Where To Invest February 2016 Newsletter
Read the January 25, 2016 Where To Invest February 2016 Newsletter in .pdf format – Click Here
January 25, 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 2015 Newsletter Covering:
Where to Invest February 2016
Best Stocks To Buy February 2016
Stock Market Investing Strategies
Stock Options Trade Alerts
Options Trading Strategies
How To Trade Options
Gain For The Week $ 761
2016 YTD Profits $ 1493
Over 14% Returns
2015 YTD Profits $ 6646
Over 66% Returns
2014 Profits = $ 20,443
Over 204% Returns
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
Visit: PrincetonResearch.com/join.htm
For Free Where To Invest Your Money Now
High Return Investments Trade Alerts
Go To: PrincetonResearch.com/alerts.htm
$10,000 Trading Portfolio
Charles Moskowitz Discussion
We have No Open Long Positions:
Funds in Use = None
Week 3 was dramatic in its ability to turn on a dime and make a good recovery. We had only one position to start the week (a short) with a small commitment to the QQQ 2/99 puts. Those were sold and we bought another small position leaning in the other direction. We bought CL 2/62.50 calls and sold the whole position on Friday at just over a 100% gain. The total for the week was a gain of $761 and bringing our YTD gain to $1,493. Not too bad for a market that put in the worst performance in the history for the start of a new year.
Oil was the star of the recovery along with the ECB promising that they would continue to do “whatever it takes” to help their economy along. As I said last week, we were historically oversold and the sentiment was “absurdly skewed” to the bears and we were in for a tradable rally.
Earnings continue to disappoint. This week some of the “best of the best,” have not made their numbers. Notable were AXP (-12% Friday) equal to over $50 in the DJIA, and SBUX just making earnings but missing on revenues and not great guidance. In fact, the reason we sold the whole position in CL was because we don’t want to deal with their earnings this coming week. NFLX beat and after a $10 rally in the extended hours opened down the next day.
Clearly the problems still exist, and a short term sprint in the oil futures doesn’t chase all of the problems away…. The US$ is still too strong for our exports, the world is still oversupplied with oil, Putin is still a thug and we have the most partisan do nothing leaders in Washington. On the upside they will have to clean up the 2 feet of snow before getting back to what they call work….
On the technical side I see plenty of areas of stiff resistance, so let’s discuss the “measured move.” In mid-August we broke from 2080 for a 5 day move of 200 point S&P500 cascade lower. It took about a month to rally halfway back into the resistance @ 2000. After a 10-day decline we tested the lows (1865) and rallied back through that same resistance for an almost identical move up…..170 down, 80 up, 80 up, a 3 week consolidation and finally 80 up right into the old highs….These may not be exact numerical halves and doubles but they are certainly close enough. After the 2 month consolidation (Nov.-Dec.) we started the year with 270 down and now looking at the overhead resistance around 2000, just about 135 points from the low…..The only issue for me is how long we consolidate between here (1906) and the first real problems of getting through 1950 or so. We are already slightly overbought from our 3 day move from 1812 to 1906. I am therefore going to stay only lightly involved and keep away from the earnings reports………..CAM
Market Strategies $10,000 Trading Account Trade Table
New Trades will be Texted tomorrow
They are likely to be buying TBT options; SHB options and NVAX shares
DATE |
TRADES |
PRICE |
COST |
PROCEEDS |
RESULTS |
01 22 |
Sold 4 CL February 62.50 Calls |
2.90 |
1160 |
584 Gain |
|
01/20 |
Sold 3 QQQ February 99 Puts |
3.09 |
927 |
177 Gain |
|
01/20 |
Bought 4 CL February 62.50 Calls |
1.44 |
576 |
||
01/15 |
Bought 3 QQQ February 99 Puts |
2.50 |
750 |
Remember, these trades are based on your participation in the
TEXTING SERVICE TO RECEIVE ALL UPDATES.
