Where To Invest May 2016 Market Strategies

Where to Invest newsletter

Where To Invest May 2016

Where To Invest May 2016 Market Strategies

May 2, 2016

Market Strategies Newsletter – Sample Issue


Where To Invest May 2016

 

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 May 2016

Best Stocks To Buy May 2016

Stock Market Investing Strategies

Stock Options Trade Alerts

Options Trading Strategies

How To Trade Options

 

Proven Profits Trading Success

Results From Our Recent Trade Alerts:

 

53% Loss on MSFT May 52 Calls in 2 Days

97% Profits on SJM May 125 Puts in 7 Days

27% Profits on QQQ May 109 Puts in 7 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

50% Loss on QQQ Puts in 5 Days

50% Loss on GLD Calls in 15 Days

207% Profits on SIG Puts in 6 Days

48% Profits on BA Calls in 2 Days

50% Loss on JPM Calls in 3 Days

70% Profits on GLD Calls in 1 Day

 

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$10,000 Trading Portfolio
Charles Moskowitz Discussion

 

There are 2 positions:

            

Long 4 FXE June 109 Puts and

3 SIG  May Puts

 

Funds in Use = $ 955

 

Week 17 had only one closed out trade in MSFT 5/52 calls.  It was a 50% down rule closeout that included a small gap of $ .07 from when I sent out the text to sell at the market when we were trading @ $ .50.  The loss of $196 brought YTD performance back down to a still very respectable $4575.  We have two open trades in FXE puts and SIG puts for a total of funds in use of $955.

The FXE trade is approaching the 50% down area so you need to remember that we paid $1.00 so be alert to the $ .50 price for a sale.  I’ve not gone ahead and issued a sell since we have been to this general area on a weekly basis 6 times since February of 2015 with moves back to the $106 area.  We are in the June options which have a little more resilience than the shorter expirations.

For the past several weeks we have been talking about the race to the bottom for all of the world’s currencies and the need for some portion of your money to be invested in Gold.  Trading in the options of GLD (the gold ETF) is somewhat difficult since many of the moves and pullbacks have occurred in the “overnight, electronic sessions” that we don’t have access to when we are in a market that only operates during the 9:30am to 4:00pm hours.  This is why I made the recommendation to own some of the actual commodity in the form of non-numismatic coins.  I still feel that way, but I want to take a minute to discuss the futures market.  Commodities tend to trade for long periods of time in the direction of the underlying trend.  The gold has clearly put in an important bottom a 5 year 50% decline between September 2011 and the lows made at yearend 2015.  This was followed by a 24% rally from 1050 to 1299.  There is some important overhead resistance between 1300 and 1400, but if the bottom is in fact in, this market can continue higher you several years.

I think we are due for a pullback, and for that reason I think that we can play with some long-dated calls on some of the better pure-play gold and silver companies. I would look at Hecla (HL), Harmony (HMY) and Newmont (NEM).  All are overbought and vulnerable to 20-30% declines but that doesn’t negate their longer term potential to double assuming we continue to observe a real bull market in the futures.

So, I will be looking to take advantage of any moves lower in these 3 names.  You will find some GTC orders under the market for both the stocks and the longer dated calls.

 

 

 

Market Strategies $10,000 Trading Account Trade Table

 

DATE TRADES PRICE COST PROCEEDS RESULTS
04/28 Bought 3 SIG May 105 Puts 1.85 555
04/27 Sold 4 MSFT May 52 Calls

( 50% Loss Rule )

      172 196 Loss
04/25 Bought 4 MSFT May 52 Calls 0.92 368
04/18 Bought 4 FXE June 109 Puts 1.00 400

 

3rd Week expiration when the month is listed without a date.

 

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 market investing strategies

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New Trades $10,000 Account:

 

                                      ( 1 ) Buy 6 HL September $ 3.50 Calls @ $ 0.85

                                      ( 2 ) Buy 4 NEM  May 33 Calls @ $ 1.85                                      

                               

NEW Trades $ 100,000 account:                             

                                         

                          1 ) Buy 12 HL September $ 3.50 Calls @ $ 0.85

                          2 ) Buy   8 NEM May 33 Calls @ $ 1.85

                          3 ) Buy 1000 HL @ $ 3.95 GTC

                          4 ) Buy 150 NEM @ $ 31.80 GTC

                          5 ) Buy  1000 HMY @ $ 3.15 GTC

Investing Strategies

Fundamental Analysis Stocks To Buy with Stops

Using fundamentals the following are stocks to buy and they have done well. Now it is your decision whether to take profits in these uncertain times.

