Read the April 25, 2016
Where to Invest In May 2016
Market Investing Strategies Newsletter Issue
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April 25, 2016
Market Strategies Newsletter – Sample Issue
Balanced Investing Strategies To Make Money In Up Or Down Markets
A Publication of Princeton Research, Inc. (www.PrincetonResearch.com)
Contributing Staff: Michael King, Charles Moskowitz
Where To Invest In 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:
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
41% Profits on XLF Calls in 6 Days
29% Profits on JPM Calls in 8 Days
70% Profits on GLD Calls in 1 Day
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$10,000 Trading Portfolio
Charles Moskowitz Discussion
There is one position:
Long 4 FXE June 109 Puts
Funds in Use = $ 400
Still Wondering When ???
Funds in use are only $400.
In a week that the popular averages didn’t do much of anything. We managed to make money on the short side again with gains on the balance of the SJM puts and the QQQ puts. The point is that you have to be selective when deciding what stocks within the market of stocks you want to trade. While the Dow was up .60%, and the S&P500 up .52%, the QQQ was LOWER by 1.5%.
Often when we have a market that is overbought and extended with what seem to be confusing fundamentals we see groups of stocks (like the tech sector) that show weakness at different times. Clearly Energy has taken the lead for this market while retail, or biotech show cracks in their façade. While some call this rotation into stronger sectors, I would make the point that the Marco point of view, with the market near its highs, might also be considered topping out of what has been the strongest sectors. The saying “flat tops bring drops” exists for a reason…But again, When is still the question??
Again, you really don’t want to try to fight the Fed, or the EU on the overall direction of the all the money that continues to get pumped into world markets, but that doesn’t mean that there aren’t stocks that move lower. It also doesn’t mean that we won’t participate on the upside. We continue to look for the best trades in either direction.
We have also played the gold market several times this year, and it feels to me as if we have made an important bottom. That doesn’t exclude hard and fast selloffs. I am looking to be a buyer of the metal in the $1190-1210 level if it gets there. The problem for me is that as long as bonds remain weak we should have some strength in the US$. This puts me at odds with the conventional wisdom since I am also short the Euro via the FXE 6/109 put position. What the current setup doesn’t take into consideration is that in this new world order we have the constant threat of terrorism every single day. This is one of the issues that also effect gold in a major way. As long as I can continue to buy at support with good stop protection we will be right there…CAM
Market Strategies $10,000 Trading Account Trade Table
| DATE | TRADES | PRICE | COST | PROCEEDS | RESULTS |
| 04/22 | Sold 4 QQQ May 109 Puts | 1.96 | 784 | $168 Gain | |
| 04/22 | Sold Balance 2 SJM May 125 Puts | 2.20 | 440 | $182 Gain | |
| 04/21 | Sold 2 SJM 125 Puts
( 100% profit rule to sell half ) |
2.90 | 580 | $ 322 Gain | |
| 04/18 | Bought 4 FXE June 109 Puts | 1.00 | 400 | ||
| 04/18 | Bought 4 SJM May 125 Puts | 1.29 | 516 | ||
| 04/15 | Bought 4 QQQ May 109 Puts | 1.54 | 616 |
3rd Week expiration when the month is listed without a date
Remember, these trades are based on your participation in the
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New Trades Options Account:
1) Buy 10 SLV May 16 Calls @ $ 0.51
2) Buy 4 SIG May 110 Puts @ $ 2.15
3) Buy 4 MSFT May 52 Calls @ $ 0.92
NEW Trades $ 100,000 account:
1) Buy 20 SLV May 16 Calls @ $ 0.51
2) Buy 8 SIG May 110 Puts @ $ 2.15
3) Buy 8 MSFT May 52 Calls @ $ 0.92
MARKET Laboratory – Weekly Changes
Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect.
