Options Trading

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http://www.princetonresearch.com/5-20-2013-Market-Strategies.pdf

 

May 20, 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

$10,000 Options Trading Account

 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

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Market Strategies

$10,000 Options Trading Account

 

Open Positions:

There are four open positions:

Funds in Use: $ 2,675

Options Trading Strategies Comments

This week we edged up toward 200%

with a gain of $1,495

bringing the YTD total to $19,713

or 197%

 

Funds in use is $2,675 and this is representative of my feeling that at this stage of the current rally I want to take on slightly smaller positions to help manage risk.

The markets continue to climb the Wall of Worry and the sentiment numbers below show no explosive expansion of bulls, a seemingly good sign, but having been here before, I maintain a healthy degree of skepticism.

Gold and Silver continue to fall, but the mass liquidation seems to me to be the result of some well-known panic liquidation.  This may be the EFT having to sell actuals because of the direct relationship between it and holdings of the metal, or it may be a failed (or failing) hedge fund stuck on the wrong side.

When thinking about Gold futures you have to remember that “margin” is not as with stocks, a 50% requirement, but rather a “good faith down payment” that may be only 5% of the value.  The practical upshot is that a 5% decline ($70 @ $1,400) wipes out 100% of the margin.  However, until it is actually sold, the risk continues.  This is one of the reasons to use the GLD, and we use the options in order to limit possible losses.

Have a good week.

….CAM

Remember, these trades are based on your participation in the

VIP Subscriber Members Only TEXTING SERVICE TO

RECEIVE ALL UPDATES.

 Where To Invest Now Options Trading Strategies Table

 

DATE	OPTIONS	PRICE	COST	PROCEEDS	RESULTS
5/17	This Information Is For VIP Member Subscribers Only	0.80		800	200 Gain
5/17		0.785		1570	110 Gain
5/16		0.60	600
5/15		2.20		660	315 Gain
5/15		0.89		890	210 Gain
5/15		0.95		475	300 Gain
5/14		0.70		420	360 Gain
5/13		1.15	690
5/13		0.68	680
5/13		0.84	840
5/13		1.15	690
5/06		0.80	800
4/25		0.10	60
4/23		1.55		775	600 Gain
4/19		1.00		1000	650 Gain
4/15		0.35	700
4/01		0.73	1460

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.Previous closed out trades not listed here may be seen in previous market letters in the VIP Subscribers Members Area. 

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 Strategies Where To Invest Now

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

Recommendations will be both listed in this letter and texted to members.

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

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 made $ 3,584.00

in closed out positions last week

increasing our profits

for the year to a hypothetical $39,561

We have four long options positions:

 

The Stock table includes eighteen 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

$ 5,350 for four options positions,

$ 61,075.00 in 18 stock positions

totaling $66,425  with $33,575 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
• Call 702 650 3000 for up to date information.

 

                                                                                                                                         

Note: Previous closed out stock and option positions can be found in past Market 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:

www.princetonresearch.com/investment-strategies.htm

To Lock In Your SPECIAL Low Subscription Rate

 

This Weeks’ Market Strategies

Economic Numbers and Media Data

 

Market Strategies

Trading Fundamentals

Stocks booked solid gains on Friday despite low volume on an options expiration day.

All Ten Dow Industrial Groups were higher led by Financials, up 3.32%.

Industrials added 2.34%; Consumer Goods 2.15%;

Oil and Gas 1.96% and Technology 1.80%.

Health Care gained 1.53%; Basic Materials 1.49%;

Utilities 1.25%; Consumer Services 1.17% and

Telecommunications 0.51%.

 

Market Strategies Economic Data

Michigan Sentiment hit pre-recession levels at 83.7 jumping from 76.4 in April, well above the consensus estimates of 78. The Present Conditions Index increased to 97.5 from 89.9 which was the highest level since October 2007.

The expectations Index increased to 74.8 from 67.8. Industrial Production which includes Manufacturing, Mining and Utilities declined 0.4%in April, following a 0.3% decline in March.

There were similar declines both in April 2012 and 2011. Motor vehicle production declined 1.3% in April. Excluding motor vehicle and parts production, other manufacturing fell 0.3% following a March decline of 0.6%. Utility production fell as normal temperatures returned lowering heating demand. Mining production rebounded somewhat increasing 0.9% after declining 0.6% in March. Overall, manufacturing production is down 0.1% since December 2012.

Capacity Utilization fell to 77.8% from a downwardly revised 78.3% from what was originally reported as 78.5% in March.

Retail Sales increased 0.1% in April well above the consensus which had expected a decline of 0.3%. Clothing rose 1.2%; general merchandise 1.0%, and non-store retailers 1.4%.

Lower gasoline prices reduced gas station sales 4.7%. The increase was the result of consumers reducing their savings rate according to Briefing.com.

Income growth has to improve for sales to continue positive.

Export prices (less-Agriculture) declined 0.5% and Import prices 0.2% ( less oil ) and  continuing a world-wide deflationary trend.

The ( NAHB ) National Association of Home Builders reported a continued upward trend going to 44 from 41 last month.

Market Strategies Technical Information

Support Levels S&P 500    1635

Resistance S&P 500           1720

 

Support Levels DOW          15,080

Resistance DOW                 15,480

 

Support Levels QQQ           70.95                  

Resistance QQQ                  75.10

                  

Support Levels Nasdaq      3290

Resistance Nasdaq             3575

 

Market Strategies Cycles

Not so long ago there were far more investors and traders discussing (and expecting) a market correction. The range in magnitude varied, but it was being discussed. As the market has continued to rally on, to new all-times, there has been less and less discussion of a pullback. Those still expecting a pullback now have weakening economic data on their sides and a market valuation that no longer looks cheap with the S&P 500 currently trading with a 15 to 16 price-to-earnings multiple. The last argument frequently cited as a reason for a correction is the time the market has gone without one.

This last argument is probably the weakest one of all and reminds me of the gambler’s fallacy. Although this fallacy does not correlate well to the market, it does explain how the human mind can reach an erroneous conclusion after observing a seemingly low probability scenario unfold. In the case of the market, the fallacy seems to be that after six-plus months without a correction of 5% or more, the market must be more susceptible now than it was in the second month of this rally.

Admittedly, proving that six months without a 5% or more correction makes a correction more or less likely or has no impact at all on whether or not a correction is coming is not as easy as illustrating the gambler’s fallacy with a simple fair coin toss and some math. For one, the market has a bias and that direction is up. Up, because of monetary and fiscal policy that attempts to foster and support economic growth and corporate earnings. But, we can examine the S&P 500’s history and draw some conclusions. Because 5% is a commonly and widely accepted threshold for a pullback to be considered a correction this is the value used. Obviously, many corrections ultimately exceeded 5% before the market recovered to its pre-correction level, but for this study every 5% decline was considered.

Looking back at the last 64 years of S&P 500 trading seems to confirm that just because there has not been a correction for six months, does not mean it is more or less likely to begin now. For starters, since 1950, there were five full calendar years in which there were no 5% corrections; 1954, 1958, 1964, 1993 and 1995. The longest streak was 594 calendar days from December 1957 to August 1959. This streak nearly covered an entire bull market; it came up just two months short.

 

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

mike@princetonresearch.com

Visit: www.princetonresearch.com

Options Trading