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April 4, 2016
Market Strategies Newsletter – Sample Issue
Balanced Investing Strategies To
Make Money In Up Or Down Markets
A Publication of Princeton Research, Inc. (www.PrincetonResearch.com)
Contributing Staff: Michael King, Charles Moskowitz
Where To Invest In 2016 Newsletter Covering:
Where to Invest April 2016
Best Stocks To Buy April 2016
Stock Market Investing Strategies
Stock Options Trade Alerts
Options Trading Strategies
How To Trade Options
Proven Profits Trading Success
Results From Our Recent Trade Alerts:
41% Profits on XLF Calls in 6 Days
54% Profits on JPM Calls in 1 Day
70% Profits on GLD Calls in 1 Day
29% Profits on JPM Calls in 8 Days
50% Loss on SPY Puts in 6 Days
64% Profits on BAC Calls in 2 Days
60% Profits on QQQ Puts in 2 Days
150% Profits on SIG Puts in 3 Days
48% Profits on SPY Calls in 2 Days
92% Profits on VA Calls in 6 Days
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$10,000 Trading Portfolio
Charles Moskowitz Discussion
Gain For The Week $ 462
2016 YTD Profits $ 2883
Over 28% Returns
We Have 2 Open Positions:
Long 4 GLD April 119 Calls and
4 SIG April 120 Puts
Funds in use = $ 884
Week 13 wasn’t unlucky for the Options account. We had a gain of $462 bringing YTD gains to $2,883. We have only 2 positions with the second half of the GLD calls (first half sold via text at near 100% up) and the SIG puts. One trade Virgin Airways ( VA ) is in the $100,000 account that will be a big winner Monday, which we couldn’t make in the options account.
Virgin Air is being bought by Alaskan Air around $20 over what we paid, but the structure of the available options, not being particularly active, were only every $5 for strike prices, and have been inactive until Friday. You might be tempted to say that with a $20 who cares, but we don’t usually buy options based on takeover rumors, and buying a call that is out the money by several dollars doesn’t fit our risk parameters. Of course after the fact they look cheap, but without the deal they generally turn out worthless…
We edged higher again this past week, and frankly it doesn’t feel that appropriate. If things are good, the Fed will raise rates, if things are bad, and earnings season starts in a few weeks (with most projections for bad news) then the market is fully priced right where it is. I’m pretty sure that no one has forgotten what happened when rates moved higher in December. The only sector that could be helped from higher rates would be the financial. As discussed before, the positive yield curve gives the banks better margins on business loans. Even if the Fed raises rates, the savings rate has steadily increased over the past 12 months, and the banks aren’t paying much for the use of those funds.
The election is beginning to look like a “lose / lose” proposition. Hillary hates drug companies and talks about Wall Street (although she takes piles of $$ from them),
Bernie would be a disaster with all of the social programs that can’t be paid for and his continuing demonization of the “rigged” economy. Trump doesn’t even deserve an explanation of his short comings….
So, we’re long GLD calls with virtually no cost and short the SIG with a very close stop.
If, by chance Yellen comes across as dovish, the gold has pulled back and tested our last buy point and can move back to $1250-1260…CAM
MARKET Laboratory – Weekly Changes
Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect.
| Dow
17,792.75 +277.02 +1.58% |
Nasdaq
4914.54 +141.04 |
S&P 500
2072.78 +36.84 +1.81% |
Transportation
7887.77 -38.25 -0.48% |
Russell 2000
1117.68 +38.15 +3.53% |
Nasdaq100
4532.08 +126.55 +2.87% |
| Gold (spot)
1222.20 +0.80 +0.07% |
Silver
1504.6 -15.3 -1.0% |
Crude
36.79 -2.67 -6.8% |
Heating Oil
113.17 -7.83 -6.5% |
Unleaded Gas
1.4016 -0.0930 -6.2% |
Natural Gas
1.956 +0.074 _4.1% |
| VIX
13.10 -1.64 -11.0% |
Put/Call Ratios
S&P 100 146/100’s +1/100’s |
Put/Call Ratios
CBOE Equity 64/100’s -18/100’s
|
Bonds
164-12 +1-11 2.61% -0.04% |
10 Yr. Note
130-094+1-02 1.79%-0.09%
|
Copper
216.30 -6,60 -3.0% |
| CRB Inflation
Index 168.03 -4.15 -2.4% |
Barron’s* Confidence
70.2 +0.3 |
S&P100
919.33 +15.27 +1.69% |
5 Yr. Note
121-01 +25 1.24% -0.11%
|
Dollar
94.61 -1.66 -1.7% |
DJ Utilities
671.04 +10.84 +1.64% |
| AAII
Confidence Index
Long Term Average |
Bullish
27.2% -6.6%
38.74% |
Bearish
25.8% +2.1%
30.30% |
Neutral
47.0% +4.5%
30.96% |
M1 Money
Supply +6.44% Mar 21st
|
M2 Money
Supply +6.15% Mar 21st
|
* Component Change in the Confidence Index
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.