| Dow
18,003.75 +106.29 +0.59% |
Nasdaq
4906.23 -31.99 |
S&P 500
2091.58 +10.85 +0.52% |
Transportation
8085.98 +107.75 +1.35% |
Russell 2000
1146.69 +15.77 +1.39% |
Nasdaq100
4474.19 -68.97 -1.52% |
| Gold (spot)
1228.70 -4.40 -0.4% |
Silver
1690.0 +58.7 +3.6% |
Crude
43.73 +3.37 +8.3% |
Heating Oil
131.74 +7.44 +6.0% |
Unleaded Gas
1.5484 +0.0701 +4.8% |
Natural Gas
2.140 +0.238 +12.5% |
| VIX
13.22 -0.40 -2.9% |
Put/Call Ratios
S&P 100 126/100’s -11/100’s |
Put/Call Ratios
CBOE Equity 69/100’s +4100’s
|
Bonds
162-15 -3-21 2.70%+0.14% |
10 Yr. Note
129-15-1-054 1.88%+0.13%
|
Copper
226.45 +11.15 +5.2% |
| CRB Inflation
Index 173.65. +6.01 +3.5% |
Barron’s* Confidence
68.5 +0.4 |
S&P100
928.35 +4.38 +0.47% |
5 Yr. Note
120-16 -237 1.35% +0.14%
|
Dollar
95.12 +0.42 +0.4% |
DJ Utilities
639.52 -22.98 -3.47% |
| AAII
Confidence Index
Long Term Average |
Bullish
33.4% +5.6%
38.74% |
Bearish
23.9% -1.0%
30.30% |
Neutral
42.7% -4.6%
30.96% |
M1 Money
Supply +6.60% Apr 11th
|
M2 Money
Supply +6.02% Apr 11th
|
* Component Change in the Confidence Index
M1…all money in hands of the public, Time Deposits Traveler’s Checks, Demand Deposits
M2.. adds Savings and Money Market Accounts both compared with the previous year.
Market Strategies Technical Information
Support/Resistance Levels: SUPPORT RESISTANCE
S&P 500 2081 2117
Dow 17,750 18,163
QQQ 107.10 111.70
Transports 7785 8255
NASDAQ 4740 50.38
The DJT finally closed above its 200-day moving average.to lead the indexes higher.
Keep an eye on volatility. The UVXY needs to remain at these lower levels for the rally to continue.
If the UVXY rallies the indexes will decline. The Russell is the only index still below its 200-day m.a.
$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) |
||
| NVAX 500 | 5.38 | 04/18 | |||||
| SCO 20 | 109.88 | 04/12 | |||||
| XLF 200 | 22.25 | 03/24 | |||||
| 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 | |||||
| APC 100 | 53.53 | 12/07 | |||||
| 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 | |||||
Recommendations will be both listed in this letter and texted to members.
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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 three closed option positions:
SJM May 125 Puts were sold on two dates making a gain of $ 644 and $ 384.
QQQ May 109 Puts gained $ 328.
The total profit for the three close-outs was $1,336.
There were no closed out stock positions.
The result for the entire week was a net gain of $ 1,336.
For the entire year on closed out trades, our profits increased to $15,880
The options expire on the third Friday of each Month unless otherwise posted.
The Stock table has the following 22 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 $78,575
for the 21 open long stock positions plus a credit of $900 for the SUN written Calls, which
reduces the requirement to $ 77,675.
The Open Option Position requires $ 800. This increases the margin requirement to $ 78,475,
leaving $ 21,525 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.
