Where To Invest in July 2016
June 27, 2016 — Where To Invest in July 2016
Market Investing Strategies Newsletter – Here
June 27, 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 in July 2016
Best Stocks To Buy in July 2016
Stock Market Investing Strategies
Stock Options Trade Alerts
How To Trade Options
Proven Profits Trading Success
Results From Our Recent Trade Alerts:
50% Profits on TBT Calls in 8 Days
86% Profits on AA Calls in 6 Days
66% Profits on SPY Puts in 2 Days
47% Profits on SLV Calls in 3 Days
18% Loss on QQQ Calls in 5 Days
58% Profits on SUN Calls in 3 Days
85% Profits on SPY Puts in 3 Days
82% Profits on SLV Calls in 2 Days
51% Profits on AA Calls in 7 Days
157% Profits on NEM Calls in 4 Days
107% Profits on SIG Puts in 14 Days
28% Profits on NEM Calls in 13 Days
105% Profits on SIG Puts in 14 Days
97% Profits on SJM Puts in 7 Days
207% Profits on SIG Puts in 6 Days
70% Profits on GLD Calls in 1 Day
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$10,000 Trading Portfolio
Charles Moskowitz Discussion
There are 2 open positions:
Long 6 HL Sept 3.50 Calls
Long 6 AA July 9 Calls
Funds in Use = $ 1026
Week 25 was exciting, to say the least. Since I was concerned about the Brexit vote, I got out of almost all positions (a day early as usual) and kept only the metals related positions in SLV and HL calls and we had a small “balance” position in the SPY puts.
The strategy worked well, and I sold the SPYs shortly after the open for a 50% profit and the SLV calls for about the same. We went into the weekend with only the HL and AA calls. We actually replaced the AA calls @ $ .86 after selling them on Wednesday @ $1.08 and $1.26.
I sent out a midweek note that handicapped the situation and a Silver chart but I still think a reminder is appropriate; the vote was a referendum and as such non-binding. So, while the public has spoken it is now up to the British Parliament to take up the issue. So, why all the falling markets ? The answer is simple, just look at the currencies. While most people judge what’s going on via the stock markets, the Forex (currency) markets are dramatically more important. So, as the currencies go the market follows. Imagine the loss of buying power if you get paid in British Pounds while they decline in value from over $1.50 to under $1.40. The size of the FOREX markets dwarf the stock markets.
While the current EU countries may say that they will not trade with Great Britain it is still a powerhouse country and with a de facto devaluation their products just got cheaper; and as we all know, the opportunity to buy cheaper will always win out over ideologies. It may take a little while, but human nature will always win out.
There are no new trades tonight since I want to see a little more stability to define the risks…..CAM
Market Strategies $10,000 Trading Account Trade Table
| DATE | TRADES | PRICE | COST | PROCEEDS | RESULTS |
| 06/24 | Sold 2 SPY June 30th 205 Puts | 3.34 | 668 | 266 Gain | |
| 06/24 | Bought 6 AA July 9 Calls | 0.86 | 516 | ||
| 06/24 | Sold 6 SLV July 16.50 Calls | 0.67 | 402 | 118 Gain | |
| 06/22 | Bought 2 SPY June 30th 205 Puts | 2.01 | 402 | ||
| 06/22 | Sold 3 AA July 9 Calls
( later same day ) |
1.08 | 324 | 135 Gain | |
| 06/22 | Sold 3 AA July 9 Calls
( 100% Profit Rule ) |
1.26 | 378 | 189 Gain | |
| 06/22 | Sold 10 TBT July 35 Calls | 0.77 | 770 | 260 Gain | |
| 06/21 | Bought 6 SLV July 16.50 Calls | 0.44 | 264 | ||
| 06/21 | Sold 4 PYPL July 37 Calls
( 50% Loss Rule ) |
0.55 | 220 | 220 Loss | |
| 06/21 | Sold 6 QQQ July 109 Calls | 1.01 | 606 | 138 Loss | |
| 06/16 | Bought 6 QQQ July 109 Calls | 1.24 | 744 | ||
| 06/16 | Bought 6 AA July 9 Calls | 0.63 | 378 | ||
| 06/14 | Bought 10 TBT July 35 Calls | 0.51 | 510 | ||
| 06/08 | Bought 4 PYPL July 38 Calls | 1.10 | 440 | ||
| 05/03 | Bought 6 HL September 3.50 Calls | 0.85 | 510 |
3rd Week expiration when the month is listed without a date
Previous closed out trades not listed here may be seen in previous market letters in the
VIP Subscribers Members Area.
Remember, these trades are based on your participation in the
Subscriber Members Only
TEXTING SERVICE TO RECEIVE ALL UPDATES.
