
Where To Invest November 2015
November 2, 2015
Market Strategies Newsletter
Sample Issue
Read the November 2, 2015 Where To invest Now and
Options Trading Newsletter in .pdf format – Click Here
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
Gain For The Week $ 1587
2015 YTD Profits $ 8425
Over 84% Returns
2014 Profits = $ 20,443
Over 204% Returns
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$10,000 Trading Portfolio
Charles Moskowitz Discussion
We Have 3 Long Open Positions:
SUN Dec 40 Calls
TBT Nov 43 Calls and
TWTR Dec 30 Calls
Funds in use = $1,782
Week 44 produced a gain based on a strong US$ and strength in the Financials.
We had a gain of $1587 with almost half coming from our position in the XLF calls.
This brings our YTD gain to a new high of the year of $8,425.
Funds in use are $1,782.
We are still carrying a position for continued strength in the Dollar with the TBT calls. The
position in TWTR is the second half of our original buy on the earnings miss on which we
had a 100% up rule sale the same day.
This is the last of the big weeks of earnings and I for one will be glad to see it over. The disparity among individual companies is within industries is evident, but none as much as solar.
SCTY reported Friday and was down 22% while FSLR did the same and was up over 11%.
In the high-end TIF has stabilized after falling from $96 to $75 (closed $82.44) while SIG, mid-price, has rallied from $115 to over $150 in the same period. What is clear, is that all participants within industries can- not be painted with the same brush.
While I’d like to be more active in the Gold and Energy areas, but they continue to confound.
The chart of NE, Noble Energy looks great after a 3 1/2 month consolidation, I can only be a buyer
a bit under the market. It can pull back 15% and I still wouldn’t call it a breakdown. For that reason
I’ll have to wait…being wrong for 15% without wanting to be a seller doesn’t fit my risk parameters.
The Gold has looked like it was flagging out between the recent highs around $1190 and great support at $1150, but on Wednesday it resolved itself with a run from $1152 to a high of $1183, only to collapse and close the week at $1141. The NUGT (3X Gold ETF) went from $49 and closed the week at $34.69. I’ll be watching it back at support around $27-30 as a buy.
As for the overall market, I am concerned with the rising rate scenario in the very short term.
The Fed seems to have turned Hawkish even though many of the sentiment indicators of economic activity were weak. This brings up the dichotomy that has been the biggest downfall for stocks…UNCERTAINTY…
It seemed pretty clear before Wednesday that rates would go unchanged for the rest of the year. Now, not so much. It’s not the rates that are the problem… Remember that people still bought homes with mortgage rates at 15%, so a move up from 3 1/2 to 4 or 5% doesn’t end the world as we know it. But, the uncertainty created will cloud every-ones view…
Have a good week, and watch the texting service for new trades…..CAM
Market Strategies $10,000 Trading Account Trade Table
New Trades Options account:
( 1 ) Buy 10 NE November 14 Calls @ $ 0.51
( 2 ) Buy 6 UNP Nov 88 Puts @ $ 1.33
( 3 ) Buy 4 IWM November 113 Puts @ $ 2.10
DATE | TRADE | PRICE | COST | PROCEEDS | RESULTS |
10/29 | Sold 5 XLF October 30th 23 Calls | 1.41 | 705 | 420 Gain | |
10/28 | Sold 5 XLF October 30th 23 Calls ( 100% profit Rule ) | 1.14 | 570 | 285 Gain | |
10/28 | Sold 3 TWTR December 30 Calls ( 100% Profit Rule ) Three lots remain Open | 2.68 | 804 | 402 Gain | |
10/28 | Sold 8 FEYE November 28 Calls | 2.40 | 1920 | 480 Gain | |
10/28 | Bought 6 TWTR December 30 Calls | 1.34 | 804 | ||
10/27 | Bought 8 FEYE November 28 Calls | 1.80 | 1440 | ||
10/21 | Bought 8 SUN December 40 Calls | 0.75 | 600 | ||
10/19 | Bought 6 TBT November 43 Calls | 1.30 | 780 | ||
10/19 | Bought 10 XLF October 30th 23 Calls | 0.57 | 570 |
Remember, these trades are based on your participation in the
TEXTING SERVICE TO RECEIVE ALL UPDATES.
