Read the May 30, 2016 — Where To Invest June 2016 Market Investing Strategies Newsletter in .pdf format
Where To Invest June 2016
May 30, 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 June 2016
Best Stocks To Buy June 2016
Stock Market Investing Strategies
Stock Options Trade Alerts
How To Trade Options
Proven Profits Trading Success
Results From Our Recent Trade Alerts:
159% Profits on AA June 9 Calls
157% Profits on NEM June 35 Calls
6% Loss on XLF June 23 Puts
40% Loss NEM June 34 Calls
107% Profits on SIG May 105 Puts
28% Profits on NEM May 33 Calls in 13 Days
50% Loss on FB May 121 Calls 50 in 7 Days
105% Profits on SIG May 105 Puts in 14 Days
97% Profits on SJM May 125 Puts in 7 Days
27% Profits on QQQ May 109 Puts in 7 Days
53% Loss on MSFT May 52 Calls in 2 Days
365% Profits on SIG April 120 Puts in 10 Days
207% Profits on SIG April 120 Puts in 6 Days
70% Profits on GLD April 119 Calls in 1 Day
207% Profits on SIG Puts in 6 Days
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$10,000 Trading Portfolio
Charles Moskowitz Discussion
There are 3 Open positions:
Long 6 HL Sept Calls
Long 5 AA June 9 Calls and
Long 4 TGT June 70 Calls
Funds in Use = $ 1109
Week 21 was a minor gain of $ 30 bringing YTD gains to $4594. We have only 3 open positions in AA 6/9 calls, TGT 6/70 calls and HL September calls, using $1109 for those positions.
As I mentioned last week, the AAII bullish number was at a dramatic low of 19%, and yet even with the rally that drove both the Dow and the S&P500 up over 2%, the number declined to 17.8% and almost 53% are unsure, or neutral. Also mentioned was the fact that both charts were “flagging out” and this week’s consolidation was all above the crucial breakout from support around 2020 (S&P). The market continues to defy the economic numbers like 3 straight quarters of recession style earnings reports for many of the big names. As I’ve said MANY times before, beating drastically reduced “expectations” is not a meaningful accomplishment.
The Gold market was dramatically lower this week and while we took some losses and had a net loss on the 2 NEM positions, I am again going to get long the metal tomorrow.
I’ve attached a chart of the June contract on page 13, which includes price, momentum, on balance volume and Bollinger Bands. While you may not have the experience with a chart like this I will give you my reading of it:
The futures are very oversold. The price has been down 8 days in a row.
The price is at the bottom of the Bollinger Bands. This is an actual resource and unlike a stock it may fluctuate, but it can’t go to $0.
We are at support which has held and sent prices higher several times. While I would not blindly buy this market I will try to buy calls at or near the $1200-1210 level. We still own the HL calls, and while they are at a small loss they are also somewhat longer dated and don’t expire until the 3rd week in September.
Have a good week and thanks to all those who emailed me with condolences on the loss of my younger brother this past week…….CAM
All trades were based on your participation in the texting service to receive updates. Previous closed out trades not listed here may be seen in previous market letters.
Market Strategies $10,000 Trading Account Trade Table
| DATE | TRADES | PRICE | COST | PROCEEDS | RESULTS |
| 05/26 | Sold 5 AA June 9 Calls | 0.71 | 375 | 120 Gain | |
| 05/24 | Sold 4 NEM June 34 Calls | 0.94 | 376 | 240 Loss | |
| 05/23 | Sold 10 XLF June 23 Puts | 0.44 | 440 | 30 Loss | |
| 05/23 | Sold 4 NEM June 35 Calls | 1.23 | 492 | 180 Gain | |
| 05/20 | Bought 4 TGT June 70 Calls | 0.91 | 364 | ||
| 05/19 | Bought 10 AA June 9 Calls | 0.47 | 470 | ||
| 05/19 | Bought 4 NEM June 34 Calls | 1.54 | 616 | ||
| 05/12 | Bought 10 XLF June 23 Puts | 0.47 | 470 | ||
| 05/04 | Bought 4 NEM June 35 Calls | 0.78 | 312 | ||
| 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.