Previous closed out trades not listed here may be seen in previous market letters in the
For Free Where To Invest Your Money Now
High Return Investments Trade Alerts
Go To: PrincetonResearch.com/alerts.htm
MARKET Laboratory – Weekly Changes
Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect.
| Dow
16,093.51 +105.43 +0.66% |
Nasdaq
4591.18 +102.76 |
S&P 500
1906.90 +26.57 +1.41% |
Transportation
6778.54 +89.48 +1.34% |
Russell 2000
1020.66 +12.94 +1.28% |
Nasdaq100
4141.08 -129.70 -3.04% |
| Gold (spot)
1097.20 +5.70 +0.5% |
Silver
1405.7 +16.1 +1.1% |
Crude
32.19 +2.77 +9.4% |
Heating Oil
100.76 +5.91 +6.3% |
Unleaded Gas
1.0212 -0.1065 +6.1% |
Natural Gas
2.139 +0.039 +1.9% |
| VIX
22.34 -4.68 -27.02% |
Put/Call Ratios
S&P 100 78/100’s -45/100’s |
Put/Call Ratios
CBOE Equity 63/100’s -30/100’s
|
Bonds
159-01 -0-03 2.82% +0.01% |
10 Yr. Note
128-12 -024 2.05%+0.02%
|
Copper
200.25 +5.90 +3.0% |
| CRB Inflation
Index 159.93 -8.65 -5.1% |
Barron’s* Confidence
67.3 -3.0 |
S&P100
839.89 -15.69 -1.83% |
5 Yr. Note
119-317 -015 1.48% +0.03%
|
Dollar
99.53 +0.58 +0.6% |
DJ Utilities
589.14 +6.35 +1.09% |
| AAII
Confidence Index
Long Term Average |
Bullish
21.5% +3.6%
38.74% |
Bearish
48.7% +3.2%
30.30% |
Neutral
29.8% -6.8%
30.96% |
M1 Money Supply
+5.74% Jan 11th
|
M-2 Money
Supply +6.61% Jan 11th |
* 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 1877 1922
Dow 15,755 16,263
QQQ 99.94 105.90
Transports 66.78 7387
NASDAQ 4500 4759
The market may have made a short term bottom. The S&P could rally all the way back to 1940-50 where it would be a short once again. Strength in the dollar remains a headwind. Buy the UUP or the Feb 25 Calls. The S&P 500 low at 1808 was a bottom from which the rally was 5% or nearly a 0.382 retracement.
$100,000 Trading Portfolio Stock Positions and Trades
New Stock Trades will be Texted…. Always use a stop loss.
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) |
||
| KRO 800 | 5.13 | 01/04 | |||||
| EYES 1000 | 6.49 | 12/28 | |||||
| APC 100 | 51.21 | 12/10 | |||||
| VA 200 | 36.50 | 12/08 | |||||
| APC 100 | 53.53 | 12/07 | |||||
| LVLT 100 | 50.81 | 11/23 | |||||
| TWTR 200 | 28.51 | 10/28 | |||||
| CUBA 500 | 7.58 | 09/28 | |||||
| MOS 100 | 43.55 | 08/14 | |||||
| CRM 100 | 72.90 | 04/29 | 66.25 | ||||
| NBGGY 600 | 1.40 | 02/17 | |||||
| BAC. Wts 5,000 lots | 0.7411 | 12/26 | |||||
| BSBR 500
500 |
4.84
3.75 |
12/18
|
|||||
| SAN 600 | 8.40 | 12/16 | |||||
| AA 500 | 14.21 | 10/16 | |||||
| NBGGY 300 | 2.95 | 05/19 | |||||
| NBGGY 300 | 4.08 | 8/12 | |||||
| TEXQY* 200 | 6.56 | 7/11 | |||||
| REPR* 5000 | 0.22 | 10/22/12 | |||||
Remember, these trades are based on your participation in the
TEXTING SERVICE TO RECEIVE ALL UPDATES.
Previous closed out trades not listed here may be seen in previous market letters in the
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.
For Free Where To Invest Your Money Now
High Return Investments Trade Alerts
Go To: PrincetonResearch.com/alerts.htm
Market Market Strategies $100,000 Trading Account
New Options Trades:
Will be Texted Monday early
There was two closed option positions:
The February 99 QQQ Puts gained $ 354.
The Colgate Palmolive CL Calls made $ 354.
There were no stock trades.
The QQQ was a trend related trade while the Colgate was a “value trade” buy at depressed levels. Participants who bought the common stock also got the dividend.
