Market Strategies

 

 

Covering High Return Balanced Investing Success Strategies For

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

 A Publication of Princeton Research, Inc. (http://www.princetonresearch.com/)

 March 05, 2012,

Market Strategies Guide To

Successful Trading

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

and you will automatically be included.

 

To Read The Market Investing Strategies Newsletter In Adobe PDF Version – CLICK HERE 

http://www.princetonresearch.com/3-5-2012-Market-Strategies.pdf

 

$10,000 OPTIONS ONLY ACCT:

 

New Trades for this week:

BUY 10 MCD March 100 CALLS @ $ .90OB       
BUY 20 XLF March 15 PUTS @ $ .30 OB                         

BUY 10 STLD April 15 PUTS @ $ .70 OB                    

The $10,000 Options Only account had a Loss last week of $656, decreasing our gains for the year from $4,399 to $3,743.

 

Two positions remain:

The RCII March 35 Puts and

SPY March 137 Puts.

The Open positions are highlighted in the options table below. 

Approximately $ 1350 funds are in use.

 

 

After watching the Sunday morning political commentaries today I was going to start this narrative with more about how dysfunctional our government has become, but I think it should be self-evident to any rational observer…Instead, I’d like to make a couple of observations about this market. 

As it has been said by those much smarter than me, “The market climbs a wall of worry,” and we have certainly had worries.  The only problem is that the “worries” are the knowns … If and when we have an issue that is not part of that known universe, you better not get caught being the last one buying the expiring, just out of the money calls.  This is why we make sure to keep an open mind, and a balanced approach to investing.  Right now we are entering the week with two PUT positions, and we have only a light position in each giving us the flexibility to add new positions in either direction.  My feeling, based on the further narrowing of the rally and the major divergence with the Russell Small Cap index (down 3% this week) makes  me feel that the path of least resistance is lower….However, if IBM comes out of the consolidation to the upside, I’ll have to consider getting some long technology positions…..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 February, January and 2011 weekly newsletters.

See past issues at http://www.princetonresearch.com/market-strategies-newsletter/

DATE	TRADE	PRICE	COST	PROCEEDS	RESULTS
3/1	Bought 5 SPY March  137 PUTS	1.62	810
2/29	Sold 3 AAPL March-2  530 PUTS	1.64		492	156 Loss
2/29	Bought 3 AAPL March-2  530 PUTS	2.16	648
2/29	Sold 10 CCL March 30  Calls	.90		900	400 Gain
2/29	Sold 5 RVBD March 28 PUTS		.60	300	300 Loss
2/28	Sold 10 ANR March 20  Calls	.56		560	440 Loss
2/28	Bought 10 CCL March 30  Calls	.50	500
2/27	Sold 10 MTOR March 8  Calls	.20		200	200 Loss
2/27	Bought 10 ANR March 20  Calls	1.00	1000
2/21	Bought 5 RVBD March 28 PUTS	1.20	600
2/21	Bought  6 RCII March 35 Puts	.90	540
2/21	Bought 10 MTOR March 8  Calls	.40	400

New trades $ 10,000 account…In Texting we have a limited amount of words. In the interest of brevity: OPTIONS ONLY: 3 March, 4 April . 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 1000 CLWR @ $2.17 OB

BUY 700 PDLI @ $6.45 OB

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 February 27 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

BUY 40 XLF MARCH 15 PUTS @ $ .30 OB  

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 TZA, 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

BUY 20 MCD March 100 CALLS @ $ .90OB        

BUY 20 STLD April 15 PUTS @ $ .70 OB      

Option and overall Comments

We had a loss last week of $1,392 in a mixed week. Our gain for the year was $12,255 and with last week’s loss has decreased to $10,863.  We have three long options positions remaining, the CSCO Jan 20 Calls, RCII March 35 Puts and SPY March 137 Puts. The stock table includes twelve long stock positions: CISG, DZZ, ANX, ABR, PKRK, QUIK, DVR, AEZS, LEI, LEOM, XBOR (a double)

and SDS. The SDS is a double inverse SP500 ETF,DZZ is a double inverse Gold ETF.

 

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 $2,950 in the
options positions and $ 58,200 in the 13 long stock positions for a total of $ 61,150 with $ 38,850 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 February 27 and newsletters dating back to July 20, 2009.                                                                                                       

                                                                     

                                This Weeks’ Economic Numbers and Media Data

 

Economic Data

Most of the economic reports were disappointing. The ISM ( Institute of Supply Management ) Report fell to 52.4 in February, disappointing in that the consensus called for an improvement to 54.7 up from 54.1 in January. Anything above 50.0 is indicative of an expanding economy, but the expectations were more ebullient. Construction Spending was also much weaker than expected coming in at + 0.1% vs the 1.0% consensus.