Market Strategies Technical Information
Support/Resistance Levels: SUPPORT RESISTANCE
S&P 500 2032 2087
Dow 17,550 17,893
QQQ 106.90 112.70
Transports 7755 8140
NASDAQ 4740 5005
The DJT failed to close above its 200-day m.a. which is a disappointment to the rally. The QQQ closed above its 200 day moving average but the Nasdaq closed right at the 200-day m.a. but not above it. The indexes all have plenty of overhead resistance just ahead of seasonal earnings reports.
$100,000 Trading Portfolio
Stock Positions and Trades
Each stock is allocated a theoretical $ 5,000 share of the portfolio unless otherwise indicated.
| Stock
|
Purchase Price | Purchase Date | Stop/Loss | Price/Date Sold | Profit/
(Loss) |
||
| This information Is
Available to Our Members.
Go Here http://www.princetonresearch.com/join.htm
to Get The Best Full VIP Membership Rates Available
|
22.25 | 03/24 | |||||
| 111.08 | 03/18 | 138.20 04/01 | $ 542 | ||||
| 29.50 | 02/23 | Sold 3 32.50 Calls | $ 900 credit | ||||
| 6.02 | 02/22 | ||||||
| 6.49 | 12/28 | ||||||
| 51.21 | 12/10 | ||||||
| 36.50 | 12/08 | ||||||
| 53.53 | 12/07 | ||||||
| 50.81 | 11/23 | ||||||
| 28.51 | 10/28 | ||||||
| 43.55 | 08/14 | ||||||
| 1.40 | 02/17 | ||||||
| 0.7411 | 12/26 | ||||||
| 4.84
3.75 |
12/18
|
||||||
| 8.40 | 12/16 | ||||||
| 14.21 | 10/16 | ||||||
| 2.95 | 05/19 | ||||||
| 4.08 | 8/12 | ||||||
| 6.56 | 7/11 | ||||||
| 0.22 | 10/22/12 | ||||||
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.
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Market Strategies $100,000 Trading Account
There were five closed option positions:
S&P March 31st 202 Puts were sold at $ 0.48 on the 50% Loss Rule for a loss of $ 384.
April 104.50 S&P Puts had a smaller loss of $ 12.
JPM April 60 Calls were sold for a profit of $ 528
XLF April 22 Calls made a gain of $ 336.
Half of the 16 lot Gold Call position was sold for a gain of $ 456.
There was one closed out stock position: 20 shares of the SCO made a nice gain of $ 542.
The result for the entire week was a net gain in options of $ 924.
In stocks, the 20 lot SCO position made $ 542 making a gain for the week of $ 1,466.
For the entire year on closed out trades, our profits increased to $ 8,705.
The options expire on the third Friday of each Month unless otherwise posted.
The Stock table has the following 21 positions: AA, APC(2), BAC.B.WS, BSBR( 2 ), EYES, LVLT, MOS, NBGGY (3), REPR, SAN, STNG,SUN,TEXQY, TWTR, VA: XLF; short 3 SUN Calls
The options call for a $ 2,500 investment unless otherwise stated; each stock position requires $5,000 unless otherwise mentioned specifically.
We are basing money management on a hypothetical $ 100,000, using a total of $80,987
for the 20 open long stock positions plus a credit of $900 for the SUN written Calls, which
reduces the requirement to $ 80,087. The Open Option Positions require $ 884. This increases the margin requirement to $ 80,971, leaving $ 19,029 in cash.
These figures are approximate and there might be errors.
We have not counted the dividends received from many previous trades such as Apple, Colgate Palmolive, JP Morgan, North American Tankers, STNG, Santander, their Brazil affiliate BSBR and Blue Capital Reinsurance which was sold for a profit and many others.
The trading is hypothetical and we do not count commission costs.
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 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
| Option | COST | Date | Sold | Date | Profit/
(Loss) |
| This information Is
Available to Our Members.
