Where To Invest Now Investment Strategies Newsletter Oct 7, 2013

October 7, 2013

Market Investing Strategies Newsletter

Sample Issue

Covering High Return Balanced Investing Strategies To

Make Money In Up Or Down Markets

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

NOTE: This is a Sample Issue Only!

 

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Market Investing Strategies

Stock Options Trading

$10,000 Account

There are four open positions:

 

15 DSX October 12^th Calls: 10 @ 0.65; 5 @ 0.60

6 VLO November 35 Calls @ 1.16

4 WTW Oct 37.50 Calls

 

Funds in Use $ 2,206

                               

Market Investing Strategies

Stock Options Trading

$10,000 Account Traders Comments

 

We had a loss this week of $775

bringing the YTD performance to $26,069

a total equity to $36,069

 

Over 260% Returns 

Another week of dysfunction and stupidity in Washington has kept the market walking on eggshells.  However, one thing that sticks out to me is that just like the dramatic rise in the 10 year bonds has been decoupled from the market with a decline of just 6%, the debt ceiling / default issue seems to be losing some of its negative power.

We basically have the mirror image of the September first half rally with the last 3 weeks of decline.  The market is oversold and only had a 5% decline back to the point of breakout at 14,900.

If “they” can get this issue resolved we can make new highs.  The tech-heavy NASDAQ Composite is just 10 points off its recovery high, same for the Russell 2000.

After looking at 900+ charts this weekend I am really impressed with the number of big name stocks that are at support or have pulled back to important moving averages.  Names like:

CRM, SHW, SLB, GNW, MSFT, BBBY, JPM, CMCSA, BAC, X, NFLX, and WFM.

Even COH, one that I’ve played several times from the short side is showing some promise.

The most important gem gleaned from this list is that it represents no single industry group.  Basis materials, banks, energy, consumer discretionary, transportation and tech are all there.

If we do get Washington resolved this broad list will allow for good rotation and a solid basis for another move higher.  Actually, I don’t think that I’ve allowed myself to be this optimistic on the overall market in quite some time.  While there is always the possibility of a new leg up, now the probability seems to be getting better and better.

Maybe our representatives will get it right…at least now it seems like the flip of a coin…either they will or they won’t…..no better or worse than 50/50.

..CAM

 

Market Investing Strategies

Stock Options Trading Chart

$10,000 Account

New Trades:

Buy SPY 4 October 169 Calls @ $1.35

Buy CRM 4 October 52.50 Calls @ $1.15

Buy XLF 10 October 20 Calls @ $0.26

 

Remember, these trades are based on your participation in the

Subscriber Members Only

TEXTING SERVICE TO RECEIVE ALL UPDATES.

 

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 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 Investing Strategies

$100,000 Trading Portfolio

We were stopped last week on ETAK and bought SOHO using a TEXT.

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 past Market Investing 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.

 

Market Investing Strategies

$100,000 Trading Portfolio

Recommendations And Overall Comments

New Trades:

Buy SPY 8 October 169 Calls @ $ 1.35

Buy CRM 8 October 52.50 Calls @ $ 1.15

Buy XLF 20 October  20 Calls @ $ 0.26

We lost $ 1,550 in closed out positions last week

reducing our profits for the year to a

hypothetical $ 57,050

 

not counting open positions losses of about $ 10,735

 

We also have not counted dividends received on stocks like Apple and JP Morgan.

 

We have four long options positions:

The Stock table has the following 23 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 and

are using $ 4,412 in four options positions and

$ 77,254 in 23 stock positions

totaling $ 81,666 with
$ 18,334 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 Market Investing 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

 

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

 

NOTE: This is a Sample Issue Only!

TO GET OUR TRADE ALERTS BY TEXT MESSAGE AND

THE COMPLETE VIP MEMBERS ONLY

MARKET STRATEGIES NEWSLETTER ISSUES

Visit:

PrincetonResearch.com/investment-strategies.htm

 

To Lock In Your SPECIAL Low Subscription Rate

 

This Weeks’ Market Investing Strategies

Economic Numbers and Media Data

 

Market Investing Strategies

Trading Fundamentals

According to Barrons there have been 17 previous shutdowns since 1976 ranging from one to 21 days. The average was six days. For shutdowns lasting 10 days or less the S&P was down by a mean of 0.8%, but for those lasting more than 10 days the average down move was 2.6%. The longer shutdowns affected stocks for another month after it ended.

 

The 10 Dow Industrial groups were very little changed: 5 were up and 5 down. Basic materials led the bull with a modest 1.06% gain followed by Health Care, up 1.01%. Consumer Services gained 0.39%; Oil and Gas 0.29% and technology 0.23%. On the bear side Consumer services fared the worst with a small downturn of 0.68%; Utilities lost 0.61%; Industrials 0.52%; Telecommunications 0.4% and Financials 0.09%.

 

Market Investing Strategies Economic Data

The ISM Manufacturing Index increased to 56.2 in September from 55.7 in August. That is the strongest reading since April 2011. The Briefing.com consensus expected the index to fall to 55.0.

Key Factors:

Production levels improved modestly as the related index increased to 62.6 in September from 62.4. After reaching its highest point since April 2011, the new orders index fell from 63.2 in August to a still elevated 60.5 in September.  Future production trends will continue to be highly reliant on new orders growth as the level of backlogs contracted for a fifth consecutive month. The Order Backlog Index, however, did manage a slight improvement as the index increased to 43.0 from 42.5. The Employment Index increased to 55.4 in September from 53.3 in August.

The Labor Dept had its doors closed and could not issue the monthly employment report which was due last Friday.