 

Value oriented stocks were mixed last week. Sunoco, Church and Dwight, Harley Davidson, Sally Beauty and AT&T are all in good shape and should be bought on weakness.

 

We bought Microsoft at its 200 day m.a. about 50.77 and were stopped out at $ 49.87.

 

Enzo Biochem has come to life and appears ready to take on the $ 5 level.

 

The HDGE is a buy for hedging against long positions.  It has been a major success for those who believe in hedging.  The losses were very small on the HDGE considering huge gains on the longs.

 

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

Or sold

FFIC Flushing Financial Bank Holding company Savings and loans 13 3,5 592Mln 19.95 19.10 Buy on a dip
SUN Sunoco Oil and Gas Refining and marketing 10 0.2 2.1B 35.89 29 Unable
AA Alcoa Aluminum Processing and Technology N/A 0.4 9.5B 11.17 7.05 8.97X

Earnings season begins

SBH Sally Beauty Holdings Specialty Retailer and distributor beauty supplies 16 1 4B 31.40 27.30 30x
HOG Harley Davidson Motorcycles and related products 11 1.32 8B 47.83  39.84 Sold at 51.66  on 4/4
CHD Church & Dwight Consumer Products Sodium bicarbonate Arm and Hammer 25 3 10.6B 92.70 79.80

01/26/16

Take Profits sold 94.20
T AT&T Communications 36 1.54 211.7B 38.82 34.10 37x
MSFT Microsoft Technology Software, Services, Devices 17 4.7 431B 49.87 50.90

 

53.50x stopped out at

 $ 52.04

VA Virgin Air Regional Airlines 7.2 0.9 1.5B 55.69 30.30

Bought

Merging with Alaska
ENZ Enzo Biochem Life Sciences NA 1.35 134M  4.98 4.15

Suggested buy

4.48x
BAC Bank of America Commercial Bank 10 2.02 165.3B 14.56 11.86 10.90x
HDGE Advisor Shares Ranger Bear ETF 10.30  No Position  

 

 

MARKET Laboratory – Weekly Changes

 

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

 

Dow

17,773.64

-230.11

-1.28%

Nasdaq

4775.36

-130.87
-2.67%

S&P 500

2065.30

-26.28

-1.26%

Transportation

7871.63

-214.35

-2.65%

Russell 2000

1130.84

-15.85

-1.38%

Nasdaq100

4341.30

-132.89

-2.97%

Gold (spot)

1289.20

+60.50

+4.9%

  Silver

1781.9

+86.9

+5.1%

Crude

45.92

+2.19

+5.0%

Heating Oil

138.60

+6.86

+5.2%

Unleaded Gas

1.6044

+0.0560

+3.6%

Natural Gas

2.178

-0.089

-4.2%

VIX

15.70

+2.48

+18.8%

Put/Call Ratios

S&P 100

110/100’s

-16/100’s

Put/Call Ratios

CBOE Equity

68/100’s

-1/100’s

 

Bonds

163-10 + 27

2.66% -0.04%

10 Yr. Note

130-02 +19    1.82%-0.06%

 

Copper

228.35

+1.50

+0.7%

CRB Inflation

Index

184.61.

+4.96

+2.8%

Barron’s* Confidence

68.5

+0.4

S&P100

915.02

-13.33

-1.44%

5 Yr. Note

120-292 +132

1.28% -0.07%

 

Dollar

93.02

-2.08

-2.2%

DJ Utilities

654.44

+14.92

+2.33%

AAII

Confidence

Index

 

Long Term

Average

Bullish

27.4%

-6.0%

 

38.74%

Bearish

28.6%

+4.7%

 

30.30%

Neutral

44.0%

+1.3%

 

30.96%

M1 Money

Supply

+5.71%

Apr 18th

 

 

M2 Money

Supply

+6.17%

Apr 18th

 

 

* 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             2039                                     2090

Dow                  17,610                                  18,070

QQQ              104.50                                 108.10

Transports          7745                                     8005

NASDAQ            4660                                             48.80

 

 Market Investing Strategies

$100,000 Trading Portfolio Stock Positions and Trades

                                                          

Each stock is allocated a theoretical $ 5,000 share of the portfolio unless otherwise indicated.  

