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December 10, 2012

Market Strategies Newsletter

Sample Issue

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Covering High Return Balanced Investing Strategies To

Make Money In Up Or Down Markets

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

 

$10,000 Options Trading Account

New Trades for this week:

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Options Trading Strategies Comments

 This week we made $2,235

bringing YTD performance to a

new high of $16,109.

 

This is a return of over 161%

We made most of the gain on NFLX, buying support and taking advantage of a major rally from $75 to $88 on Tuesday.

We still hold most of the positions from last week as they still look like they have more room to go up.  We are very wary of the overhead resistance and headline risk.  Between the Fiscal Cliff and Debt ceiling problems it’s hard to see clear sailing from here.  Add to that, the Syrian troubles and the ever-present Eurozone issues and we could lose $20 off the S&P500 any morning.

The markets seem to be discounting “some” resolution to the Fiscal Cliff issue, but there is a disturbingly common thought that if we go over it won’t really matter.  That may be true, but the complication arises if we go over and it stretches for more than a couple of days and the outgoing Congress decides that it’s not their problem.

We will continue to work to limit your risk and find more shorts at resistance and longs at support. This time of the year we need to find the correct seasonal trades and implement the best money management techniques to supplement our performance.

— CAM

 

New Trades for this week:

Previous closed out trades not listed here may be seen in previous market letters in the VIP Subscribers Members Area.

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Market Strategies Where To Invest Now

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

Market Strategies $100,000 Trading Portfolio

 

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Recommendations will be both listed in this letter and texted to members

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, 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.

 

$100,000 Trading Portfolio

Options Trading Strategies

Recommendations And Overall Comments

 

We gained $ 3,939.00 last week

Our gain for the year increased to

$ 55,689

 

We have six long options positions plus sixteen stock positions remaining:

 

The Stock table includes the following sixteen positions:

 

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 $ 5,044. in the six options positions and $ 61,781 in the 16 stock positions a total of  $ 61,781.00 with $ 38,219.00 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 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

 

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Note: Previous closed out stock and option positions can be found in previous market letters in the VIP Subscribers Members Area.

 

This Weeks’ Market Strategies

Economic Numbers and Media Data

Market Strategies Trading Fundamentals

The Dow was strong up 129.55 or 1%, while Nasdaq, off down 1.07% was led lower by poor showing of tech stocks, namely Apple. There was no change from Washington as Speaker Boehner said no progress had been made and time was running out. Minority Leader Pelosi said that Democrats stand ready to extend Bush era tax cuts for everyone except for the top 2% of earners.

Five of the Ten Dow Industrial groups were higher. Financials led all with a modest 1.28% gain. Oil and gas shares were higher 0.90%; Industrials rose by 0.75%; Health care added 0.51% and utilities rounded out the winners with a small 0.17% gain. The five losers were led by Technology off 1.41%; Basic Materials fell 1.25%; Telecommunications lost 0.39%; Consumer Goods were off 0.19% and Consumer Services down just 0.03%.

 

Market Strategies Economic Data

Nonfarm Payrolls were reported at 146K, well above the consensus which had called for 90K. The Unemployment rate fell to 7.7%. This created a huge opening rally which ran out of steam when the Michigan sentiment came out at just 74.5 well below the 82.4 expected some 35 minutes after the opening. However the markets soon regained their bullish impetus and on light volume climbed back to regain most of their loss. Hourly earnings had doubled to + 0.2% from 0.0% last month. The Average Workweek was unchanged at 34.4 hours.

Consumer credit was reported at + $ 14.2B indicating continued consumer spending and confidence to borrow on their credit cards.

Earlier in the week, Productivity was reported to have improved to 2.9% for the 3^rd Qtr well above the + 1.9% for the 2^nd Qtr. Better Productivity helps maintain low inflation.

Factory Orders rose 0.8% in October following the September increase of 4.5%. Manufacturing showed up better than expected.

 

Market Strategies Technical Information

Support Levels S&P 500         1385; 1405

Resistance S&P 500                1424; 1435

 

Support Levels DOW             12970; 13000

Resistance DOW                    13275; 13400

 

Support Levels QQQ                 6420; 6460

Resistance QQQ                        6640; 6730

 

Support Levels Nasdaq             2930; 2980

Resistance Nasdaq                    3040; 3090 

 

CYCLES

Whatever method you use to pick stocks, your ultimate success or failure will depend on your ability to ignore the worries of the world long enough to allow your investments to succeed. It isn’t the head but the stomach that determines the fate of the stock-picker. Peter Lynch ( Fidelity Investments Beating the Street 1994 )

Every year the “January Effect” seasonal comes into play. For tax purposes traders tend to sell their losers. This is an extremely short-term strategy. Patience is needed to be sure the selling has taken place and run its course significantly because these stocks are not selected necessarily on a quality basis. This strategy eliminates preferred stocks; closed end mutual or hedge funds; new issues. We only consider fully traded shares on listed exchanges including AMEX, NYSE or Nasdaq.

This strategy is designed to get in and out as soon as there is a significant gain. One has to be nimble as the stocks were bought on a technical basis rather than a fundamental although it doesn’t hurt to utilize some logic. These stocks all behave differently, and there is no standard trading rule that applies to these trades. In general, it is best to close out of all these stocks after the first of the year.

 

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*Rule 17 B Attestations:

*Princeton has approximately 2,581,578 shares of AIVN both free and restricted and represents them for I.R.. Princeton also has about 40,000 shares of TXGE. Princeton is paid $ 1,500 per month from RMS Medical Products. When there is no movement in penny stocks, even though there is no or very small losses, we will liquidate when money is needed for other opportunities.

 

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 its free-trading shares in companies it represents at any time.

Market Strategies 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

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