
Options Trading
May 13, 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)
Contributing Staff: Michael King, Charles Moskowitz
See the newsletter in .pdf format
Market Strategies
$10,000 Options Trading Account
There are seven open positions:
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Funds in Use: $ 2,670
Options Trading Strategies Comments
Remember, these trades are based on your participation in the
VIP Subscriber Members Only TEXTING SERVICE TO
RECEIVE ALL UPDATES.
This week we generated a loss of $636
lowering the YTD performance to
$18,218 or 182%.
We have become a little bit more cautious about our trading and it has taken the form of slightly decreased activity as well as smaller positions.
One observation about this market is that the weekly sentiment numbers continue to shift, but not so much from “bullish” to “bearish” with any regularity.
This week the move of up 8.4 is just slightly above average (30.5) working off the massive move from a couple of weeks ago (4/11) when it fell to 19.3% Bulls.
The more common changes seem to signify shifts from the “uncommitted” or neutral in both directions.
It’s a market that keeps shifting the uncommitted in and out. We bought 250 shares of the VXX ( volatility ) for the big account expecting a shift from complacency.
This is NOT a bad thing. It keeps us from overheating on the upside and avoids the cascading down moves that cause the public to exit altogether. And it also shows that the “roll” from debt to equity isn’t the only way to bring money into the market.
While the Barron’s front page is the only place to trumpet the 15,000 level for the DOW, we may still be able to move higher. I really hate for everyone to be bullish…”EVERYONE IS NEVER RIGHT” comes hauntingly back to mind….Maybe this time it actually is different.
…CAM
Where To Invest Now
Options Trading Strategies Table
Previous closed out trades not listed here may be seen in previous market letters in the VIP Subscribers Members Area.
DATE |
|
PRICE |
COST |
PROCEEDS |
RESULTS |
5/08 |
This Information Is For VIP Member Subscribers Only |
0.34 |
|
340 |
340 Loss |
5/07 |
0.33 |
|
330 |
320 Loss |
|
5/07 |
2.97 |
|
594 |
74 Gain |
|
5/06 |
0.50 |
|
250 |
50 Loss |
|
5/01 |
4.05 |
|
405 |
145 Gain |
|
5/01 |
0.65 |
650 |
|
|
|
4/30 |
2.60 |
780 |
|
|
|
4/25 |
0.10 |
60 |
|
|
|
4/24 |
0.68 |
680 |
|
|
|
4/23 |
1.20 |
|
600 |
300 Gain |
|
4/23 |
1.55 |
|
775 |
600 Gain |
|
4/19 |
1.00 |
|
1000 |
650 Gain |
|
4/18 |
0.60 |
600 |
|
|
|
4/15 |
0.35 |
700 |
|
|
|
4/01 |
0.73 |
1460 |
|
|
Notes: In Texting we have a limited amount of words. In the interest of brevity: OPTIONS ONLY: 1 January , 2 February. 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 25th 147 calls or puts.
Market Laboratory – Weekly Changes
Prices are copied from Barron’s Weekly and
Yahoo Finance and may be incorrect
Dow 15,118.49 +144.53 +0.97% |
Nasdaq 3436.58 +57.95 +1.72% |
S&P 500 1633.70 +19.28 +1.19% |
Transportation 6,375.52 +156.62 +2.52% |
Russell 2000 975.16 +20.74 +2.17% |
Nasdaq 100 2981.02 36.43 +1.24% |
Gold (spot) 1436.80 -27.50 -1.9% |
Silver (Dec ) 2365.8 -35.6 -1.5% |
Crude 96.04 +0.43 +0.45% |
Heating Oil 290.62 +2.18 +0.8% |
Unleaded Gas 2.8603 0.0349 +1.2% |
Natural Gas 3.910 -3.2% |
VIX 12.59 -1.02 -7.5% |
Put/Call Ratios S&P 100 88/100’s -39/100’s |
Put/Call Ratios CBOE Equity 60/100’s -01/100’s
|
Bonds 145-00 -2-02 3.10% +0.13% |
10 Yr Note 132-024-25 1.90% +0.15%
|
Copper 335.30 +3.85 +1.2% |
CRB Inflation Index 288.68 -1.49 -0.5% |
Barron’s Confidence 69.2% +1.9% |
S&P100 732.85 +7.20 +0.99% |
5 Yr Note 123-317 -135 0.82% +0.09%
|
Dollar 83.14 +1.01 +1.2% |
DJ Utilities 513.71 -15.59 -2.95% |
AAII Confidence Index |
Bullish 40.8% +9.8% |
Bearish 27.4% -8.5% |
Neutral 31.8% -1.3%
|
M1 Money Supply +14.29% Apr29th
|
M-2 Money Supply +6.73% Apr29th
|
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
Recommendations will be both listed in this letter and texted to members.
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 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 lost $ 252.00 in closed out positions last week
reducing our profits for the year to an hypothetical $ 35,977
We have one long BAC warrant position and three long options positions:
The Stock table includes the following nineteen 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 $ 2,670 for the one warrant and three options positions, $ 73,684 in the19 stock positions for a total of $76,354 with $23,646 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
Option |
COST |
Date |
Sold |
Date |
Profit (Loss) |
This Information Is For VIP Member Subscribers Only |
Calls 0.80 |
5/06/13 |
|
|
|
Calls 0.65 |
5/01/13 |
0.33 (50% Loss Rule ) |
5/07/13 |
( $ 640 ) |
|
Puts 2.60 |
4/30/13 |
4.05 (sold 2 lots leaves 4)
2.97 Sold remaining 4 lots |
5/01/13
5/07/13 |
$ 290
$ 148 |
|
Calls 0.10 |
4/25/13 |
|
|
|
|
Calls 0.68 |
4/24/13 |
0.34 (50% Loss Rule ) |
5/08/13 |
( $ 680 ) |
|
Calls 0.60 |
|
0.50 |
5/06/13 |
( $ 100 ) |
|
Calls 0.35 |
4/15/13 |
|
|
|
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 | Hecla (HL ) Mining reports earnings before the open.
