Where To Invest March 2015 Market Strategies Newsletter

Where to invest Stocks to buy

March 9, 2015

Market Strategies Newsletter

Sample Issue

 Where To Invest Market Strategies

Covering High Return 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

Stock Options Trading Newsletter Covering:

Where to Invest March 2015

Best Stocks To Buy March 2015

Stock Market Investing Strategies

Stock Options Trade Alerts

Options Trading Strategies

How To Trade Options


2015 Year To Date Profits $ 3,652

Over 36% Returns


2014 Profits = $ 20,443

Over 204% Returns


$20,443 Profits for $10,000 Trading Account

By Following all trades in 2014 a

$10,000 account would be worth $30,443

 Where Ti Invest march 2015

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Where to Invest March 2015

Market Strategies

$10,000 Trading Account Traders Comments

We have five open long positions:

6 AA April 15 Calls

20 ARRY March 9 Calls @ 0.30

10 ARRY March 9 Calls @ 0.18

NAT March $ 10 Calls

SPY March 209 Puts


Funds in Use $ 1,710


Loss last week $100




Week 9 was a small loss of $100 bringing our YTD gains back to $3,652 with only 4 open positions utilizing $1,710.  Actually, a $100 loss on a week like this past one was just fine with me.

The market turned on a dime from the 15 year high close on NASDAQ @ 5008.10 pulling back 1.5%.

As discussed in this space recently, I am concerned about the narrowness of the rally.

AAPL moving into the Dow will increase volatility, and since it generally fades after new product releases, maybe not in a good way.

While I love their products, I’m more concerned with the technicals of the stock.  After the last big rally and peak (10/15/14-11/25/14) from  $95 to $117, it moved sideways and lower down to $104 has now rallied to $131.17.  It also closed below the short term (13 day) moving average on Wednesday and really doesn’t have much support until $120.  If that doesn’t hold, we could go toward the gap around $113.


Another issue is the “This time it’s different” mantra being front and center in the financial media.  Clearly the NASDAQ is broader and more diversified but traders are still traders and the confluence of fear and greed never changes…  Something disturbing will occur, be it geopolitical or fundamental, and buyers will want to stand aside and the momentum will shift.  Maybe not for long but certainly this market is no stranger to sharp declines.  If it’s not Internet, it could be biotech or any other group.


We went back into a long position in OSIR on Thursday.  For those of you who don’t recall we were in this in July 2013 around the $10 area when they had news and saw a 2 day move from $12 to $27.  We are not in the options since they are highly illiquid, but the stock has been consolidating for 16-18 months between $12 and $17.50 and when they reported earnings this week and it came back down to support I jumped on it.


Resistance is around $20.25 but Fridays’ close of $18.40 is the highest close in over 2 years.  While this group is probably the one with the bulls-eye on it’s back since it’s run so far, there is a deal or an announcement of an approval everyday causing major moves in the target or recipient of an approval.  As I mentioned on the liquidation of the SLXP position, we don’t buy for takeovers.  We bought OSIR at support, and we will use a stop at $15.89 (just below last weeks low).


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Best Stocks To Buy march 2015

 Market Strategies $10,000 Trading Account Trade Table

New Trades:

1) Buy 4 AAPL March 125 Puts @ $ 1.80   O.B. (Or Better)

2) Buy 4 UAL April 70 Calls @ $ 1.90  O.B.

03/06 Sold 2 SPY March 209 Puts 3.60          720       360 Gain
03/03 Sold 8 VJET March 10 Calls( 50% Rule plus Gap Down 0.10           80       240 Loss
03/02 Sold 10 RWM March 16 Calls ( 50% Rule Plus Gap Down 0.08           80       220 Loss
03/02 Bought 4 SPY March 209 Puts 1.80 720
02/25 Bought 10 ARRY March 9 Calls 0.18 180
02/24 Sold 10 TJX March 72.50 Calls 0.25         250        350 Loss
02/23 Bought 20 ARRY March 9 Calls 0.30 600
02/19 Bought 8 VJET March 10 Calls 0.40 320
02/17 Bought 10 TJX March 72.50 Calls 0.60 600
02/13 Bought 8 NAT March 10 Calls 0.60 600
02/06 Bought 10 RWM March 16 Calls 0.30 300

Remember, these trades are based on your participation in the

Subscriber Members Only



Previous closed out trades not listed here may be seen in previous market letters in the

VIP Subscribers Members Area.