Previous closed out trades not listed here may be seen in previous market letters in the
For Free Where To Invest Your Money Now
High Return Investments Trade Alerts
Go To: PrincetonResearch.com/alerts.htm
MARKET Laboratory – Weekly Changes
Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect.
Dow
17,663.54 +16.84 +0.10% |
Nasdaq
5053.75 +21.88 |
S&P 500
2079.36 +4.21 +0.20% |
Transportation
8128.07 -167.51 -2.02% |
Russell 2000
1161.86 -4.19 -0.36% |
Nasdaq100
4648.83 +24.74 +0.54% |
Gold (spot)
1141.50 -21.80 -1.9% |
Silver
1556.7 -26.0 -1.6% |
Crude
46.59 +1.90 +4.5% |
Heating Oil
151.67 +3.86 +2.6% |
Unleaded Gas
1.3716 +0.0752 +5.8% |
Natural Gas
2.321 -0.172 -7.5% |
VIX
15.07 +0.61 +4.2% |
Put/Call Ratios
S&P 100 170/100’s -21/100’s |
Put/Call Ratios
CBOE Equity 62/100’s -9/100’s
|
Bonds
156-14 -23 2.93% +0.04% |
10 Yr. Note
127-22-234 2.14%+0.06%
|
Copper
231.75 -3.25 -1.4% |
CRB Inflation
Index 195.61 +1.90 +1.0% |
Barron’s* Confidence
75.7 +1.1 |
S&P100
926.74 +1.02 +0.11% |
5 Yr. Note
119-247 -175 1.52% +0.11%
|
Dollar
96.92 -0.12 -0.1% |
DJ Utilities
580.50 -13.91 -2.34% |
AAII
Confidence Index
Long Term Average |
Bullish
40.4 % +5.6%
38.74% |
Bearish
20.6% -3.4%
30.30% |
Neutral
39.0% -2.2%
30.96% |
M1 Money Supply
+4.91% Oct 19th
|
M-2 Money
Supply +5.59% Oct 19th |
* 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.
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Market Strategies Technical Information
Support/Resistance Levels: SUPPORT RESISTANCE
S&P 500 2039 2094
Dow 17,045 17,788
QQQ 108.10 114.39
Transports 80.79 8307
NASDAQ 4890 5148
$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) |
||||
TWTR 200 | 28.51 | 10/28 | |||||||
SPXU 200 | 34.10 | 10/15 | |||||||
CUBA 500 | 7.58 | 09/28 | |||||||
MOS 100 | 43.55 | 08/14 | |||||||
CRM 100 | 72.90 | 04/29 | 66.25 | ||||||
NBG 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 | |||||||
FCX 150 | 34.99 | 09/09 | 7.75 | ||||||
NBG 300 | 2.95 | 05/19 | |||||||
NBG 300 | 4.08 | 8/12 | |||||||
TEXQY* 200 | 6.56 | 7/11 | |||||||
REPR* 5000 | 0.22 | 10/22/12 | |||||||
Remember, these trades are based on your participation in the
TEXTING SERVICE TO RECEIVE ALL UPDATES.
Previous closed out trades not listed here may be seen in previous market letters in the
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
New Options Trades:
1) Buy 20 NE November 14 Calls @ $ .51
2) Buy 12 UNP November 88 Puts @ $ 1.33
3) Buy 8 IWM November 113 Puts @ $ 2.10
There were four closed option positions:
16 FEYE Nov 28th Calls were sold on the 100% Profit Rule making $ 960
20 XLF were sold in two tranches: first on the 28th gaining $ 570.
The second on the following day making $ 840
Twitter was sold on the 28th gaining $ 804
for a grand total of $ 3,174 one of the best weekly options profits of the year.
There were no closed out stock trades.
For the year to date we have gains of $ 20,517.
Open position losses increased by $942 to $ 14,571.
The options expire on the third Friday of each Month unless otherwise posted.
The Stock table has the following 16 positions:
AA, BAC.B.WS, BSBR( 2 ), CRM, CUBA, FCX, MOS, NBG (3),
REPR, SAN, SPXU, TEXQY, TWTR
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 and are using a total of
$ 58,713 for the 16 open stock positions. There are three long option positions requiring
$ 3,564 and one written Call with a credit of $ 410 netting a requirement of $ 3,154 which added to the stock longs totals an outlay of
$ 61,867 leaving
$ 38,133 in cash.