 

Durable Goods orders fell sharply in January -4.0 and -3.2% Ex-Transportation. The Case-Shiller 20-City index showed a decline of 4.0%, slightly worse than the -3.8% last month. Stocks declined on the news but the lower prices were quickly bought. Volumes were very light.

 

On the positive side, The GDP ( 4^th Qtr ) was 3.0%,a 0.2% improvement from most expectations. However, these numbers reflect the 4^th quarter of 2011. The Consumer Confidence Report came in at a huge 70.8% in February and the S&P 500 got to 1373 Tuesday, then 1378 Wednesday before profit-taking took it down. The Beige Book published by the Fed was bullish showing the economy to be growing.

 

The markets are always looking forward and with little on the way there was little movement and volumes were the lowest for a year. Volume barely totaled 520 million shares on the NYSE.

 

Weekly Jobless Claims at 351,000,a little better than the 355,000 consensus and Total Continuing Claims of 3,402,000 vs 3,425,000 expected were supportive of an improving labor market.

Auto and truck sales rose 15.7%, according to sales tracker Autodata, which puts the annual pace of sales at 15.1 million vehicles when adjusted for seasonal factors. That’s a big jump from the 14.1 million annual sales rate in January and the best pace of sales since February of 2008. Consumers flocked to auto dealerships in February at the strongest pace in four years, hungry to buy fuel-efficient vehicles and to upgrade to newer trucks.

 

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

 

The Fed Chairman Ben Bernanke delivered his semi- annual monetary policy report to Congress last Wednesday in which he indicated the improvement in the economy will delay or inhibit  further monetary expansion. This, hardly a surprise, nonetheless proved to be a disappointment to Stocks as well as Gold and Silver, but a boost to the Dollar. However, after a one-day mid-week normal decline in the S&P 500  just – 6.50 on that day and news to a low of 1363.81, there was no follow-through to the downside.  While the markets may seem over-bought, just look at the above econ table to see that PUTS on the S&P 500 declined 30 to 155, which in itself is still one of the highest  numbers. Anything above 75 PUTS/CALLS  is considered bullish.

 

Eventually there has to be a correction of meaningful proportions, but never easily accommodating. We have always maintained a policy of both longs and shorts to be able to take advantage of surprises.

 

 

Technical Information

 

      Support Levels:   S&P 500           1361; 1346                  Resistance S&P 500   1377; 1383

                                        DOW            12,890 12,740              Resistance DOW        13,040; 13,100

                                        QQQ             6417; 6337                  Resistance QQQ        6509; 6577                     

                                       Nasdaq          2928; 2883                   Resistance Nasdaq     2990; 3036                                          

                                    

CYCLES

 

The Stock Trader’s Almanac believes that a first half top will most likely occur in the March to May timeframe, but the much anticipated pullback of 2-4% may not occur and the market may push higher than we have forecasted before any significant decline takes hold.
As the market is nearing the DJIA 13,000-13,500 range it has become increasingly apparent that some contrary thinking may be in order. It may not be classic contrary analysis, but almost all traders and market pundits, market professionals and people we know and talk to have been expecting a  correction over the past several weeks and have been wrong.

 

Although the close on “leap day” was soft, previous February gains solidified a top ten finish for the full month on the NASDAQ. Its 5.4% advance was its eighth best February in the index’s 42 year history. S&P 500 (since 1930) and Russell 2000 (since 1979) performed well enough to land in the top 20, DJIA (since 1901) with a 2.5% however, only managed to claim the 25th best February.

This positive February performance followed January’s gains and added a new twist to analysis that begun last week in a blog titled Top 10 S&P 500 New Year Starts that was subsequently followed by the Top 15 DJIA New Year Starts. If Apple (AAPL) was a DJIA component, undoubtedly, the DJIA would be performing much better than its current lagging 6.0% year-to-date performance as of the close of February trading.

In the tables and charts below the top performing years have been compiled to illustrate what has happened in the past when both January and February were positive and the combined gain for the two months was at least 5%. There are just two exceptions to these criteria, one for NASDAQ and one for the Russell 2000. In order to include 2011 and 1989 respectively, the 5% rule was relaxed, slightly. This was done to expand the dataset with modern era data.

 

 

          

 

 

 

 

 

                    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. USPR paid us 200,000 restricted shares. Cross Border paid us 25,000 restricted shares several months ago and we bought and own another 25,000 purchased at higher prices.

 

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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