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New Trades Will Be TEXTED To MEMBERS
MARKET Laboratory – Weekly Changes
Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect.
| Dow
17,400.75 -274.41 -1.55% |
Nasdaq
4707.98 -92.36 |
S&P 500
2037.41 -33.81 -1.63% |
Transportation
7320.55 -269.29 -3.55% |
Russell 2000
1127.54 -17.16 -1.50 % |
Nasdaq100
4285.70 -88.68 -2.03% |
| Gold (spot)
1320.00 +27.50 +2.1% |
Silver
1778.9 +37.8 +2.2% |
Crude
47.64 -0.34 -0.7% |
Heating Oil
146.85 -2.05 -1.4% |
Unleaded Gas
1.5338 +0.0136 +0.9% |
Natural Gas
2.662 +0.039 +1.5% |
| VIX
25.76 +6.35 +32.7% |
Put/Call Ratios
S&P 100 130/100’s -20/100’s |
Put/Call Ratios
CBOE Equity 74/100’s +2/100’s
|
Bonds
169-31 +26 2.42% -0.01% |
10 Yr. Note
132-12 +166 1.57%-0.04%
|
Copper
211.05 +5.95 +2.9% |
| CRB Inflation
Index 188.69. -3.69 -1.9% |
Barron’s* Confidence
67.6 +3.3 |
S&P100
900.51 -14.44 -1.58% |
5 Yr. Note
121-244+084 1.08% -0.04%
|
Dollar
95.54 +1.40 +1.5% |
DJ Utilities
685.71 -0.87 -0.13% |
| AAII
Confidence Index
Long Term Average |
Bullish
22.0% -3.3%
38.74% |
Bearish
35.2% -2.3%
30.30% |
Neutral
42.8% +5.6%
30.96% |
M! Money
Supply +8.29% June 13th
|
M2 Money
Supply +6.97% June 13th
|
* 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 2010 2076
Dow 17,160 17,720
QQQ 102.10 106.60
Transports 7115 7635
NASDAQ 4540 49.40
$100,000 Trading Portfolio Stock Positions and Trades
Each stock is allocated a theoretical $ 5,000 share of the portfolio unless otherwise indicated.
|
Symbol
|
Purchase Price | Purchase Date | Stop/Loss | Price/Date Sold | Profit/
(Loss) |
||
| PYPL 150 | 37.65 | 06/08 | |||||
| SCO 20 | 89.28 | 05/13 | |||||
| HL 1000 | 3.95 | 05/03 | |||||
| MOS 200 | 27.53 | 05/02 | |||||
| NVAX 500 | 5.38 | 04/18 | |||||
| SCO 20 | 109.88 | 04/12 | |||||
| EYES 500 | 5.04 | 04/04 | |||||
| SUN 300 | 29.50 | 02/23 | |||||
| EYES 1000 | 6.49 | 12/28 | |||||
| TWTR 200 | 28.51 | 10/28 | |||||
| MOS 100 | 43.55 | 08/14 | |||||
| NBGGY 600 | 1.40 | 02/17 | |||||
| SAN 600 | 8.40 | 12/16 | |||||
| AA 500 | 14.21 | 10/16 | |||||
| TEXQY* 200 | 6.56 | 7/11 | |||||
| REPR* 5000 | 0.22 | 10/22/12 | |||||
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 VIP Subscribers 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.
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Market Strategies $100,000 Trading Account
There were seven closed option positions all five profitable and two negative:
The two losers were the 12 QQQ July 9 Calls bought at $ 1.24 and sold at $ 1.01 for a loss of $ 276 and the 8 PYPL Calls bought June 8th and sold on the 24th on the 50% Loss Rule losing $ 440.
There were five winning trades:
The Alcoa Calls half sold on the 100% Profit Rule making $ 378 and the other 6 calls sold a few minutes later gaining $ 276.
The 20 TBT Calls bought June 14th and sold June 22nd made $ 520. The 12 SLV July 16.50 Calls bought June 21st and sold on the 24th gained $ 276 while the 4 SPY 205 Puts bought on the 22nd and sold the 24th made $ 532.
The net gain for the options trading was $ 1260.
For the entire year on closed out trades, our hypothetical profits increased to $16,440.
The options expire on the third Friday of each Month unless otherwise posted.
The Stock table has the following 16 positions:
AA, EYES(2), HL, MOS(2), NBGGY, NVAX, PYPL, REPR,
SAN, SCO(2), SUN, TEXQY and TWTR
The options call for a $ 2,500 investment unless otherwise stated; each stock position requires $5,000 unless otherwise mentioned specifically.
The money management is based on a hypothetical $ 100,000.
We are using a total of $65,092 for the 16 open long stock positions.
The Open Option Positions require $ 2,056.
This increases the margin requirement to $ 67,148
leaving $ 32,852 in cash.
Open positon losses increased by $ 525 as a result of the Santander position.
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, Mosaic, North American Tankers, STNG, Santander, which pays over 5%, 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) |
| AA July 9 12 lots | Calls
0.86 |
06/24/16 | |||
| SPY June 30th 205
4 lots |
Puts
2.01 |
06/22/16 | 3.34 | 06/24/2016 | $ 532 |
| SLV July 16.50
12 lots |
Calls
0.44 |
06/21/16 | 0.67 | 06/24/2016 | $ 276 |
| QQQ July 109
12 lots |
Calls
1.24 |
06/16/16 | 1.01 | 06/21/2016 | ( $ 276 ) |
| AA July 9
12 lots |
Calls
0.63 |
06/16/16 | 1.26
( Sold Half on 100% profit Rule )
1.08 Sold Balance |
06/22/2016
06/22/2016 |
$ 378
$ 276 |
| TBT July 35
20 lots |
Calls
0.51 |
06/14/16 | 0.77 | 06/22/2016 | $ 520 |
| PYPL July 38
8 lots |
Calls
1.10 |
06/08/16 | 0.55
( 50% Loss Rule ) |
06/21/2016 | ( $ 440 ) |
| HL Sept 3.50
12 lots |
Calls
0.85 |
05/03/16 |
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 VIP Subscribers Members Area.