These figures are approximate and there might be errors.
We have not counted the dividends received from Apple, JP Morgan, North American Tankers, Santander, their Brazil affiliate BSBR and Blue Capital Reinsurance which was sold for a profit and many others.
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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High Return Investments Trade Alerts
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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) |
TWTR Dec 30
6 lots Open |
Calls
1.34 |
10/28/15 | 2.68
Sold Half 100% Profit Rule |
10/28/2015 | $ 804 |
FEYE Nov 28
16 lots |
Calls
1.80 |
10/27/15 | 2.40 | 10/28/2015 | $ 960 |
SUN Dec 40
16 lots |
Calls
0.75 |
10/21/15 | |||
TBT Nov 43
30 lots |
Calls
1.30 |
10/19/15 | |||
XLF Oct 30 23
20 lots |
Calls
0.57 |
10/19/15 | 1.14
Sold Half100% Profit Rule 1.41 |
10/28/2015
10/29/2015 |
$ 570
$ 840 |
SPXU Nov 33 | Calls
2.05 |
10/16/15 | Credit against long | $ 410 |
Remember, these trades are based on your participation in the
TEXTING SERVICE TO RECEIVE ALL UPDATES.
Previous closed out trades not listed here may be seen in previous market letters in the
For Free Where To Invest Your Money Now
High Return Investments Trade Alerts
Go To: PrincetonResearch.com/alerts.htm
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 | Visa V ( 0.63 vs 2.18 )
Cardinal Health CAH ( 1.10 vs 1.00 ) Dominion D ( 1.05 vs 0.93 ) CAN Financial CAN ( 0.78 vs 0.79 ) Ecolab ECL ( 1.28 vs 1.21 ) Sysco SYY ( 0.51 vs 0.52 ) Health Net HNT 0.95 vs -0.11 ) Diamond Offshore DO ( 0.60 vs 0.96 )
10:00 hrs ISM Index October ( 50.0 vs 50.2 ) 10:00 hrs Construction Spending Sept ( 0.4% vs 0.7% )
American Int’l AIG ( 1.01 vs 1.21 ) Avis CAR ( 2.00 vs 1.91 ) Olin OLN ( 0.31 vs 0.33 ) Blue Capital Reinsurance BCRH ( 0.35 ) Tenet Health THC 0.28 vs 0.36 |
TUESDAY | Archer-Daniels ADM ( 0.69 vs 0.81 )
Emerson EMR ( 0.97 vs 1.20 ) Martin-Marietta MLM ( 2.19 vs 1.45 ) Kellogg K ( 0.84 vs 0.94 ) McGraw-Hill Financial MHFI ( 1.06 vs 1.02 ) Mosaic MOS ( 0.52 vs 0.56 ) Office Depot ODP ( 0.16 vs 0.10 ) Western Refining WNR ( 1.60 vs 1.73 ) Taser TASR 0.09 vs 0.14 Sprint S -0.07 vs -0.19 )
10:00 hrs Factory Orders Sept ( -0.9% vs 1.7% ) 17:00 hrs Auto Sales Oct ( NA vs 5.8Mln ) Truck Sales ( NA vs 8.9 Mln )
Tesla Motors TSLA -0.60 vs 0.02 ) CBS ( 0.80 vs 0.74 ) Ashland ASH ( 1.50 vs 1.40 ) Groupon GPN ( 0.02 vs 0.03 ) Hecla Mining HL ( -0.04 vs +0.01 ) Herbalife HLF 1.05 vs 1.45 U.S. Steel X ( -0.22 vs 2.16 ) Papa John’s PZZA ( 0.45 vs 0.39 )
|
WEDNESDAY | Allergan AGN ( 3.42 vs 1.78 )
3D Systems DDD ( 0.08 vs 0.18 ) Chesapeake Energy CHK ( -0.13 vs 0.38 ) Honda HMC ( 73.79 vs 78.73 ) Becton Dickinson BDX ( 1.90 vs 1.68 ) Michael Kors KORS( 0.89 vs 1.00 ) Henry Schein HSIC ( 1.47 vs 1.34 ) Regeneron REGN ( 3.21 vs 2.52 ) Time Warner TWX ( 1.09 vs 1.22 )