        

Stock

 

 

Purchase Price Purchase Date Stop/Loss   Price/

Date Sold

  Profit/

(Loss)

LABD    100 36.005       04/25 40.05   04/26 $ 405
NVAX    500 5.38       04/18
SCO        20 109.88       04/12
EYES    500 5.04       04/04
XLF       200  22.25       03/24 23.43  04/25 $ 236
SUN      300 29.50       02/23 Sold 3 32.50 Calls $ 900 credit
STNG   500 6.02       02/22
EYES  1000 6.49       12/28
APC      100 51.21       12/10 54.02  04/27 $ 281
APC      100 53.53       12/07 54.02  04/27 $   49
LVLT    100 50.81       11/23
TWTR  200 28.51       10/28
MOS  100 43.55       08/14
NBGGY  600 1.40       02/17
BAC. Wts 5,000 lots 0.7411       12/26
BSBR  500

500

4.84

3.75

     12/18

 

SAN  600 8.40      12/16
AA  500 14.21      10/16
NBGGY 300  2.95      05/19
NBGGY 300 4.08 8/12
TEXQY* 200 6.56 7/11
REPR* 5000 0.22 10/22/12

   
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 was one closed option position:

 

MSFT May 52 Calls were sold on the 50% Loss rule taking a hit for $ 392 on the 8 lots.

 

There were three closed out stock positions:

 

XLF bought on March 24th was sold on April 25th for a profit of $ 236.

LABD purchased April 25th was sold the very next day at $ 40.05 for a gain of $ 405.

2 positions of Anadarko Petroleum ( APC ) bought Dec 7th  and 10th of last year were sold for a small gain of $ 49 and $ 281 respectively April 27th at $ 54.02.

 

The stock positions made a profit of $971.

 

The net gain for the week after subtracting the option loss was $ 579.

 

For the entire year on closed out trades, our hypothetical profits increased to $16,459.

 

The options expire on the third Friday of each Month unless otherwise posted.

 

The Stock table has the following 20 positions:

 

AA, APC(2), BAC.B.WS,  BSBR( 2 ), EYES, LVLT, MOS, NBGGY (3), NVAX, REPR,  SAN, SCO, STNG, SUN, TEXQY, TWTR, XLF, short 3 SUN Calls.

 

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

 

We are basing money management on a hypothetical $ 100,000, using a total of $66,403

for the 20 open long stock positions plus a credit of $900 for the SUN written Calls, which reduces the requirement to $ 65,503. The Open Option Position requires $ 800. This increases the margin requirement to $ 66,303, leaving $ 33,697 in cash.

 

These figures are approximate and there might be errors.

 

We have not counted the dividends received from many previous trades such as Apple, Colgate Palmolive, JP Morgan, North American Tankers, STNG, Santander, 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)

SIG May 105

6 lots

Puts

1.85

04/28/16
MSFT May 52

8 lots

Puts

0.92

04/25/16 0.43

( 50% Loss Rule )

04/27/2016 ( $ 392 )
FXE June 109

8 lots

Puts

1,00

04/18/16
SUN June 32.50

3 lots written

Calls

 

3.00 02/23/2016 $ 900 credit

Covered write

 

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This Weeks’ Economic Numbers

Earnings Releases and Media Data

 

Before the Open on top of the Row;

After the close below the Economics Information

 

MONDAY CNA Financial CAN ( 0.62 vs 0.83 ) Sysco SYY ( 0.42 vs 0.30 ) Loews Corp L ( 0.52 vs 0.29 )

Diamond Offshore DO ( 0.29 vs 0.50 ) Helmrich&Payne HP -0.24 vs 1.37 Myers MYE ( 0.12 )