NOTE: In texting we have a limited amount of words. In the interest of brevity:
The Quantity and Strike Price for each trade is specific. 1=January, 2=February
Trading is hypothetical. We may trade weekly options and they are noted: SPY 1/25 147 for
SPY Jan 25th 147 Calls or Puts.
New Trades Options Account:
( 1 ) Buy 4 NEM June 31 Calls @ $ 1.39
( 2 ) Buy 4 KR June 35 Calls @ $ 1.29
NEW Trades $ 100,000 account :
( 1 ) Buy 20 NUGT @ $ 64.95
( 2 ) Buy 8 NEM June 31 Calls @ $ 1.39
( 3 ) Buy 8 KR June 35 Calls @ $ 1.29
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MARKET Laboratory – Weekly Changes
Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect.
| Dow
17,873.22 +372.28 +2.13% |
Nasdaq
4933.50 +163.95 |
S&P 500
2099.06 +46.74 +2.28% |
Transportation
7772.28 +100.39 +1.31% |
Russell 2000
1150.45 +38.17 +3.43 % |
Nasdaq100
4512.54 +149.64 +3.43% |
| Gold (spot)
1213.80 -38.60 -3.1% |
Silver
1653.2 -26.3 -1.6% |
Crude
49.33 +1.58 +3.3% |
Heating Oil
150.15 +0.94 +0.6% |
Unleaded Gas
1.6378 -.0034 -0.2% |
Natural Gas
2.169 -0.038 -1.7% |
| VIX
13.12 -2.08 -13.7% |
Put/Call Ratios
S&P 100 117/100’s +14/100’s |
Put/Call Ratios
CBOE Equity 59/100’s -16/100’s
|
Bonds
164-10 +0-02 2.65% -0.01% |
10 Yr. Note
129-254 +03 1.85%-0.02%
|
Copper
211.40 +5.85 +2.9% |
| CRB Inflation
Index 186.14. +1.93 +1.1% |
Barron’s* Confidence
67.3 +1.4 |
S&P100
929.49 +20.34 +2.24% |
5 Yr. Note
120-164 +02 1.38% -0.01%
|
Dollar
95.70 +0.43 +0.5% |
DJ Utilities
656.28 +6.20 +0.95% |
| AAII
Confidence Index
Long Term Average |
Bullish
17.8% -1.5%
38.74% |
Bearish
29.4% -4.7%
30.30% |
Neutral
52.9% +6.2%
30.96% |
M1 Money
Supply +9.28% May 16th
|
M2 Money
Supply +6.64% May 16th
|
* 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 2055 2116
Dow 17,580 18,060
QQQ 107.10 110.90
Transports 7455 7855
NASDAQ 4700 49.80
$100,000 Trading Portfolio Stock Positions and Trades
Each stock is allocated a theoretical $ 5,000 share of the portfolio unless otherwise indicated.
|
|
Purchase Price | Purchase Date | Stop/Loss | Price/Date Sold | Profit/
(Loss) |
||
| 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 | Sold 3 32.50 Calls | $ 900 credit | |||
| 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.
Market Strategies $100,000 Trading Account
There were four closed option positions: The 8 NEM June 34 Calls were $ 480 in the red and the 20 XLF Puts lost $ 60. The 10 ( half ) sold of the 20 lots AA position made $ 240, while the 8 NEM Calls bought on May 4th, sold on May 23rd gained $ 360.
The total for the week in theoretical options results was a profit of $ 60.
There were no closed out stock positions.
For the entire year on closed out trades, our hypothetical profits increased to $12,115.
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, REPR, SAN, SCO(2), SUN, TEXQY, TWTR, 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 $59,443
for the 15 open long stock positions plus a credit for the covered writes of $900 for the SUN written Calls which reduces the requirement to $ 58,543. The Open Option Positions require $ 2218. This increases the margin requirement to $ 60,761, leaving $ 39,239 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, 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.