This increased gains for 2016 to $ 3,135.
The options expire on the third Friday of each Month unless otherwise posted.
The Stock table has the following 20 positions:
AA, APC(2), BAC.B.WS, BSBR( 2 ), CRM, CUBA, EYES, KRO, LVLT, MOS,
NBGGY (3), REPR, SAN, TEXQY, TWTR, VA
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 and are using a total of
$ 80,093 for the 20 open stock positions. There are no long option positions leaving
$ 19,907 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, JP Morgan, North American Tankers, Santander, their Brazil affiliate BSBR and Blue Capital Reinsurance which was sold for a profit and many others. We will begin adding them next year.
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) |
| CL Feb 62.50
8 lots |
Calls
1.44 |
01/20/15 | 2.90 | 01/22/2015 | $ 1,168 |
| QQQ Feb 99
6 lots |
Puts
2.50 |
01/15/15 | 3.09 | 01/20/2015 | $ 354 |
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.
For Free Where To Invest Your Money Now
High Return Investments Trade Alerts
Go To: PrincetonResearch.com/alerts.htm
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 | DR Horton DHI ( 0.41 vs 0.39 ) Halliburton HAL ( 0.24 vs 1.19 ) Kimberly Clark KMB ( 1.43 vs 1.35 ) Mc Donalds MCD ( 1.23 vs 1.22 )
Ashland ASH ( 1.39 vs 1.46 ) Crane CR ( 1.11 vs 1.13 ) Brown and Brown BRO ( 0.37 vs 0.36 ) Packaging Corp PKG ( 1.03 vs 1.16 ) Sanmina SANM ( 0.58 vs 0.61 ) Steel Dynamics STLD ( 0.07 vs 0.40 ) Swift Trans SWFT ( 0.47 vs 0.55 ) |
| TUESDAY | 3M MMM ( 1.62 vs 1.81 ) AK Steel AKS ( 0.06 vs 0.14 ) Allegheny Tech ATI ( -0.38 vs 0.18 ) Coach COH ( 0.66 vs 0.72 ) Danaher DHR ( 1.26 vs 1.04 ) Dover DOV ( 0.75 vs 1.01 ) DuPont DD ( 0.27 vs 0.71 ) Freeport-McMoRan FCX ( -.16 vs 0.25 )
Johnson & Johnson JNJ ( 1.42 vs 1.27 ) Lockheed LMT ( 2.91 vs 3.01 ) Parker Hannifin PH ( 1.18 vs 1.84 )Peabody Energy BTU ( -8.44 vs -1.21 ) Phillips PHG ( 0.56 vs 0.15 ) Polaris PII ( 1.64 vs 1.98 ) Procter and Gamble PG ( 0.98 vs 1.06 ) 09:00 hrs Case-Shiller 20-city Index Nov ( 5.8% vs 5.5% ) 09:00 hrs FHFA Housing Price Index Nov ( NA vs +0.5% ) 10:00 hrs Consumer Confidence Jan ( 96.8 vs 96.5 ) Apple AAPL ( 3.23 vs 3.06 ) AT&T ( 0.63 vs 0.55 ) Capital One COF ( 1.61 vs 1.73 ) Stryker SYK ( 1.55 vs 1.44 ) U.S. Steel X( -0.86 vs 1.82 ) VMware VMW 1.25 v 1.08 |
| WEDNESDAY | Anthem ANTM ( 1.17 vs 1.73 ) Boeing BA ( 2.12 vs 2.31 )Biogen BIIB 4.05 vs 4.09 Ericsson ERIC ( 2.79 vs 1.71 ) Fiat Chrysler FCAU ( 0.41 vs 0.35 ) General Dynamics GD ( 2.38 vs 2.19 ) Hess HES -1.46 vs 0.18 Illinois Tool ITW 1.21 vs 1.18
Novartis NVS 1.21 Progressive PGR (0.46 vs 0.63) Rockwell ROK (1.33 vs 1.64) State Street STT ( 1.18 vs 1.37 ) St Jude STJ 1.01 vs 1.03 Textron TXT 0.82 vs 0.76 United Micro UMC ( 0.12 vs 0.36 ) United Tech UTX ( 1.53 vs 1.62 ) 07:00 hrs MBA Mortgage Index 01/16 ( NA vs +9.0% ) 10:30 hrs Crude Inventories 01/23 ( NA vs +3.979 Mln Bbls ) 14:00 hrs FOMC Rate Decision Jan ( 0.5% vs 0.5% ) Ameriprise Financial AMP ( 2.35 vs 2.30 ) eBay EBAY ( 0.50 vs 0.90 ) Celestica CLS ( 0.30 vs 0.23 ) Discover DFS ( 1.30 vs 1.19 ) Facebook FB ( 0.58 vs 0.54 ) McKesson MCK ( 3.14 vs 2.89 ) Texas Instruments TXN ( 0.74 vs 0.69 ) Texas Instruments TXN ( 0.74 vs 0.69 ) United Rentals URI ( 2.34 vs 2.19 ) |