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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 |
08:30 hrs International Trade in Goods ( -$59.2B vs -$57.5B ) Federal Reserve Chair Janet Yellen joins European Central Bank President Mario Draghi in Sintra, Portugal at a European forum on central banking. Treasury Secretary Jacob Lew speaks at the Bretton Woods Committee annual meeting. |
| TUESDAY | Barnes & Noble Education BNED -0.16 Carnival CCL ( 0.38 vs 0.25 ) His IHS 1.48 vs 1.50
08:30 hrs GDP-Third Estimate 1st Qtr ( + 1/0% vs 0.8% ) Implicit Price Deflator-Third Estimate ( + 0.6% vs +0.6% ) 09:00 hrs Case-Shiller 20-city Index April ( + 5.5% vs + 5.4% ) 10:00 hrs Consumer Confidences June ( 93.1 vs 92.6 ) Nike NKE ( 0.48 vs 0.98 ) A Schulman SHLM ( 0.78 vs 0.72 ) ltron ITRI 0.34 vs 0.20 AeroVironment AVAV ( -0.10 vs 0.31 ) Westport Fuel Systems WPRT ( -0.23 vs -0.27 ) |
| WEDNESDAY | General Mills GIS ( 0.60 vs 0.75 ) Monsanto MON ( 2.41 vs 2.39 ) Acuity Brands AYI
( 2.03 vs 1.37 ) UniFirst UNF ( 1.35 vs 1.61 ) Worthington WOR ( 0.64 vs 0.52 ) Omnova Solutions OMN ( 0.14 vs 0.11 ) Eros International EROS ( 0.04 vs 0.30 ) The federal reserve issues stress test results that will determine whether banks can boost payouts and share buybacks. President Barack Obama meets his Mexican and Canadian counterparts 07:00 hrs MBA Mortgage Index 06/25 ( NA vs + 2.9% ) 08:30 hrs Personal income May ( 0.3% vs 0.4% ) Personal Spending May ( 0.3% vs 1.0% ) CORE PCE Price Index May ( + 0.2% vs + 0.2% ) 10:00 hrs Pending Home Sales May ( -1.4% vs 5.1% ) 10:30 hrs Crude Inventories 06/25 ( NA vs -0.917Mln Bbls )
Marvell MRVL ( 0.09 vs 0.25 ) Apollo Education APOL ( 0.28 vs 0.53 ) Pier 1 Imports PIR ( -0.05 vs 0.08 ) Progress Software PRGS ( 0.29 vs 0.35 ) Investors Real estate Trust IRET ( 0.14 vs 0.16 ) NantKwest NK ( -0.13 )
|
| THURSDAY | ConAgra CAG ( 0.52 vs 0.59 ) Constellation Brands STZ ( 1.52 vs 1.26 ) Darden Restaurants DRI ( 1.08 vs 1.08 ) McCormick MKC ( 0.74 vs 0.75 ) Greenbrier GBX ( 1.08 vs 1,49 ) Lindsay Corp LNN ( 0.99 vs 1.10 ) Schnitzer Steel SCHN ( 0.11 vs 0.00 )
08:30 hrs Initial Claims 06/25 ( 265K vs 259K ) Continuing Claims 06/18 ( NA vs 2142K ) 09:45 hrs Chicago PMI June ( 50.8 vs 49.3 ) 10:30 hrs Natural Gas Inventories 06/25 ( NA vs 62bcf )
St. Louis Fed President James Bullard who recently flipped from hawk to dove on interest rates, talks about the U.S. economy and monetary policy.
Franklin Covey FC ( 0.10 vs 0.07 ) Micron MU ( -0.09 vs 0.54 )
|
| FRIDAY |
10:00 hrs ISM Index June ( 51.4 vs + 51.3 ) 10:00 hrs Construction Spending May ( + 0.5% vs -1.8% ) 14:00 hrs Auto Sales June ( NA vs 5.16 Mln Units ) 14:00 hrs Truck Sales June ( NA vs 8.55 Mln Units )
Bond markets close early ahead of the July 4th weekend
U.S. Oil Rig Count decreased last week. Nat Gas rig count increased by 4 to 90. The oil rig count fell by 7 to 330 making a total US rig count of 420. August Crude closed at $ 47.64 off $ 2.47 for the week. Natural Gas closed the week at $ 2.694, plus 0.047.
|
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Market Strategies Fundamentals
Stocks ended a horrible week reversing lower Friday on Britain’s decision to leave the European Union. The vote was very close 17,410,742 voted to leave vs 16, 141,242 to remain.