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) |
| SJM May 125
8 lots
4 lots left open |
Puts
1.29 |
04/18/16
|
2.90
( 100% Profit Rule sold half )
2.20 Sold Balance |
04/21/2016
04/22/2016 |
$ 644
$ 364 |
| FXE June 109
8 lots |
Puts
1,00 |
04/18/16 | |||
| QQQ May 109
8 lots |
Puts
1.54 |
04/15 16 | 1.96 | 04/22/2016 | $ 328 |
| 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 | Halliburton HAL ( 0.04 vs 0.49 ) Lab Corp LH ( 1.96 vs 1.73 ) Philips PHG ( 0.20 vs 0.20 )
First Data FDC ( 0.22 ) Roper ROP ( 1.46 vs 1.55 ) Community Bank CBU ( 0.55 vs 0.54 ) 10:00 hrs New Home Sales March ( 521K vs 512K ) Germany Hosts President Obama, British prime Minister David Cameron and other world leaders to discuss global issues. The International Monetary Fund will hold a press conference on the outlook for Middle Eastern and Central Asian economies. Express Scripts ESRX ( 1.22 vs 1.10 ) NXP Semi NXPI ( 1.11 vs 1.35 ) Avangrid AGR ( 0.56 ) Allison Transmission ALSN ( 0.58 vs 0.38 ) Crane CR ( 0.86 vs 0.92 ) Everest Re RE ( 5.54 vs 7.34 ) Allison Transmission ALSN ( 0.58 vs 0.38 ) Nabors NBR ( -0.33 vs +0.20 ) |
| TUESDAY | 3M MMM ( 1.92 vs 1.85 BP BP ( -0.01 vs 0.14 ) Baxter BAX ( 0.29 vs 1.00 ) Barrick Gold ABX
( 0.11 vs 0.05 ) Centene CNC ( 0.71 vs 0.52 ) Corning GLW ( 0.28 vs 0.35 ) AK Steel AKS ( -0.11 vs -0.28 ) DuPont DD ( 1.04 vs 1.34 ) Eli Lilly LLY ( 0.84 vs 0.87 ) Fiat Chrysler FCAU ( 0.16 vs 0.05 ) Freeport McMoran FCX ( -0.16 vs -0.06 ) Hershey Foods HSY ( 1.07 vs 1.09 ) Lockheed LMT ( 2.61 vs 2.74 ) Procter PG ( 0.82 vs 0.92 ) Whirpool WHR ( 2.69 vs 2.02 ) 08:30 hrs Durable Goods Orders March ( +1.7% vs -2.8% ) 08:30 hrs Durable Goods ex-transportation March ( +0.5% vs -1.0% ) 09:00 hrs Case-Shiller 20-city Index February ( 5.6% vs 5.7% ) 10:00 hrs Consumer Confidence April ( NA vs 96.2 ) Apple AAPL ( 2.09 vs 2.33 ) AT&T T ( 0.69 vs 0.63 ) Capital One COF ( 1.91 vs 2.00 ) CH Robinson CHRW ( 0.82 vs 0.73 ) Chipotle Mexican Grill CMG ( -1.05 vs 3.88 ) |
| WEDNESDAY | Boeing BA ( 1.84 vs 1.97 ) Comcast CMCSA ( 0.79 vs 0.79 ) Franklin Resources BEN ( 0.64 vs 0.98) Federal-Mogul FDML ( 0.27 vs 0.25 ) Goodyear GT ( 0.71 vs 0.54 ) General Dynamics GD ( 2.16 vs 2.14 ) Northrop NOC 2.49 vs 2.41 United Micro UMC ( 0.13 vs 0.32 )
07:00 hrs MBA Mortgage Index 04/23 ( NA vs +1.3% ) 10:00 hrs Pending Home Sales March ( +0.3% vs +3.5% ) 10:30 hrs Crude Inventories 04/23( NA vs +2.08 Mln Bbls ) 14:00 hrs FOMC Rate Decision April ( + 0.5% vs +0.5% ) Facebook FB ( 0.62 vs 0.42 ) Eversource Energy ES ( 0.84 vs 0.81 ) Marriott MAR ( 0.84 vs 0.73 ) PayPal PYPL ( 0.35 Pilgrim’s Pride PPC ( 0.37 vs 0.82 ) SanDisk SNDK 0.54 vs 0.62 Universal Hlth UHS ( 1.87 vs 1.78 ) Texas Inst TXN ( 0.66 vs 0.61 ) Rent-A-CenterRCII ( 0.40 vs 0.52 ) Tenaris TS ( 0.09 vs 0.19 ) Unum Group UNM 0.91 vs 0.89 XL Group 0.50 vs 0.75 |
| THURSDAY | Aetna AET ( 2.23 vs 2.39 ) AbbVie ABBV ( 1.15 vs 0.94 ) Air Products APD ( 1.81 vs 1.55 )
Avnet AVT ( 0.99 vs 1.04 ) Bunge BG ( 0.76 vs 1.58 ) Bristol-Myers BMY ( 0.65 vs 0.71 ) UPS UPS ( 1.21 vs 1.12 ) Waste Mgmt WM ( 0.55 vs 0.49 ) Yandex YNDX ( 6.31 vs 6.99 ) 08:30 hrs GDP-Adv 1st Qtr April ( +0.9% vs +1.4% ) 08:30 hrs Implicit Price Deflator ( + 0.6% vs +0.9% 08:30 hrs Initial Claims 04/23 ( 259K vs 247K ) 08:30 hrs Continuing Claims 04/16 ( NA vs 2137K ) 10:30 hrs Natural Gas Inventories 04/23 ( NA vs +7 bcf ) Amazon AMZN ( 0.61 vs -0.12 ) Amgen AMGN 2.61 vs 2.48 Baidu BIDU ( 1.05 vs 1.22 ) Gilead Sciences GILD ( 3.13 vs 2.94 ) FLEX 0.28 vs 0.27 Hartford HIG ( 1.02 vs 1.08 ) Linkedln LNKD 0.60 vs 0.57 Reinsurance Group 1.96 vs 1.77 Wynn ( 0.83 vs 0.70 ) |