| THURSDAY | Abbott Labs ABT ( 0.61 vs 0.71 ) Alibaba BABA ( 0.90 vs 0.81 ) Under Armour UA
( 0.47 vs 0.40 ) AutoNation AN 1.06 vs 1.02 Baker Hughes BHI ( -0.10 vs 1.44 ) Blackstone BX ( 0.56 vs 1.25 ) Bristol Myers BMY 0.28 vs 0.46 Caterpillar CAT 0.69 vs 1.35 Celgene CELG 1.21 vs 1.01 Eli Lilly LLY .78 vs .75 Ford F ( 0.51 vs 0.26 ) Jetblue JBLU ( 0.51 vs0.26) Northrop Grumman NOC 2.02 vs 2.48 Nucor NUE 0.25 vs 0.68 Quest DGX 1.19 vs 1.05 Raytheon RTN 1.81 vs 1.86 Pulte .50 vs .43 Valero VLO 1.39 vs 1.83 Thermo Fisher TMO 2.11 vs 1.99 SHW ( 1.87 vs 1.37 ) 08:30 hrs Initial Claims 01/23 ( 285K vs 293K ) 08:30 hrs Continuing Claims 01/23 ( 2225K vs 2208K ) 08:30 hrs Durable Goods Orders Dec ( -0.5% vs 0.0% ) D.G. Ex-Transportation ( -0.1% vs 0.0% ) 10:00 hrs Pending Home Sales Dec ( 0.8% vs -0.9 %) 10:30 hrs Natural Gas Inventories 01/23 ( NA vs -178bcf ) Amazon AMZN ( 1.57 vs 0.45 ) Amgen AMGN 2.29 vs 2.16 Broadcom BRCM ( 0.71 vs 0.90 ) Microsoft MSFT ( 0.70 vs 0.71 ) Hanesbrands HBI 0.46 vs 1.46 Western Digital WDC ( 1.55 vs 2.26 ) Visa V ( 0.68 vs 2.53 ) Reinsurance group RGA 2.57 vs 2.99 Skyworks SWKS ( 1.58 vs 1.26 ) Landstar Systems LSTR ( 0.87 vs 0.86 ) |
| FRIDAY | AbbVie ABBV ( 1.13 vs 0.89 ) American Airlines AAL ( 1.97 vs 1.52 ) Colgate-Palmolive CL ( 0.72 vs 0.76 ) Chevron CVX 0.72 vs 0.76 ) Honeywell HON ( 1.59 vs 1.43 ) Master Card MA 0.69; Sony SNE 73.69 vs 0.63 Newell NWL 0.56 vs 0.49 ) Phillips 66 PSX 1.36 vs 1.63 TYCO TYC 0.41 vs 0.49 Whirlpool WHR 3.88 vs 3.52
08:30 hrs GDP-Adv 4th Qtr ( 0.9% vs 2.0% ) GDP Deflator 4th Qtr ( 0.9% vs 1.3% ) 08:30 hrs Employment Cost Index 4th Qtr ( 0.6% vs 0.6% ) 09:45 hrs Chicago PMI Jan ( 45.0 vs 42.9 ) 10:00 hrs Michigan Sentiment Jan ( 93.2 vs 92.6 )
|
Market Strategies Fundamentals
Stocks rebounded last week led by a reversal in the Nasdaq, which rallied 278 points or 6.4% from a low of 4313.39 to close up on the week at 4591, up 102.76 points or 2.29%. The S&P 500 had fallen to 1812 before climbing 94.61 points or 5.2% off the low last Wednesday to close with gains of 26.57 points or 1.41%. The Dow Jones Transportation Index rose 89.48 or 1.34% to be third best performing index. The Tranny had fallen to 6403, levels not seen since October of 2013. The Russell had fallen to 958.48 challenging July 2013 prices. The Dow, having been battered by its worst performing member American Express ( AXP: $ 55.06 ) – $7.58 or -12%, was the lowest gainer of all the beleaguered indexes up just 105 points to 16,093.51 or just 0.66%. American Express is 21st of the Dow 30 comprising 2.34% of the index.