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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) |
| TGT June 70
8 lots |
Calls
0.91 |
05/20/16 | |||
| AA June 9
10 lots Open |
Calls
0.47 |
05/19/16 | 0.71 | 05/26/2016 | $ 240 |
| NEM June 34
8 lots |
Calls
1.54 |
05/19/16 | 0.94 | 05/24/2016 | ( $ 480 ) |
| XLF June 23
20 lots |
Puts
0.47 |
05/12/16 | 0.44 | 05/23/2016 | ( $ 60 ) |
| HL Sept 3.50
12 lots |
Calls
0.85 |
05/03/16 | |||
| NEM June 35
0.78 |
Calls
0.78 |
05/04/16 | 1.23 | 05/23/2016 | $ 360 |
| SUN June 32.50
3 lots written |
Calls
|
3.00 | 02/23/2016 | $ 900 credit
Covered write |
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 | Memorial Day Holiday in U.S. Markets are closed
Spring Bank Holiday in the U.K.
France holds an international conference aimed at restarting talks between Palestinians and Israelis by the end of the year. |
| TUESDAY | Bank of Nova Scotia BNS ( 1.42 vs 1.42 ) Medtronic MDT ( 1.26 vs 1.16 )
08:30 hrs Personal Income April ( +0.4% vs +0.4% ) 08:30 hrs Personal Spending April ( +0.7% vs +0.1% ) CORE PCE Prices ( +0.2% vs +0.1% ) 09:00 hrs Case-Shiller 20-city Index March ( +5.1% vs +5.4% ) 09:45 hrs Chicago PMI May ( 50.9 vs 50.4 ) 10:00 hrs Consumer Confidence May ( 96.2 vs 94.2 ) Ascena Retail Group ASNA ( 0.13 vs 0.18 ) NCI Building Systems NCS ( 0.01 vs -0.06 ) Quanex NX ( 0.09 vs 0.07 ) TiVo TIVO ( 0.09 vs 0.08 ) Workday WDAY ( -0.02 vs -0.02 ) |
| WEDNESDAY | Valeant Pharma VRX ( 1.39 vs 2.36 ) Michael Kors KORS ( 0.97 vs 0.90 ) Cracker Barrel CBRL ( 1.80 vs 1.49 ) G-III Apparel GIII ( 0.03 vs 0.15 ) Land’s End LE ( -0.03 vs 0.05 )
07:00 hrs MBA Mortgage Index 05/28 ( NA 08:15 hrs ADP Employment Change May * 180K vs 156K ) 10:00 hrs ISM Index May ( 50.4 vs 50.8 ) 10:00 hrs Construction Spending April ( +0.5% vs +0.3% ) 14:00 hrs Auto Sales May ( NA vs 5.11 Mln Units ) 14:00 hrs Truck Sales May ( NA vs 8.73 Mln Units ) 14:00 hrs Fed’s Beige Book June ( NA ) Ctrip CTRP ( -0.06 vs +0.04 ) Verint Systems VRNT ( 0.41 vs 0.66 ) Analogic ALOG ( 0.88 vs 1.07) 58.com WUBA ( -0.68 vs -0.54 ) Semtech SMTC ( 0.28 vs 0.27 ) |
| THURSDAY | Canadian Natrl Res CNQ ( -0.40 vs +0.02 ) Navistar NAV ( -0.14 vs -0.78 ) Joy Global JOY ( -0.01 vs 0.59 ) Hovnanian HOV ( 0.03 vs -0.13 ) Calavo Growers CVGW ( 0.49 vs 0.49 ) Conn’s CONN ( 0.10 vs 0.43 ) Ciena CIEN ( 0.27 vs 0.35 )
OPEC Meets and is not expected to set output targets. Fed Governor Jerome Powell gives an address on the role of regulation in today’s banking system. New York Fed President Dudley hosts luncheon with Eric Schmidt of Alphabet 08:30 hrs Initial Claims 05/28 ( 268K vs 268K ) 08:30 hrs Continuing Claims 05/21 ( NA vs 2163K ) 10:30 hrs Natural Gas Inventories 05/28 ( NA vs 71bcf ) 11:00 hrs Crude Inventories 05/28 ( NA vs -4.226 Mln Bbls ) Ambarella AMBA ( 0.28 vs 0.71 ) Broadcom AVGO ( 2.36 vs 2.13 ) Comtech Telecom CMTL ( – 1.71 vs 0.30 ) Cooper COO ( 1.92 vs 1.72 ) Marvell MRVL ( 0.09 vs 0.25 ) |
| FRIDAY |
08:30 hrs Nonfarm Payrolls May ( 155K vs 160K ) 08:30 hrs Nonfarm Private Payrolls May ( 160K vs 171K ) 08:30 hrs Unemployment Rate May ( 4.9% vs 5.0% ) 08:30 hrs Hourly Earnings May ( 0.2% vs 0.3% ) 08:30 hrs Average Workweek May ( NA vs 34.5 ) 08:30 hrs Trade Balance April ( -$41.6B vs -$40.4B ) 10:00 hrs Factory Orders April ( 1.6% vs 1.1% ) 10:00 hrs ISM Services May ( 55.4 vs 55.7 ) Bristol-Myers and Merck present data at the American Clinical Oncology meeting U.S. Oil Rig Count was unchanged for the week ended May 27th at 316, Nat Gas rig count increased one rig to 88 making a total US rig count of 404. June Crude closed at $ 48.94.