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.

Best Stocks To Buy March 2015

undervalued stocks to buy

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MARKET Laboratory – Weekly Changes

Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect.








S&P 500








Russell 2000







Gold (spot)












Heating Oil




Unleaded Gas




Natural Gas








Put/Call Ratios

S&P 100



Put/Call Ratios

CBOE Equity





143-12  -3-21

2.81%  +0.22%

10 Yr. Note

126-02 -1-234     2.20%+0.19%






CRB Inflation





Barron’s* Confidence







5 Yr. Note

118-114 -296

1.68% +0.14 %






DJ Utilities
















M1 Money  Supply


February 23rd

M-2 Money



February 23rd


* 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.

Stock Market Investing Strategies

Market Strategies Technical Information


Support Levels S&P 500        2051

Resistance S&P 500              2093


Support Levels DOW          17,740

Resistance DOW                17,885


Support Levels QQQ            107.00

Resistance QQQ                  108.30


Support Levels NASDAQ      4860

Resistance NASDAQ            4970


Closes below support triggers sales/above highs buys


Stock Options Trade Alerts

$100,000 Trading Portfolio Stock Positions and New Trades


1) Buy 50 shares SCO  @ mkt   ( mkt means market order )

2) Sell 150 shares CALM  @ mkt 


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/


OSIR 300 16.34       03/04
ARRY 500   8.02       02/24
CALM 150 37.17       02/23
UWTI 1200 3.55       02/17  2.87 sco 2.84 02/26 ( $ 852 )
FORM 500 8.56       02/13
NAT  500 10.16       02/13
ENZ 1200 3.39       02/06 2.89 2.89 02/23 ( $ 600 )
BAC. Wts 5,000 lots 0.7411      12/26
BSBR  500 4.84      12/18
BCRH  300 16.84      12/18
SAN  600 8.40      12/16
SLXP  50 100.80      11/25 156.36 02/23 $ 2778
FB  100 74.18      11/24
XCO 1200 3.10      11/28
INO  500 9.92      11/17
AA  500 14.21      10/16
FCX 150 34.99      09/09
NBG 300   2.95      05/19
XRGYF 5000* 0.407      03/14
RPTP 400 15.37      01/16
NBG 300 4.08 8/12
TEXQY* 200 6.56 7/11
REPR* 5000 0.22 10/22/12 .12 sco

Remember, these trades are based on your participation in the

Subscriber Members Only



Previous closed out trades not listed here may be seen in previous market letters in the

VIP Subscribers Members Area.

How To Trade Options
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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Options Trading Strategies

How To Trade Options

Market Strategies $100,000 Trading Account


New Options Trades:


1) Buy 8 AAPL March 125 Puts @ $ 1.80  O.B.

2) Buy 8 UAL April 70 Calls @ $ 1.90  O.B. 


There were three closed long option positions:


RWM losing $440

VJET lost $480

The S&P Puts doubled necessitating selling half on the double gaining $ 720.


The result was a loss on closed positions of $ 200 with four lots of the S&P Puts remaining.


There were no closed stock positions.


For the full year to date, we have gains of $ 13,290.


Open position losses increased to $ 11,454.


There are five long Open Options positions:


Long Alcoa Calls

Two separate positions of ARRY, one of 40 lots, the other 20

NAT March 10 Calls and

SPY March 209 Puts


The Stock table has the following 21 positions:





The options call for a $ 2,500 investment unless otherwise stated; each stock position requires $5,000 unless otherwise specifically stated.


We are basing money management on a hypothetical

$ 100,000 and are using a total of

$   87,158 for the 21 open stock positions. There are five option long positions requiring

$     3,420 totaling

$   90,578 leaving

$     9,422 in cash.


These figures are approximate and there might be errors.


We have not counted the dividends received from Apple, JP Morgan, BSBR ( Brazil ), Santander, Blue Capital Reinsurance and others. Blue Capital issued a special extra dividend of $ 0.66 per share which enabled us to reduce our cost by that amount. In addition it pays about 7% per year in regular dividends.