The surge in oil prices turned the markets around just as they had been a depressant. Crude rallied 9.4%, up $ 2.77/bbl to $ 32.19. The dollar gained 0.58 or 0.6% to 99.53. The greenback now appears poised to approach the December highs around the 100.50 level. Big violent rallies are happening often in bear markets, different from more lethargic rallies in bull markets.
Market participants were surprised Wednesday morning when the People’s Bank of China failed to unveil a rate cut, a reduction in the required reserve ratio, or any other stimulus measure in the wake of the ‘ lackluster’ GDP report of +6.8%. China’s 4th Qtr GDP rose 1.6% ( expected 1.7% ) quarter-over-quarter. Separately, December Industrial production rose 5.9% year-over-year ( consensus 6.0% ) and previous + 6.2%. Their December retail Sales rose 11.1% year-over-year ( consensus 11.3% ). December Fixed Asset Investment rose 10.0% vs 10.2% expected. While these numbers are uninspiring to most, they remain a respectable growth story. Both Apple and Starbucks are prospering in their economy.
The U.S. Treasury complex lost ground in a curve-flattening trade Friday as the boost in crude prices helped the shorter term yields to gain relative to both the 10-yr and long bond.
Value Stocks Offer Opportunity
In a recent long/short portfolio strategy article, there is a comparative performance of growth and value stocks by examining the iShares Russell 1000 Growth ETF (NYSEARCA:IWF in blue) relative to the iShares Russell 1000 Value ETF (NYSEARCA:IWD in black ). Over the past one, three, and five-year time frames, there has been a clear trend of outperformance by growth stocks over value stocks.
There are many ways to play a reversion to the mean. An investor could simply buy value stocks, or could initiate a pair trade with the aforementioned IWF and IWD, or a more comprehensive long/short strategy could be employed. Whatever method is utilized, finding a way to take advantage of the valuation gap between growth and value stocks should be the goal.
Conclusion – Sell Rallies & Buy Value
The market sell-off has been broad but has neglected to hit the “ faith based stocks” over the past month. The sheer size of the decline guarantees there will be plenty of countertrend rallies. For investors that own the broader market, this is an opportunity to improve the quality of portfolios. For value investors, who have underperformed since 2011, the opportunity set is different, and dips should be used to accumulate out-of-favor stocks. Earnings estimates for 2015 and 2016 are still declining as shown in the following charts but at a slower pace.
Put simply, being a value investor has been costly to relative and absolute performance over the past five years. Building on this, larger capitalization stocks, particularly mega-capitalization growth stocks, have been in vogue, while large capitalization value stocks have been out-of-favor. In the financial markets, the pendulum will often swing to extremes, and we appear to be at an inflection point where value equities could start to outperform growth equities, as key momentum stocks, including Chipotle (NYSE:CMG) and Netflix (NASDAQ:NFLX) begin to become more sanguine and no longer the leaders.
The Telecommunication stocks were the best Dow Group performer up 4.19%. AT&T ( T: $ 35.14 ) gained $ 1.15 or + 3.4% and Verizon ( VZ: $ 47.04 )+ $ 2.61 or + 5.9% were an example. Consumer Goods stocks like Colgate Palmolive ( CL: $ 64.61 ) + $ 1.26 or + 2%.Try buying Home Depot ( HD: $ 122.76 ) +$ 2.53 or +2%; Procter and Gamble ( PG: $ 77.36 ) + 2.38 or +3.2% longs also got a hefty dividend of $ 0.66. Look at Church and Dwight ( CHD: $ $81.07 ) + $ 2.04 or 2.6%.