|
Market Strategies Fundamentals
Stocks rallied sharply on Friday after being comforted by the FED Chairlady saying “a rate hike would likely be appropriate in the coming months.” Traders then left their open long positions happily leaving for the long weekend believing that the increase of rates was not imminent. The rallies were substantial but on very low volume. All of the fundamental news was good as might be expected with such strength followed into buying of some equities and covering of short positions.
However, the market leader, the DJ Transportation average, as usual, has failed to confirm.
The Nasdaq jumped 164 points or 3.44% to 4,933.50 just ahead of the Russell 2000 which was second best gaining 38 points or +3.43% to 1150.45. The S&P 500 added 46.74 points or + 2.28% to 2099.06 while the Dow rose 372 points or + 2.13% to 17,873.22. The DJT stubbornly added 100 points to gain 1.3% to 7772.28 closed just barely but unconvincingly above its 200 day moving average. It also remains to be the only major index that is still below its 50-day moving average
Volatility continued to decline. The VXX ( $ 13.59 ) – $ 1.51 last week or 10% has given grief to the bears as stocks rarely decline along with declining volatility. The VXX peaked at 30.85 on February 11th when the Dow visited its yearly lows at 15,503. The best trade on the board has been being short the Ultra VIX triple volatility index ( UVXY: $ 10.65 ) – 2.65 or 19.6% last week, has been in a huge downtrend from Feb 11th when it reached 61.92.
Gold ( GLD: $ 115.62 ) also does better in times of high volatility. The GLD was at 119.06 on Feb 11th when volatility was high and stocks visiting their lows. The GLD is possibly seeking a double bottom at $ 115.00.
Housing was strong. New Home Sales rose to its highest level since January 2008. Also, an index tracking contract signings of previously owned homes reached its highest level in a decade.
Oil prices rose for the week. Crude prices catapulted above the $ 50/bbl mark for the first time in seven months before ending the week at $ 49.33 basis the July contract or $ 48.94 spot..
Rail traffic turned negative and then progressively worse in pulses throughout 2015. While intermodal traffic quickly turned positive, domestic carloads, led by coal (for export), continued to deteriorate. Rail loads became “less worse” in January and showed continued improvement until going over the proverbial cliff 9 weeks ago, a big negative, but one that might be a symptom of inventory liquidation. Amid the sea of improving data, rail traffic stands out like a sore thumb. Carloads down -10.6% YoY Loads ex-coal down -7.4% YoY
Air traffic is robust, but capacity has increased as have labor costs. The markets are forecasting deterioration in profits. The ETF ( JETS: $ 22.95 ) has been sideways at best well below the 13, 50 and 200 daily moving averages. Boeing ( BA: $ 129.33 ) has new headwinds as there are serious problems with over capacity, too many older planes being leased and looming as competition.
The gold chart on page13 shows gold near its major support at $1200-1220. It has been there 5 times since moving thru that level on its way from $1060 to 1300. This is simply a low risk trade on an instrument that is oversold and at support. I am using a sell stop on any close below 1190. This is a “right, or right out” trade…..
