Market Strategies

Where To Invest Now

Covering High Return Balanced Investing Success Strategies For

Stocks ■ Bonds ■ Interest Rates ■ Natural Resources ■ Currencies ■ Venture Capital ■ Gold

A Publication of Princeton Research, Inc. (www.PrincetonResearch.com)

 

 April 30, 2012

Market Strategies Newsletter

Balanced Investing Strategies

For Where To Invest Now

To subscribe to the Options Only Acct Trades simply TEXT the word UPDATES to 69302

and you will automatically be included.

 

To Read This Market Strategies Newsletter In Adobe PDF Version – CLICK HERE – http://www.princetonresearch.com/4-30-2012-Market-Strategies.pdf

 

$10,000 OPTIONS ONLY ACCT

New Trades for this week 

The $10,000 Options Only account had a Gain last week of $608 increasing our gains for the year from $1,888 to $2,496.

One position remains: The CSCO May 20 Calls.

The Open position is highlighted in the options table below.  Approximately $410 funds are in use.

This was a week with tradable rallies and declines.  We started the week with the assumption that we were in the process of possibly breaking to the downside from a “Bear Flag” that would complete the pullback from the Q1 rally.  We made some money on both our FDX Puts and our IBM Calls, but the market dug in with the help of earnings surprises to the upside in several of the big names.  This put a bid under the market that lasted right thru to Friday.  However, I am not sure that the flag has been negated.  The SPY is still under the bottom of the already broken uptrend that the SPY has traced out since the October 2011 low of 107.43.  Any close above $141.84 will cause me to be bullish although we will be overbought on a short term basis.

 

I will have to watch how the market trades on Monday before I can buy either Calls or Puts.

Some of the stocks I’M looking at are LULU, PICO, GDI, and FDX (which is still under its uptrend line.)  

Please be sure to follow the update service by texting the word UPDATES to 69302….
CAM

 

Remember, these trades are based on your participation in the

TEXT MESSAGE TRADE ALERTS SERVICE TO RECEIVE ALL UPDATES.

TEXT the word UPDATES to 69302 To Get In Now

 

Previous closed out trades not listed here may be seen in the March, February and January weekly newsletters. See past issues at http://www.princetonresearch.com/market-strategies-newsletter/

DATE	TRADE	PRICE	COST	PROCEEDS	RESULTS
4/27	Sold 2 IBM May 205 Calls	2.85		570	270 Gain
4/27	Sold 2 IBM May 205 Calls	3.25		650	350 Gain
4/26	Sold  8 FAZ May 22 Calls	.75		600	600 Loss
4/26	Sold 4 FDX May 87.5 Puts	1.99		796	244 Gain
4/26	Sold 4 FDX May 87.5 Puts	2.24		896	344 Gain
4/24	Bought 8 FDX May 87.5 Puts	1.38	1104
4/19	Bought 8 FAZ May 22 Calls	1.50	1200
4/19	Bought 5 CSCO May 20 Calls	.82	410
4/19	Bought 4 IBM May 205 Calls	1.50	600

New trades $ 10,000 account…In Texting we have a limited amount of words.

In the interest of brevity: OPTIONS ONLY: 5 May, 6 June . The Quantity and Strike Price for each trade is specific.

For any questions please call 702 650 3000

 

 

Market Laboratory – Weekly Changes

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

 

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.

New Stock Recommendations

 

BUY 350 BKS at Market, protect with a 12.50 SCO (Stop Close Only)
Last week we sold AMZN and with a ‘Text Alert’ we raised the stop on SNTS

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

Note: Previous closed out stock and option positions can be found in the April 23 and newsletters dating back to July 20, 2009.  Stay alert on the free texting service for new trades and exits.

 

Model Portfolio Comments/Changes:

 

INDEX OPTION RECOMMENDATIONS

 

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, SDS and RWM, whichgo 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.

 

New Stock Option Recommendations

Option and overall Comments

 

We had a Gain last week of $2594.75 in an Up week. Our gain for the year was $7,500 and with last week’s Gain has increased to $10,094.75.  We have Two long options positions remaining, the CSCO Jan 20 Calls, CSCO May 20 Calls. The Stock table includes Fourteen long stock positions: FAZ, RWM, SIRI, AAPL (a double), TXGE, EXM, CWTR, IYT, AIVN, SNTS, CISG, LEI, LEOM and
XBOR (a double). FAZ and RWM are inverse ETF’s.

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

We are basing money management on a hypothetical $ 100,000.00 and are using $1060 in the options positions and $ 73,300 in the 14 long stock positions for a total of $ 74,360 with $ 25,640 in cash. These figures are approximate. We do not count commission costs and there may be errors.

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 $ 100,000 account

 

• Text UPDATES to 69302.
• 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
• Subscribers can follow us on Twitter or call  702 650 3000 for up to date information.

 

Note: Previous closed out stock and option positions can be found in the April 23 and newsletters dating back to July 20, 2009.                                                                                                    

 

This Weeks’ Economic Numbers and Media Data

 

 

Economic Data

 

GDP came in much weaker than expected. The advance reading of the 1^st Qtr indicated the economy grew 2.2% well below a consensus of 2.5%, with many economists expecting more. In addition there was no outright suggestion by the Fed that quantitative easing was on the horizon. However, if you glance at the above table M1 has grown to +19% and M2 +10.2%, which are on a steady increase. At the end of December, M1 was +16.6% and M2 +9.2%. A year ago, M1 was +1.7% and M2 +5.8%. If you look back at your previous market letters the tables can be compared. The Fed can reduce the money supply at will by selling Treasuries.