07:00 hrs MBA Mortgage Index 10/31 ( NA vs -3.5% ) 08:15 hrs ADP Employment Change Oct ( 180K vs 200K ) 08:30 hrs Trade Balance September ( -$43.0Blm vs -$48.3Bln ) 10:00 hrs ISM Services Oct ( 56.6 vs 56.9 ) 10:30 hrs Crude Inventories 10/31 ( NA vs +3.38Mln Bbls )
Facebook FB ( 0.52 vs 0.43 ) FireEye ( -0.45 vs -0.51 ) Dynergy DYN 0.97 vs -0.05 ) MetLife MET ( 0.76 vs 1.60 ) Sun Life SLF ( 0.88 vs 0.76 ) Prospect Capital PSEC ( 0.26 vs 0.28 ) Qualcom QCOM ( 0.86 vs 1.26 ) Whole Foods WFM ( 0.35 vs 0.35 )
|
THURSDAY | Apache APA ( -0.36 vs 1.38 )
Agrium AGU ( 0.67 vs 0.63 ) Celgene CELG ( 1.22 vs 0.97 ) Canadian Natural Resources CNQ ( -0.09 vs 0.89 ) Crocs CROX ( 0.09 vs 0.30 ) Duke Energy DUK ( 1.51 vs 1.40 ) Gartner IT ( 0.42 vs 0.44 ) Huntington Ingalls HII ( 2.01 vs 1.67 ) Ralph Lauren RL ( 1.74 vs 2.25 ) Starwood Property Trust STWD ( 0.53 vs 0.55 ) Teekay Shipping TK ( 0.26 vs -0.17 ) Telus TU 0.65 vs 0.64
07:30 hrs Challenger Job Cuts October ( NA vs 93.2% ) 08:30 hrs Initial Claims 10/31 ( 262K vs 260K ) 08:30 hrs Continuing Claims 10/24 ( 2145K vs 2144K ) 08:30 hrs Productivity 3rd Qtr Preliminary ( -0.2% vs 3.3% ) 08:30 hrs Unit Labor Costs-Prel 3rd Qtr ( + 2.2% vs -1.4% ) 10:30 hrs Natural Gas Inventories 10/31 ( NA vs 63 bcf )
Alexander and Baldwin ALEX ( 0.20 ) Encore Capital ECPG ( 1.31 vs 1.17 ) EOG Resources EOG ( -0.30 vs 1.31 ) Kraft Heinz KHC ( 0.63 ) Take-Two TTWO ( 0.15 vs -0.44 ) Walt Disney DIS ( 1.14 vs 0.89 ) Weight Watchers WTW ( 0.29 vs 0.67 ) |
FRIDAY | Arcelor Mittal MT ( -0.22 vs 0.01 )
Cigna CI ( 2.20 vs 1.95 ) Enerplus ERF ( -0.04 vs 0.32 ) Humana HUM ( 2.13 vs 1.85 ) Magnum Hunter MHR ( -0.26 vs -0.16 )
08:30 hrs Nonfarm Payrolls Oct ( 181K vs 142K ) Nonfarm Private Payrolls ( 160K vs 118K ) Unemployment Rate ( 5.1% vs 5.1% ) 08:30 hrs Hourly Earnings Oct ( +0.2% vs 0.0% ) 08:30 hrs Ave Workweek October ( 34.5 vs 34.5 ) 15:00 hrs Consumer Credit Sept ( $ 18.0 Bln vs $ 16.0 Bln )
Berkshire Hathaway BRK.B ( 2659 vs 2876 ) Kronos KRO ( 0.06 vs 0.28 )
|
Market Strategies Fundamentals
All major indexes were quite neutral for the week with three of the five slightly higher, while both the Transportation and Russell averages were quite negative. However, for the entire month stocks had their best performance in four years.
The Nasdaq had a mildly friendly week , the leader of all indexes gaining 21.88 points or 0.43%. The S&P 500 added just 4 points to 2079 while the Dow gained 16.84 up 0.10%. The DJ Transportation Index was a disappointment falling 2% or 167.51 points ignoring all the good numbers especially from airline constituents. The Russell 2000 lost 4 points or 0.36% finding support at its 13-day moving average.