10:00 hrs ISM Index April ( 51.4 vs 51.8 )

10:00 hrs Construction Spending March ( + 0.6% vs -0.5% )

American International AIG ( 1.00 vs 1.22 ) Anadarko Petroleum APC ( -1.18 vs -0.72 ) Community Health CYH ( 0.77 vs 0.85 ) Owens-Illinois OI ( 0.40 vs 0.44 ) Edison EIX 0.88 vs 0.90 Denny’s DENN ( 0.11 vs 0.10 ) Olin OLN 0.13 vs 0.17 Tenet Healthcare THC ( 0.33 vs 0.46 ) Texas Roadhouse TXRH ( 0.54 vs 0.46 ) UGI UGI 1.25 vs 1.23 Wynn ( 0.82 vs 0.70 )

TUESDAY Archer-Daniels ADM ( 0.45 vs 0.77 ) CVS health CVS 1.16 vs 1.14  Emerson EMR ( 0.63 vs 0.65 ) HCA HCA 1.49 vs 1.36 Henry Schein HSIC ( 1.39 vs 1.28 ) Hyatt Hotels H ( 0.25 vs 0.11 ) Kennametal KMT ( 0.23 vs 0.46 ) Mylan Labs MYL ( 0.76 vs 0.70 ) Scotts Miracle Grow

SMG 2.47 vs 2.06 Sprint S -0.13 vs -0.06 Starwood Hotels HOT ( 0.59 vs 0.65 ) Valero Energy VLO ( 0.65 vs 1.87 ) Westlake Chem WLK 0.93 vs 1.10 Xylem XYL ( 0.34 vs 0.33 )

Elon Musk’s Space X will try to repeat its successful landing of a booster rocket, after launching a satellite.

14:00 hrs Auto Sales April ( NA vs 5.12 mln )

14:00 hrs Truck Sales April ( NA vs 8.21 mln )

Agrium AGU -0.05 vs 0.12 Avis CAR (-0.06 vs +0.17 ) CBS CBS ( 0.94 vs 0.78 ) Jack Henry JKHY ( 0.67 vs 0.63 ) ONEOK Partners OKS ( 0.50 vs 0.21 ) XPO Logistics XPO -0.18 vs -0.13 Trinseo TSE ( 1.35 vs 0.80 ) Smart Final SFS 0.09 vs 0.10 West Union WU 0.38 v 0.39

WEDNESDAY Anheuser-Busch InBev BUD ( 0.91 vs 1.40 ) CDW CDW 0.65 vs 0.56 Delphi Automotive DLPH ( 1.34 vs 1.21 ) Dominion D 0.94 vs 0.99 Mosaic MOS 0.13 vs 0.70 Priceline PCLN

( 9.60 vs 8.12 ) Time-Warner TWX ( 1.29 vs 1.19 ) Sumitomo SMFG 117.58 Zoetis ZTS 0.41

07:00 hrs MBA Mortgage Index 04/30 ( NA vs -4.1% )

08:15 hrs ADP Employment Change April ( 196K vs 200K )

08:30 hrs Productivity- Prel 1st Qtr ( -1.4%  vs -2.2% )

08:30 hrs Unit Labor Costs – Prel ( +2.6% vs +3.3% )

08:30 hrs Trade Balance March ( -$41.4B vs -$47.10B )

10:00 hrs ISM Services April  ( 54.5 vs 54.5 ) )

10:30 hrs Crude Inventories 04/30 ( NA vs +1.99Mln Bbls )

21st Cent Fox FOXA 0.47 vs 0.42  Annaly NLY 0.31 vs 0.25 Arris ARRS 0.40 vs 0.44

MetLife MET 1.38 vs 1.44 Sunoco LP ( 0.78 vs 0.44 ) Whole Foods WFM ( 0.41 vs 0.43 )

THURSDAY 3D Systems DDD 0.05 vs Same Alibaba BABA ( 0.56 vs 0.48 ) Apache APA ( -0.89 vs -0.37 )

Becton Dickinson BDX 2.01 vs 1.61 Hecla HL ( 0.01 vs 0.03 ) Jacobs JEC 0.68 vs 0.72 Merck

MRK ( 0.85 vs 0.85 ) Sally Beauty SBH ( 0.41 vs 0.39 )  Teledyne TDY ( 1.08 vs 1.20 )

The climate action Summit in Washington convenes public officials and business leaders to implement the Paris Agreement to mitigate global warming.