The money supply measures reflect the different degrees of liquidity—or spend ability—that different types of money have. The narrowest measure, M1, is restricted to the most liquid forms of money; it consists of currency in the hands of the public; travelers checks; demand deposits, and other deposits against which checks can be written. M2 includes M1, plus savings accounts, time deposits of under $100,000, and balances in retail money market mutual funds.

All the econ reports were poor. Durable Goods orders fell 1.1% vs a consensus of + 0.5%. Weekly Jobless Claims rose again for the fourth week to 388,000 well above expectations of 373,000. Consumer Confidence reported by the Conference Board for April fell to 69.2 from 70.2, while the Michigan University Consumer Sentiment rose to 76.4 from the preliminary reading of 75.7.

Just how long can the market hold on to a good rally with bearish fundamentals. Last month the Employment report was very bearish. ( 120K vs 200K expected ) The Dow fell from a high of 13,297 to 12,710. Here we are again at 13,228 and the number expected Friday is just 160K. The outlook is modified by future expectations. However, earnings will be behind us and support will be questionable.

 

Fundamentals

(previous letters may be seen at www.princetonresearch.com)

 

Fed Chairman Bernanke held a press conference in which he stated the FOMC is prepared to take additional actions, if necessary which was a relief to those thinking QE was off the table. This was damaging to bearish positions as the shorts were forced to cover. The dollar declined 0.71% or 0.56  to 78.75. More significantly, the dollar broke below its 200 day moving average. The weaker greenback benefits multi-national stocks such as Apple, IBM, Kimberly Clark and Microsoft, which are on a bullish rampage..

 

The week began with bearish news from China concerning weaker manufacturing numbers. Manufacturing readings from Germany and France were also disappointing. France created further concerns on rising fears that the populace will not go along with restrictions and that Sarkozy has lost his grip and may not be re-elected. Then on Wednesday, the Fed’s FOMC maintained fed funds at 0.00% to 0.25% stating it expects rates to remain at such low levels through 2014. In addition they added 20 basis points to both ends of its forecast for 2012 real GDP to be + 2.4-2.9% and reduced by 10 points 2013 from 2.7% to 3.1%. The Fed also forecasted that inflation for the next couple years will not surpass 2.0%.

 

Both Apple ( AAPL: $ 603.00 ) + 31.30 or 5.5% and Amazon ( AMZN: $ 226.85 ) + 38.61 or 20.5%, sported great results besting estimates and their shares skyrocketed. The S&P 500 first-quarter growth rate for companies was + 4.7% without Apple, 7.1% including Apple. Out of 275 companies reporting so far, nearly 75% beat analyst’s expectations.

 

Telecommunications led all Ten Dow Industrial groups last week with a hefty 3.85% advance. Oil and Gas followed up 2.47%; Financials added 2.35% and Consumer Services 1.88%. Industrials gained 1.84%; Utilities 1.70%; Basic Materials 1.34%; Health care 0.94% and Consumer Goods 0.59%.

 

Technical Information

 

      Support Levels:   S&P 500           1399; 1377                 Resistance S&P 500   1415; 1421

                                        DOW            13,220; 13,040           Resistance DOW         13,340; 13,460

                                        QQQ             6659; 6591                 Resistance QQQ         6836; 6919                     

                                       Nasdaq          3036; 2990                 Resistance Nasdaq      3102; 3157                                          

 

CYCLES

 

Cycles suggest continued strength at month end and the beginning of new month for a Monday / Tuesday high then softness towards the end of week. The Unemployment Report expected Friday May 4^th may be quite negative as the initial Claims Reports for the past several weeks have been poor suggesting the economy is having a tough time absorbing applicants.. Unlike market bottoms that are more often than not events, market tops tend to be a process. At bottoms, consensus can be quickly reached about valuations and sentiment whereas at tops there is more mud in the water and debate. The MACD has reversed from the official Seasonal STA MACD Sell signal on April 3, and with markets stampeding the MACD has reversed course as long positions are improving. This does not mean that we expect the markets to go up a straight line. Taking all of this into consideration, we are comfortable taking a defensive posture only after big rallies for the “Worst Six Months”, May through October. And although we are wary for defense, this does not mean we anticipate a significant bear market to develop. The robust start of election-year 2012, combined with bullish election year forces are likely to produce solid full-year gains, but the path to full-year gains is likely to continue to be rough going.

 

 

 

                    Rule 17B requires disclosure of payment for investor relations*

 

Princeton Research has received about $ 2,500 per month from Lucas ( LEI ) marked with an asterisk.    Princeton has been paid for investor relations in the past and has negotiated a contract to be paid 100,000 restricted shares from Leo Motors. In addition Princeton has bought shares. Princeton is paid by Baron Energy ( BROE ) to do investor relations in the amount of 300,000 shares. Princeton has also bought separate shares about 327,600 and owns the shares for its own account. Cross Border paid us 25,000 restricted shares several months ago. We do not currently represent Cross Border. Princeton has 2,225,000 shares of AIVN.

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 Email issue. Princeton may buy or sell shares in companies it represents at any time.

CONTACT

 

Please Direct All Inquiries To:

Mike King

Princeton Research

3887 Pacific Street, Las Vegas, Nevada 89121

 

Phone: (702) 650-3000

Fax: (702) 697-8944

mike@princetonresearch.com

 

Visit: www.princetonresearch.com

 

 

 

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