Options Trading Newsletter
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October 26, 2015
Market Strategies Newsletter
Sample Issue
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
Where To Invest In 2015 Newsletter Covering:
Where to Invest November 2015
Best Stocks To Buy November 2015
Stock Market Investing Strategies
Stock Options Trade Alerts
Options Trading Strategies
How To Trade Options
2015 YTD Profits $ 6838
Over 68% Returns
2014 Profits = $ 20,443
Over 204% Returns
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Charles Moskowitz Discussion
$10,000 Trading Portfolio
We Have 3 Long Open Positions:
SUN Dec 40 Calls
TBT Nov 43 Calls and
XLF Oct 30th $ 23 Calls
Funds in use = None
Week 43 was confusing to me. We had a loss of $1,068 bringing YTD back down to $6,838.
The cross currents are pretty extreme. Gold looked like it was well on the way to a meaningful recovery after a strong consolidation and base last week.
This week was a relatively short range affair (inside week) and was stopped dead by the overhead resistance from 1175-1205. We’ll have to wait until we see where it will hold on this pullback. It is a very well defined “flag” formation and a break to the upside would yield a test of 1210-1220.
The A.A.I.I sentiment numbers show little change in the bullish, a loss of bearish consensus but the neutral number is up to 41.2%… Both Bullish and Bearish numbers are below their long term averages and Neutral is 33% over…..I guess I’m not the only one confused.
As Mike notes in the fundamental section, Oil usage looks like it could be down for a significant period of time, with those numbers lower across the board by all three major tracking agencies involved. While this is the “dividend” for the middle class, it clearly hasn’t helped retailers for the last quarter or Q3 and Q4 of last year when oil prices declined from a July high of $104.99 to close out the year at $52.69. This years’ holiday season will certainly tell the tale.
My problem is that the rally continues to become more and more narrow. We had great earnings this past week, but only in the BIG technology names.. MSFT,AMZN, GOOG and NFLX with AAPL coming shortly.
The big multinationals like P&G and IBM missed on US$ strength. It’s hard for me to figure out if the strong USD$ precedes the rise in interest rates or if when rates do move higher, we’ll have an even stronger dollar. If that’s the case these multinationals will have a very hard time for a while as interest rates tend to trend once reversed in either direction. This is the quandary that disturbs the market. The question of which way the Fed goes causes much indecision…as is noted above in the A.A.I.I. numbers. This should cause even more trouble for this week in particular…..CAM
Market Strategies $10,000 Trading Account Trade Table
DATE |
PRICE |
COST |
PROCEEDS |
RESULTS |
|
| 10/22 | Sold 6 SPY Oct 30th 202 Puts
( 50% Loss Rule ) |
0.83 | 496 | 498 Loss | |
| 10/21 | Bought 8 SUN December 40 Calls | 0.75 | 600 | ||
| 10/21 | Bought 6 SPY Oct 30th 202 Puts | 1.66 | 996 | ||
| 10/20 | Sold 2 TSLA October 30th 225 Calls
( 50% Loss Rule ) |
2.90 | 540 | 580 | 570 Loss |
| 10/20 | Bought 2 TSLA October 30th 225 Calls | 5.75 | 1150 | ||
| 10/19 | Bought 6 TBT November 43 Calls | 1.35 | 780 | ||
| 10/19 | Bought 10 XLF October 30th $ 23 Calls | 0.57 | 570 |
Remember, these trades are based on your participation in the
TEXTING SERVICE TO RECEIVE ALL UPDATES.
Previous closed out trades not listed here may be seen in previous market letters in the
For Free Where To Invest Your Money Now
High Return Investments Trade Alerts
Go To: PrincetonResearch.com/alerts.htm
Options Trading Newsletter
MARKET Laboratory – Weekly Changes
Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect.