Lackluster earnings and continued top line revenue growth continue to be a headwind for stocks. So far earnings reported for S&P 500 companies have dropped nearly 5% in the third quarter, based on the 65 that have reported and forecasts for the rest.
Markets in the Asia-Pacific region were mostly lower. The Yinn ( YINN: $21.71 ) – 3.90 or -15.2%, which is the volatile Direxion 3x Bullish indicator, was defensive all week. Talk abounds that China will soon lower its GDP growth target. Many emerging nations including China felt the pinch of the FOMC’s relatively hawkish directive on Wednesday, which kept alive the possibility of a rate hike in December leading to a dollar rally.
Greed is gradually returning from the oversold conditions of August-September. It still needs to go above 85 to be significant.
The AAII Confidence Index finally rallied above its Long Term Bullish average of 38.74% to 40.4% which adds to vulnerability of stocks. Bearishness dropped to just 20.6% well below the average of 30.30%. Adding to uncertainty, those neutral rose to 39.0% well above 30.96% average.
Market Strategies Economic Data
GDP increased 1.5% in the third quarter, down from a 3.9% gain in Q2 2015. The Briefing.com Consensus expected GDP to increase 1.6%. Excluding inventories, real final sales rose 3.0%. That is in-line with normal potential growth patterns. Even though the headline growth level was on the lighter side, the overall economy looked pretty healthy in the third quarter. All of the downside growth trend was the result of a substantial pullback in inventory growth. That was a normal reaction following two consecutive quarterly gains.
Personal consumption spending increased 3.2% in Q3 2015, down from a 3.6% gain in the second quarter. Goods spending increased 4.5%, with much of that gain coming from a 6.7% increase in durable goods demand. Services spending increased 2.6%.
Personal income increased 0.1% in September after increasing an upwardly revised 0.4% (from 0.3%) in August. The Briefing.com Consensus expected personal income to increase 0.2%. Personal spending rose 0.1% in September after increasing 0.4% in August. The consensus expected personal spending to increase 0.2%.Wages and salaries were flat in September, which was slightly better than the 0.2% decline that was implied in the September employment report.
On the spending side, goods spending declined 0.5% in September after increasing 0.1% in August. A 0.8% gain in durable goods spending, which was mostly the result of strong auto sales, was offset by a 1.2% decline in nondurable goods spending. Services spending increased 0.4% in September, down from a 0.5% increase in August. The personal savings rate ticked up to 4.8% in September from 4.7% in August.
The Chicago PMI increased to 565.2 in October from 48.7 in September which was the best reading since January. The New Orders portion of the Purchasing Manager’s Index increased to 59.4 in October from 49.5 in September. Backlogs, however, continued in decline being lowered to 45.5 in October from 46.5 September.
The University of Michigan Consumer Sentiment Index was revised down to 90.0 in the final October reading from 92.1 in the preliminary report. The Briefing.com Consensus expected the index to be revised up to 92.6. The Current Conditions Index was revised down to 102.3 in the final October reading from 106.7. The expectations Index was revised down to 82.1 from 82.7.
The Conference Board’s Consumer Confidence Index declined to 97.6 in October from a downwardly revised 102.6 (from 103.0) in September. The Briefing.com Consensus expected the Consumer Confidence Index to decline to 102.5.
The Present Situation Index declined to 112.1 in October from 120.3 in September. The Expectations Index fell to 88.0 from 90.8. Despite improvement in jobs security, as shown by historic lows in the initial claims level, and relatively low gasoline prices, consumer confidence weakened over the last month. That stands in contrast to the preliminary October reading of the University of Michigan Consumer Sentiment Index, which increased to 92.1 from 87.2 in September.
The decrease in confidence is unlikely to have a material impact on consumption trends. Consumption relies on income not sentiment. As long as the labor market continues to improve, consumption growth should follow.