Go Here http://www.princetonresearch.com/join.htm
to Get The Best Full VIP Membership Rates Available
|
Puts
1.40 |
04/01/16 | |||
| Puts
1.33 |
03/30/16 | 1.32 | 04/01/2016 | ( $ 12 ) | |
| Calls
0.52 |
03/29/16 | 0.96 | 03/30/2016 | $ 528 | |
| Calls
0.81 |
03/28/16 | 1.38 Sold Half | 03/29/2016 | $ 456 | |
| Calls
0.51 |
03/24/16 | 0.72 | 03/30/2016 | $ 336 | |
| Puts
0.96 |
03/23/16 | 0.48 | 03/29/2016 | ( $ 384 ) | |
| Calls
|
3.00 | 02/23/2016 | $ 900 credit
Covered write |
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This Weeks’ Economic Numbers
Earnings Releases and Media Data
Before the Open on top of the Row;
After the close below the Economics Information
| MONDAY | 10:00 hrs Factory Orders February ( -1.7% vs +1.6% )
10:15 hrs Boston Fed President Eric Rosengren ( FOMC voter ) speaks on cybersecurity and financial stability 17:15 hrs and 19:00 hrs Minneapolis Fed President Kashkari ( non-FOMC voter ) participates in a town hall discussion ending “ too big to fail.”
|
| TUESDAY | Darden Restaurants DRI ( 1:20 vs 0.99 ) Walgreens Boot Alliance WBA ( 1.28 vs 1.18 ) International Speedway ASCA ( 0.40 vs 0.36 ) Greenbrier GBX ( 1.56 vs 1.57 )
08:30 hrs Trade Balance Feb ( -$46.20B vs -$45.7B ) 10:00 hrs ISM Services March ( 54.0 vs 53.4 ) Wisconsin holds primaries for both Republican and Democratic candidates. The Senate Banking Committee looks at the effects of consumer-finance regulations. 13:00 hrs Chicago Fed President Evans speaks in Hong Kong about current economic policy and financial conditions. ( non-FOMC voter ) The Senate Foreign Relations committee takes up recent Iran actions and the implementation of the nuclear deal. A Schulman SHLM ( 0.26 vs 0.39 ) Team TISI ( 0.11 vs 0.11 ) |
| WEDNESDAY | Monsanto MON ( 2.42 vs 2.90 ) Constellation Brands STZ ( 1.14 vs 1.03 ) Acuity Brands AYI
( 1.57 vs 1.07 ) RPM Inc RPM ( 0.15 vs 0.20 ) Schnitzer Steel SCHN ( -0.26 vs -0.33 ) 07:00 hrs MBA Mortgage Index 04/02 ( NA vs -1.0% ) 10:30 hrs Crude Inventories 04/02 ( NA vs + +2.299 Mln Bbls ) 14:00 hrs FOMC Minutes March 16th meeting ( NA ) Bed Bath & Beyond BBBY ( 1.81 vs 1.80 ) Marvell MRVL ( 0.10 vs 0.25 ) Apollo Education APOL ( -0.10 vs -0.10 ) Mistras Group MG ( 0.05 vs 0.01 ) Ollies Bargain Outlet OLLI ( 0.28 ) |
| THURSDAY | ConAgra CAG ( 0.59 vs 0.59 ) CarMax KMX ( 0.71 vs 0.65 ) Rite Aid RAD ( 0.06 vs 0.12 )
08:30 hrs Initial Claims 04/02 ( 270K vs 276K ) 08:30 hrs Continuing Claims 03/26 ( NA vs 2173K ) Fed Chair Janet Yellen joins a talk with former Fed chiefs: Ben Bernanke Alan Greenspan and Paul Volcker in New York. International Monetary Fund Managing Director Christine Lagarde speaks at the Women in the World Summit. 10:30 hrs Natural Gas Inventories 04/02 ( NA vs -25bcf ) 15:00 hrs Consumer Credit Feb ( $ 14.40Bln vs $ 10.5Bln ) ECB President Mario Draghi makes a presentation about Europe’s economic and financial situation. The IMF releases the analytical chapters of its World Economic Outlook
Anglo Dynamics ANGO ( 0.14 vs 0.12 ) PriceSmart PSMT ( 0.90 vs 0.98 ) Duluth Trading DLTH ( 0.31 ) Ruby Tuesday RT ( 0.06 vs -0.01 ) WD-40 WDFC ( 0.86 vs 0.76 ) Sea Change SEAC ( 0.01 vs -0.05 ) |
| FRIDAY | 10:00 hrs Wholesale Inventories Feb (-0.2% vs 0.3% )
Kansas City Fed President Esther George speaks about the economy. Treasury Auctions: 28Bln 3-mo ( 0.30 ) and $ 24 Bln 6-month ( 0.475 ) last auction prices U.S. Oil Rig Count fell 10 to 362, the lowest since at least the ‘40s. |
Market Strategies Fundamentals
Stocks reversed on Friday from a terrible opening that sent the Dow careening off more than 100 points until 10AM EDT when the ISM Report came out. This changed everything. The Dow reversed from being down 117 points to a rally gaining 277 points on the day to close at 17,792.75. It had reached a new high at 17,811 not seen since December 7th.
The Russell and Nasdaq indexes performed even better as they were more oversold. The Russell gained 38 points or 3.53% to close at 1117.68, while the Nasdaq rose 141 points or 2.95% to 4,914.54.