07:30 hrs Challenger Job Cuts  April ( NA vs + 31.7% )

08:30 hrs Initial Claims 04/30 ( 259K vs 257K )

08:30 hrs Continuing Claims 04/23 ( NA vs  2130K )

10:30 hrs Natural Gas Inventories 04/30 ( NA vs +73 bcf )

Allegheny Corp Y ( 7.50 vs 7.82 ) Cerner CERN 0.53 vs 0.45 EOG EOG -0.84 vs 0.03 FireEye FEYE ( -0.50 vs -0.48 ) Fluor FLR ( 0.84 vs 0.96 ) Herbalife HLF 1.09 vs 1.29  News Corp NWSA ( 0.04 vs 0.05 ) POST 0.41 vs 0.87 Ryerson RYI ( 0.06 vs 0.15 ) Rockwell Medical RMTI ( -0.13 vs -0.07 ) SunPower SPWR -0.22 vs 0.13 Yelp YELP ( 0.03 vs 0.10 )

FRIDAY Arcelor Mittal MT ( -0.29 vs -0.41 ) CIGNA CI 2.15 vs 1.96 Cognizant tech CTSH

( 0.79 vs 0.71 ) CST Brands CST 0.25 vs 0.20 Exelon EXC 0.68 vs 0.71  

08:30 hrs Nonfarm Payrolls April ( 207K vs 215K )

Nonfarm Private Payrolls April  ( 191K vs 195K )

Unemployment Rate ( 5.0% vs Same )

08:30 hrs Hourly Earnings April ( +0.3% vs +0.3% )

Average Workweek ( 34.5 vs 34.4 )

15:00 hrs Consumer Credit March   ( $18.0B vs $ 17.3B )

Berkshire Hath BRK.B 2761 vs 2583 Cameco CCJ  ( 0.25 vs 0.18 ) Kronos Worldwide

KRO -0.10 vs 0.16 Transocean Partners RIGP ( 0.50 vs 0.41 )

U.S. Oil Rig Count fell 11 to 332, Nat Gas rig count fell 1 to 87. Oil rose 5% on the week and gained each of the last 4 weeks a total of 22.6%.

 

 

Market Strategies Fundamentals

Stocks had a heavy sell-off Thursday and Friday of last week led by tech stocks, which had been leading the markets lower for several days. Apple ( AAPL: $ 93.74 )  reported its first quarterly loss in 13 years declining 11% to lead the tech rout. Carl Icahn made headlines announcing a sale of his entire Apple position.

The tech-laden Nasdaq fell 131 points or 2.7%. The Transportation Index was almost as bad falling 214 points or 2.65%. Both the S&P, down 26.28 or 1.26% and the Dow, off 230 points or 1.28%, were only modestly sold as was the Russell 2000 which fell just 1.38%.

Five of the Ten Dow Industrial Groups were higher led by Utilities up 2.26%; Telecommunications was up 0.95%; Oil and Gas gained 0.53% Consumer Goods +0.44% and Basic Materials +0.17%. Leading the decliners, Technology fell 3.75% followed by Health care, off 2.97% and Financials off 1.16%; Consumer services fell 0.76% and Industrials 0.58%.

Economic fundamentals were also discouraging as First quarter GDP rose just 0.5%, well below forecasts. Even Europe had a higher GDP growing at a 0.6% clip. The Chicago Purchasing Manager’s Index ( PMI ) fell more than expected in April to 50.4% from 53.6% in March, a level just barely indicating expansion in economic activity.

Overnight, the Japanese yen surged higher on a fresh wave of risk aversion as they surprisingly pulled back from further easing.

As a result the dollar collapsed 0.77% to a new 2016 low at 93.07, a level not seen since August 2015. This of course helped all metal prices to achieve new heights. Gold soared to $ 1299, while Silver settled at $ 17.82 after soaring past the $ 18.00 mark.