| Dow
17,646.70 +430.73 +2.50% |
Nasdaq
5031.86 +145.18 |
S&P 500
2075.15 +42.04 +2.07% |
Transportation
8295.58 +216.97 +2.69% |
Russell 2000
1166.06 +3.75 +0.32% |
Nasdaq100
4624.09 +185.47 +4.18% |
| Gold (spot)
1163.30 -20.30 -1.7% |
Silver
1582.7 -28.7 -1.8% |
Crude
44.60 -2.66 -5.6% |
Heating Oil
147.81 -4.98 -3.3% |
Unleaded Gas
1.2964 -0.0386 -2.9% |
Natural Gas
2.286 -0.144 -5.9% |
| VIX
14.46 -0.59 -3.9% |
Put/Call Ratios
S&P 100 191/100’s +62/100’s |
Put/Call Ratios
CBOE Equity 71/100’s -2/100’s
|
Bonds
157-05 -1-25 2.89% +0.03% |
10 Yr. Note
128-134-196 2.08%+0.05%
|
Copper
235.00 -5.35 -2.2% |
| CRB Inflation
Index 193.71 -2.66 -2.9% |
Barron’s* Confidence
74.6 +0.9 |
S&P100
925.72 +24.48 +2.72% |
5 Yr. Note
120-102 -115 1.41% +0.07%
|
Dollar
97.08 +2.35 +2.5% |
DJ Utilities
594.41 -2.57 -0.43% |
| AAII
Confidence Index
Long Term Average |
Bullish
34.8 % +0.7%
38.74% |
Bearish
24.0% -3.1%
30.30% |
Neutral
41.2% +2.4%
30.96% |
M1 Money Supply
+6.18% Oct 12th
|
M-2 Money
Supply +6.03% Oct 12th |
* Component Change in the Confidence Index
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.
Market Strategies Technical Information
Support/Resistance Levels: SUPPORT RESISTANCE
S&P 500 2019 2094
Dow 17,045 17,698
QQQ 107.90 114.39
Transports 80.79 8307
NASDAQ 4890 5088
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$100,000 Trading Portfolio Stock Positions and Trades
Each stock is allocated a theoretical $ 5,000 share of the portfolio unless otherwise indicated.
|
|
Purchase Price | Purchase Date | Stop/Loss | Price/Date Sold | Profit/
($Loss) |
||
| SPXU 200 | 34.10 | 10/15 | |||||
| CUBA 500 | 7.58 | 09/28 | |||||
| MOS 100 | 43.55 | 08/14 | |||||
| CRM 100 | 72.90 | 04/29 | 66.25 | ||||
| NBG 600 | 1.40 | 02/17 | |||||
| BAC. Wts 5,000 lots | 0.7411 | 12/26 | |||||
| BSBR 500
500 |
4.84
3.75 |
12/18
|
|||||
| SAN 600 | 8.40 | 12/16 | |||||
| AA 500 | 14.21 | 10/16 | |||||
| FCX 150 | 34.99 | 09/09 | 7.75 | ||||
| NBG 300 | 2.95 | 05/19 | |||||
| NBG 300 | 4.08 | 8/12 | |||||
| TEXQY* 200 | 6.56 | 7/11 | |||||
| REPR* 5000 | 0.22 | 10/22/12 | |||||
Remember, these trades are based on your participation in the
TEXTING SERVICE TO RECEIVE ALL UPDATES.
Previous closed out trades not listed here may be seen in previous market letters in the
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.
For Free Where To Invest Your Money Now
High Return Investments Trade Alerts
Go To: PrincetonResearch.com/alerts.htm
Market Strategies $100,000 Trading Account
There were two closed option positions;
4 TSLA Oct 30th 225 Calls were stopped out on the 50% Loss Rule losing $ 1140
12 SPY did just as poorly getting stopped out with a loss of $ 996.
The net loss in options was $ 2136.
There were no closed out stock trades.
For the year to date we have gains of $ 17,343.
Open position losses increased slightly by $159 to $ 13,629.
The options expire on the third Friday of each Month unless otherwise posted.
The Stock table has the following 15 positions:
AA, BAC.B.WS, BSBR( 2 ), CRM, CUBA, FCX, MOS, NBG (3), REPR, SAN, SPXU, TEXQY
The options call for a $ 2,500 investment unless otherwise stated; each stock position requires $5,000 unless otherwise mentioned specifically.
We are basing money management on a hypothetical $ 100,000 and are using a total of $52,991 for the 15 open stock positions. There are three long option positions requiring $ 3,900 and one written Call with a credit of $ 410 netting a requirement of $ 3490 which added to the stock longs totals an outlay of $ 56,481 leaving $ 43,519 in cash.
These figures are approximate and there might be errors.
We have not counted the dividends received from Apple, JP Morgan, North American Tankers, Santander, their Brazil affiliate BSBR and Blue Capital Reinsurance which was sold for a profit and many others.
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.