The S&P 500 gained 36.84 up 1,8% to 2072.78. Only the Transportation average was lower down 38 points to 7887.77. The Tranny fell below its bellwether 200 day moving average by a few points to spoil what was otherwise a magnificent day for the bulls.
Volatility was key as a clue for the week’s trading as the VIX and UVXY continued to show weakness throughout the week and even prior to the ISM report. The UVXY could not rally even 100 points when the Dow was off more than 100, while the VXX could only muster a rally of 40 points before the report and its sharp correction. Both the VXX and UVXY go down when the market is bullish.
ISM Manufacturing for March rose to 51.8 surprised most analysts. U.S. factory activity expanded in March for the first time in seven months, since last summer. This may be a sign the nation’s economy is slowly shaking off the effects of a strong dollar and depressed oil prices. The industry’s Institute for Supply Management said Friday its gauge of manufacturing activity rose to 51.8 in March from 49.5 in February. A reading above 50 indicates that sector activity, reflecting factors such as orders, production and hiring is increasing.
Thus far, 2016 has been a very active year for the VIX, especially when compared to the ultra-low volatility seen between 2012 and 2014. The economic strength of the United States will dictate how the VIX performs throughout the remainder of 2016. If economic conditions and job growth weaken, expect a rising VIX. If positive economic conditions persist and the bull market continues, expect the VIX to revisit the lows seen in 2015.
Every major spike in volatility since the 1990s can be categorized into two main groups: political and economic events. Political events result from tensions due to war or government instability. For example, during the Russian-Ukrainian conflict in 2013, the VIX rose from a relatively low point of $12 to just over $19, representing a 57% increase in a very short time period. Most political events can be solved in a few weeks, such as the U.S. government shutdown in September 2013. During the shutdown, the VIX spiked from $12.52 to over $21 and plummeted back to $12.34 within a matter of a few weeks.
Economic events result from negative economic growth or negative economic sentiment. The January 2016 drop in the S&P 500, along with the 51% increase in volatility, was caused by fears of a global economic slowdown. Economic events tend to drag on for longer time periods and are only resolved by positive economic data or a change in economic sentiment. Job growth in the United States continued to be positive during the beginning of 2016, which led to a recovery in the S&P 500 and a subsequent decline in the VIX by subsiding fear.
The dollar closed at 94.61, down 1.66 or 1.7% for the week. Crude oil fell sharply down 2.67 to 36.79, off 6.8%, but stocks maintained their advance. High quality dividend-paying consumer stocks were the benefactor. Church and Dwight ( CHD: $ 93.70 ) + 2.25 or +2.5% for the week made a new all-time high. Colgate Palmolive ( CL $ 71.20 ) + 1.29 or +1.8% for the week also reached a new all-time high. Both Coca-Cola ( KO $ 46.83 ) + $ 1.25 or + 1.8% and Hershey ( HSY: $ 93.71 ) + $ 3.64 or +4% were on break-out mode. Procter and Gamble ( PG: $ 83.53 ) + 0.8% or $ 0.64 closed at a new high for the year.
Treasuries declined on Friday in a curve-flattening trade as the better-than-expected U.S. economic data prompted traders to move up their forecast dates for the next rate hike from the Fed. However, for the week treasuries remained strong even after the bullish Employment report. The Long Bond closed at 164-12 and the 10-Yr Treasury 130-94, both at the highest levels since February 11th when the markets were much lower.
This report speaks in favor of more rate hikes from the Fed, but it is worth remembering that Fed Chair Yellen spoke on Wednesday and advocated a cautious approach to tightening policy, putting strong emphasis on international developments and their ability to influence the monetary policy path.
Cleveland Fed President Loretta Mester ( FOMC voter ) said that she has slightly revised down her forecast for the appropriate path of monetary policy normalization since December, mostly due to her forecast for a lower long-term equilibrium rate.
Market Strategies Economic Data
The March Employment report showed above-consensus headline growth coupled with an increase in average hourly earnings after last month’s report disappointed on the earnings front. On this report, average hourly earnings growth matched expectations, lifting the year-over-year rate to 2.3% from 2.2% in February. The Unemployment Rate was 5.0% (Briefing.com consensus 4.9%) versus the same 5.0% in February. March average hourly earnings were up 0.3% (Briefing.com consensus +0.3%) after being down 0.1% in February. Over the last 12 months, average hourly earnings have risen 2.3% versus 2.2% in February.
Nonfarm payrolls increased by 215,000 (Briefing.com consensus 200,000). February nonfarm payrolls were revised to + 245,000 from 242,000. January nonfarm payrolls revised lower to +168,000 from 172,000.
Private sector payrolls increased by 195,000 (Briefing.com consensus 195,000). February private sector payrolls revised to 236,000 from 230,000. January private sector payrolls revised to 182,000 from 158,000..
The U-6 unemployment rate, which accounts for the total unemployed plus persons marginally attached to the labor force and the underemployed, was 9.8% versus 9.7% in February.