Market Strategies Economic Data
The U.S. economy grew at a 0.8% annualized rate in the first quarter, as the GDP was revised up from the initial estimate of +0.5%. The growth rate for the Qtr 4 2015 was 1.4%. The Briefing.com estimate was for a +0.9% first quarter growth.
The report was a bit disappointing for three reasons: First, a 0.8% growth rate is still weak from a historical context. Secondly, personal consumption expenditures growth was left unchanged at + 1.9%. The third draw back was that the upward revision has a good bit to do with the change in private inventories, which was smaller than previously estimated. The other driver behind the upward revision was gross private domestic investment, which subtracted 0.45 percentage points from growth in the second estimate versus 0.60 percentage points with the advance estimate.
| Category | Q1 | Q4 | Q3 | Q2 | Q1 |
| GDP | 0.8% | 1.4% | 2.0% | 3.9% | 0.6% |
| Inventories (change) | $69.6B | $78.3B | $85.5B | $113.5B | $112.8B |
| Final Sales | 1.0% | 1.6% | 2.7% | 3.9% | -0.2% |
| PCE | 1.9% | 2.4% | 3.0% | 3.6% | 1.7% |
| Nonresidential Inv. | -6.2% | -2.1% | 2.6% | 4.1% | 1.6% |
| Structures | -8.9% | -5.1% | -7.2% | 6.3% | -7.6% |
| Equipment | -9.0% | -2.1% | 9.9% | 0.3% | 2.3% |
| Intellectual Property | -0.1% | -0.1% | -0.8% | 8.3% | 7.4% |
| Residential Inv. | 17.2% | 10.1% | 8.2% | 9.4% | 10.1% |
| Net Exports | -$561.2B | -$551.9B | -$546.1B | -$534.6B | -$541.2B |
| Export | -2.0% | -2.0% | 0.7% | 5.1% | -6.0% |
| Imports | -0.2% | -0.7% | 2.3% | 3.0% | 7.1% |
| Government | 1.2% | 0.1% | 1.8% | 2.6% | -0.1% |
| GDP Price Index | 0.6% | 0.9% | 1.3% | 2.1% | 0.1% |
The Durable Goods Orders report for April was a real eye-opener. It indicated durable goods orders jumped 3.4% in April (Briefing.com consensus +0.6%) on top of an upwardly revised 1.9% increase in March (from +0.8%).
Excluding transportation, orders were up 0.4% (Briefing.com consensus +0.5%) and were revised for March to show a 0.1% increase versus a previously reported 0.2% decline
The load in April was carried by transportation equipment, which saw an 8.9% jump in new orders led by a 64.9% increase in new orders for nondefense aircraft and parts.
Capital goods orders were up a robust 7.2% after a 7.5% increase in March.
Machinery orders were a disappointment, declining 1.9% after declining 0.8% in March.
The other disappointment was the drop in business spending, as reflected in the 0.8% decline in new orders for nondefense capital goods excluding aircraft. That followed on the heels of a 0.1% decline in March and a 2.1% decline in February.
Shipments of nondefense capital goods excluding aircraft were up 0.3%, which will be a positive input for Q2 GDP forecasts.
The headline surprise from the report was certainly inspiring at first blush, yet there are still some bothersome trends below the surface that suggest the manufacturing sector isn’t exactly operating in a high gear.
| Category | APR | MAR | FEB | JAN | DEC |
| Total Durable Orders | 3.4% | 1.9% | -3.3% | 3.7% | -3.9% |
| Less Defense | 3.7% | -0.6% | -2.4% | 3.5% | -1.9% |
| Less Transport | 0.4% | 0.1% | -1.5% | 1.5% | -0.5% |
| Transportation | 8.9% | 5.3% | -6.7% | 8.2% | -10.0% |
| Capital Goods | 7.2% | 7.5% | -10.5% | 18.1% | -17.8% |
| Nondefense | 7.8% | -0.1% | -7.9% | 20.0% | -15.3% |
| Nondefense/nonaircraft (core cap gds) | -0.8% | -0.1% | -2.1% | 2.4% | -4.1% |
| Defense Cap Goods | 3.7% | 80.7% | -29.7% | 5.6% | -31.4% |
The final reading for the University of Michigan Consumer Sentiment for May was revised to 94.7 from the preliminary reading of 95.8. The revised figure was below the Briefing.com consensus estimate of 95.5, yet it was still up nicely from the final reading of 89.0 for April and the 90.7 reading registered for May 2015. The downward revision was due solely to the Index of Consumer Expectations, which was lowered to 84.9 from the preliminary reading of 87.5. The Current Economic Conditions Index was revised higher to 109.9 from the preliminary reading of 108.6.