| FRIDAY | Aon AON ( 1.33 vs 1.37 ) Chevron CVX -0.16 vs 1.37 Exxon Mobil XOM 0.31 vs 1.17
Phillips 0.87 vs 1.51 Praxair PX 1.27 vs 1.43 Royal Caribbean RCL 0.32 vs 0.20 08:30 hrs Personal Income March ( + 0.3 vs +0.2 ) Personal Spending March ( +0.2% vs +0.1% ) CORE PCE Prices March ( +0.1% vs +0.1% ) 08:30 hrs Employment Cost Index First Qtr ( +0.6% vs +0.6% ) 09:45 hrs Chicago PMI April ( 53.3 vs 53.6 ) 10:00 hrs Michigan Sentiment Final ( 92.0 vs 89.7 ) Berkshire Hath BRK.B 2744 vs 2583 Vanguard Nat Resources ( -0.05 vs 0.21 ) U.S. Oil Rig Count fell 8 to 343, In U.S., the fifth consecutive drop. Oil rose 8.3% for the week, even after major producers failed to agree on an output freeze. But prices haven’t risen enough to spur increased drilling. |
Market Strategies Fundamentals
The Dow Jones Industrial Average gained 106.29 points or +0.59& to a lofty 18,003.75; its first close above the 18,000 level since July21st. The Transportation Average did even better gaining 107.75 points or + 1.35% to 8,085.98. The Russell 2000 added 15.77 points or 1.39% to 1146.69 and closing above its 200 day moving average for the first time since mid-July.The S&P 500 was also higher gaining 11 points to just about 2092. It was only the Nasdaq Index that spoiled the party as the tech laden index declined 32 points or 0.65%.
The volatility indexes were all lower. The VIX ( VXX: 16.00 ) – 0.93 or -5.8% continued lower, while the more volatile UVXY ( 15.51 ) – 1.93 or -11.1% virtually gave not the least bit of movement to the upside. Lower volatility is a bullish environment for equities.
Stocks cannot break with volatility so low, a pain to many abundant bears so sure that stocks are going to break. The tech sector has certainly given them hope as the faith based stocks such as Apple, Alphabet and Netflix have been very weak, while both Apple and Facebook have earnings this week. Apple ( AAPL: $ 105.68 ) -$ 4.17 or -3.8% set the stage with early weakness for techs to falter. Then came Netflix ( NFLX $ 95.90 ) – $ 15.61 or -14% and Alphabet ( GOOG: $ 719 ) down $ 40 or -5.3%. to complete a scary week for the tech sector. Apple earnings come Tuesday after the close and a $ 2 earnings number is expected some 14% below a year ago with dismal top line sales also expected.
Divergence between what appears to be deteriorating financial conditions such as poor tech earnings,and low volatility whci supprts the price of stocks is liely to continue. Flat tops creat market drops is an old accronym that has been accurate more often. We are getting such action in tech stocks but value stocks are consistently gaining strength. There is more likely a shift in leadership rather than a major direction change in equities.
Many times in recent years, even as the market traded just a couple percentage points away from all time highs, we’ve seen investor sentiment readings get nearly as bearish as they were at the lows of the financial crisis. That’s not supposed to happen, and it’s happening here again as the S&P is 2% from the all- time high. History tells me investor sentiment has turned extremely bullish at market peaks, which is a tell-tale sign that a downturn is near. One of the reasons to have remained bullish over the last few years is because of how depressed market sentiment is. You just don’t see the market put a top in when sentiment is overly negative.