These value stocks should be bought when the markets have huge sell-offs like the past Wednesday. Some have high valuations so patience is a necessity to get a low enough price for a good value.
Technology stocks added 2.36% to be the second best gainer. Apple ( AAPL: $ 101.42 ) + $ 4.29 a gain of 4.4% the week before earnings next Tuesday after the close. Please go to page 6 for more detail on prominent earnings releases. Consumer Services gained 2.21% followed by Oil and Gas and Consumer Goods, both up 2%. Health Care gained 1.28%; Utilities added 1.06%; Basic Materials 0.58%; Industrials 0.47%. The only loser was Financials because of the horrible performance by American Express.
Market Strategies Economic Data
Existing Home Sales surged 14.7% month-over-month in December to a seasonally adjusted rate of 5.46 million units from 4.76 million in November. This was the largest monthly increase ever recorded. December closed out the strongest year of Existing Home Sales since the 2006 number of 6.48 million.
Housing starts overall decreased 2.5% in December to a seasonally adjusted annual rate of 1.149 million (Briefing.com consensus 1.197 mln), which left them up 6.4% year-over-year. Building permits dipped to 1.232 million (Briefing.com consensus 1.200 mln) from a downwardly revised 1.282 million (from 1.289 mln) in November. The dip in housing starts was the result of a downturn in starts for both single-family units (-3.3% month-over-month) and multi-family units (-1.0% month-over-month).
The drop in new single-family starts occurred across all regions, which made it all the more disappointing: Northeast (-4.4%), Midwest (-4.6%), South (-1.4%), and West (-6.2%).
The dip in building permits was much smaller than expected thanks to a 1.8% pickup in permits for single-family units.
Another bright note out of the report is that the number of units under construction increased to 981,000 in December from 965,000 in November. This will be a positive input insomuch as it relates to fourth quarter GDP computations.
| Category | DEC | NOV | OCT | SEP | AUG |
| Starts | 1149K | 1179K | 1071K | 1207K | 1116K |
| 1 Unit | 768K | 794K | 715K | 741K | 734K |
| Multi Units | 381K | 385K | 356K | 466K | 382K |
| Permits | 1232K | 1282K | 1161K | 1105K | 1161K |
Leading Economic Indicators
The Conference Board’s Leading Economic Index declined 0.2% in December following an upwardly revised 0.5% increase (from 0.4%) for November. There are 10 Leading Indicators which are illustrated on the table below.
The -0.2% was slightly worse than the Briefing.com consensus estimate, which called for a 0.1% decline. The December downturn was paced by negative contributions from the ISM new orders index (-0.1) and building permits (-0.1), as well as average weekly initial claims (-0.07) and stock prices (-0.05). Those areas offset a 0.22 percentage point contribution from the interest rate spread.
The Coincident Economic Index increased 0.1% in December. There are four categories: (1) Number of employees on Non-Ag Payrolls (2 ) Index of Industrial production ( 3 ) Manufacturing and Trade levels plus ( 4 ) personal income.
The Lagging Economic Index increased 0.2%. There are 7 and gaining on the Coincident Indicators is a bearish sign. ( 1 ) Average Duration of Unemployment ( 2 ) Inventories-to-Sales Ratio ( 3 ) Change in Labor Cost per Unit of Output ( 4 ) Average Prime Rate ( 5) Commercial and Industrial Loans Outstanding ( 6 ) Ratio of Consumer installment Credit to Personal Income and last ( 7 ) Consumer Price Index. This component comes from the Bureau of Labor Statistics and represents the inflation in consumer prices for service products. Price increases in consumer-related service products tend to occur in the early months of a recession, and subside at the start of a recovery.
The low prices in basic commodities such as steel, copper and oil do not usually occur at the beginning of a recession.