The average workweek was unchanged at 34.4 (Briefing.com consensus 34.5) March manufacturing workweek slipped to 40.6 hours from 40.7 hours in February. Factory overtime was 3.3 hours for the fourth month in a row
The labor force participation rate was 63.0% versus 62.9% in February.
| Category | MAR | FEB | JAN | DEC | NOV |
| Establishment Survey | |||||
| Nonfarm Payrolls | 215K | 245K | 168K | 271K | 280K |
| Goods-Producing | -4K | -15K | 24K | 44K | 53K |
| Construction | 37K | 20K | 18K | 48K | 65K |
| Manufacturing | -29K | -18K | 18K | 6K | 3K |
| Service-Providing | 199K | 251K | 131K | 215K | 226K |
| Retail Trade | 48K | 67K | 67K | 7K | 52K |
| Financial | 15K | 5K | 17K | 8K | 18K |
| Business | 33K | 30K | -2K | 60K | 48K |
| Temporary help | 4K | -12K | -44K | 25K | 1K |
| Education/Health | 51k | 84K | 26K | 63K | 45K |
| Leisure/Hospitality | 40K | 45K | 34K | 35K | 46K |
| Government | 20K | 9K | 13K | 12K | 1K |
| Average Workweek | 34.4 | 34.4 | 34.6 | 34.5 | 34.5 |
| Production Workweek | 33.6 | 33.6 | 33.7 | 33.8 | 33.7 |
| Factory Overtime | 4.3 | 4.3 | 4.3 | 4.2 | 4.3 |
| Aggregate Hours Index | 0.2% | -0.4% | 0.4% | 0.3% | 0.2% |
| Avg. Hourly Earnings | 0.3% | -0.1% | 0.5% | 0.0% | 0.2% |
| Household Survey | |||||
| Civilian Unemp. Rate | 5.0% | 4.9% | 4.9% | 5.0% | 5.0% |
| Civilian Labor Force | 396K | 555K | 502K | 466K | 271K |
| Civilian Employed | 246K | 530K | 615K | 485K | 247K |
| Civilian Unemployed | 151K | 24K | -113K | -20K | 25K |
The March ISM improvement to 51.8 was driven by increases in most sub-indices of the report.
Although the vast majority of components improved, the Employment Index slipped to 48.1 from 48.5. The five-month streak of readings below 50 was the longest stretch of this kind since 2009.
| Category | MAR | FEB | JAN | DEC | NOV |
| Total Index | 51.8 | 49.5 | 48.2 | 48.0 | 48.4 |
| Orders | 58.3 | 51.5 | 51.5 | 48.8 | 49.0 |
| Production | 55.3 | 52.8 | 50.2 | 49.9 | 49.8 |
| Employment | 48.1 | 48.5 | 45.9 | 48.0 | 50.8 |
| Deliveries | 50.2 | 49.7 | 50.0 | 49.8 | 49.6 |
| Inventories | 47.0 | 45.0 | 43.5 | 43.5 | 43.0 |
| Export Orders | 52.0 | 46.5 | 47.0 | 51.0 | 47.5 |
| Prices paid (not seas adj) | 51.5 | 38.5 | 33.5 | 33.5 | 35.5 |
The New Orders Index rose to 58.3 from 51.5; the Imports Index rose to 49.5 from 49.0; the Exports Index increased to 52.0 from 46.5; the Supplier Deliveries Index rose to 50.2 from 49.7; and the Prices Index surged to 51.5 from 38.5
Market Strategies Cycles
April 1999 was the first month to gain 1000 DJIA points. However, from 2000 to 2005, “Tax” month was hit hard, declining in four of six years. Since 2006, April has been up ten years in a row with an average gain of 2.8% to reclaim its position as the best DJIA month since 1950. April is third best for S&P and fourth best for NASDAQ (since 1971).
April marks the end of our “Best Six Months” for DJIA and the S&P 500. On April 1, we will begin looking for our seasonal MACD sell signal and corresponding early signs of seasonal weakness. Even in presidential election years, the second best year of the four-year cycle, the “Worst Six Months” have experienced some nasty selloffs.
The first half of April used to outperform the second half, but since 1994 that has no longer been the case. The effect of April 15 Tax Deadline appears to be diminished. (For 2016, the deadline to file is Monday April 18. The normal date falls on Emancipation Day this year. This date is a holiday in the District of Columbia and is observed in the same manner as all other federal holidays.) The market is clearly focused on first quarter earnings during April. Exceptional Q1 earnings and positive surprises tend to be anticipated with stocks and the market moving up in advance of the announcements and consolidating or correcting afterwards.