The massive selloff in stocks was led as usual by the Dow Jones Transports which collapsed on the news plummeting 351 points or 4.6% to 7320.55. All 20 members of the index were massively in the red. Gold, Silver the U.S. Dollar and Treasuries all soared in a flight to safe haven investments. Gold rose $ 58.80/oz Friday on the Brexit turmoil to $ 1,320 its highest level in almost two years,
The DJT had been challenging its 200 day price moving average and in fact surpassed it briefly last Monday having climbed all the way to 7757. Airline and travel stocks got particularly hammered with big airline stocks down an average of 9%. American Airlines ( AAL: $ 27.05 ) traded down $ 3,28 or -10.81% on the day to lead all members of the beleaguered index, a new low close for the year and its lowest close since October 23rd 2014. AAL trades for about five times estimated 2016 earnings. Delta ( DAL: $ 35.18 ) – $ 3.15 or -8.2% has a similar low P/E. United Air ( UAL: $ 41.06 ) – $ 4.11 or – 9.1%. Federal Express made a dismal showing ( FDX: $ 150.57 ) – $ 7.32 or -4.6% fell below its 200 day m.a. Fedex has a flat top extending back all the way to March when it surged above that level. .
The Nasdaq fell 202 points on Friday to 4708, down 92 points for the week but 202 points for the day. It was a complete reversal from the momentum Thursday in which the index appeared headed to test much higher levels. Alphabet ( GOOG: $ 675.22 ) – $ 26.65 or -3.8% reversed course after making an outside day up reversal Thursday, just completely collapsed right from the opening and was sold all day. It was the worst close since February 24th.
The Dow Jones had just crossed above the 18,000 level Thursday to 18.011.07, before reversing 600 points and plummeting to 17,401.
Markets do not do well with uncertainty especially with the S&P having a GAAP PE around 24.
Her Majesty’s Treasury has recently released an assessment of the immediate and the long-term economic impacts of Brexit. The assessment of the immediate impact of Brexit suggests: 1) a 4-6% decline in UK GDP; 2) a 2-2.5% rise in unemployment; and 3) a 3-4% decline in average real wages.
It’s tempting to look at Brexit as a signpost event. The UK’s departure from the EU captures many fears that can be expected to drive sentiment: Political polarization and volatility, a reversal of a decades-long trend favoring global trade and economic unification, an eye once again on policymakers’ reaction to disruption in the financial system. That the decision seems to have been made on a politico-economic razor’s edge (51.9% leave, 48.1% stay) only heightens the drama.
The effects of the UK’s vote to leave the European Union have been felt around the world. Markets have re-priced to reflect heightened political uncertainty, the threat of lower growth in Europe, and the potential for deeper contagion to the global economy and financial system.
Market Strategies Economic Data
Existing home sales in May increased 1.8% month-over-month to a seasonally adjusted annual rate of 5.53 million (Briefing.com consensus 5.50 mln) from a downwardly revised 5.43 million (from 5.45 mln) in April.
There were gains in all regions, with the exception of the Midwest, which saw sales drop 6.5% to an annual rate of 1.30 million. Sales increased 4.1% in the Northeast, 4.6% in the South, and 5.4% in the West. Total housing inventory at the end of May increased 1.4% to 2.15 million existing homes for sale, but at the current sales pace, that left unsold inventory unchanged at a 4.7-month supply. A 6.0-month supply is typically seen during normal periods of buying and selling.
The uptick in existing home sales has been helped by the increase in home equity, which has afforded homeowners increased move-up capability. However, the increase in home prices, limited supply, and student loan debt repayment obligations have continued to compress buying activity among first-time buyers, who accounted for 30% of existing home sales in May versus 32% in April.
In a sign of the competitive times for buyers, properties typically stayed on the market for 32 days in May, down from 39 days in April and 40 days a year ago. That is the shortest time on market since the National Association of Realtors began tracking this measure in May 2011.
The month of May marked the strongest pace of home sales since February 2007.
The most striking statistic out of the report was the 4.7% increase in the median existing home price for all housing types to $239,700. That surpassed the peak median sales price of $236,300 last June and marked the 51st consecutive month of year-over-year gains.
| Category | MAY | APR | MAR | FEB | JAN |
| Existing Home Sales | 5.53M | 5.43M | 5.36M | 5.07M | 5.29M |
| Months Supply | 4.7 | 4.7 | 4.4 | 4.4 | 4.0 |
| Median Price Y/Y | 4.7% | 5.6% | 5.1% | 5.0% | 8.0% |
Durable Goods orders for May were a real disappointment. Orders declined in every category. New orders declined 2.2% month-over-month (Briefing.com consensus -0.6%) while orders excluding transportation declined 0.3% (Briefing.com consensus +0.1%). April’s change was revised down to 3,3% from the initial reading of 3.4%.
The disappointment is deep-seated for several reasons. First, orders declined in almost every category. Secondly, business investment continued to flag, evidenced by a 0.7% decline in new orders for nondefense capital goods excluding aircraft, which followed a 0.4% decline in April. Third, shipments of nondefense capital goods excluding aircraft, which factor into the GDP report, were down 0.5%, reversing most of a 0.6% increase in April.