Category | OCT | SEP | AUG | JUL | JUN |
Conference Board | 97.6 | 102.6 | 101.3 | 91.0 | 99.8 |
Expectations | 88.0 | 90.8 | 91.6 | 82.3 | 92.8 |
Present Situation | 112.1 | 120.3 | 115.8 | 104.0 | 110.3 |
Employment (‘plentiful’ less ‘hard to get’) | -3.6 | -0.1 | 0.4 | -7.5 | -4.8 |
1 yr inflation expectations | 5.1 | 5.1 | 4.9% | 5.1% | 5.1% |
Market Strategies Cycles
November begins the “Best Six Months” for the DJIA and S&P 500, and the “Best Eight Months” for NASDAQ. Small caps come into favor during November, but don’t really take off until the last two weeks of the year. November is the number-three DJIA and number-two S&P 500 month since 1950. Since 1971, November ranks third for NASDAQ. November is now the number one month for Russell 1000 and second best for Russell 2000 since 1979.
Presidential Years and Market Math
It’s never too early to start thinking about next year. Sure, we still have a holiday season and a Fed decision, to get through before 2015 rings out. But now is when we start to focus on our trades for November we need to forecast what the year may, or may not, have in store. Unfortunately, the calendar-gazing habit tends to bring out the silly side of investing. No small number of “experts” habitually hold forth on the airwaves with a gravitas-laced analysis of the January effect or some other variation of “when X (calendar event) happens, expect Y (stocks to go up, down, all around)”. Next year is 2016, meaning of course that it is once again time to elect a US president. And presidential years take calendar-centric silliness to a whole new level. Not only is there an imagined pattern to presidential election years, as the pundits would have it, but there are “rational” explanations as to why this is so. Fact or fable? Let’s do what we always do, and examine the data.
In pre-election years, November’s performance is substantially weaker. DJIA has advanced in only half of the last 16 pre-election years since 1950 with an average gain of 0.3%. S&P 500 has been up in 9 of the past 16 pre-election years, also gaining on average a paltry 0.3%. Small-caps and techs perform better with Russell 2000 climbing in 5 of the past 9 pre-election years, averaging 1.0%. NASDAQ has been up in 6 of the last 11 pre-election year Novembers with an average 0.9% gain.
Contributing to pre-election year November’s weaker performance is nasty declines in 1987, 1991 and 2007 The twelve month periods coinciding with the calendar years of 2012, 2008, 2004 and 2000 have all been below average (3.7 percent, -33.8 percent, 3.1 percent and -6.2 percent respectively).
Options expiration often coincides with the week before Thanksgiving. DJIA posted ten straight gains 1993-2002 and has been up 17 of the last 22 weeks before Thanksgiving. The Monday of expiration week had been streaky with the DJIA up five straight, 1994-1998, during the bulk of the last 20th Century bull market, down five in a row, 1999-2003, up three, 2004-2006, but has been mixed since 2007, up four and down four. The net result is a bearish down 9 times in the last 16 years. Options expiration day has a clearly bullish bias, up 11 of the last 13. The week after expiration has been weak lately, down five of the last nine, but up 9.7% in 2008, enough to be the best November weekly DJIA performance since 1950.
Being a bullish month November has seven bullish S&P days, though it does have weak points. NASDAQ and Russell 2000 exhibit the greatest strength at the beginning and end of November. Russell 2000 is notably bearish on the 12th trading day of the month (November 17, 2015), when the small-cap benchmark has risen just five times in the last 31 years (since 1984). The Russell 2000’s average decline is 0.49% on the day. Recent weakness around Thanksgiving has shifted DJIA and S&P 500 strength to mirror that of NASDAQ and Russell 2000 with the majority of bullish days at the beginning and end of the month. The best way to trade Thanksgiving is to go long into weakness the week before the holiday and exit into strength just before or after.
It is true that recent elections have not coincided with great times for investors. In addition we need to begin looking at year-end tax loss selling of losers such as companies involved with energy, steel and heavy transportation.
Undervalued Small Cap Stocks
Lower Priced stocks that look to be a buy:
Repro-Med Systems, Inc ( OTCQX: REPR 0.41 )*
is now a member of the OTCQX, a leading U.S. Stock Exchange. Repro-Med Systems is a unique U.S. manufacturer of proprietary and patented medical devices world-wide which maintains offices and manufacturing facilities in Chester, NY. Principal products include the Freedom 60 Syringe Infusion System, RMS High-Flo Subcutaneous Safety Needle Sets and the RES-Q-VAC Medical Suctioning Pump. In addition to being regulated by the FDA which has the authority to approve medical devices for marketing in the U.S., RMS complies with ISO International standards for quality development and manufacturing. RMS Medical Products is a d/b/a of Repro-Med Systems, Inc which was founded in 1980.
