June 11, 2012 Market Strategies Newsletter Options Trading Strategies

Options Trading Strategies

Market Strategies Newsletter


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)

Contributing Staff: Michael King, Bill Chippas, Charles Moskowitz


 June 11, 2012

Market Strategies Newsletter

Where To Invest Now,

Stocks To Buy And

Options Trading Strategies

To subscribe to the Text Message Trade Alerts

TEXT the word UPDATES to 69302


To Read This Market Strategies Newsletter In Adobe PDF Version:

CLICK HERE – http://www.princetonresearch.com/6-11-2012-Market-Strategies.pdf


Options Trading Strategies

$10,000 Options Trading Portfolio

New Options Trades for this week:

Buy 10 TBT July 17 Calls @ Market
Buy 6 IWM July 80 Calls @ $1.40 or better

Buy 6 AIG July 32 CALLS @ Market

The $10,000 Options Only account had a Gain last week of $220, increasing our gains for the year from $3,182 to $3,402.

Three positions remain:

The BAC warrants,

MCD July 87.5 Calls and the

SLV July 29 Calls.

The Open positions are highlighted in the options table below.

Approximately $ 2110 funds are in use.

The good news was that this week had some big moves to the upside. The lesser good news was that we ran up right to the 25 day moving averages on the S.& P. 500 at 1325 and the DJIA @ 12,555.  The other good news was that after breaking the 200 day MA (DJIA) last Friday we didn’t go any lower, and the S. & P. never closed below this important point.

These points are important if for no other reason than everyone references them.

From my prospective we also confirmed some areas for support and resistance.

The action in many stocks has been highly constructive. BAC after moving higher from the lows of mid-May did not break on the 275-point downdraft and closed above both the 25 and 200-day averages.  IBM bounced off the 200-day and recovered to close over $8.00 higher.

We came into Friday concerned about the 25-day moving average and looked for defensive issues ending up buying MCD at the open after it reported weaker same store growth…..not down, just not as expected.  We paid $1.51 for July $87.50 calls ($ .01 off the low) and watched as the stock rallied from down over $2.60 to close down just $ .63…The calls closed at $2.20.

The weekend news that Spanish banks are getting $100 billion Euros will send the markets higher.  We are adding TBT calls and IWM calls in slightly smaller size to participate.

The market is still “oversold” and still faces headline risk, but our balanced approach yielded gains in both directions, as the market moved on Euro news and the Senate questioning of Mr. Bernanke.  This is the reason why traders need to sign up for the FREE texting service to take advantage of our hard work….CAM

To Get Our Trade Alerts By Text Message And

The Complete Members Only

Market Strategies Newsletter Issues

Use The Subscribe Button On

The Right Side Of This Page


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/









Bought 5 MCD July 87.50 Calls




Bought 10 SLV July 29 Calls




Sold  10 XLF June 14 Puts



70 Gain


Bought 10 XLF June 14 Puts




Sold 10 SLV July 29 Calls



360 Gain


Bought 10 SLV July 29 Calls




Sold 6 FB June 30 Calls



210 Loss


Bought 6 FB June 30 Calls




Bought 1000 BAC.WS.B



New trades $ 10,000 account…In Texting we have a limited amount of words. In the interest of brevity: OPTIONS ONLY: 7 July, 8 August . 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









S&P 500








Russell 2000




Nasdaq 100
















Heating Oil




Unleaded Gas




Natural Gas






Put/Call Ratios

S&P 100



Put/Call Ratios     CBOE Equity



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


Last week we TEXTS Alerts we Bought AGQ, MFST and Sold MTOR, IYT, MSFT and AGQ.

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


Purchase Price

Purchase Date



Price/Date Sold



AGQ 100



MFST 150



29.42 6/7/12


RCII 150




34.91 6/7/12





AGQ 100



43.94 6/6/12


MTOR   800



4.90 stop

5.57 6/6/12

( 56 )

SNSS 2000



2.40 stop





SIRI 2000



1.78 stop





TXGE*20830       .24    4/9/12
IYT 60



85.02 stop

89.55 6/8/12

 ( 175 )

AIVN* 10000
* 5000



.10 sco
.10 sco

XBOR* 2000




CISG 600



5.69 sco




0.70 sco

LEI* 2425







0.03 sco

Note: Previous closed out stock and option positions can be found in the June 4 and newsletters dating back to July 20, 2009.  Stay alert on the free texting service for new trades and exits.