The decline in May featured a 34.1% drop in orders for defense aircraft and parts.
Overall, new orders for transportation equipment declined 5.6%, led by a 2.8% drop in orders for motor vehicles and parts. Some other prominent order declines were seen in primary metals (-1.4% after a 0.7% decline in April), fabricated metal products (-0.3% after a 3.6% increase in April), machinery (-0.2% after a 2.0% decline in April), and electrical equipment, appliances, and components (-0.1% after a 0.2% decline in April).
On a year-over-year basis, new orders excluding transportation are down 0.5% while orders for nondefense capital goods excluding aircraft are down 3.5%.
| Category | MAY | APR | MAR | FEB | JAN |
| Total Durable Orders | -2.2% | 3.3% | 2.0% | -3.3% | 3.7% |
| Less Defense | -0.9% | 3.7% | -0.5% | -2.4% | 3.5% |
| Less Transport | -0.3% | 0.5% | 0.3% | -1.5% | 1.5% |
| Transportation | -5.6% | 8.5% | 5.3% | -6.7% | 8.2% |
| Capital Goods | -4.9% | 7.9% | 7.8% | -10.5% | 18.1% |
| Nondefense | -0.8% | 8.7% | 0.3% | -7.9% | 20.0% |
| Nondefense/nonaircraft (core cap gds) | -0.7% | -0.4% | 0.3% | -2.1% | 2.4% |
| Defense Cap Goods | -28.0% | 3.3% | 80.7% | -29.7% | 5.6% |
The Conference Board reported a 0.2% decline in its Leading Economic Index for May. That was well below the Briefing.com consensus estimate, which called for a 0.2% increase, and it followed on the heels of two consecutive monthly gains.
The decline in May was led by average weekly initial claims, which subtracted 0.23 percentage points, offsetting gains in six other components. The strongest of those gains was the interest rate spread, which added 0.16 percentage points to the index. The Conference Board estimated small positive contributions for manufacturers’ new orders for consumer goods and materials (+0.01 percentage points) and nondefense capital goods orders excluding aircraft (+0.02 percentage points).
Separately, the Coincident Index was unchanged in May while the Lagging Economic Index increased 0.3%.
In the six-month period ending May 2016, the leading economic index was flat after increasing 1.2% during the previous six months. The Conference Board added that the weakness among the leading indicators has become somewhat more widespread than the strengths in recent months.
| Category | MAY | APR | MAR | FEB | JAN |
| Total Index | -0.2% | 0.6% | 0.0% | 0.1% | -0.2% |
| Manufacturing Workweek | 0.00% | 0.07% | -0.07% | -0.13% | 0.13% |
| Initial Claims | -0.23% | 0.11% | -0.07% | 0.26% | -0.08% |
| Cons. Gds Orders | 0.01% | 0.03% | -0.02% | 0.04% | -0.13% |
| ISM New Orders | 0.01% | 0.01% | 0.06% | -0.08% | -0.08% |
| Nondef. Cap Gds Orders, exc. Aircraft | 0.02% | -0.03% | 0.01% | -0.09% | 0.10% |
| Building Permits | 0.02% | 0.15% | -0.24% | -0.07% | -0.03% |
| Stock Prices | -0.02% | 0.10% | 0.24% | -0.03% | -0.27% |
| Leading Credit Index | 0.03% | 0.05% | 0.08% | 0.03% | 0.00% |
| Interest Rate Spread | 0.16% | 0.16% | 0.17% | 0.16% | 0.20% |
| Consumer Expectations | -0.01% | -0.05% | -0.01% | -0.04% | 0.01% |
The University of Michigan’s Consumer Sentiment index was finalized at 93.5 for June, down from the prior estimate of 94.3. The index was at 94.7 in May. Expectations fell to 82.4 from 84.9. Current Conditions rose to 110.8 from 109.9. 12-month inflation expectations were revised up to 2.6% from 2.4% and 5-year expectations were revised up to 2.6% from 2.3%.
Market Strategies Cycles
Brexit day finally arrived. The United Kingdom has completely bailed on the European Union. The vote was very close, 51.9% vs 48.1% considering the destructive effects of such economic disruption.
The effects of the UK’s vote to leave the European Union have been felt around the world. Markets have re-priced to reflect heightened political uncertainty, the threat of lower growth in Europe, and the potential for deeper contagion to the global economy and financial system.
Equity markets initially traded down sharply, but in some cases recovered ground during the day. Meanwhile, the dash for safe havens led the Japanese yen to rally by more than 6% at one point, 10-year gilt prices are +2.7%, Treasuries +1.7%, and Bunds +1.5%. The Swiss franc did not rally materially against the euro, but only due to intervention from the Swiss National Bank to limit currency strength.
The latest Gold COT report shows a net speculative long position of close to 257,000 contracts, the highest we have ever seen. Additionally, total speculative longs are at 279,000 long contracts outstanding which is also the highest historically.
This report closed on Tuesday, so it does not include any of Friday’s tremendous price action in gold and so we expect current positions to be even more one-sidedly bullish.