The XME ( XME: $ 24.62 ) the S&P Metals and Mining Spider continued to surge last week making new highs for the year. After collapsing to a low of $ 11.38  on January 20th, the index has more than doubled heralding a much needed boost for steel prices. The following stocks make up almost 50% of the Index.

Top 10 Holdings (46.98% of Total Assets)  

 

Company Symbol % Assets
Cliffs Natural Resources Inc Co CLF 5.45
Schnitzer Steel Industries, Inc SCHN 4.78
Coeur Mining, Inc. Common Stock CDE 4.77
United States Steel Corporation X 4.71
Stillwater Mining Company Common SWC 4.66
Freeport-McMoRan, Inc. Common S FCX 4.62
Steel Dynamics, Inc. STLD 4.53
Carpenter Technology Corporation CRS 4.53
Worthington Industries, Inc. Co WOR 4.47
Kaiser Aluminum Corporation KALU 4.46

 

Market Strategies Economic Data

The GDP report was a disappointment increasing just 0.5% for the quarter. That was below expectations of a + 0.9% and the weakest quarter of growth since the first quarter of 2015, which was up just 0.6%. Even Personal Consumption Expenditures ( PCE )  were +1.9%, unexpectedly weak

Gross private domestic investment declined 3.5%, exports were down 2.6%, imports were up 0.2%, and government spending was up 1.2%. There was a 1.27 percentage point contribution to Q1 GDP from personal consumption expenditures, which flowed almost entirely from a 1.24 percentage point contribution from spending on services.

Category Q1 Q4 Q3 Q2 Q1
GDP 0.5% 1.4% 2.0% 3.9% 0.6%
  Inventories (change) $60.9B $78.3B $85.5B $113.5B $112.8B
  Final Sales 0.9% 1.6% 2.7% 3.9% -0.2%
   PCE 1.9% 2.4% 3.0% 3.6% 1.7%
   Nonresidential Inv. -5.8% -2.1% 2.6% 4.1% 1.6%
     Structures -10.6% -5.1% -7.2% 6.3% -7.6%
     Equipment -8.6% -2.1% 9.9% 0.3% 2.3%
     Intellectual Property 1.7% -0.1% -0.8% 8.3% 7.4%
   Residential Inv. 14.9% 10.1% 8.2% 9.4% 10.1%
   Net Exports -$566.6B -$551.9B -$546.1B -$534.6B -$541.2B
     Export -2.6% -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 0.7% 0.9% 1.3% 2.1% 0.1%

 

Gross private domestic investment subtracted 0.6 percentage points as a 0.76 percentage point drag from nonresidential investment weighed heavily. Net exports subtracted 0.34 percentage points. Government spending added 0.2 percentage points. Real final sales of domestic product, which excludes the change in inventories, were up a scant 0.9% versus the prior 10-quarter average of 2.4%.GDP Deflator was up 0.7%

 

 

 

The Durable Goods Orders report for March was another disappointing piece of economic news, including downward revisions to the prior month’s data. Specifically, durable goods orders increased 0.8% in March (Briefing.com consensus +1.7%) after declining a downwardly revised 3.1% (from -2.8%) in February.

Excluding transportation, orders declined 0.2% (Briefing.com consensus +0.5%) after declining a downwardly revised 1.3% (from -1.0%) in February.

Category MAR FEB JAN DEC NOV
Total Durable Orders 0.8% -3.1% 4.3% -4.6% -0.5%
    Less Defense -1.0% -2.3% 3.8% -2.5% -2.0%
    Less Transport -0.2% -1.3% 1.4% -0.7% -0.5%
    Transportation 2.9% -6.7% 10.6% -12.2% -0.5%
  Capital Goods 3.7% -9.6% 19.4% -17.4% -2.3%
  Nondefense -1.1% -8.0% 20.7% -14.0% -7.9%
    Nondefense/nonaircraft (core cap gds) 0.0% -2.7% 3.3% -3.5% -0.9%
  Defense Cap Goods 48.4% -22.3% 9.9% -35.6% 45.6

The Conference Board’s Consumer Confidence Index registered a 94.2 reading for April (Briefing.com consensus 96.7) versus a downwardly revised 96.1 reading (from 96.2) for March.  The cause of the dip was all about the outlook. The Present Situation Index actually increased in April to 116.4 from 114.9 in March. The Expectations Index, however, fell to 79.3 from 83.6.