Model Portfolio Comments/Changes:


As noted on page one, this was an exciting and profitable week.  While we didn’t get much horizontal activity the market was marked by definite areas of support and resistance.  We are still the tail (EURO news and political considerations) wagging the dog.  China growth was not as great as expected and our Balance of Trade numbers were of little import.  Oil continued weak and the metals had dramatically volatile action. We are still confined to the 1295 (S. & P. 500) lows and 1335 highs.

Political considerations were in the forefront with the Wisconsin Recall and the continuing comments by party members that conflicted with the Obama attacks on Romney’s Bain Capital history all as the coming Supreme Court ruling on Obamacare.  These are issues produce more bluster than substance. Many of the big names, big cap stocks look ready to move higher.  AAPL looks ready to test the minor resistance around 620 on its way to test the highs near 645.  AMZN seems to have worked of its explosive move on the earnings report in April (it gapped up over $30).  Even on its pullback with the market selloff in May AMZN only came back to $206.
It remains above the 200 day MA and is still slightly oversold.  The only issue for me today is the still somewhat elevated VIX /VXX levels and the fact that the reverse Russell (RWM), FAZ, and DXD have all broken out and pulled back to support.  This makes me somewhat wary of the sustainability of the rally….CAM



Buy 20 TBT July 17 Calls @ market

Buy 12 IWM July 80 Calls @ $1.40 or better


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

Buy 12 AIG July 32 CALLS @ Market

Option and overall Comments

We had a Gain last week of $ 927 in an Up week. Our gain for the year was $12,215.85 and with last week’s gain has increased to $13,142.85. We have Four long options positions remaining, the MCD July 87.5 Calls, SLV July 29 Calls, FAZ June 22 Puts, CSCO Jan 20 Calls. The Stock table includes Eleven long stock positions: AGQ, SNSS, SIRI, AAPL (a double), TXGE, AIVN, CISG, LEI, LEOM, XBOR (a double) and BAC warrants. The AGQ is a double long silver 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 $3,258 in the four options positions and $ 59,575 in the 11 long stock positions for a total of $ 62,833 with $ 37,167 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. 


To Get Our Trade Alerts By Text Message And

The Complete Members Only

Market Strategies Newsletter Issues

Use The Subscribe Button On

The Right Side Of This Page


Note: Previous closed out stock and option positions can be found in the June 04 and newsletters dating back to July 20, 2009.                                                                                                    

This Weeks’ Economic Numbers and Media Data

Monday Investors will assess domestic and overseas weekend comments.
IMF issues a report on Spanish Banks. Best Buy (BBY) Earnings.
Tuesday 08:30 hrs Export Prices ex-ag. May (NA vs 0.2% )
08:30 hrs Import Prices ex-oil May ( NA vs 0.1% )
Wednesday Italy and Germany auction Bonds

07:00 hrs MBA Mortgage Index 06/09 ( NA vs 1.3% )
08:30 hrs Retail Sales May  ( -0.2% vs 0.1% )

08:30 hrs Retail Sales ex-auto May  ( 0.0% vs 0.1% )
08:30 hrs PPI May  (  -0.7% vs  -0.2% )
08:30 hrs Core PPI May  ( 0.2% vs 0.2% )
10:00 hrs Business Inventories Apr ( 0.2% vs 0.3% )
10:30 hrs Crude Inventories 06/09  ( NA vs -0.111M )Thursday08:30 hrs Initial Claims 06/09 ( 375K vs 377K )
08:30 hrs Continuing Claims 06/02 ( 3275K vs 3293K )

08:30 hrs CPI May  ( -0.2% vs 0.0% )

08:30 hrs Core CPI May ( 0.1% vs 0.2% )
08:30 hrs Current Account Balance Q1 ( -$130.9B vs -$124.1B ) FridayBank of Japan meets, no change in rates is expected.
08:30 hrs Empire Manufacturing Jun  ( 13.5 vs 17.1 )

09:00 hrs Net Long-Term TIC Flows  Apr ( NA vs $36.2B )
09:15 hrs Industrial Production May  ( 0.1% vs 1.1% )
09:15 hrs Capacity Utilization  May  ( 79.1% vs 79.2% )

09:55 hrs Mich Sentiment  Jun  (  77.0 vs 79.3)

Investors will assess upcoming weekend events and Greek Elections on Sunday.