All of this is worrisome from a contrarian point of view, and we think investors need to stay disciplined here as there are few longs left to buy.
In the latest Commitment of Traders report (COT), we saw another week where, surprisingly enough, speculative longs continued to build on record-breaking position levels. This build in speculative long positions was despite the fact that the COT report closes on Tuesday and thus didn’t include any of Friday’s massive post-Brexit jump in the gold price – which means whatever positions we see this week that we should expect a more extreme position next week with gold $50 higher.
Even before the Brexit exit, the Fed acknowledged that interest rates would remain low because of geopolitical worries. If it were just domestic concerns rates would more likely be on the rise. But as a result the Fed Chair lady also acknowledged that interest rates are likely to remain lower, longer.
Thursday’s initial weekly jobless claims were also better than expected down 18,000 to 259,000 with Continuing Claims falling to 2.142 million the lowest level since the 2000 era, suggesting the U.S. labor market is at a minimum resilient. The market is selling off in the short-term. However, in the longer-term, the economy is strong and only the uncertainty of the Presidential election was overhanging the market. A tradeable rally was and is still a most likely event.
NASDAQ’s Mid-Year Rally
Every year when the days get long and the temperature rises on Wall Street, we always hear those infamous buzzwords, the “Summer Rally.” As volume begins to shrink the hopes for a Summer Rally catch the ear of investors. On page 72 of Stock Trader’s Almanac 2016 it is illustrated that there is a Summer Rally, but there is a rally for all seasons and the one that occurs in summer is weakest. Yes the market has performed well in a few summers (2013, 2009 & 2003 are some recent notable exceptions), but as a rule it generally does not. Any outsized summer gains have been predominantly due to extenuating circumstances and/or after a sizable correction in a bear market.
NASDAQ however, has usually delivered a short, powerful rally that starts at the end of June. Is Brexit going to change this? The accompanying table shows NASDAQ averaging a 2.2% gain since 1985 during the 12-day period from June’s third to last trading day through July’s ninth trading day. The trend in stocks has reversed from long to short. This year the counter-trend rally could begin next week and run until about July 14.
The following stocks have resisted the decline and seem likely to rally and should be considered on an overall market sell-off: Coresite Realty Corp ( COR: $ 84.86 ); LGI Homes ( LGIH: 30.10 ) Dycom Industries ( DY: 86.71 ); AMN healthcare ( AHS: $ 39.01 ) Store Capital Corp ( STOR: $ 27.79 ); WalMart ( WMT: $ 71.96 ) The shorts remain the generals: Apple ( AAPL $ 93.40 ) Google ( GOOG: $ 675.22 ) Disney ( DIS $ 95.72 ); Costco ( COST $ 156 )
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Undervalued Small Cap Stocks
Lower Priced stocks that look to be a buy:
Repro-Med Systems,Inc ( OTCQX: REPR 0.36 )*
Fourth quarter preliminary net revenues will exceed $3.2 million, representing a slight increase over the $3.1 million of the previous quarter. Sales are led by the Company’s proprietary infusion products. The Company’s fiscal year ended February 29, 2016.
Andy Sealfon, Company President and CEO commented, “The military has expressed interest in our products for utilization in emergency applications as well as use in VA hospitals. We believe that because of our performance standards and the reliability of our products, we will provide them with great value and benefits.”
The Company manufactures medical products used for infusions and suctioning. The Infusion product portfolio currently includes the FREEDOM60(R) and the newer FreedomEdge™ 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.
NHIA is a trade association representing the interests of entities providing infusion and specialty pharmacy products and services to home-based infusion patients.
The Company’s website is 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.
Enzo Biochem ( ENZ: $ 5.45 )
The stock moved from approximately $5 a share to approximately $6.50 from May 1 to early June. If you look at the chart pattern of the stock the big volume came in on May 9 which coincided with the Louis Navellier recommendation that I sent to you on that date. He recommended 5 stocks of which 3 (including Enzo) all had similar chart patterns with significant increases in trading volume. I don’t know how much of that volume came from individual investors but the buying had lots of 100-500 share trades which tells me that individuals, not Institutional investors were strong buyers of Enzo.
During the same time frame the Russell Index probably started to see some front running by Index funds or ETF’s to take a position into Enzo’s stock as they looked to be included in the Index. These funds mirror the Russell Index. The Russell is a two edged sword. The positive edge is that for Enzo it probably means 2-3 million shares will be bought. Enzo was included in the 2000 and 3000 Russell Index on June 10.
The Russell will hedge their long positions by shorting the stock against their long position to go neutral if they think the market shows weakness or if the fundamentals of the company change. If you remember when Enzo was removed from the Index a couple of years ago the short position was 4 million plus shares and the day Enzo was removed the shorts delivered their long position against the short to flatten the position. The short position on that day dropped to 1 million shares. Enzo had a conference call on their third quarter release last week and I didn’t see any change in the fundamentals. However those individual investors that bought on the Navellier recommendation don’t know the Company and saw that they reported a loss for the quarter (even though they beat estimates) and may have taken profits.