The Freedom60 has a proprietary technology that makes it desirable for the delivery of medications in a variety of therapies. It is very popular for the delivery of subcutaneous immunoglobulin for the treatment of primary immune deficiency disease. The infusion pump uses “dynamic equilibrium” which safely adjusts the flow of medication in accordance with what the patient’s body can accept. This minimizes complications often encountered with other infusion systems which can lead to site reactions and discomfort for the patient. The portability and simple operation of the FREEDOM60 Improves quality of life for patients who otherwise might have to use a complicated electronic pump mounted to a cumbersome infusion pole. Patients then don’t have to be confined.
RMS High-Flo Subcutaneous Safety Needle Sets are being welcomed by healthcare providers and patients alike for their consistently high quality. The infusion sets are an ideal companion for the company’s FREEDOM 60 pump. The needle sets are patented and approved by the FDA. There has not been a new technology in needles other than Repro Med’s vastly better needle sets in quite some time.
RES-Q-VAC is a hand-held suction pump used to clear a patient’s airway or for other purposes when reliable hospital quality suctioning is needed. It uses patented technology to protect users from airborne pathogens and spillage of suctioned material. It is used by emergency service personnel and other first responders, as well as in hospitals and other institutions. There also is a version for use by dentists. RES-Q-VAC is invaluable in the event of disasters where power is lost because it doesn’t require electricity.
The Freedom 60 Syringe Infusion System is a method for administering medication through a small needle to the subcutaneous tissue, which is the fatty tissue just under the skin. Subcutaneous infusion allows medication into the vascular system more slowly. Combined with more frequent delivery this provides more consistent and stable blood levels. The elimination of large swings in these levels decreases side effects improving overall quality of life. RMS provides High-Flo needles to optimize liquid flow. Their smaller 26 gauge high flow needle flows at the same rate as the considerably larger 24 gauge needles, which are considerably less painful when entering the skin.
The Freedom 60 has had great success in Europe reflected in a huge sales increase of 47.8% first quarter 2015 up from same quarter 2014.
Repro-Med Systems, Inc has had an increase in sales each of the last four years. They finished the year of 2014 with $ 11.2 million in sales reflecting top line growth of 29% from 2013.In each of the previous two years they had a 12% increase in sales. The company has had at least $ 700 thousand of net income in each of the past four years and has no debt. The patented needle sets alone can give the company a huge growth potential. In my opinion, with new products coming on stream, the stock should trade between $ 3 and $ 8 in the next two years.
Enzo Biochem ( ENZ 3.72 ) Bought at our price of $ 2.78.
This turbulent market has had an effect on the price of Enzo Biochem. The markets, in my opinion, have been in a rotating correction and in some instances, a bear market for some months. It appears that the cause of this is China but I am sure that there are other factors. If you remember the ‘flash crash” of 2010 the market correction was over quickly and those that held through that market decline profited handsomely over the years after the crash. I think that the market is giving us another chance to buy Enzo Biochem at a bargain price. The Company’s fiscal year was over July 31. I would imagine the Quarter and Year results will be made available by mid-October. With the cash settlement in two litigations the cash position should show a major improvement. Top line revenues should also show an improvement. Depending on R&D expenses and litigation expenses the net loss should also show improvement. At today’s price of $2.90 the Company is valued at approximately $130 million and with revenues approaching $100 million or 1.3 times revenues. The last Craig Hallum report had a fair value of Enzo’s business of $6 per share. When AmpiProbe is approved and into the market that number is projected at $14 per share. There is always risk in the market so the investment is not without risk but if held over time should deliver handsome profits off of today’s price. Items to look forward to by the end of the year would be litigation news and an AmpiProbe decision all of which should have a positive impact on the stock price.
ProtoKinetix, Incorporated ( PKTX: 0.09 )
(the “Company” or “ProtoKinetix”) (www.protokinetix.com) trading at $ 0.0521 low and 0.0969 high on Friday has a huge upside potential. They are in collaboration with the James Shapiro laboratory at the University of Alberta. The sole intention of the collaboration is to develop a commercial product pipeline of therapeutic applications for the AAGP™ family of molecules.