It was noted in the report that there were only four prior months since the peak in January 2007 that the Sentiment Index was higher than in May 2016.
Interestingly, it was said the biggest uncertainty for consumers is not whether the Fed will hike rates in the next few months, but rather what government economic policies will look like under a new president. As a result consumers have placed an added emphasis on precautionary savings.
Fed Chair Janet Yellen said that if the economy remains on its current course, the Fed will gradually and cautiously increase rates over time in the coming months. She also indicated that wage growth is not accelerating which indicates that there is still slack in the labor market. However, the market sentiment seems to have acquiesced to the idea of a June or July rate hike. The dollar as a result rallied to a new seven week high of 95.77, up 0.64% on Friday. Te euro sank to a two-month low as the thinking of higher rates drew capital westward across the Atlantic in search of higher returns. The British Pound has held up well against the greenback in recent sessions as polling data shows a progressively smaller chance for Brexit. In the U.K. consumer confidence rose 2 points while France’s main index of consumer confidence rose far more than expected, 4 points in May to 98.0 from 94.0 in April. Concerns over unemployment fell to a seven year low.
Market Strategies Cycles
June has shone brighter on NASDAQ stocks over the last 45 years as a rule, ranking eighth with a 0.7% average gain, up 25 of 45 years. This contributes to NASDAQ’s “Best Eight Months” which ends in June. June ranks near the bottom on the Dow Jones Industrials just above September since 1950 with an average loss of 0.3%. S&P 500 performs poorly as well, ranking tenth, but essentially flat (–0.03% average). Small caps also tend to fare well in June. Russell 2000 has averaged 0.6% in the month since 1979.
In election years since 1950, June’s performance improves notably. June is the #4 DJIA month in election years averaging a 0.9% gain with a record of eleven advances in sixteen years. For S&P 500, June is #1 with an average gain of 1.4% (13-3 record). Election year June ranks #4 for NASDAQ and #5 for Russell 2000 with average gains of 1.9% and 1.6% respectively. This performance improvement is most likely the result of presidential candidate field being sufficiently narrowed and the ultimate Democratic and Republican nominees identified.
The second Triple Witching Week of the year brings on some volatile trading with losses frequently exceeding gains. On Monday of Triple-Witching Week the Dow has been down eleven of the last nineteen years. Triple-Witching Friday is better, up nine of the last thirteen years, but weaker over the past 23 years, up thirteen, down ten with an average loss of 0.2%. Full-week performance is choppy as well, littered with greater than 1% moves in both directions. The weeks after Triple-Witching Day are horrendous. This week has experienced Dow losses in 23 of the last 26 years with average losses of 1.1%. NASDAQ and Russell 2000 have fared better during the week after, up five of the last seven.
June’s first trading day is the Dow’s best day of the month, up 21 of the last 28 years. Gains have been sparse throughout the remainder of the month until the last three days when NASDAQ and Russell 2000 stocks begin to exhibit strength. The last day of the second quarter is a bit of a paradox as the Dow has been down 17 of the last 25 while NASDAQ and Russell 2000 have nearly the opposite record, although, since 2003 technology and small-caps indices have been dragged down by their large-cap brethren.
Last Friday the Stock Trader’s Almanac posted on their blog that there is a 76.9% chance of a Bear Market Decline Exceeding 20%. As the S&P 500 was reaching the 1-year anniversary of making its last all-time high, they examined the previous times the benchmark had gone more than a year without marking a new high.