Normally bullish election-year influences (the second best year of the four-year presidential election cycle) have the exact opposite effect on April. Average gains since 1952 are approximately half of the average gain of all years since 1950 for DJIA and S&P 500. Largely due to a 15.6% loss in 2000, NASDAQ’s typical strength in all Aprils since 1971 is transformed into an average loss in election years.
Psychological: Neutral. According to the most recent Investor’s Intelligence Advisor Sentiment survey, bearish advisors have declined to 25.8%. Bullish advisors are 27.2%. This blend is neutral and indicates the market can move in either direction but trades are likely to go with the flow. CBOE Weekly Put/Call is perhaps more neutral down from an elevated reading of 0.82 last week. The direction of the DJ Transportation average will have a major impact.
Fundamental: Resilient. The U.S. labor market continues to make gains even as the global macro picture is tepid. The U.S. Unemployment Rate remained at 5.0% in March as 215k new jobs were added. This is a solid showing considering the Federal Reserve Bank of Atlanta GDP Now model is forecasting Q1 GDP of just 0.6%. Firming crude oil and a softening dollar should provide modest tailwinds to corporate profits in Q2 and beyond should current trends persist.
Technical: Nearing Resistance. DJIA and S&P 500 have reclaimed their respective 50- and 200-day moving averages, but are likely to run into resistance at the highs from Q4 of last year. NASDAQ and Russell 2000 have yet to return to the green in 2016. The DJ Transportation Index needs to surge above its 200-day moving average quickly if the rally is to continue.. Technology and small-caps need to catch up. Then there would be a reasonably solid chance that the rally continues. Q4 closing highs for DJIA and S&P 500 were 17918.15 and 2109.79. NASDAQ and Russell 2000 breakeven in 2016 is 5007.41 and 1135.89.
Monetary: 0.25-0.50%. As broadly expected, there was no rate hike at the Fed’s latest meeting and depending on data, it could be months before the next. Expectations currently stand at two rate increases in 2016, down from four. These expectations were essentially confirmed earlier this week by Fed Chair Yellen as she promoted “greater gradualism” and the Fed’s ability to provide “considerable scope” for stimulus if needed.
Seasonal: Bullish. April is DJIA’s best performing month since 1950, third best for S&P and fourth best for NASDAQ (since 1971). However, April also marks the end of the STA’s “Best Six Months” for DJIA and the S&P 500. In early April the STA will begin looking for the usual seasonal MACD sell signal and corresponding early signs of seasonal weakness and will issue an Alert when it triggers.
Stocks have been on an upward tear throughout March, bucking the pattern of late month weakness.
The week after triple-witching did display its usual weakness. The Stock Trader’s Almanac expected a strong March and April rally on the heels of the nasty down January and February. But the usual end-of-March respite has been mollified by the sweet, dovish and measured words of Fed Chair Yellen.
The STA expects the market rally to continue into and through April, but to fall short of new highs and then begin to retreat later in the spring into the summer lull and the Worst Six Months (“Sell in May”), stabilizing after the conventions, rallying again into yearend, but falling short of new highs yet again.
But for now the path appears to be higher and the first trading day of April has been true to form, a boon to traders – up 76.2% of the time on the DJIA and S&P 500 over the last 21 years with average gains on the day of about 0.5% NASDAQ has been a bit less strong, two-thirds of the time and Russell 2000 is up 61.9% of the time.
Undervalued Small Cap Stocks
Lower Priced stocks that look to be a buy:
Repro-Med Systems, Inc ( OTCQX: REPR 0.34 )*
Repro Med Systems, Inc. dba RMS Medical Products (OTCQX: REPR) has been one of the best performing stocks in 2016. They announced that its net revenues for the third quarter ended November 30 for fiscal 2016 increased 18% over the previous year’s Q3, led by the Company’s sales of proprietary infusion products. The Company’s current fiscal year ends February 29, 2016.
Revenues for the third quarter of fiscal 2016 were $3,145,000 compared with $2,655,000 for the third quarter of fiscal 2015. Revenues for the first nine months of the fiscal 2016 were $8,942,000 compared with $7,797,000 for the same period last year, an increase of 15%.
RMS continues to benefit from recent lean manufacturing initiatives, which have resulted in increased capacity and decreased direct assembly labor costs compared to last year. Gross margin improved in fiscal Q3 to 67% from 60% in the same quarter last year, and from 63% in fiscal Q2.
Driven by the strong sales in the quarter, net income for the third quarter was $168,000, an improvement of 81% compared with the same period last year. In addition, net income was negatively impacted due to costs associated with several trade shows in the quarter, the hiring of new sales representatives, and continued legal and consulting fees, all of which reflect an investment for growth in future periods. Excluding certain of these non-recurring items, net income margin would have been in excess of 10% for the quarter.