The market in general was down 5 straight days and the index’s that got long the stock may have shorted to hedge their position. That can be confirmed on the first two week short report due out next week. The short position at the end of May was 937,000 shares down from the mid- month short of 1,010,700.The stock has come down some 15% from its high which is not a big deal. To me it is just a technical move.
The stock is approaching oversold territory and as the fear grows the opportunity becomes bigger. The fundamentals haven’t changed and in fact have become stronger with the latest AmpiProbe approval. Enzo has cash of $50 million and no debt. There are 7 more cases to get settled in Delaware which can provide significant additions to the cash position. AmpiProbe will have more submissions to the New York regulatory agency this year. AmpiProbe is cheaper, better and faster than existing technology and that is a $3 billion market.
This is an awesome potential for a 47 million share company and who knows what will happen if the NIH has positive statements on their Optiquel test for Uveitis. The stock is 50% owned by Institutions and funds, 15% by insiders and I guess 10% by hedge funds. That leaves some 11 million shares in the float. If the Russell causes 2-3 million shares to be bought the float then become 8-9 million shares. Good news can really move the price.
Gold Mining USA OTC: GMUI ( 0.01 )*
Has both mining activities in Australia and the U.S. Gold Mining USA Inc is an emerging natural resources company focused on developing metallurgical and mining projects. The Company’s business model is to acquire projects with the potential to provide significant resources through exploratory drilling and generate value through their development, joint venture or divestment. GMUI has a team of experts who will manage all mining operations available on their website. In addition GMUI has an Offtake Agreement with a prestigious Swiss-based Gold buyer and Refiner to purchase its gold production at the spot price at the London Bullion Market ( LBMA ) on the day gold is collected.
Australia and Nevada provide the opportunities to exploit smaller, undeveloped or previously mined gold resources that are of no interest to the large mining companies. In addition, there are numerous small hard rock and alluvial gold mines which have viable gold resources but are unable to raise the funds to start up or continue operations.
The company has signed an ongoing agreement with Cardno, a professional infrastructure and environmental services company, to assist in the evaluation and implementation of a work program on one of its North America properties. Steve Craig, a well-known Certified Professional Geologist, will be heading up the efforts on the project.
An initial target acquisition, Mt Tymn, provides an opportunity to enter the gold mining arena in Australia on a small scale with the confidence of total outlay recovery and good profits, sufficient to expand operations by acquisition of similar nearby deposits to continue positive cash flow mining and commence an exploration program capable of even greater rewards.
Oakridge Global Energy Solutions, Inc. (OTCQB:OGES 0.40) *
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
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 Pro Series 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 a small format prismatic 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 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.
iSIGN Media Solutions Inc ( ISDSF: $ 0.104 )
A public company trading on the Toronto Stock Exchange Venture market under the symbol ISD
(TSX-V: ISD), and in the United States on the OTC under the symbol of ISDSF.
The web site is www.isignmedia.com
iSIGN is a Software as a Service (“SaaS”) company whose US patented software (patent # 8,781,887 B2, received in July 2014) is a unique ‘push and pull’ technology that utilizes Bluetooth and Wi-Fi to ‘push’ messages in any language to mobile devices within a 300 ft (100 meter) radius of our technology, while gathering valuable information from the interaction of our technology with mobile devices within range of our hardware. Recently one of the largest insurance companies in the world categorized the smart antenna as a security device and has given an amusement park a 15-20% discount on their insurance premiums. Please go to “ priority posts” to view recent events.
Recently, a major North American insurance company has categorized the smart antenna as a safety and security device which will open new markets for iSIGN especially in amusement centers, malls and commercial real estate projects.
Through iSIGN’s reseller, We Build Apps, an installation of approximately 500 Smart Antennas into Crocker Park, a roughly 78 acre shopping complex in Ohio, consisting of retail stores, restaurants, residential apartment buildings and office building is close to be signed This complex is managed by Stark Enterprises who manage a total of 16 properties. The potential is for an expansion into the other properties who can also achieve a reduction in their insurance premium costs.
Technology Overview
The patented and proprietary technology does not involve apps and related downloads in order to receive and view messages and, as messages are delivered by Bluetooth and Wi-Fi, is capable of interacting with all cell phones including I Phones and androids. The second hardware unit, the Smart Player, contains all the features of the Smart Antenna, while adding the ability to manage content on digital screens at the same time.
eHealth Consortium Group in Australia Update / June 22, 2016
According to our reseller, JEA Technologies, eHealth Consortium Group’s intention is to start installations in hospitals located in the State of Victoria. Installations into hospitals located in the States of New South Wales, Queensland, Northern Territory, Western Australia, South Australia, Tasmania and Australian Capital Territory would follow later.
As advised by JEA, the State of Victoria has a population of 4.6 million people and has 24 major government owned and operated hospitals in the Melbourne Metropolitan area, as well as 11 private hospital corporations.
The projected number of Smart Antennas per hospital, ranges from 10 to 15, which will be determined once site surveys at each hospital are completed. Installations are expected to be in: (i) each public entrance, installed into the entrance’s digital signage or the hospital way finding kiosks (information systems that guide people through a physical environment and enhance their understanding and experience of the space); (ii) the public food courts of the hospital’s cafeteria areas; (iii) the Accident & Emergency departments where there are long waiting times; and (iv) public waiting areas.