Professor James Shapiro is Professor of Surgery, Medicine and Surgical Oncology, and Director of the Clinical Islet Transplant Program and the Living Donor Liver Transplant Program at the University of Alberta in Edmonton, Canada. He has a busy hepatobiliary surgical practice in HPB oncology, and in liver and kidney-pancreas transplant surgery. His center carries out 80 liver transplants per year, and has done around 80 living donor liver transplants. The University of Alberta just celebrated their 1000th liver transplant.
Dr. Shapiro directs the largest clinical islet transplant program worldwide with almost 170 patients treated, and led the clinical team that developed the “Edmonton Protocol” – the first trial to achieve consistent 100% insulin independence in a series of islet-alone transplant recipients with Type 1 diabetes (published in the NEJM 2000). Before Dr. Shapiro’s trial, the success rate with islet transplantation was less than 8%. He led an international multicenter trial to replicate these findings in 9 international centers (published in NEJM 2006).
Over the last 32 months Dr. Shapiro and his team have been extensively testing the AAGP™ molecule in allogeneic transplants using human islet cells as the model. As regenerative medicine is rapidly becoming adopted in the treatment of degenerative diseases, the protection of the transplanted cells, tissues, and organs is of paramount importance. Transplanted cells and tissues are subjected to extreme stress factors that, unless protected, could cause failure to graft or premature death. The success of the tests conducted in Edmonton have demonstrated that AAGP™ has the potential to be widely adopted in many areas of regenerative medicine.
Fundamental Analysis Stocks To Buy with Stops
The HDGE continued to decline last week falling well-below our 11.04 buy level, the barrier between bear and bull markets. We would look to buy with a stop loss at 10.28. It is high risk but a possible hedge against some of our successful longs like LUV and URI. HDGE is the BEAR hedge.
We now want to be long stocks at their respective limits. Buy Intel on dips and Arcelor Mital.
We bought CVS and were stopped out for a loss of 3.30 points.
We always use stops. Keep losses small.
We are long Southwest Air (LUV) at 30.50, United Rentals at 64.34 and Sunoco at 36.08
We bought Virgin Air (VA) at 32.20. Please check on the previous weekly market letters if there are questions.
We are long in Diana Shipping at 6.60. DSX is a bear market opportunity with a small risk.
We are long Bank of America at 15.65. and would use 15.02 as a stop loss.
BAC looks to have made a double bottom at the 14.63 area.
Symbol | Name | Business Description | PE | P/S | MV mln | Price | Buy Limit | Stop Loss
Or sold |
SUN | Sunoco | Retail Sale Fuels | 14 | 0.26 | 3B | 34.49 | 36.08 | 32.71x |
URI | United Rentals | Equipment Rental | 8 | 1.13 | 15B | 74.86 | 64.34 | 62x |
DE | Deere | Farm and Construction equipment | 13 | 0.84 | 26.3B | 78.0 | 77.50 | 76.77x |
KR | Kroger | Food Mfg and Processing | 18 | 0.33 | 37B | 37.80 | 36.76 | 33.40x |
CVS | CVS Health | Pharmacy Sundries and drug store | 18 | 0.79 | 116B | 98.78 | 102.35 | 99x |
MT | Arcelor Mittal | Integrated Steel mining and manufacturing | 16.8 | 0.14 | 11.10B | 5.61 | 5.80 | 5.22x |
INTC | Intel | Technology chips platforms processors | 13.6 | 2.8 | 152.83B | 33.86 | 30.48 | 28.50 |
VA | Virgin Air | Regional Airlines | 7.2 | 1.0 | 1.5B | 35.61 | 32.20 | 29.50 |
LUV | Southwest Air | Regional Airlines | 16 | 1.15 | 22.6B | 46.29 | 33 | 32.31sco |
ENZ | Enzo Biochem | Life Sciences | NA | 1.35 | 134M | 3.72 | 2.78 | 3.28x |
BAC | Bank of America | Commercial Bank | 10 | 2.02 | 165.3B | 16.78 | 15.65sco | 15.02x |
HDGE | Advisor Shares | Ranger Bear ETF | 10.52 | 11.04 X | 11.00X | |||
DSX | Diana Shipping | Dry Cargo Shipping | N/A | 3.7 | 611 | 6.31 | 6.60 | 5.90 |
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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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