All 10 Dow Industrial Indicators were higher led by Financials gaining 4.44%.

Technology rose 4.21 %; Oil and Gas reversed their losing ways up 4.0%.

Basic Materials added 3.88% and Consumer Services added 3.74%;

Industrials 3.66%; Health Care 3.03%;

Telecomm  and Utilities 2.88% and

Consumer Goods 2.56%.

Wisconsin Governor Scott Walker did more for the markets with his huge victory fighting against the collective bargaining rights of unions. Walker was able to make the case that years of corrupt union-politician back-scratching had been bankrupting the state.

Financials proved to be a source of strength. The sector ascended from an early loss to a 1.2% gain with help from bank stocks, which collectively climbed 1.6%, based on the KBW Bank Index. Tech contributed to the effort by trading up to a 0.9% gain. For the week Financials advanced 4.4%, while Tech advanced a little more than 4.2%.

The markets benefitted from a weaker dollar which declined 1% to close out the week at 82.05. All this while the M1 percent increase year-to-year also declined below 14% which has been consistent with the Fed on a course of taking back some excess liquidity.

Europe’s leaders will convene this weekend to address Spain’s struggling banking system.

The weekend also brings some price data from China.

Economic Data

It was a light week for some lackluster economic reports. The Trade Balance fell slightly to -$ 50.1 billions for April an improvement from the March Report at -$ 52.6 billions. The negative numbers detract from GDP but with the lower oil price could even do much better next month upon the release of the May numbers  April exports fell $1.5 billions to $182.9 billions, while imports declined $4.1 billions to $233.0 b. The drop in exports was primarily driven by a $0.8 bln decline in civilian aircraft and aircraft engines and a $ 0.4 bln drop in chemical exports. April exports fell $1.5 bln to $182.9 bln while imports declined $4.1 bln to $233.0 bln.

Factory orders fell 0.6% in April after declining 2.1% in March. Productivity for the first quarter declined 0.9% down from 0.5% in the advance release last month due to a downward revision to output. As a result unit labor costs were revised down from 2.0% to 1.3%. The consensus had expected unit labor costs to be increased by 2.3%. Hourly compensation fell 2% from fourth quarter levels.

Initial Unemployment Claims were 377K about in line with 375K expected.

The Fed’s beige book was quite positive giving reasons why it is unlikely for a QE3. In fact, the Fed’s survey of its 12 banking regions, covering the period from early April to late May, paints a surprisingly upbeat picture of a U.S. economy continuing to improve at a moderate pace. Manufacturing in most areas is seen as expanding nicely, travel and tourism are strengthening, and the long-depressed housing market is showing more signs of recovery.


Technical Information

Support Levels:

S&P 500           1310; 1304

Resistance S&P 500   1334; 1346

DOW                        12,445; 12,320

Resistance DOW     12,680; 12,740

QQQ                        6257; 6165

Resistance QQQ      6350 6417

Nasdaq          2820; 2775

Resistance Nasdaq      2883; 2937




The AAII Confidence index declined again to 27.5.. When below 30%, it is bullish, a clear sign that everyone is bearish. So if you are going to stand on the same side of the boat as everyone else expecting just another modest correction, you may want to put on a life preserver. Should this pattern run its course, as it has in the previous two years, the correction that is widely expected could manifest itself into new highs unexpected.


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 ( LEOM ). In addition Princeton has bought shares. Cross Border paid us 25,000 restricted shares several months ago. We do not currently represent Cross Border but we like the company. We own about 3,000 shares. Princeton has 2,281,578 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.



Please Direct All Inquiries To:

Mike King

Princeton Research

3887 Pacific Street, Las Vegas, Nevada 89121

 Phone: (702) 650-3000

Fax: (702) 697-8944


 Visit: www.princetonresearch.com




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