The total number of Smart Antennas for the 35 hospitals in the State of Victoria is expected to be from a minimum of 350 to a maximum of 525 for these hospitals and would increase as installations expand into the other 7 States. iSIGN revenues will be derived from the sale of the Smart Antenna units as well as the monthly data management/message broadcasting fees.
Previous Developments
In late October 2015 iSIGN signed a Licensing/Original Equipment Manufacturer Agreement with Rich Multimedia Technologies (“RMT”) to integrate iSIGN’s Smart Antenna into RMT’s Tele-Digital Store Front Kiosk (essentially a digital signage kiosk). iSIGN will receive a licensing fee based on built units and will also receive a data management fee once the Kiosk is activated. The total fee per Kiosk is $3 US per day. RMT is immediately constructing 5,000 Kiosks for Mexico (airport, transit system and government offices) and has a roll-out plan for a further 3,600 Kiosks into various international airports in the US and Canada by the end of calendar 2016. Based upon a $3 US per day per kiosk fee, the revenue opportunity from this one installation is $9.417 million annually, once all 8,600 Kiosks are build and activated. The profit margins are 60-70 percent of revenues. Rich Multi Media is presently in five airports in the United States and is presently integrating approximately 600 Isign’s Smart Antenna in all there kiosks.
Fundamental Analysis Stocks To Buy with Stops
Using fundamentals the following are stocks to buy and they have done well.
The table is hypothetical. We have taken numerous profits as indicated on the table below.
Kroger ( KR: $ 35.18 ) was bought at $ 35.71.
We bought the HOG at $ 45. Don’t like the pattern. If you are long, consider liquidating.
We bought the Sunoco at $ 29.50. Sell July $ 30 Calls against the position.
Buy Enzo Biochem with a 40 cent risk. The Russell rebalancing could be interesting for ENZ.
The HDGE should now be bought.. The HDGE goes Up when the market goes Down.
It is a good hedge against long positions. We bought and were stopped out.
We are still interested in buying the Flushing Financial at our theoretical buy limit.
| Symbol | Name | Business Description | PE | P/S | MV mln | Price | Buy or Sell Limit | Stop Loss
Or offset |
| DY | Dycom | Materials. Construction Cell Towers internet Infrastructure | 25 | 1.1 | 2.7B | 86.89 | 86.71 | 82x |
| BA | Boeing | Aerospace, commercial jetliners, military systems | 14 | 0.85 | 81B | 129.82 | Sell Short
132.95 06/09
|
134.40x
Stopped out 06/23
|
| KR | Kroger | Processor and Retailer Foods | 15 | 0.31 | 34B | 35.14 | 35.71
6/14/16 |
Stop not entered |
| HL | Hecla Mining | Basic Materials | 44 | 3.61 | 1.7B | 4.72 | 3.95 | 4.27x |
| FFIC | Flushing Financial | Bank Holding company Savings and loans | 13 | 3,5 | 592Mln | 19.92 | 19.10 | Buy on a dip: still waiting to get long |
| SUN | Sunoco | Oil and Gas Refining and marketing | 10 | 0.2 | 2.1B | 30.06 | 29.50 | Long again |
| AA | Alcoa | Aluminum Processing and Technology | N/A | 0.4 | 9.5B | 9.38 | 7.05 | Sell
|
| SBH | Sally Beauty Holdings | Specialty Retailer and distributor beauty supplies | 16 | 1 | 4B | 28.31 | 27.30 | 30x stopped out at 30 |
| HOG | Harley Davidson | Motorcycles and related products | 11 | 1.32 | 8B | 43.55 | 45 bought June 10th
|
Sold at 51.66 on 4/4 new stop at 43 |
| CHD | Church & Dwight | Consumer Products Sodium bicarbonate Arm and Hammer | 25 | 3 | 10.6B | 98.18 | 79.80
01/26/16 |
Sold at 94.20 |
| T | AT&T | Communications | 36 | 1.54 | 211.7B | 41.52 | 34.10 | 37.78x |
| VA | Virgin Air | Regional Airlines | 7.2 | 0.9 | 1.5B | 56.00 | 30.30
Bought |
Merging with Alaska |
| ENZ | Enzo Biochem | Life Sciences | NA | 1.35 | 134M | 5.79 | 6.05
Originally bought at $ 2.78 8/24/15 |
5.18x |
| BAC | Bank of America | Commercial Bank | 10 | 2.02 | 165.3B | 13.40 | 11.86 | 13.80x stopped out 6/10 |
| HDGE | Advisor Shares | Ranger Bear ETF | 10.82
Bought stopped out |
Bought at 10.40 on 06/20 | 10.27x
Stop below the 13 D M.A. |
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
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Charles Moskowitz
(781) 826-8882
Princeton Research
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Fax: (702) 697-8944
Where to Invest in July 2016
Best Stocks To Buy in July 2016
Stock Market Investing Strategies