The red circled area indicates the low Fund manager positioning compared to other points in time. The green shaded area corresponding to these low levels in the past have been a precursor for higher prices as shown in the chart.
The reason for the high cash levels is revealed by a recent Bank of America Fund Manager Survey. Investors are still pessimistic, with only 10% expecting a stronger economy in the next year. This explains the low allocations to equities and high allocations to cash.
As far as individual investors are concerned, the market saw $4.8b outflow from equity funds this week. Cash outflows have been negative12 of the past 15 weeks. The $2b inflow to taxable bond funds has been positive 14 of past 15 weeks.
During the past month, cash balances have risen and allocations to equities have declined. If one is a contrarian that supports the case for higher equity prices in the period weeks or months ahead.
Allocations to US equities remain near an 8 year low, a level from which the U.S. should continue to outperform. A weakish dollar is necessary to fuel a buoyant stock market.
In order to begin answering the question, it is helpful to return to basics. What was the driver of the dollar’s rally? There are many different narratives, but the most compelling one focused on the divergence between the US and nearly the rest of the world. The US responded early and aggressively to the Great Financial Crisis, and this produced superior economic outcomes.
For example, the US began an asset program to expand monetary support after the Fed’s policy rate was near zero in 2009. Europe and Japan began several years later. The US began tapering its purchases before the ECB launched its asset purchase program. The Federal Reserve raised the Fed funds target range while the ECB and BOJ were still in the process of expanding their unorthodox policies, which include negative policy rates.
Market Strategies Economic Data
Initial Claims were 247,000 for the week ending April 16 (Briefing.com consensus 263,000), a decrease of 6,000 from the prior week’s unrevised level. There were no special factors influencing the initial claims reading. The 4-week moving average for Initial Claims fell to 260,500 from 25,000. This latest reading is the lowest level of initial claims since November 24, 1973 and marked the 59th straight week claims have been below 300,000, which is the longest streak since 1973. From the latest reading, the four-week moving average for initial claims fell to 260,500 from 265,000.
Continuing Claims for the week ended April 9th dropped by 39,000 to 2.137 million. The four-week moving average for Continuing Claims is 2.169 million, which is the lowest level since November 11, 2000.
The claims data is a clear reflection of a strong labor market. Hourly wages have followed more slowly. Higher wages would negatively impact corporate earnings. Target stores have followed Wal-Mart in raising wages.
| Category | Apr 16 | Apr 9 | Apr 2 | Mar 26 | Mar 19 |
| Initial Claims | 247K | 253K | 266K | 276K | 265K |
| 4-Wk Moving Avg | 261K | 265K | 267K | 263K | 260K |
| Continued Benefits | 2137K | 2176K | 2189K | 2172K | |
| 4-Wk Moving Avg | 2169K | 2179K | 2188K | 2191K |
Markit’s U.S. manufacturing PMI fell to 50.8 in April from 51.5 in March. The April reading was the lowest since September 2009. The Eurozone’s PMI fell just 0.1% in April to 51.5 down from 51.6% in March, however, better than the U.S. reading. The Dollar gained Friday 0.57% to 95.12 mostly against the yen as the Bank of Japan agreed to offer negative interest rate loans to banks to offset the costs of negative interest rate policy. Polls in the UK for membership in the European Union are turning to the “Remain” side following President Obama’s visit and his making a case for staying.
Leading Economic Indicators increased 0.2% in March. That was less than the Briefing.com consensus estimate, which called for a 0.4% increase. The added disappointment in the report is that February was revised lower to show a 0.1% decline after an originally reported 0.1% increase.
The biggest contributors to the March increase were stock prices (0.24 percentage points) and the interest rate spread (0.17 percentage points). They were offset to a certain degree by building permits, which subtracted 0.25 percentage points.
The building permits impact effectively accounted for much of the difference between the consensus estimate and the actual number. The building permits data for March was released earlier in the week. The other two components estimated by the Conference Board were manufacturers’ new orders and nondefense capital goods orders excluding aircraft. Neither was accorded much strength as the estimated contributions were 0.01 and 0.03 percentage points, respectively.