Comments from the Conference Board indicate the consumer’s outlook has moderated. That moderation was attributed in part to feeling less optimistic about business conditions improving over the next six months, anticipating there will be fewer jobs, and not expecting as much as before that their incomes will increase.

 

 

The April reading was roughly flat 94.2 vs the 94.2 reading seen in April 2015.

Spending activity is tied more closely to income growth than it is to the confidence readings.

 

 

Category APR MAR FEB JAN DEC
Conference Board 94.2 96.1 94.0 97.8 96.3
  Expectations 79.3 83.6 79.9 85.3 83.0
  Present Situation 116.4 114.9 115.0 116.6 116.4
Employment (‘plentiful’ less ‘hard to get’) 1.4 0.2 -0.8 -0.6 -0.3
1 yr inflation expectations 4.8% 4.8% 4.7% 4.8% 4.9%

 

 

Market Strategies Cycles

 

Since issuing the Stock Trader’s Almanac Tactical Seasonal Switching Strategy MACD Sell Signal after the market’s close on April 5, DJIA and S&P 500 meandered 3.2%  higher as of the close April 20th and just 0.6% above the sell signal as of the close Friday the 29th. As of yesterday, both the slower and faster moving MACD indicators applied to DJIA (1) and S&P 500 were negative. Recent market resiliency has provided an opportunity to unwind some long positions as it still appears there is significant resistance at the all-time highs of last May.

 

For the second time in about four months, DJIA’s 50-day moving average has crossed back above its 200-day moving average (2). This crossover is known as a golden cross and has been traditionally a bullish omen, except that was not the case four months ago nor many of DJIA’s other recent occurrences.

 

 

Considering how close some of the indices are to their all- time highs, the number of issues hitting new highs should be higher. While new highs have been disappointing, new lows have disappeared and nothing really bad will happen without a significant increase in new lows. The new highs are limited to the metals.

The market has been rather forgiving this earnings season, giving many stocks a pass (except AAPL) on misses and lower numbers, attributing it all to a tepid economy. But it has failed to breakout or breakdown, until perhaps last Thursday and Friday.  One reason why this golden cross could be a false sign of further is gains is the fact that the market has been running in streaks recently and the current winning streak is looking quite long in the tooth (3). After declining in seven of ten weeks from week ending December 11, 2015 through February 12, 2016, DJIA and S&P 500 (4) have been up in eight of the last ten weeks. NASDAQ has one more week of losses (6) over the past ten weeks and is currently on track for two losses in a row.

 

Aside from two weeks when DJIA and S&P 500 were down, NYSE Weekly Advancers have outnumbered NYSE Weekly Decliners (7) by a healthy margin. This confirms broad participation in the rally which is a healthy sign. However, weekly New Highs (8) peaked during the week ending April 1. This would suggest that the market’s recent push toward all-time highs has run out of steam. An expanding number of New Highs will be needed for the market to make any meaningful move higher. Last year’s DJIA/S&P 500 peak in May was also accompanied by a decline in New Highs.

 

Weekly CBOE Put/Call remains modestly elevated at 0.69 last week (9). This suggests that there is plenty skepticism about the current rally or it could mean traders and investors are anticipating some weakness once “Sell in May” officially arrives this coming week. May-day has usually been strong, then the following days could bring in selling.

 

 

 

 

“Sell in May and Go Away” works for stocks in general, but is volatility really a good hedge? The seasonality of TVIX and VXX.  outperformance  potential is present in a portfolio that includes volatility, but the timing of volatility is never easy. Here is one possible way to trade the Sell in May.