Notably, it was said in the latest release that the Leading Economic Index increased 0.7% in the second half of 2015, which was much slower than the 2.0% growth seen in the first half of the year. Also, it was acknowledged that the strengths among the leading indicators have become less widespread and are now only balanced with the weaknesses.
| Category | DEC | NOV | OCT | SEP | AUG |
| Total Index | -0.2% | 0.5% | 0.5% | -0.1% | 0.0% |
| Manufacturing Workweek | 0.00% | 0.00% | -0.07% | 0.00% | 0.00% |
| Initial Claims | -0.07% | -0.08% | 0.06% | 0.10% | -0.09% |
| Cons. Gds Orders | 0.01% | 0.05% | -0.06% | 0.09% | 0.02% |
| ISM New Orders | -0.13% | -0.13% | -0.05% | -0.11% | -0.08% |
| Nondef. Cap Gds Orders, exc. Aircraft | 0.01% | -0.02% | 0.03% | 0.02% | -0.06% |
| Building Permits | -0.12% | 0.31% | 0.15% | -0.15% | 0.08% |
| Stock Prices | -0.05% | 0.11% | 0.16% | -0.19% | -0.10% |
| Leading Credit Index | 0.05% | 0.08% | 0.08% | 0.03% | 0.02% |
| Interest Rate Spread | 0.22% | 0.24% | 0.22% | 0.23% | 0.23% |
| Consumer Expectations | -0.01% | 0.00% | 0.01% | 0.01% | 0.04% |
Market Strategies Cycles
With the market poised for worst January ever, the next eight days are crucial. If we can turn positive for the January Barometer that would be a coup and be a good sign that further declines this year will be mitigated.
Our flagship indicator, the January Barometer created by Yale Hirsch in 1972, simply states that as the S&P goes in January so goes the year. It came into effect in 1934 after the Twentieth Amendment moved the date that new Congresses convene to the first week of January and Presidential inaugurations to January 20.
The long-term record has been stupendous, an 87.9% accuracy rate, with only eight major errors in 66 years. Major errors occurred in the secular bear market years of 1966, 1968, 1982, 2001, 2003, 2009, 2010 and 2014. Including the eight flat years (less than +/- 5%) yields a 75.8 % accuracy ratio.
As the opening of the New Year, January is host to many important events, indicators and recurring market patterns. U.S. Presidents are inaugurated and present State of the Union Addresses. New Congresses convene. Financial analysts release annual forecasts. Residents of earth return to work and school en mass after holiday celebrations. On January’s second trading day, the results of the official Santa Claus Rally are known and on the fifth trading day the First Five Days early warning system sounds off, but it is the whole-month gain or loss of the S&P 500 that triggers our January Barometer.
Some refuse to accept the fact the January Barometer exists. Passage of the Twentieth Amendment in 1933 created the January Barometer. Since then it has essentially been “As January goes, so goes the year.” January’s direction has correctly forecasted the major trend for the market in many of the subsequent years. Prior to 1934, newly elected Senators and Representatives did not take office until December of the following year, 13 months later (except when new Presidents were inaugurated). Defeated Congressmen stayed in Congress for all of the following session. They were known as “lame ducks.”
Since 1934, Congress convenes in the first week of January and includes those members newly elected the previous November. Inauguration Day was also moved up from March 4 to January 20. January’s prognostic power is attributed to the host of important events transpiring during the month: new Congresses convene; the President gives the State of the Union message, presents the annual budget and sets national goals and priorities.
These events clearly affect our economy and Wall Street and much of the world. Add to that January’s increased cash inflows, portfolio adjustments and market strategizing and it becomes apparent how prophetic January can be. Switch these events to any other month and chances are the January Barometer would become a memory. In light of all this debate and skepticism we have compared the January Barometer results along with the full year results, the following eleven months results, and the subsequent twelve months results to all other “Monthly Barometers” using the Dow Jones Industrials, the S&P 500 and the NASDAQ Composite.
Here’s what we found going back to 1938. There were only 9 major errors. In addition to the eight major errors detailed on page 16 of the Stock Trader’s Almanac 2016: Including these 9 major errors, the accuracy ratio is 88.5% for the 78-year period. Including the 9 flat year errors (less than +/– 5%) the ratio is 76.9% — still effective.
Undervalued Small Cap Stocks
Lower Priced stocks that look to be a buy:
Repro-Med Systems, Inc ( OTCQX: REPR 0.41 )*
Repro Med Systems, Inc. dba RMS Medical Products (OTCQX: REPR) 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 28, 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 FreedomEdgeTM Syringe Infusion Pumps, RMS Precision Flow Rate TubingTM and RMS HIgH-FloTM 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 $ 0.20 )*
Appears ready to go; up 20% on the week.