Separately, the Coincident Economic Index remained unchanged in March while the Lagging Economic Index increased 0.4%. The report is showing slow but not slowing economic growth.
| Category | MAR | FEB | JAN | DEC | NOV |
| Total Index | 0.2% | -0.1% | -0.2% | -0.2% | 0.4% |
| Manufacturing Workweek | 0.00% | -0.13% | 0.13% | 0.00% | 0.00% |
| Initial Claims | -0.07% | 0.26% | -0.08% | -0.05% | -0.06% |
| Cons. Gds Orders | 0.01% | 0.07% | -0.12% | 0.14% | 0.03% |
| ISM New Orders | 0.06% | -0.08% | -0.08% | -0.14% | -0.13% |
| Nondef. Cap Gds Orders, exc. Aircraft | 0.03% | -0.10% | 0.13% | -0.15% | -0.04% |
| Building Permits | -0.25% | -0.07% | 0.00% | -0.19% | 0.31% |
| Stock Prices | 0.24% | -0.03% | -0.27% | -0.05% | 0.11% |
| Leading Credit Index | 0.07% | 0.02% | -0.01% | 0.01% | 0.06% |
| Interest Rate Spread | 0.17% | 0.16% | 0.20% | 0.22% | 0.24% |
| Consumer Expectations | 0.00% | -0.04% | 0.01% | -0.02% | 0.00% |
Market Strategies Cycles
As of yesterday’s close DJIA was up 3.9% year-to-date; S&P 500 was up 2.9%, NASDAQ down 1.2% and Russell 2000 was up just 0.6% which creates the relatively unique situation where DJIA and S&P 500 are outperforming both NASDAQ and Russell 2000. In 45 years since 1971, DJIA and S&P 500 have bettered NASDAQ and Russell 2000 just eleven times (Russell 2000 eight times since 1979) over the course of the full year. Seven of those eleven years were flat to downright ugly. Only 1975, 1986, 1989 and 1997 were above average years.
Generally the Russell 2000 and NASDAQ tend to be comprised of U.S. orientated companies of smaller size which are generally more sensitive to local economic conditions. Poor performance from these companies is suggestive of either current weakness or a tepid U.S. outlook. Additional strength from NASDAQ and Russell 2000 would go a long ways to confirm that the current rally has further room to run.
In consideration of the seasonal upcoming to: Sell in May and go away, there are three new short sale ideas from the Stock Trader’s Almanac. In selecting these candidates, the STA searched for negative revenue and earnings trends. Further restrictions included: a minimum average daily trading volume of at least 100,000 shares over the past 20 trading sessions, share price above $10 and a minimum market cap of $500 million. In addition, the STA focused on sectors that enter seasonally weak periods in the month of May. A hypothetical $ 2,000 will be allocated to each.
Invesco Ltd (IVZ) is a publicly-owned financial investment manager. The market’ struggles over the past year and a half or so have translated directly to declines in revenue and earnings. IVZ has missed earnings estimates for the last two quarters. IVZ could be shorted near projected monthly pivot point resistance at $32.55 or a breakdown below support at $29.77 with confirming negative stochastic, MACD, and relative strength indications. If shorted, set an initial stop loss 8% above the entry price.
Methanex Corp (MEOH) produces and supplies methanol globally. Revenue and earnings have been falling faster than analysts’ estimates. Earnings have missed for four straight quarters. Production has also been hindered in some areas by a lack of raw materials. MEOH could be shorted near resistance at $36.35 or on a breakdown below $29.28 with confirming negative stochastic, MACD, and relative strength indications. If shorted, set an initial stop loss 8% above the entry price.
Virtus Investment Partners (VRTS) is another publicly traded investment manager that has struggled with the investment landscape over the past year plus. Revenue and earnings are forecast to decline this quarter and beyond. VRTS could be shorted near resistance at $81.45 or on a breakdown below $67.29 with confirming negative stochastic, MACD, and relative strength indications. If shorted, set an initial stop loss 8% above the entry price.