 

Market Investing Strategies

Technical Information

Support Levels S&P 500    1672 and 1655

Resistance S&P 500           1696 and 1713

 

Support Levels DOW          15,125 and 14,960

Resistance DOW                 15,340 and 15,530

 

Support Levels QQQ           7836 and 7763                  

Resistance QQQ                  7939 and 8029

                  

Support Levels Nasdaq      3734 and 3682

Resistance Nasdaq             3806 and 3867

 

Market Investing Strategies Cycles

Spurred by recent talk and yesterday’s Chart of the Day, where past Federal government shutdowns were shown to not have been all that bad for the market, here is a chart of DJIA and S&P 500 performance 30 trading days before and 60 trading days after the start of the past 17 shutdowns. It is worth noting that the 10 most recent shutdowns all occurred during the secular bull market that ran from 1982-2000.

From the chart above, it is apparent that the market, on average, struggled before the shutdown and the three days following the shutdown, but from there the market quickly got back on track and was up around 2% or more 60 trading days later. At first blush this data would suggest that a shutdown is a bullish event however, this may not be the case.

Starting in January 1976 and running through December 1996, the average 12-week rolling return for DJIA was 2.3%, for S&P 500 it was 2.5%. Assuming a 5-day trading week, 12 weeks is approximately 60 trading days. Within this context, a 1.91% DJIA gain and a 2.37% S&P gain would be below average. Although it can be dangerous to say, “This time is different,” it actually is. Raising the debt limit is no longer a routine housekeeping item for Congress. Instead, it has become a major political sticking point.

In all likelihood, some kind of budget agreement will be reached and the Federal government will return to full operation. At which point the debt limit will be increased, but at this time it remains to be seen when either of this will happen as both parties in the debate appear quite comfortable placing the blame for any and all consequences on the other side. Market volatility is on the rise and a better buying opportunity is likely down the road.

Seasonal MACD Update

For those of you calculating MACD at home, you likely noticed that NASDAQ’s MACD indicator turned positive yesterday even though NASDAQ was down. Although the window to issue our Seasonal MACD Buy signal opened on Monday, there is a significant amount of uncertainty again this year. The Federal government is partially shutdown, the Treasury is using “extraordinary measures” to avoid violating the federal debt limit and Congress is gridlocked trying to address these issues. As a result, we are not issuing our Seasonal MACD Buy signal until DJIA, S&P 500 and NASDAQ MACD indicators are all positive.

As of yesterday’s close, DJIA needed to gain 559 points to turn its MACD indicator positive, S&P 500 needed to gain more than 32 points while any decline in excess of 3.35 points would turn NASDAQ’s MACD indicator back to negative. Today’s trading will widen these margins even further. An email alert will be issued when DJIA, S&P 500, and NASDAQ MACD Buy indicators are all positive. At that time, the “Best Six/Eight Months” will be declared underway and we will look to establish new long positions in SPDR DJIA (DIA), S&P 500 (SPY), PowerShares QQQ (QQQ) and iShares Russell 2000 (IWM). DIA, SPY, QQQ and IWM appear in the portfolio table below. Their respective buy limits and stop losses will be added when our Seasonal MACD Signal Alert is issued.

October Seasonalities; Debt Ceiling and up-coming earnings provide resistance to the Market

October has a dreadful history of market crashes such as in 1929, 1987, the 554-point drop on October 27, 1997, back-to-back massacres in 1978 and 1979, Friday the 13th in 1989 and the 733-point drop on October 15, 2008. During the week ending October 10, 2008, Dow lost 1,874.19 points (18.2%), the worst weekly decline in our database going back to 1901, in point and percentage terms. It is no wonder that the term “Octoberphobia” has been used to describe the phenomenon of major market drops occurring during the month. (Stock Market Almanac)

But October has also been a turnaround month—a “bear killer”. Twelve post-WWII bear markets have ended in October: 1946, 1957, 1960, 1962, 1966, 1974, 1987, 1990, 1998, 2001, 2002 and 2011. However, eight were midterm bottoms. This year is neither a midterm year nor is a bear market in progress, thus October’s performance in past post-election years is of greater importance.

Post-election year October’s are neither good nor bad since 1953, ranking mid-pack across DJIA, S&P 500, NASDAQ and Russell 1000 with gains averaging from 0.3% (Russell 1000) to 0.9% (NASDAQ). Only Russell 2000 has a negative average return (since 1981). DJIA has the best historical odds for gains having advanced in 10 of the last 15 post-election year Octobers. Despite the best average gain, NASDAQ actually has the worst record, declining in 6 of the last 10 post-election year Octobers. A 12.8% gain in 2001 boosts its average. Should a meaningful decline materialize in October it is likely to be an excellent buying opportunity, especially for any depressed technology and small-cap shares.

 

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. Princeton will be engaged by Target Energy. No contract is currently in place. 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 two small penny stocks ( REPR and AIVN ) we represent for a total outlay of $ 4,725 is well worth the risk. The Target ADR trades at about $ 5.90 in U.S. vs 0.065 in Australia. Princeton owns 400,000 Australia shares and about 500 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 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 (702) 650-3000

mike@princetonresearch.com

Or

Charles Moskowitz (781) 826-8882

CAM@MoneyInfo-LLC.com

 

Princeton Research

3887 Pacific Street, Las Vegas, Nevada 89121

 

Phone: (702) 650-3000

 

Fax: (702) 697-8944

 

NOTE: This is a Sample Issue Only!

TO GET OUR TRADE ALERTS BY TEXT MESSAGE AND

THE COMPLETE VIP MEMBERS ONLY

MARKET STRATEGIES NEWSLETTER ISSUES

Visit:

PrincetonResearch.com/investment-strategies.htm

To Lock In Your SPECIAL Low Subscription Rate