We do not count commission costs and all trading once again is hypothetical.


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…


Small cap stocks to buy

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/


SPY March 209

8 lots



03/02/15 3.60

( Sold Half on 100% Profit Rule )

03/06/15 $ 720
ARRY March 9

20 lots



ARRY March 9

40 lots



VJET March 10

16 lots



02/19/15 0.10

( Sold 50% Rule Plus Gap )

03/03/15 ( $ 480 )
NAT March 10

16 lots



RWM March 16

20 lots



02/06/15 0.08

( Sold 50% Rule Plus GAP )

03/02/15 ( $ 440 )


Remember, these trades are based on your participation in the

Subscriber Members Only



Previous closed out trades not listed here may be seen in previous market letters in the

VIP Subscribers Members Area.



This Weeks’ Economic Numbers and Media Data


Earnings Reports Before the Open on Top of the Row;

After the Close are Below the Economics Numbers.


Monday Bitauto Holdings ( BITA 0.62 vs 0.40 )

Pozen ( POZN 0.15 vs -0.07 )

08:30 hrs  Personal Income Jan ( 0.4% vs 0.3% )

Personal Spending ( -0.1% vs -0.3% )

CORE PCE-Prices ( 0.2% vs 0.0% )

10:00 hrs  ISM Index Feb ( 53.0 vs 53.5 )

10:00 hrs  Construction Spending Jan ( 0.2% vs 0.4% )

Casey’s General ( CASY 0.78 vs 0.30 )

Mindray Medical  MR ( 0.44 vs 0.62 )

Urban Outfitters ( URBN 0.57 vs 0.59 )

Westport Innovations( WPRT -0.47 vs-0.51 )

Tuesday Barnes and Noble ( BKS 1.19 vs 0.86 ) S

uperior Industries ( SUP 0.15 vs 0.23 )  

10:00 hrs Wholesale Inventories Jan ( -0.3% vs 0.1% )

10:00 hrs JOLTS- Job Openings Jan ( NA vs 5.028 Mln )

Dynamic Materials ( BOOM 0.18 vs 0.02 )

Ocwen Financial ( OCN  -0.61 vs 0.74 )

Wednesday Brown Shoe ( BWS 0.16 vs 0.14 )

Fuel Systems Solutions ( -0.20 vs -0.16 )

07:00 hrs MBA Mortgage Index 03/07 ( NA vs 0.1% )

10:30 hrs Crude Inventories 03/07 ( NA vs 10.303 Mln Bbls )

14:00 hrs Treasury Budget Feb ( NA vs -$193.5Bln )

Men’s Wearhouse ( MW -0.07 vs -0.38 )

Molycorp ( MCP ( -0.26 vs -0.28 )

Thursday Dollar General ( DG 1.17 vs 1.01 )

Genesco GCO ( 2.38 vs 2.07 )

JA Solar ( JASO 0.26 vs 0.16 )

Kirklands ( KIRK 0.87 vs 0.69 ) 

Repligen ( RGEN 0.04 vs 0.10 )     

08:30 hrs Initial Claims 03/07 ( 306K vs 320K )

Continuing Claims 02/28 ( 2421K vs 2421K )

08:30 hrs Retail Sales Feb ( 0.4% vs -0.8% )

Retail Sales  ex-Auto Feb +0.6% vs -0.9% )

08:30 hrs Unit Labor Costs – Rev 4th Qtr ( 2.9% vs 2.7% )

08:30 hrs Export Prices ex-Agriculture Feb ( NA vs -1.0% )

Import Prices ex-Oil Feb ( NA vs -0.7% )

10:00 hrs Business Inventories Jan ( 0.1% vs 0.1% )

10:30 hrs Natural Gas Inventories 03/07 ( NA vs -228bcf )

Aeropostale ( ARO -0.03 vs -0.35 )

Jamba ( JMBA -0.34 vs -0.33 )

Inogen ( INGN 0.02 vs 0.89 )

Paragon Shipping ( -0.34 )

Ulta Salon ( ULTA 1.28 vs 1.09 )