Starting with the S&P 500 all-time closing high in 1929, there were 13 previous times where S&P 500 spent more than 1-year before closing at a new all-time high. With the exception of 1994, there was always a bear market using their preferred Ned Davis Research definition of a bear market, which requires a peak to trough decline of 13% or more after 145 calendar days or a 30% decline. Using the arbitrary 20% definition, S&P 500 avoided a bear market just 3 times out of 13 (shaded in light grey in the table). In other words, previous all-time-high 1-year dry spells suffered a 20% or greater S&P 500 decline 76.9% of the time.
In the table above the STA added that when the Ned Davis Research (NDR) bear was reached on DJIA, when the S&P 500 hit the -20% level and where the S&P 500 was at the 1-year mark. This presents two different scenarios for the current situation in 2016. The current market clearly has some resemblance to the 3 light grey highlighted years above in 1960, 1984 and 1995 where the market suffered mild declines, avoiding the 20% bear and rebounding relatively quickly, resuming the overarching up move of a secular bull market.
On the flipside, the current market also bears close resemblance to the 3 years shaded in light pink. At the 1-year mark in 1957, 1969 and 1981 the market was in the midst of a much larger decline that had yet to materialize. In 1957 the market had barely dropped, not yet reaching the NDR bear-level. But in 1969 and 1981 trouble was brewing.
A new high in the near term would be extremely encouraging and likely be a sign that at a minimum the market will mark time, move sideways and give up little ground. On the contrary, should the current rally fail to produce a new all-time high, it would suggest underlying weakness and greater odds of a substantial bear market in the next 6-12 months.
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Undervalued Small Cap Stocks
Lower Priced stocks that look to be a buy:
Repro-Med Systems,Inc ( OTCQX: REPR 0.35 )*
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.
This month the Company participated in the 25th Annual National Home Infusion Association (NHIA) Conference and Expo in New Orleans, LA and used the occasion to introduce its new “On-Line Calculator”, a tool to help determine which of the Company’s Precision Flow Rate Tubing™ and RMS HIgH-Flo Subcutaneous Needle Sets™ to use based on the medication being administered and desired time of infusion.
RMS Medical Products was one of 110 exhibitors in attendance at NHIA. Customers responded well to the new calculator and expressed that the new format of the “On-Line Calculator”, which can be used on any computer, tablet, or mobile device, was easy to use and very helpful. The marketing and sales teams continue to build new relationships and expand the Company’s customer base as evidenced by continued strong sales.
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 www.rmsmedicalproducts.com.
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.
Oakridge Global Energy Solutions, Inc. (OTCQB:OGES 0.58) *
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 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 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.
Pluristem Therapeutics ( Nasdaq : PSTI: $ 1.58 ) is a leading developer of patented placenta-based cell therapy products through its ( Placental expanded ) platform. In 2016 PLX cells will enter pivotal trials aimed at marketing approval in two indications serving multi-billion dollar markets. Positive clinical trial data for the cells have been reported in multiple indications. PLC cells release a cocktail of therapeutic proteins in response to inflammation, ischemia, hematological disorders and radiation damage. The Company’s proprietary, three – dimensional expansion technology is used to grow the cells in mass quantities with batch-to-batch consistency at Pluristem’s FDA and EMA approved state-of-the-art manufacturing facility. The cells do not require tissue matching prior to administration, making the treatment cost effective and readily available in virtually any medical setting. Pluristem has a strong intellectual property position, GMP-certified manufacturing facilities, strong balance sheet and strategic relationships with major research institutions.
Japan’s Patent Office just granted Pluristem two key patents, which cover: 1) Pluristem’s core technology of three-dimensional expansion methods for producing therapeutic cell products derived from placental or fat cells; 2) the use of placenta-derived cell products grown with this 3D technology to treat disorders of the hematopoietic system* (see below for a bit of detail), such as disorders caused by exposure to radiation or chemotherapy, and failed engraftment of hematopoietic stem cell transplants. Pluristem continues to strengthen its IP position in order to support the current negotiations with pharmaceutical companies in Japan regarding potential partnerships for the development and commercialization of its Placental expanded (PLX) cells.