This biotechnology company is seeking to commercialize patented therapies in emerging nations that combat chronic, life-threatening diseases by rebalancing the immune system. The trials in Africa are going well.
The value 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.
Oakridge Global Energy Solutions, Inc. ( OTCQB: OGES $ 0.57 ) *
Oakridge Global Energy Solutions Inc., is a publicly traded company, trading symbol: OGES on the OTCQB with a market capitalization of approximately USD $ 250,000,000, whose primary business is the development, manufacturing and marketing of energy storage products.
Oakridge Global Energy Solutions, Inc. (OGES) is an integrated energy storage solutions company that uses state-of-the-art technology in the design, development and manufacture of high-quality cells, batteries, and energy storage systems.
The company’s innovative ‘Made in the USA’ product line includes multiple lithium-ion chemistries, technologies and form factors that are optimized to address four high-demand target markets – motive applications, such as electric and hybrid electric fleet vehicles (especially golf cars and local area electric vehicles), stationary living space power for domestic, commercial and grid applications (homes, businesses, RVs, boats, and uninterruptable power supplies), remote control and portable devices (including medical devices), and also starter motor batteries for motorcycles, jet skis, snow mobiles and boats, as well as cars and trucks.
All the company’s batteries and power systems also have major application to the military, aerospace, marine, medical and telecom sectors generally.
Fundamental Analysis Stocks To Buy with Stops
Dycom we were and still are looking for a place to buy.
We bought once and were stopped out. LUV and VA were stopped out with very nice gains.
We want to be a buyer of both once again.
Both Intel and Kroger were excellent positions. We were stopped out of both the Intel and Kroger with profits. We would buy Kroger again.
Continue to buy Bank of America on dips.
We were finally able to get filled on theoretical orders to buy Microsoft .
Enzo is on our radar just waiting for a much better chart pattern,
Both Ericsson and Church and Dwight are worth a look at our prices.
The HDGE has been a major success for those who believe in hedging.
Call 702 650 3000 for questions.
| Symbol | Name | Business Description | PE | P/S | MV mln | Price | Buy Limit | Stop Loss
Or sold |
| ERIC | Ericsson | Communications Technology | 24 | 1 | 30.3B | 9.34 | 9.15 | 8.48x |
| CHD | Church & Dwight | Consumer Products Sodium bicarbonate Arm and Hammer | 25 | 3 | 10.6B | 81.07 | 79.80 | 77x |
| T | AT&T | Communications | 36 | 1.54 | 211.7B | 35.14 | 34.10 | 32x |
| DY | Dycom Industries | Internet Cable Provider | 28 | 1.10 | 2.5B | 64.58 | 64
Price to buy |
rebuy |
| MSFT | Microsoft | Technology Software, Services, Devices | 17 | 4.7 | 431B | 52.29 | 50.90
|
rebuy |
| KR | Kroger | Food Mfg and Processing | 18 | 0.33 | 37B | 37.12 | 36.76
11/16 |
39.60x |
| VA | Virgin Air | Regional Airlines | 7.2 | 1.0 | 1.5B | 32.87 | 32
Suggested buy |
30.50x |
| LUV | Southwest Air | Regional Airlines | 16 | 1.15 | 22.6B | 39 | 38.20
|
36x
|
| ENZ | Enzo Biochem | Life Sciences | NA | 1.35 | 134M | 4.63 | 4.15 | 3.78x |
| BAC | Bank of America | Commercial Bank | 10 | 2.02 | 165.3B | 13.56 | 13.56 | 11.90x |
| HDGE | Advisor Shares | Ranger Bear ETF | 11.93 | Buy 11.28 | 11.00x |
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
Visit: PrincetonResearch.com/join.htm
For Free Where To Invest Your Money Now
High Return Investments Trade Alerts
Go To: PrincetonResearch.com/alerts.htm
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.
CONTACT
Please Direct All Inquiries To:
Mike King
(702) 650-3000
Charles Moskowitz
(781) 826-8882
Princeton Research
3887 Pacific Street,
Las Vegas, Nevada 89121