Friday ANN ( ANN -0.02 vs 0.10 )

Buckle ( BKE 1.24 vs 1.23 )

EBIX ( EBIX 0.39 vs 0.40 ) 

Hibbett Sport ( HIBB 0.68 vs 0.64 )

Travel Centers of America ( TA 0.03 vs 0.39 )

08:30 hrs PPI Feb ( +0.3% vs -0.8% )

CORE PPI ( +0.1% vs +0.1% )

10:00 hrs Michigan Sentiment Mar  ( 95.8 vs 95.4 )



Market Strategies Fundamentals


The Dow was down this week after a record-setting start. It fell 276 points over 5 days, and closed the week at 17,856.78, off 275.82 or 1.52%. The NASDAQ and S&P 500 both lost ground as well, with the NASDAQ falling 36 points. The NASDAQ, which crossed the 5000 mark for the first time since 2000, made a key reversal week, an outside week down closing below the previous week the week down to 4,927.37. The S&P 500 ended at 2,071.26, off 33 points or 1.6%. Another big story was the huge loss in  Utilities. The Dow Jones Utilities Index fell the most of any index, losing 24.14, or 4.06% another large weekly loss.  Since January 29th the DJ Utility Index is off 12.8%.


The Hang Seng index, not to be outdone, lost over 400 points. Losses were initiated by the high number  of the jobs report which stoked fears of a Fed rate hike.


the U.S. Dollar hit its highest level since 2003, before rising oil prices and current account deficits pushed the index as low as 71 in 2007. It rose 125 ticks or 1.29% to 97.63, on the back of a non-farm payroll report that showed the U.S. economy created more jobs in February than expected (Actual 295K, Briefing.com consensus 240K, Prior 257K). The details of the employment report were not as encouraging, but the fundamentals of the Dollar Index rally (Eurozone weakness, lower oil prices, more energy production in the U.S, and all over the world is creating a foundation of delation.


Treasuries ended a tough week with a very bad day on the back of a February employment report that      was encouraging, at least on its face. While the report was inconclusive, the Treasury market’s rally between mid-December and February was likely driven by a lot of short positions blowing out and momentum trading, and the trend lower has not been ambiguous at all. The 2-year note held up better than the belly and long end of the curve, falling “only” 8 basis points to 0.72%


Yield check:

2-yr:  +8 bps to 0.72%

5-yr: +13 bps to 1.7%

10-yr: +13 bps to 2.24

30-yr: +11 bps to 2.84%

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Market Strategies Economic Data


February Nonfarm Payrolls


Nonfarm payrolls added 295,000 jobs in February well above the consensus at a + 240K jobs after adding a downwardly revised 239,000 (from 257,000) in January. The unemployment rate fell to 5.5% in February from 5.7% in January. The consensus expected the unemployment rate to fall to 5.6%.


Updated: 06-Mar-15 10:49 ET





Headline payrolls topped expectations, which is generally a good result. However, average hourly earnings increased marginally (0.1%) after growing by 0.5% in January. Productivity was lower. Lackluster wage growth combined with the improvement in payrolls led to a 0.4% increase in aggregate wages. To put that in perspective, even after the downward revision to the January payroll numbers, income did increase a much stronger 0.7% last month.

Since consumption growth, and economic growth in general, follow the trend in income, the February employment results were decidedly worse than January even though this month’s headline payroll number far exceeded both expectations and the prior level. The number is not as strong as the headline would suggest. The decline in the unemployment rate was completely due to another exodus in labor market participation. The participation rate dropped to 62.8% in February from 62.9% in January. If the labor force participation rate remained at January levels, the unemployment rate would have remained at 5.7%.


The February employment data was not bad, but not necessarily good either.