“We continue to see growth in all sectors of the homecare infusion market both domestically and internationally,” commented Andy Sealfon, President and CEO of the company. “I am also very excited about our newest board member, Cyril N. Narishkin and have appointed him as Interim Chief Operating Office to support our expanded management team and accelerate our growth opportunities. Cyril brings a wealth of experience consulting with companies of all sizes, and will also be instrumental in assisting the Company on its lean initiatives and growth plans,” Mr. Sealfon added.
The Company manufactures medical products used for infusions and suctioning. The Infusion product portfolio currently includes the FREEDOM60(R) and our latest FreedomEdge (TM) Syringe Infusion Pumps, RMS Precision Flow Rate Tubing(TM) and RMS High-Flo(TM) Subcutaneous Safety Needle Sets. These devices are used for infusions administered in professional healthcare settings as well as at home. The company’s RES-Q-VAC line of medical suctioning products is used by emergency medical service providers in addition to a variety of other healthcare providers.
The Company’s website may be visited at www.rmsmedicalproducts.com.
Repro-Med Systems, Inc has had an increase in sales each of the last four years. They finished the year of 2014 with $ 11.2 million in sales reflecting top line growth of 29% from 2013.In each of the previous two years they had a 12% increase in sales. The company has had at least $ 700 thousand of net income in each of the past four years and has no debt. The patented needle sets alone can give the company a huge growth potential. In my opinion, with new products coming on stream, the stock should trade between $ 3 and $ 8 in the next two years.
Immune Therapeutics ( OTCQB: IMUN $ 0.16 )*
Use of Naltrexone as an immune modulator was recognized by Dr. Ian Zagon at the University of Pennsylvania.2,3 The late Dr. Bernard Bihari, a Neurophysician from New York, USA (who passed away on May 16th, 2010) began treating his patients in the late 1980s4,5. Since that time, many doctors throughout the United States prescribe LDN for a number of indications including Multiple Sclerosis (MS), Parkinson’s disease, Crohn’s disease, HIV/AIDS, cancer and other autoimmune and inflammatory diseases. A number of research and clinical trials have been completed and undergone in regards to LDN immunotherapies, with phase I and phase II clinical trials successfully run at a number of universities in the United States and Europe, including Pennsylvania State University Medical School at Hershey; University of Chicago; State University of New York; SUNY Upstate Medical University; London Health Sciences Centre – University Hospital, USA; Alpert Medical School of Brown University; Department of Neurology, San Raffaele Scientific Institute; Division of Rheumatology, St. Louis College of Pharmacy; Department of Internal Medicine, University of Utah; Jondi-Shapoor University of Medical Sciences; Department of Psychiatry & Behavioral Sciences, Duke University Medical Center; and Multiple Sclerosis Center at UCSF6. These efforts were pioneered by leading immunologists Dr. Nicholas Plotnikoff, Dr. Ronald Herberman, Dr. Bernard Bihari, Dr. Angus Dalgleish, Dr. Ian S. Zagon, Dr. Jill Smith, Dr. McLaughlin, Dr. Jacqueline McCandless, and Moshe Rogosnitzky, among others.
Clinical trials in Africa have gone well and results should be released soon.
Oakridge Global Energy Solutions, Inc. (OTCQB: OGES 0.82) *
Oakridge global energy is a developer, designer and manufacturer of proprietary energy storage solutions. The Company is based out of Florida’s “space coast” near Kennedy Space Center. They make premium quality, proprietary batteries, battery systems and lithium ion cells that are built for maximum performance over the traditional lead/acid batteries. OGES, proudly manufacturing in America since 1986, produces batteries for military, consumer, government, and industrial applications. Target market priorities include golf cars and other recreational vehicles, electronics, and devices requiring rechargeable batteries.
Oakridge Energy produces highly reliable, sustainable and dependable batteries for mobile power sources. Based on size and weight, OGES products deliver a higher capacity than comparable competitor batteries. OGES batteries are higher in quality, longer lasting and safer to use. These batteries have undergone and passed rigorous military testing in underwater and aerial vehicles proving to be high/low pressure tolerant. Most significant, OGES batteries are superior performing yet competitive in the market.
Martac Maritime Tactical Systems, Inc., MARTAC recently conducted very successful field trials on the Inter-coastal waterway in Palm Bay, Florida. MARTAC is a Melbourne, Florida based company that designs and produces the Man-Portable Tactical Autonomous Systems (MANTAS) that can reach extreme high speeds and operate anywhere in the world. These vehicles are designed to be used in numerous applications including naval fleet protection, mine warfare, port and harbor security patrol, antipiracy, search and rescue, and many others. shows our high quality and high performance gets us into the military space at a time when made in USA is of critical strategic importance.
Freedom Trucks shows that Oakridge can outperform Tesla and the “Tesla of trucks” – trucks are much more difficult and laborious to power than cars – because of the Oakridge high power high energy
dense batteries, we need only 180 OGES batteries to power the interstate truck that pulls an
80,000 lb trailer, whereas it would take 208,000 Tesla/Panasonic batteries, which is simply not feasible.
