March 18, 2013

Market Strategies Newsletter

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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)

 Market Strategies

$10,000 Options Trading Account

 

Six Open Positions:

 

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Options Trading Strategies Comments

This week we had a gain of $1,086

bringing our YTD performance back

up to $11,908 or almost 120%.

 

Our funds in use are $4,340 for the six open positions listed above.

 

I’d like to discuss a question from a subscriber on Friday about the open position in the $100,000 account of 20 AAPL we hold. While this narrative is primarily used to address the Options Only account, it’s also the first page people see when they receive the letter, so here it is…..

“Why didn’t we sell out that position when the decline became obvious?”

The answer is simple…We wanted to continue to own the stock to participate in the upside and we traded against it. The math is simple, we own 20 shares with an average price of $594, or a current

loss of $3,020. We have had several trades in AAPL options in both accounts and in the Options Only they are simply gains, however, in the $100,000 account they serve to reduce our cost of the position.  On 1/11 we bought 4 AAPL 1/515 puts @$5.95. On Monday we sold them with a gain of $3,840. We have reduced the cost of the position and offset the $3,020 loss with a net gain of $820.  We still own the position and it is actually a NET POSITIVE.  With the new tax rates, a long term gain is preferred.

The market continued to add to its gains last week.  The Wall of Worry seems to have an escalator moving us up and over.  My big issue now is the over-extended nature of the market from its 200 day MA, and the sentiment figures in the Market Lab on the next page.  Bullish numbers exploded up almost 46% to 45.4%.  While it didn’t all come from bearish, the neutral number is less important to us.

We have good open equity in the current positions, but all trades are on a hair-trigger to lock in profits.  We are unlikely to initiate shorts without a break followed by a rally into resistance. There is no difference between trying to call a top or guessing at a bottom.  We continue to look for buys at support or sales at resistance.

…….CAM

 

Where To Invest Now

Options Trading Strategies Table

Remember, these trades are based on your participation in the

VIP Subscriber Members Only TEXTING SERVICE TO

RECEIVE ALL UPDATES.

 

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

 

Options Trading Strategies Notes: In Texting we have a limited amount of words. In the interest of brevity: we use 8=August , 9=September . The Quantity and Strike Price for each trade is specific.

The Quantity and Strike Price for each trade is specific.

We may trade weekly options and they are noted: SPY 1/25 147 for SPY Jan 25^th 147 calls or puts.

For any questions please call (702) 650 3000.

 

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

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

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

Note: Previous closed out stock and option positions can be found in past Market Strategies Newsletter issues available in the VIP Subscribers Members Area.

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.

 

$100,000 Trading Portfolio

Options Trading Strategies

Recommendations And Overall Comments

We gained $1,308

in closed out positions last week.

Our profits for the year

increased to $ 27,582

 

We have five options positions:

 

The Stock table includes seventeen positions:

 

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

 

We are basing money management on a hypothetical $ 100,000.00 and are using $ 7,600.00

in five options positions, $ 77,311.00 in the17 stock positions, a total of $ 84,911. 00 with

$15,089 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 past Market Strategies Newsletter issues available in the VIP Subscribers Members Area.

 

This Weeks’ Market Strategies

Economic Numbers and Media Data

 

Market Strategies Trading Fundamentals

Stocks continued to set records, eleven up weeks for the Dow.

The Dow closed at 14,514, adding to the gain of 15.2% since November 15^th. The outside day up November 16^th proved to be the first of many such patterns, which continued November 28^th, December 5^th, December 31^st and January 15^th. Every second day down has been a buy and might continue in such a pattern although the last couple weeks of March usually prove turbulent and unpredictable.

All Ten Dow Industrial groups were modestly higher. The lone loss was with Telecomm down 0.51%. The nine winners were led by Oil and Gas plus 1.32% followed closely by Financials up again 1.16%; Utilities were third gaining 1.02%. Basic Materials added 0.80%; Industrials 0.78%;

Health Care rose 0.64%; Technology added 0.56%;

Consumer Goods rose 0.05% and

Consumer Services barely up 0.01%

 

Market Strategies Economic Data

Industrial Production increased by 0.7% in February following the no-growth month of January.

The consensus had called for an increase of just 0.4%. Capacity Utilization, an integral part of the I.P. report increased to 79.6%.

Many sectors reported gains and are expected to continue. Motor Vehicle assemblies rose to 10.66 Million from 10.33 Million. Utilities output rose 1.6% in February.

Mining was the lone industry in decline falling 0.3% the third monthly decline.

February Industrial Production Updated: 15-Mar-13 10:20 ET.

 

Category	FEB	JAN	DEC	NOV	OCT
Industrial Production
Total Index	0.7%	0.0%	0.3%	1.5%	-0.3%
Manufacturing	0.8%	-0.3%	1.3%	1.7%	-0.8%
Utilities	1.6%	4.9%	-6.4%	0.6%	1.3%
Mining	-0.3%	-1.0%	-0.5%	0.9%	1.2%
Capacity Utilization
Total Industry	79.6%	79.2%	79.3%	79.1%	78.1%
Manufacturing	78.3%	77.8%	77.3%	77.3%	76.1%

 

Market Strategies Technical Information

Support Levels S&P 500    1534-1538                

Resistance S&P 500               1570-1577

 

Support Levels DOW        14115-14145            

Resistance DOW                   14540-14598

 

Support Levels QQQ           6680-6750               

Resistance QQQ                     6929-7070

                   

Support Levels Nasdaq      3070                          

Resistance Nasdaq                 3438                                    

 

Market Strategies Cycles

There is a significant correlation between Weekly Initial Jobless Claims and Dow Jones Industrial Average’s performance. This is one of the better economic reports produced by the government as it tends to be about as close to real-time as possible and cuts out many of the statistical follies common with other data. It simply measures the number of people filing for first-time unemployment insurance. In the long-term chart below, the correlation between DJIA and Weekly claims is quite clear with spikes in claims accompanying DJIA pullbacks (or worse).

Today’s Initial Jobless Claims release resulted in its four-week moving average falling to a new post-recession low. Continuing claims were also reported at a new post-recession low. The last time DJIA was at new all-time highs was just before the last recession that began in December 2007. So it is not surprising that DJIA is at new all-time highs again. Fewer and fewer people are losing their jobs while more and more are finding employment. In a country where around 70% of its GDP comes from consumers, the more employed consumers there are the better the economy will be. As long as the current employment trends remain intact, DJIA’s current trend is likely to remain intact, which is up.

 

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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. Princeton has bought  81,100 shares of RMS Medical Products. When there is no movement in penny stocks, even though there is none or very small losses, we will liquidate if money is needed for better opportunities. We now believe the three small penny stocks we represent for a total outlay of $ 9,725 is well worth the risk.

 

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.

 

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

Where To Invest Now