down.  If the economy was getting better the path of rates would be higher, not lower….If things are actually better, then the lower rates have nothing to do with the economy, but rather the flight to safety and liquidity based on World political troubles.

By the way, we had to sell the first half of that TLT trade due to our 100% up rule, which demands we sell half if a trade doubles

…CAM

Options Trading Success Strategies

$10,000 Trading Account

Trade Table

NEW TRADES 

1) Buy 4 LULU April 52.50 Puts @ $ 1.80 O.B.

2) Buy 10 LUV April 23 Calls @ $ 0.50 O.B.

Remember, these trades are based on your participation in the

Subscriber Members Only

TEXTING SERVICE TO RECEIVE ALL UPDATES.

 

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 25^th 147 calls or puts.

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Options Trading Success Strategies

Market Laboratory

Weekly Changes For market Indicators

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.

  Options Trading Success Strategies

New Stock Recommendations

$ 100,000 account

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

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 Subscriber Members Area.

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.

 

Options Trading Success Strategies

$100,000 Trading Portfolio

Recommendations And Overall Comments

New Trades:

1) Buy 8 LULU April 52.50 Puts @ $ 1.80

2) Buy 20 LUV April 23 Calls @ $ 0.50

 

We had two closed out stock positions last week

gaining a total of $ 1356.

Our losses for the new year were reduced to $ 3,836.

For the full year 2013 we had realized gains of $ 53,556.

We have open position losses of about $ 10,040 most of which are held over from last year.

We also have not counted dividends received on stocks like Apple, Nordic American ( NAT ) and JP Morgan.

We have two long options positions:

The Stock table has 18 positions:

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

$ 2,158 in two options positions and

$ 68,193 in 17 stock positions totaling

$ 70,351 with

$ 29,649 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.

Options Trading Success Strategies

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

Note: Previous closed out stock and option positions can be found in past Market Strategies Newsletter issues available in the VIP Subscribers Members Area.

This Weeks’ Market Strategies

Economic Numbers and Media Data

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NOTE: This is a Sample Issue Only!

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Market Strategies Economic Data

The employment picture is improving dramatically in the Northeast as both Pennsylvania and New York had fewer layoffs in construction, administration and services industries. PA lead with a decrease of 3,166 followed by New York with a decrease of 2,155. Illinois had 2,320 fewer layoffs.

New Jersey had 1,008 fewer layoffs as the entire employment picture improves. Wisconsin improved by 1,055, Texas 1,373, Washington 1,026. California was the worst state with an increase of 3,189 jobless with layoffs in retail trade and services businesses.

Challenger Gray and Christmas publishes a report every Thursday morning early preceding the major monthly employment report. Mr John A Challenger is the chief executive officer of the company which helps transition reemployment for displaced workers.

 

Market Strategies Trading Fundamentals

The unemployment report for this week is expected to be excellent, which is working its way into the markets.

With plenty of cash in the system, it is time to put it to work. Good news is much overdue.

So far this year the Transportation average is up just 50.79 points, but up enough to lead all major averages. The S&P 500 is up 11.42 points on the year, while both the Dow and Russell are lower. The Dow is off 253 points and the Russell 11.83 points. Looking at the  Spring Thaw table below, we are way below the averages of the past several years.

This table shows the propensity for the markets to rally along with a Spring thaw.                                    

The game changed in 2008 when the US economy was introduced to quantitative easing.

This venture into uncharted territory has become one of the largest financial experiments in modern time, and only history will be able to judge the value of this policy.

Up until the point that QE was introduced, there were never any excess reserves in the system, yet if you notice, the monetary base kept slowly increasing. Why is that? During this period, as the population and the economy continued to grow, the quantity of money needed to support the growth in goods and services also had to grow.

In principle, QE operates in similar fashion to normal open-market operations which have been with us for nearly a century. The major difference is the size of the bond purchases, and the types of bonds.

 

Market Strategies Technical Information

Support Levels S&P 500    1818

Resistance S&P 500           1867

 

Support Levels DOW          16,080

Resistance DOW                 16,440

 

Support Levels QQQ           86.16                  

Resistance QQQ                  89.40

                  

Support Levels NASDAQ      4094

Resistance NASDAQ             4297

 

Market Strategies Cycles

The Cloud is already a major component of Microsoft server products and tools with Azure playing an important role in the growth of Microsoft’s enterprise suite of products. This is a growth area in Microsoft adding $1 billion in revenue in each of 2012 and 2013. By 2015 it should be $20 billion business with margins of $18 to $19 billion. The cloud will go well with Office.

For those retail investors who have heard of the Cloud, most are aware in a very limited way but do see the value in applications like Dropbox, SkyDrive, iCloud, Google Drive or Amazon Cloud Drive which many now use having typically been introduced with the latest smartphone or tablet or on every Windows 8 desktop. Satya Nadella, the newly elected president ran Microsoft’s Cloud and Enterprise Group of businesses which included 12 businesses with revenues over $1 billion that play a key role in the information technology used by thousands of businesses.

Cisco Systems forecasts that data storage on those Cloud services will grow at a staggering 63% annually through 2017. MSFT ( $ 37.62 ) has great support at $ 36.85 and should easily take out $ 38 on a rally sometime before mid-March.

 

Rule 17B 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 $ 1,500 per month from RMS Medical Products. Princeton has bought 81,100 shares of RMS Medical Products. Princeton Research has been paid $ 2,500 to write a report on Xinergy.

Princeton has been engaged by Target Energy. No contract is currently in place. 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 0.045 in Australia. Princeton owns 400,000 Australia shares and about 500 U.S. ADR’s. Princeton is paid about 500,000 shares of Leo Motors.

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

(702) 650-3000

mike@princetonresearch.com

 

Princeton Research

3887 Pacific Street,

Las Vegas, Nevada 89121

 

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