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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
| Option | COST | Date | Sold | Date | Profit/
(Loss) |
| SUN Dec 40
16 lots |
Calls
0.75 |
10/21/15 | |||
| SPYOct30th 202
12 lots |
Puts
1.66 |
10/21/15 | 0.83
( 50% Loss Rule |
10/21/2015 | ( $ 996 ) |
| TSLA Oct 30 225
4 lots |
Calls
5.75 |
10/20/15 | 2.90
( 50% Loss Rule |
10/20/2015 | ( $ 1140 ) |
| TBT Nov 43
30 lots |
Calls
1.30 |
10/19/15 | |||
| XLF Oct 30 23 | Calls
0.57 |
10/19/15 | |||
| SPXU Nov 33 | Calls
2.05 |
10/16/15 | Credit against long | $ 410 |
Remember, these trades are based on your participation in the
TEXTING SERVICE TO RECEIVE ALL UPDATES.
Previous closed out trades not listed here may be seen in previous market letters in the
For Free Where To Invest Your Money Now
High Return Investments Trade Alerts
Go To: PrincetonResearch.com/alerts.htm
This Weeks’ Economic Numbers
Earnings Releases and Media Data
Before the Open on top of the Row;
After the close below the Economics Information
| MONDAY | Laboratory Corp LH ( 2.06 vs 1.80 ) Lending Tree TREE ( 0.58 vs 0.41 ) Check Pt Software CHKP ( 0.98 vs 0.93 ) Phillips PHG ( 0.35 vs 0.28)Xerox XRX 0.23 vs 0.27
10:00 hrs New Home Sales Sept ( 550K vs 552K )
Broadcom BRCM ( 0.73 vs 0.91 ) Crane CR ( 1.06 vs 1.12 )Everest Re RE ( 4.03 vs 6.12 ) Hartford Financial HIG ( 0.67 vs 0.63 ) Rent-A-Center RCII ( 0.45 vs 0.49 ) Swift Transportation SWFT ( 0.32 vs 0.39 ) Torchmark TMK ( 1.06 vs 1.00 ) |
| TUESDAY | Alibaba BABA ( 0.54 vs 0.45 ) Ametek AME ( 0.65 vs 0.62 ) Baxter BAX ( 0.29 vs 1.35 ) Bristol-Myers BMY ( 0.35 vs 0.45 ) Centene CNC ( 0.78 vs 1.22 ) Coach COH ( 0.40 vs 0.53 ) Comcast CMCSA ( 0.80 vs 0.73 ) Corning GLW ( 0.35 vs 0.40 ) Cummins CMI ( 2.59 vs 2.32 ) DuPont DD ( 0.10 vs 0.54 ) Ford F ( 0.46 vs 0.21 )
Merck MRK ( 0.92 vs 0.90 ) Pfizer PFE ( 0.50 vs 0.57 ) UPS ( 1.32 vs 1.37 )
08:30 hrs Durable Goods Orders Sept ( -1.3% vs -2.3% rev from -2.0% ) D.G. ex-Transportation ( 0.2% vs -0.2% rev from 0.0% ) 09:00 hrs Case Shiller 20-city Index Aug ( 5.0% vs 5.0% ) 10:00 hrs Consumer Confidence Oct ( 102.5 vs 103.0 )
Apple AAPL ( 1.87 vs 1.42 ) Anadarko APC ( -0.74 vs 1.16 ) CH Robinson CHRW ( 0.93 vs 0.85 ) Gilead Sciences GILD ( 2.87 vs 1.84 ) NCR Corp NCR 0.70 vs 0.67 |
| WEDNESDAY | ANTM ( 2.32 ) AutoNation AN ( 1.05 vs 0.90 ) Arrow Electric ARW ( 1.46 vs 1.40 )
Fiat Chrysler FCAU ( 0.22 vs 0.17 ) General Dynamics GD ( 2.13 vs 2.05 ) Hershey Foods HSY ( 1.13 vs 1.05 ) Hess HES ( -1.21 vs +1.24 ) Hilton Hotels HLT ( 0.23 vs 0.18 ) Southern SO ( 1.15 vs 1.09 ) Valero Energy VLO ( 2.66 vs 2.00 ) Walgreens Boot Alliance WBA ( 0.81 ) VCA Antech WOOF ( 0.68 vs 0.56 )
07:00 hrs MBA Mortgage Index 10/24 ( NA vs +11.8% ) 10:30 hrs Crude Inventories 10/24 ( NA vs +8.028 MlnBbls ) 14:00 hrs FOMC Rate Decision October ( 0.25% vs 0.25% )
Amgen AMGN ( 2.38 vs 2.30 ) Barrick Gold ABX ( 0.07 vs 0.19 ) GoPro GPRO ( 0.29 vs 0.12 ) Hanesbrands HBI ( 0.45 vs 1.73 ) Marriott MAR ( 0.74 vs 0.65 ) Newmont Mining NEM ( 0.18 vs 0.50 ) Western Digital WDC ( 1.56 vs 2.10 )