Key to their activities in Japan, and as is descried on the fact sheet, is that Pluristem received clearance for the protocol for a Phase 2 trial in critical limb ischemia targeting marketing approval in Japan, via Japan’s accelerated regulatory pathway for regenerative medicines. Having been accepted into that pathway, Pluristem is able to apply for conditional marketing approval after a single successful phase 2 study. If the Phase 2 results are positive and PLX-R18 gets approved on the basis of those data, they will not need to spend the years and millions of dollars on Phase 3 trials, but will have to collect “real world” data on patients who have been prescribed the drug to treat critical limb ischemia, once it hits the market. In any case, acquiring IP for all placenta-derived cell therapies is crucial to activities there, as is protection of Pluristem’s 3D manufacturing methods.
Gold Mining USA OTC: GMUI ( 0.03 ) 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.
GMUI Strategy: The company uses strict investment criteria for project acquisitions and focuses on available tenements in proximity to operating mines, or in areas with proven or potential in-ground resources in regions suitable for short-term development. Projects are selected based upon historical drilling or sampling results combined with robust geological mining concepts and financial models. The projects are explored, analyzed and where required, brought into compliance to JORC/NI 43-101.
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.
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.
Mt Tymn is located approximately 125kms southwest of Darwin, 1km east of the Stuart Highway and 18kms south of the Adelaide River. As part of this acquisition, GMUI will also own the MLs relating to Ringwood which is situated approximately 120 kms southeast of Darwin, in the Pine Creek area. The minimum gold resource at Mt Tymn is conservatively estimated at 227,000 ounces with large potential for further drilling and assessment. Gross revenue is estimated to be in excess of $ 300 million with a gross profit expected to exceed 45%.
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. Try to buy Kroger ( KR: $ 35.71 ). We would like to buy Harley Davidson HOG toward the $ 45 level with a Stop Loss at $ 43 as it went above its 13-day m.a. The HDGE is not set up for a trade. It would be a buy if the market fails to make new highs on this move. It might be bought at 10.33 with stop protection at 10.00. The HDGE goes Up when the market goes Down. It is a good hedge against long positions. We missed the Flushing Financial as it did not reach our theoretical buy limit.
| Name | Business Description | PE | P/S | MV mln | Price | Buy Limit | Stop Loss
Or sold |
|
| KR | Kroger | Processor and Retailer Foods | 15 | 0.31 | 34B | 35.71 | 35.60 | 33.70x |
| HL | Hecla Mining | Basic Materials | 44 | 3.61 | 1.7B | 3.91 | 3.95 | 3.46x |
| FFIC | Flushing Financial | Bank Holding company Savings and loans | 13 | 3,5 | 592Mln | 21.05 | 19.10 | Buy on a dip |
| SUN | Sunoco | Oil and Gas Refining and marketing | 10 | 0.2 | 2.1B | 33.57 | 29.50 | Short Calls against position |
| AA | Alcoa | Aluminum Processing and Technology | N/A | 0.4 | 9.5B | 9.35 | 7.05 | 8.97X
|
| SBH | Sally Beauty Holdings | Specialty Retailer and distributor beauty supplies | 16 | 1 | 4B | 28.48 | 27.30 | 30x stopped out at 30 |
| HOG | Harley Davidson | Motorcycles and related products | 11 | 1.32 | 8B | 45.53 | 39.84 try to rebuy at $ 45 | Sold at 51.66 on 4/4 |
| CHD | Church & Dwight | Consumer Products Sodium bicarbonate Arm and Hammer | 25 | 3 | 10.6B | 98.17 | 79.80
01/26/16 |
Sold at 94.20 |
| T | AT&T | Communications | 36 | 1.54 | 211.7B | 38.99 | 34.10 | 37.78x |
| VA | Virgin Air | Regional Airlines | 7.2 | 0.9 | 1.5B | 55.98 | 30.30
Bought |
Merging with Alaska |
| ENZ | Enzo Biochem | Life Sciences | NA | 1.35 | 134M | 6.18 | 4.15
Suggested buy Originally bought at $ 2.78 8/24/15 |
4.68x |
| BAC | Bank of America | Commercial Bank | 10 | 2.02 | 165.3B | 14.88 | 11.86 | 13.80x |
| HDGE | Advisor Shares | Ranger Bear ETF | 10.51 | Buy on a close above
11.04 |
10.70x |
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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