Market Investing Strategies Newsletter December 16, 2013

December 16, 2013

Market 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)

 

Market Strategies Stock Options Trading

$10,000 Account

There are four open positions:

CSCO Dec $24 Calls

EMC Jan $23 Calls

NBG Jan 2015, $7 Calls

TBT Jan 79 Calls

 

Funds in Use $ 2,642

Market Strategies Stock Options Trading

$10,000 Account Traders Comments

We had another small loss this week of $270

bringing YTD performance down to $29,366

 

Returns Of Over 293%

It was a seesaw week with the major averages contained in small ranges until late in the day.

At that point we had some pretty serious selloffs that gave us a down week of almost 1.7%.

Small caps, which led the way up also outpaced the big stocks with a loss of 2.28%.

At this time of the year we have a great many cross-currents caused by selling for tax losses, selling to lock in profits, and of course the buying and selling based on special situations like earnings surprises and takeovers.  It is one of the reasons that I have cut back on new positions until I see some special setups in either direction.

I’ve left out my thoughts on the “taper/no taper” discussion since they mirror Mikes comments later in the letter.

Hope everyone has a good holiday and a profitable week.

…CAM

New Trades:  All new trades will be texted

NOTE: This is a Sample Issue Only!

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THE COMPLETE VIP MEMBERS ONLY

MARKET STRATEGIES NEWSLETTER ISSUES

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Market Strategies

Stock Options Trading Chart

$10,000 Account

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.

 

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

Buy 500CEF @ $ 13.20

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 Strategies Newsletter issues available in the 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 Strategies

$100,000 Trading Portfolio

Recommendations And Overall Comments

New Trades: New Trades will be texted.

 

We lost $ 1,565 in closed out positions last week

decreasing our profits for the year to a hypothetical  $ 58,972

 

not counting open positions losses of about $ 10,909.

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 18 positions.

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

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 $ 5,284 in four options positions and

$ 59,677 in 20 stock positions

totaling $ 64,961 with
$ 35,039 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.

These figures are approximate. We do not count commission costs and there may be errors.

 

Previous Week’s Recommendations and

Rules for the Market 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 Strategies Newsletter issues available in the VIP Subscribers Members Area.

 

This Weeks’ Market Strategies

Economic Numbers and Media Data

Monday

08:30 hrs Empire Manufacturing Dec ( +5.0% vs -2.2% )

08:30 hrs Productivity 3^rd Qtr ( +2.7% vs +1.9% )

Unit Labor Costs ( +1.3% vs -0.6% )

09:00 hrs TIC Flows Oct ( NA vs  +$ 25.5B )

09:15 hrs Industrial Production Nov ( 0.4% vs -0.1% )

Capacity Utilization ( 78.4% vs 78.1% )Tuesday08:30 hrs CPI Nov ( 0.1% vs -0.1% )

CORE CPI ( +0.1% vs Same )

08:30 hrs Current Account Balance 3^rdQtr (-$101B vs -$98.9B )

08:30 hrs NAHB Housing Market Index Dec ( 55 vs 54 )Wednesday07:00 hrs MBA Mortgage Index 12/14 ( NA vs 1.0% )

08:30 hrs Housing Starts Sep ( 915K vs 891K )

Housing Starts Oct ( 920K vs NA )

10:30 hrs Crude Inventories 12/14 ( NA vs -10.585Mln Bbls )

14:00 hrs FOMC Rate Decision Dec ( 0.25% vs Same )Thursday08:30 hrs Initial Unemployment Claims 12/07 ( 333K vs 368K )

Continuing Claims 12/07 ( 2760K vs 2791K )

10:00 hrs Existing Home Sales Nov ( 5.00M vs 5.12M )

10:00 hrs Philadelphia Fed Dec  ( 5.0 vs 6.5 )

10:00 hrs Leading Economic Indicators Nov ( 0.6% vs 0.2% )

10:30 hrs Natural Gas Inventories 12/14 ( NA vs -81bcf ) )Friday08:30 hrs GDP-3^rd estimate 3^rd Qtr ( +3.6% vs Same )

GDP Deflator  3^rd Qtr ( + 2.0% vs Same )

08:30 hrs PPI Nov ( -0.1% vs -0.2% )

CORE PPI ( 0.1% vs 0.2% )

 

Market Strategies Trading Fundamentals

It was a big down week for all stock indexes. Both the Dow and S&P 500 lost 1.65%, while the Russell fell 2.15% and Nasdaq lost 1.51%. Both the Dow and the Russell are testing their respective 50 day moving averages while the Nasdaq Composite managed to close slightly above the 4,000 level.

All ten Dow Industrial Groups were lower led by Health Care down 2.65%; Utilities lost 2.20%; Telecommunications 2.06%; Consumer Goods 1.93%; Technology 1.76%; Oil and Gas 1.62%; Industrials 1.18%; Financials 1.16%; Consumer Services 0.95% and Basic Materials 0.75%.

Some of the biggest weekly losers were conglomerates, health information services, Software-infrastructure and computer distribution, solar and technology contract manufacturers. On the upside, silver and gold stocks did better as did Resorts, casinos, internet content and information and food distribution.

Market Strategies Economic Data

Highlights

The Treasury budget deficit declined to $135.2 bln in November from $172.1 bln in November 2012. Revenues increased by $ 20.7 bln, from $ 161.7 bln in November 2012 to $ 182.5 bln in November 2013. Total outlays fell to $ 317.7 bln from $ 333.8 bln in November 2012 a decline of $ 16.2 bln. For the entire year the deficit is $ 65.3 bln less than last year.

 

Market Strategies Technical Information

Support Levels S&P 500    1758

Resistance S&P 500           1796

 

Support Levels DOW          15,664

Resistance DOW                 15,884

 

Support Levels QQQ           84.36                  

Resistance QQQ                  86.05

                  

Support Levels Nasdaq      3964

Resistance Nasdaq             4097

                            

Market Strategies Cycles

Tax loss selling is a major factor for December trading which often causes stocks to be weaker the first half of the month. Weight Watchers is an example of tax selling. In fact according to the statistics on Yahoo, 35.40% of the float is short. This stock may be a cycle buy next week on any further weakness.

This year it seems there is an abundance of people that believe the recent bout of weakness is because the Fed will begin to taper its bond buying this month and will announce this next week on December 18. There is no way to know exactly what the Fed is going to do or not going to do next week, but let’s not let that fact stand in the way of wagering a guess. My guess is they will take no action. Yes, economic data is improving. GDP has climbed above 3%, unemployment is down to 7.0%, housing, autos and manufacturing are also looking alright, but inflation is still well below target and the data has only been positive for a relatively brief period of time. The Fed may have set an unemployment objective to meet as part of its criteria to slow the pace of bond purchases, but it is most likely more concerned about the lack of inflation. Deflation can have disastrous effects on a highly leveraged economy like ours. If you have doubts, see Japan over the past two decades.

And so what if the Fed does decide to taper at its next meeting? Odds are they will only trim a small amount off their monthly purchases. Taking $10 or $15 billion away still leaves a significant $70 or $75 billion in purchases, every month. On an annual basis this is the equivalent of going from $1.02 trillion to $900 billion. Both numbers are insanely large and represent more than an ample amount of liquidity. Let’s not forget why the Fed would taper, because the economy is improving. If the economy is actually gaining momentum, then now is an excellent time to take advantage of typical first-half December weakness and get positioned for the Santa Claus Rally and the January Effect.

 

Disclaimer – 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.