Establishment Survey
Nonfarm Payrolls 295K 239K 329K 423K 221K
  Goods-Producing 29K 64K 64K 76K 34K
    Construction 29K 49K 44K 30K 10K
    Manufacturing 8K 21K 19K 45K 23K
  Service-Providing 259K 173K 255K 338K 184K
    Retail Trade 32K 28K 0K 61K 26K
    Financial 10K 22K 7K 28K 7K
    Business 51K 10K 72K 96K 40K
       Temporary help -8K -14K 21K 31K 9K
    Education/Health 54K 46K 54K 51K 28K
    Leisure/Hospitality 66K 39K 56K 42K 55K
    Government 7K 2K 10K 9K 3K
Average Workweek 34.6 34.6 34.6 34.6 34.6
 Production Workweek 33.8 33.8 33.8 33.8 337
Factory Overtime 4.3 4.4 4.6 4.6 4.4
Aggregate Hours Index 0.2% 0.2% 0.3% 0.4% 0.5%
Avg Hourly Earnings 0.1% 0.5% -0.2% 0.4% 0.2%
Household Survey
Household Survey
Civilian Unemp. Rate 5.5% 5.7% 5.6% 5.8% 5.8%
Civilian Labor Force -178K 1051K -273K 119K 416K
Civilian Employed 96K 759K 111K 4K 683K
Civilian Unemployed -274K 291K -383K 115K -267K



Stocks and ETF’s bought over the past few weeks:


Notice the Flexibility  is gone now as there is no longer positions in the VXX, SPXU or UDOW  Both the VIX and SPXU protect against declines while the UDOW and various stocks reflect the long side.  We have shown this table for the purpose of being both profitable and somewhat protected for much of the time while maintaining profitable long positions.  Please check on the previous weekly market letters if there are questions.  The UAL was stopped out at 66.60.  AA was stopped out. We would like to be long Alcoa . We also bought the Diana Shipping at 6.60. The Scorpio Tankers were not ever filled as the market never got to our price.Try to buy a scale down on this move. We remain long  Mosaic. We sold the Sell the Smith and Wesson  on the opening last Monday. We remain long the XLV,  the Health Care spider with the stop relatively  close at 69. In addition we are long the DSX and Scorpio Shippers. ( All trading is hypothetical  and intended as guidance)


Symbol Name Business Description PE P/S MV mln Price Buy Limit Stop Loss

Or sold

XLV Health Care Spider ETF 72.24 70 69sco
SWHC Smith and Wesson Holding Corp Firearms; Handguns Metal Processing 8.5 0.93 527.37 13.63

Sold on March 2nd

AA Alcoa Aluminum and Metals 14.30 0.8 17.53B 14.79 14.57 and again at

14 17

DSX Diana Shipping Dry Cargo Shipping N/A 3.7 611 6.50 6.60 5.90
STNG Scorpio Tankers Oil Transportation 26 5.6 1.47B 8.64 7.46 7.48
UAL United Cont Hld Transportation 16 1.2 25.6B 66.67 stopped out at 66.60 46 original buy 63.45sco
VXX VIX Volatility Hedge Portfolio 27.62 30.97 stopped out @ 32.50


MOS Mosaic Company Agriculture Chemicals 18 2.04 17.9B 49.03 42.28 47.70


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Undervalued Small Cap Stocks


RMS Medical Systems, Inc ( REPR 0.40)* 


Has doubled this year already and can double again .


RMS designs, markets, manufactures portable easy to operate infusion devices, including needles and tubing. It is easy to handle by patients. The Freedom 60 is being marketed in Europe as well as gaining a footing among home-care professionals in America. The RescueVac is used in ambulances and planes for emergency suction.



The Grilled Cheese Truck, Inc. (OTCQB: GRLD $ 3.95 )*


Cooks, sells, serves and promotes specialty grilled cheese sandwiches. Since 2009, The Grilled Cheese Truck has been serving areas of Southern California and Phoenix, AZ. David Danhi is an Executive Chef and began the company after spending thirty years in the food industry.


Grilled cheese is gaining popularity as a classic comfort food right along with pizza. The Grilled Cheese Truck is the only known gourmet food truck that has gone public and is the first and one of the largest gourmet grilled cheese truck in the U.S. The Company has 13 trucks and growing The Company has 13 trucks and its growth is legendary in L.A.


The Grilled Cheese Truck was one of the premier gourmet food trucks to appear on the L.A. scene 5 years ago. Chef Danhi wanted to capitalize on the growing demand for food trucks and is recognized for his food crafting and grill cheese creations, such as the signature sandwich, “Cheesy Mac and RIB”. The grilled cheese sandwiches are slowly toasted, buttered and crispy, touted as the “ultimate grilled cheese sandwich”.