The following stocks are favored to be long by the Stock Trader’ Almanac:
These are the Fab Five:
Global Brass and Copper Holdings ( BRSS: $ 26.66 ); Harley Davidson ( HOG: $ 48.57 ) Stein Mart
( SMRT: $ 7.37 ); Scotts Miracle Grow ( SMG: $ 21.13 ) Sunoco ( SUN: $ 36.06 ) and United Health
( UNH: $ 134.13 ).
Currently one of the the best performing open positions; Global Brass and Copper Holdings (BRSS) has resumed its march higher. Again today it is trading at new 52-week and all-time highs. A weaker U.S. dollar is lifting copper prices and giving many commodities a boost. Even Harley Davidson (HOG) has seen in healthy rally over the past three months from just over $35 per share in end-January to over $48 today. We would buy on any $ 3-4 set -back. Both BRSS and HOG are on Hold. The greenback needs to continue its slide for prices to maintain their upward momentum.
Stein Mart Inc (SMRT) was a stock added to the Small-Cap Portfolio last December. Other than a brief pop at the start of March, shares have done little less. Current strength has pushed SMRT back into positive territory..
Spring has arrived bringing with all warmer weather and yard work. Scotts Miracle-Gro (SMG) is a direct beneficiary and that fact is reflected in its recent performance. SMG traded at a new 52-week and all-time high in late March and remains within striking distance today. SMG should be bought on a dip to $ 67.
Sunoco ( SUN ) could easily go to $ 50. It is very cheap relative to fundamentals. Sunoco has held up well when other similar stocks like Valero ( VLO: $ 61.24 ) got battered. The company will find added support from the arrival of spring and soon the summer driving season.
As a fuel wholesaler and retailer SUN is less exposed to the daily ups and downs of crude oil. Overall U.S. fuel demand and refining margins are what matters. Motor fuel demand is on the rise again as the summer driving season officially kicks off Memorial Day weekend. In the meantime shares pay a handsome dividend. We are and have been long SUN for several weeks.
United Health Group (UNH) reported first quarter earnings earlier today. Revenue rose 25% and adjusted earnings increased 17% despite losses from participating in Affordable Care Act (ACA) exchanges. UNH plans to exit all ACA exchanges in 2017. The company also enjoyed solid results from the Optum Health Care business.
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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.
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 )
A 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 exanded (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%.
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 and Sally Beauty AT^T and Microsoft are all in good shape and should be bought on weakness. We would buy Microsoft at its 200 day m.a. about 50.77.
The HDGE ism in hibernation.. 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 | 20.96 | 19.50 | Sell |
| SUN | Sunoco | Oil and Gas Refining and marketing | 10 | 0.2 | 2.1B | 36.06 | 29 | Unable |
| AA | Alcoa | Aluminum Processing and Technology | N/A | 0.4 | 9.5B | 10.40 | 7.05 | 8.97X
Earnings season begins |
| SBH | Sally Beauty Holdings | Specialty Retailer and distributor beauty supplies | 16 | 1 | 4B | 30.31 | 27.30 | 30x |
| HOG | Harley Davidson | Motorcycles and related products | 11 | 1.32 | 8B | 48.57 | 39.84 | Sold at 51.66 on 4/4 |
| CHD | Church & Dwight | Consumer Products Sodium bicarbonate Arm and Hammer | 25 | 3 | 10.6B | 92.03 | 79.80
01/26/16 |
Take Profits sold 94.20 |
| T | AT&T | Communications | 36 | 1.54 | 211.7B | 38.07 | 34.10 | 37x |
| MSFT | Microsoft | Technology Software, Services, Devices | 17 | 4.7 | 431B | 51.78 | 50.90
|
53.50x stopped out at
$ 52.04 |
| VA | Virgin Air | Regional Airlines | 7.2 | 0.9 | 1.5B | 55.71 | 30.30
Suggested buy |
28.50x
Hold for merger |
| ENZ | Enzo Biochem | Life Sciences | NA | 1.35 | 134M | 4.91 | 4.15
Suggested buy |
4.48x |
| BAC | Bank of America | Commercial Bank | 10 | 2.02 | 165.3B | 15.11 | 11.86 | 10.90x |
| HDGE | Advisor Shares | Ranger Bear ETF | 10.156 | No Position |
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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.
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