Lithium ion batteries, deliver twice the energy of nickel cadmium batteries and are the fastest growing battery segment. Their growth and demand dynamically forward trending. They are lightweight and easy to maintain. They deliver superior electro-chemical output and provide highest energy density for weight, non-metallic and are rechargeable. In 2015, the OGES ProSeries golf car was launched at the annual PGA show, the largest golf show in the world. OGES plans to have a new factory producing its patented thin film solid state lithium ion batteries by 2017. OGES is commencing delivery of small format prismatics to help several smart card customers reach the next generation. Their growth will be serviced by the new factory. These batteries are also in a rapidly growing demand for a variety of p loss 11.36.applications.
Oakridge has recently continued expansion of its ISO certified manufacturing facility and warehouse in Palm Bay, with the support of Florida Governor Rick Scott. The new facility represents a $270 million investment, increasing the size of the manufacturing plant to 70,000 sq-ft to accommodate the growing demand for OGES batteries. Production is expected to increase from 250,000 to 25 million cells per year by 2018. The company’s growth will provide 1000 Americans with new jobs; this is part of the company’s commitment to support domestic employment. Overseas, Oakridge Global Energy Solutions Limited (Hong Kong) is a subsidiary company that operates for sales and service in Asia.
Fundamental Analysis Stocks To Buy with Stops
Using fundamentals the following are stocks to buy and they have done well. Now it is your decision whether to take profits in these uncertain times.
Value oriented stocks were very strong last week. The Alcoa, Sunoco, Church and Dwight, Harley Davidson and Sally Beauty , AT&T and Microsoft were all in good shape.
Church and Dwight is looking solid and should be bought any two days down. Meanwhile we would not argue with taking profits.
Alcoa has made nice profits but has a headwind ahead of earnings on April 11th.
The HDGE goes up when the market goes down. The HDGE was stopped out for a small loss against all the long positions. It has been a major success for those who believe in hedging. The losses are very small on the HDGE considering huge gains on the longs.
We are on the sidelines looking for a buy pattern such as a GANN four-legged bottom at the 10.55 level. Watch volatility for a clue.
| Symbol | Name | Business Description | PE | P/S | MV mln | Price | Buy Limit | Stop Loss
Or sold |
| FFIC | Flushing Financial | Bank Holding company Savings and loans | 13 | 3,5 | 592Mln | 21.67 | 19.50 | 18x |
| SUN | Sunoco | Oil and Gas Refining and marketing | 10 | 0.2 | 2.1B | 32.35 | 29 | 27.50x |
| AA | Alcoa | Aluminum Processing and Technology | N/A | 0.4 | 9.5B | 9.63 | 7.05 | 7.97X |
| SBH | Sally Beauty Holdings | Specialty Retailer and distributor beauty supplies | 16 | 1 | 4B | 32.67 | 27.30 | 26x |
| HOG | Harley Davidson | Motorcycles and related products | 11 | 1.32 | 8B | 51.66 | 39.84 | sell at market 4/4 |
| CHD | Church & Dwight | Consumer Products Sodium bicarbonate Arm and Hammer | 25 | 3 | 10.6B | 93.70 | 79.80
01/26/16 |
Take Profits |
| T | AT&T | Communications | 36 | 1.54 | 211.7B | 39.05 | 34.10 | 36x |
| MSFT | Microsoft | Technology Software, Services, Devices | 17 | 4.7 | 431B | 55.57 | 50.90
|
53.50x |
| VA | Virgin Air | Regional Airlines | 7.2 | 0.9 | 1.5B | 38.90 | 30.30
Suggested buy |
28.50x
Hold for merger |
| ENZ | Enzo Biochem | Life Sciences | NA | 1.35 | 134M | 4.72 | 4.15
Suggested buy |
3.98x |
| BAC | Bank of America | Commercial Bank | 10 | 2.02 | 165.3B | 13.56 | 11.86 | 10.90x |
| HDGE | Advisor Shares | Ranger Bear ETF | 10.63 | Buy 10.96 | 10.68x
Stopped Out |
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Rule 17B Attestations and Disclaimers
Princeton Research, Inc. has approximately 2,581,578 shares of AIVN both free and restricted and represents them for Investor relations. 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 was paid $ 2,500 to write a report on Xinergy. Princeton has signed a contract with CBLI to be paid $ 2500 for July and August for investor relations. Princeton has been engaged by Target Energy. No contract is currently in place. Princeton was paid about 500,000 restricted shares of Leo Motors.
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 0.05 in Australia. Princeton owns 400,000 Australia shares and about 900 U.S. ADR’s.
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 e-mail issue. Princeton may buy or sell its free-trading shares in companies it represents at any time.
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