( expected bottom line earnings -0.1 and top line revenue -16.1% )
08:30 hrs Retail Sales Apr ( -0.3% vs -0.4% ) Ex-Auto (-0.2% vs -0.4% )
10:00 hrs Business Inventories Mar ( 0.3% vs 0.1% )
Tallgrass Energy Partners a limited partnership that owns and runs midstream energy assets is set to prices 13.05 million shares on the NYSE @ $ 21-23/ share. |
Tuesday | 08:30 hrs Export Prices ex Ag
Apr (NA vs -0.2% ) Import Prices ex Oil Apr ( NA vs -0.2% )
Eagle Materials reports after the close
|
Wednesday | Deere and Macys report sales and
earnings before the open.
MBA Mortgage Index 5/11 ( NA vs + 7.0% )
08:30 hrs PPI Apr ( -0.5% vs -0.6% ) CORE ( 0.1% vs 0.2% )
08:30 hrs Empire Manufacturing May ( 3.5 vs 3.1 )
09:00 hrs TIC FLOWS Mar ( NA vs -$17.8B )
09:15 hrs Industrial Production Apr ( -0.2% vs 0.4% ) Capacity Utilization ( 78.3% vs 78.5% )
10:00 hrs NAHB Housing Market Index May ( 44 vs 42 )
10:30 hrs Crude Inventories 05/11 ( NA vs 0.230 mln bbls )
Cisco and Jack In The Box report after the close.
|
Thursday | 08:30 hrs Initial Claims 05/11
( 330K vs 323K ) Continuing Claims 05/04 ( 3005K vs 3005K )
08:30 hrs CPI Apr ( -0.2% vs -0.2% ) CORE CPI Apr 0.2% vs 0.1% )
08:30 hrs Housing Starts Apr ( 970K vs 1036K ) Building Permits ( 950K vs 902K )
10:00 hrs Philadelphia Fed May ( 2.5 vs 1.3 )
10:30 hrs Natural Gas Inventories 5/11 ( NA vs 88 bcf )
JC Penney reports sales and earnings after the close. (-0.99 & 2,689 )
|
Friday | 09:55 hrs Michigan Sentiment
May ( 78.5 vs 76.4 )
10:00 hrs Leading Economic Indicators Apr ( 0.3% vs -0.1% ) |
Market Strategies Trading Fundamentals
Nine of the ten Dow Industrial groups were modestly higher. Industrials led the way forging a 2.28% gain followed by Basic materials and Consumer Services both up 1.88%. Financials rose 1.83% and Health Care 1.21%. Technology added 1.14% and Consumer Goods 1.14%, Oil and Gas added 0.75% and telecommunications 0.66%. Utilities were the only losing group, off 2.42%.
The Fed’s latest survey of loan officers showed a net 23% of banks eased lending standards, the most since 2005 and up sharply from 7.7% at the end of 2012. However, demand for the money is not there. Money is readily available. The share of business owners reported credit being hard to come by fell in March to the lowest level since 2006.
Market Strategies Economic Data
There was little in the way of economics reports last week that could have an adverse influence on direction of equities. Initial Unemployment Claims fell to 323K, their lowest level since January 2008, down from a consensus which called for 336K and 327K the previous week.
The Continuing Claims level fell to 3.005 mln for the week ended April 27th from 3.032 , in the previous week. The chart below shows the continued decline in unemployment claims over the past four years. The results are impressive and show the benefits of low interest rates.
Market Strategies
Technical Information
Support Levels S&P 500 1583 – 1587
Resistance S&P 500 1638 – 1644
Support Levels DOW 14,475 – 14,495
Resistance DOW 15,120 – 15,180
Support Levels QQQ 69.80 – 70.00
Resistance QQQ 73.90
Support Levels Nasdaq 3290
Resistance Nasdaq 3496
Market Strategies Cycles
Earnings season is ending and both the Dow and S&P have three consecutive days in virtually the same range: The S&P 500 range: 1,622-1,633 on Wednesday; 1623.09 to 1635.01 Thursday and 1623.71 to 1633.70 Friday. The Dow as follows: 15,056-15,106 last Wednesday; 15,105-15,144 Thursday and 15082-15118 Friday.
A similar range Monday would be bearish. Flat tops create market drops. On the other hand, a weak Monday could be just what the bull needs to achieve another bullish Tuesday. Every Tuesday since and including March 26th has been a bull. There have been seven in a row as top-pickers have worked the markets on Monday only to lose out the next day.
The bearish outlook for the week coincides with anticipated weak economic reports.
DOW MONTHLY anticipation CHART FOR MAY based on Hirsh’s Stock Trader’s Almanac
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:
www.princetonresearch.com/investment-strategies.htm
To Lock In Your SPECIAL Low Subscription Rate
*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. We were stopped out 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 two small penny stocks we represent for a total outlay of $ 4,725 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 (702) 650-3000
Or
Charles Moskowitz (781) 826-8882
Princeton Research
3887 Pacific Street, Las Vegas, Nevada 89121
Phone: (702) 650-3000
Fax: (702) 697-8944
Visit: www.princetonresearch.com