Where To Invest market strategies

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 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  0.64) *

 

Oakridge global energy is a developer, designer and manufacturer of proprietary energy storage solutions. The Company is based out of Florida’s “space coast” near Kennedy Space Center. They make premium quality, proprietary batteries, battery systems and lithium ion cells that are built for maximum performance over the traditional lead/acid batteries. OGES, proudly manufacturing in America since 1986, produces batteries for military, consumer, government, and industrial applications. Target market priorities include golf cars and other recreational vehicles, electronics, and devices requiring rechargeable batteries.

 

Oakridge Energy produces highly reliable, sustainable and dependable batteries for mobile power sources. Based on size and weight, OGES products deliver a higher capacity than comparable competitor batteries.  OGES batteries are higher in quality, longer lasting and safer to use. These batteries have undergone and passed rigorous military testing in underwater and aerial vehicles proving to be high/low pressure tolerant. Most significant, OGES batteries are superior performing yet competitive in the market.

 

Martac Maritime Tactical Systems, Inc., MARTAC recently conducted very successful field trials on the Inter-coastal waterway in Palm Bay, Florida. MARTAC is a Melbourne, Florida based company that designs and produces the Man-Portable Tactical Autonomous Systems (MANTAS) that can reach extreme high speeds and operate anywhere in the world.

 

These vehicles are designed to be used in numerous applications including naval fleet protection, mine warfare, port and harbor security patrol, antipiracy, search and rescue, and many others. shows our high quality and high performance gets us into the military space at a time when made in USA is of critical strategic importance.

 

Freedom Trucks shows that Oakridge can outperform Tesla and the “Tesla of trucks” – trucks are much more difficult and laborious to power than cars – because of the Oakridge high power high energy dense batteries, we need only 180 OGES batteries to power the interstate truck that pulls an

80,000 lb trailer, whereas it would take 208,000 Tesla/Panasonic batteries, which is simply not feasible.

 

Lithium ion batteries, deliver twice the energy of nickel cadmium batteries and are the fastest growing battery segment. Their growth and demand dynamically forward trending. They are lightweight and easy to maintain. They deliver superior electro-chemical output and provide highest energy density for weight, non-metallic and are rechargeable. In 2015, the OGES ProSeries golf car was launched at the annual PGA show, the largest golf show in the world. OGES plans to have a new factory producing its patented thin film solid state lithium ion batteries by 2017. OGES is commencing delivery of small format prismatics to help several smart card customers reach the next generation.  Their growth will be serviced by the new factory. These batteries are also in a rapidly growing demand for a variety of 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: $ 1.76 )

 

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:

 

  • Pluristem’s core technology of three-dimensional expansion methods for producing therapeutic cell products derived from placental or fat cells

 

  • 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 ( 0.05 )

 

Has both mining activities in Australia and the U.S. as well as the Savannah Resort, a senior living facility in Queensland, Australia. For more information please go to their website www.gmuiinc.com.

 

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%.

 

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Rule 17B Attestations and Disclaimers

 

Princeton Research, Inc. has approximately 2,581,578 shares of AIVN both free and restricted and represents them for Investor relations. Princeton also has about 40,000 shares of TXGE. Princeton is paid $ 1,500 per month from RMS Medical Products. Princeton has bought 81,100 shares of RMS Medical Products. Princeton was paid $ 2,500 to write a report on Xinergy. Princeton has signed a contract with CBLI to be paid $ 2500 for July and August for investor relations. Princeton has been engaged by Target Energy. No contract is currently in place. Princeton was paid about 500,000 restricted shares of Leo Motors.

 

When there is no movement in penny stocks, even though there is none or very small losses, we will liquidate ( sold AIVN on stop ) even though we like the company, if money is needed for better opportunities.

 

We now believe REPR represents upside opportunity. The Target ADR trades at about $ 4.50 in U.S. vs 0.05 in Australia. Princeton owns 400,000 Australia shares and about 900 U.S. ADR’s.

 

Pursuant to the provisions of Rule 206 (4) of the Investment Advisers Act of 1940, readers should recognize that not all recommendations made in the future will be profitable or will equal the performance of any recommendations referred to in this e-mail issue. Princeton may buy or sell its free-trading shares in companies it represents at any time.

 

CONTACT

Please Direct All Inquiries To:

Mike King

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mike@princetonresearch.com

 

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Market Strategies

Where To Invest May 2016