January ends with the commencement of the Company trading on OTCQB and the introduction of new CEO, Al Hodges. Hodges brings 35 yrs. of operations, management and restaurant experience. He has a track record for success as a performance driven executive who implements successful business plans. From concept to expansion, Hodges has built a series of successful businesses and driven up company value. The Grilled Cheese Truck has become a widely recognized name and has



Enzo Biochem ( ENZ: NYSE: $ 2.98 ) 


We bought Enzo and got stopped out last week. I would be stubborn and try to buy it again basing my belief that the fundamentals will overcome the technical pattern.  $ 3.02 is the 13-day moving average. If it can’t close above this number, we can’t be long the stock. F2015 (July) got off to a solid start with Q1 (Oct) results continuing to affirm our belief that Enzo’s core businesses are improving. Once again, revenue, gross profit and adjusted EBITDA were all better than projected, with revenue growth in both the clinical lab and life sciences businesses.


Gross margin in both businesses continued to improve, as the ongoing shift toward higher value molecular testing and efforts to improve operational efficiency continue to bolster margins. The company’s balance sheet remains on good footing while catalysts in the form of new products and litigation remain in play. Accordingly, we reiterate our Buy rating and $7 price target.

What keeps us excited about ENZ is (1) a clinical lab which is highly attractive to numerous strategic buyers; (2) a proprietary molecular diagnostic technology that could cut the cost of molecular testing by about 50%; and (3) IP litigation that could yield hundreds of millions of dollars over time



Market Strategies Cycles


The good news is:


The market is working off its overbought condition. Next week, on March 10, this bull market will be starting its seventh year. It arrives at this milestone by avoiding a 20% (widely accepted threshold for a decline to be called a bear market) or greater decline which was narrowly avoided in 2011 when S&P 500 dropped 19.4% from its April closing high to its October closing low.


So far the Dow has gained 12% from its low October 2014 and 160% from its low of 6,876 March 2009. The S&P 500 has gained 191% from the March 2009 lows and 13.7% up from the October 2014 lows, while the Nasdaq is up 19.7% from its low October 2014 and 264% from March 2009.


The current bull market has lasted longer and returned more than the historical averages across all three indices. However, there have been bull markets of longer duration but not the magnitude like today.


The negatives


Strength of the breadth indicators peaked about a year ago.  Either they will recover or prices will tumble.  If the breadth indicators recover, that recovery should begin soon because, seasonally, we are in the strongest period of the 4 year Presidential Cycle.  If prices tumble, that is likely to happen sometime after July 1st, because that is the end of the seasonally strong period.


The chart below covers the past 3 years showing the Russell 2000 (R2K) in red and an Advance – Decline line (AD ADL) calculated from the component issues of the R2K in blue.  This Advance – Decline line is a running total of daily declining issues subtracted from advancing issues.


Dashed vertical lines have been drawn on the 1st trading day of each month, those lines are red on the 1st trading day of the year.


The AD line peaked around the 1st of March last year and did not confirm the recent all time highs in the R2K.


The Current Posture


New highs declined a bit last week, but new lows remained at non- threatening levels.

The chart below covers the past 6 months showing the NASDAQ composite (OTC) in blue and a 40% trend (4 day EMA) of NASDAQ new highs divided by (new highs + new lows), OTC HL Ratio, in red.  Dashed horizontal lines have been drawn at 10% levels for the indicator.  The line is solid at the neutral 50% level.


OTC HL Ratio fell last week, but finished the week at a comfortably positive 65%.

As DJIA has pushed substantially above the high range of that chart (not because of a massive global economic boom or peace, but because of unprecedented easy monetary policy), I have again raised the floor on my initial forecast. The end game still is in play and the means to the end has only been elevated to account for this new easy money world. We still expect some tough sledding over the next few years in the market.


The low point of the economy and the bottom of the stock market now clearly appear to be behind us. However, volatility is increasing as is risk. Keep an eye on the VIX published every week on the “ Market Laboratory”. Geopolitical risk is increasing. The war on terror is still raging, a paradigm shifting technology has yet to emerge and deflation is emerging. 3D Printing and Fracking are not likely to change the world for the individual consumer like the car or the PC did. CPI has risen just 34% since 2001. We are still plagued by political dysfunction and the next administration is likely to have a rather tough go of it before we can get back to some real bipartisan leadership and policy initiatives.



The next chart is similar to the one above except it shows the S&P 500 (SPX) in red and NY HL Ratio, in blue, has been calculated from NYSE data.


NY HL Ratio also declined last week, closing at 67%.







Biotechnology seasonal strength ends in early March. Buy the BIS Ultra-Short Nasdaq Biotech ETF. A close above the 13 day MA is needed to confirm trading about 36. or Sell iShares NASDAQ Biotech (IBB)


Next week includes the first 5 trading days prior to the 2nd Friday of March during the 3rd year of the Presidential Cycle.


The tables below show the daily change, on a percentage basis for the 5 trading days prior to the 2nd Friday of March during the 3rd year of the Presidential Cycle.


OTC data covers the period from 1963 to 2014 while SPX data runs from 1953 through 2014.  There are summaries for both the 3rd year of the Presidential Cycle and all years combined.  Prior to 1953 the market traded 6 days a week so that data has been ignored.


Average returns for the coming week have been positive by all measures.



Saint Patrick’s Day is March’s sole recurring cultural event. Gains the day before Saint Patrick’s Day have proved to be greater than the day itself and the day after. Perhaps it’s the anticipation of the patron saint’s holiday that boosts the market and the distraction from the parade down Fifth Avenue that causes equity markets to languish. Or maybe it’s the fact that Saint Pat’s usually falls in historically bullish Triple-Witching Week.


Normally a decent performing market month, March performs even better in pre-election years (see Vital Statistics table below). In pre-election years March ranks: 4th best for DJIA, S&P 500, NASDAQ, Russell 1000 and Russell 2000 (January, April and December are better). Pre-election year March has been up 13 in a row for DJIA and 9 in a row for Russell 1000 & 2000. In fact, since inception in 1979, the Russell indices have a perfect, 9-for-9 winning record.


Whatever the case, since 1950, the S&P 500 posts an average gain of 0.22% on Saint Patrick’s Day (or the next trading day when it falls on a weekend), a gain of 0.11% the day after and the day before also averages a 0.22% advance. S&P 500 median values are 0.16% on the day before, 0.23% on Saint Patrick’s Day and 0.03% on the day after. In the nine years when St. Patrick’s Day falls on a Tuesday, like this year, since 1950, the day before (Monday) produced an average loss of 0.06%, while Tuesday advanced an average 0.77% and Wednesday 0.29%.


March (1950-2014)
  DJI SP500 NASDAQ Russell 1K Russell 2K
Rank 5 4 6 4 6
# Up 43 43 28 25 26
# Down 22 22 16 11 10
Average % 1.1 1.2 0.8 1.1 1.3
4-Year Presidential Election Cycle Performance by %
Post-Election 0.4 0.6 -0.3 0.8 1.2
Mid-Term 1.3 1.3 1.7 2.0 2.8
Pre-Election 2.2 2.1 3.5 2.4 3.2
Election 0.6 0.8 -1.6 -0.6 -2.1
Best & Worst March by %
Best 2000 7.8 2000 9.7 2009 10.9 2000 8.9 1979 9.7
Worst 1980 -9.0 1980 -10.2 1980 -17.1 1980 -11.5 1980 -18.5
March Weeks by %
Best 3/13/09 9.0 3/13/09 10.7 3/13/09 10.6 3/13/09 10.7 3/13/09 12.0
Worst 3/16/01 -7.7 3/6/09 -7.0 3/16/01 -7.9 3/6/09 -7.1 3/6/09 -9.8
March Days by %
Best 3/23/09 6.8 3/23/09 7.1 3/10/09 7.1 3/23/09 7.0 3/23/09 8.4
Worst 3/2/09 -4.2 3/2/09 -4.7 3/12/01 -6.3 3/2/09 -4.8 3/27/80 -6.6


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Where To Invest March 2015