|
| THURSDAY | Aetna AET ( 1.75 vs 1.79 ) Banco Santander ( SAN 0.13 vs 0.10 ) Borg Warner BWA ( 0.70 vs 0.79 ) Brunswick BC ( 0.74 vs 0.63 ) Bunge BG ( 1.57 vs 1.31 ) Goodyear Tire GT ( 0.97 vs 0.87 ) Goldcorp GG ( 0.04 vs 0.09 ) Master Card MA
( 0.87 vs 0.87 ) MGM Resorts MGM ( 0.03 vs -0.02 ) Nokia NOK ( 0.06 vs 0.09 ) Potash POT ( 0.38 vs 0.38 ) Teva Pharma TEVA ( 1.28 vs 1.32 ) Time Warner Cable TWC ( 1.54 vs 1.86 ) Virgin America VA ( 1.56 )Xcel Energy XEL 0.81 vs0.73
08:30 hrs Initial Claims 10/24 ( 264K vs 259K ) 08:30 hrs Continuing Claims 10/17 ( 2185K vs 2170K ) 08:30 hrs GDP-ADV 3rd Qtr ( 1.6% vs 3.9% ) GDP Implicit Price Deflator ( 1.3% vs 2.1% ) 10:00 hrs Pending Home Sales Sept ( +0.6% vs -1.4% ) 10:30 hrs Natural Gas Inventories 10/24 ( NA vs 81 bcf )
Baidu BIDU ( 1.30 vs 1.90 ) Banco Santander BSAC ( 0.70 vs 0.39 ) Eastman EMN ( 1.84 vs 1.89 ) Ingram Micro IM ( 0.63 vs 0.62 ) Republic Services RSG 0.53 vs 0.52 ) Starbucks SBUX ( 0.43 vs 0.77 ) Western Union WU ( 0.44 vs 0.44 ) |
| FRIDAY | Chevron CVX ( 0.74 vs 2.95 ) CVS Health CVS ( 1.29 vs 1.15 )
Colgate-Palmolive CL ( 0.72 vs 0.76 ) Mylan Labs MYL ( 1.37 vs 1.16 ) Moody’s MCO ( 1.07 vs 0.97 ) Phillips 66 PSX ( 2.24 vs 2.02 ) Rockwell Collins COL ( 1.40 vs 1.30 )
08:30 hrs Personal Income Sept ( 0.2% vs 0.3% ) Personal Spending ( 0.2% vs 0.4% ) CORE PCE Prices Sept ( +0.1% vs +0.1% ) 08:30 hrs Employment Cost index 3rdQtr ( +0.5% vs +0.2% ) 09:45 hrs Chicago PMI October ( 49.0 vs 48.7 ) 10:00 hrs Michigan Sentiment – Final Oct ( 92.6 vs 92.1 )
|
Market Strategies Fundamentals
Stocks had a huge week bolstered by great earnings: The Nasdaq led all indexes gaining 145 points to 5031.86, up 2.97%. The Transportation Average was not far behind tacking on 217 points or 2.69%.The Dow gained 430.73 points or 2.50% while the S&P added 42 points to 2,075 a gain of 2.07%. The Russell lagged again barely changed at 1166, up just 3.75 or 0.32%.
Multiple factors contributed to skyrocketing stock prices: On Thursday European Central Bank President Draghi hinted at the possibility the ECB will provide more policy accommodation before the end of the year. On Frida the people’s Bank of China ( PBOC ) announced a 25 basis point cut in its one-year lending rate to 4.35%, a 25 basis point cut in its one-year deposit rate to 1.50%, and a 50 basis point cut in the required reserve ratio for banks and another 50 basis points for qualifying institutions. The PBOC move, which came after the markets in Asia had closed for the weekend, helped light a fire under the equity markets in Europe and the U.S. which were already full of sparks given the gangbuster earnings reports from Alphabet ( GOOG: $ 702 ) + $ 40 or 5.7%; Amazon.com ( AMZN: $ 599.03 ) + 28.27 or 5% and Microsoft ( MSFT: $ 52.87 ) + $ 5.36 or 11.3%. The policy stimulus and the upbeat earnings news from some of the market’s most influential companies triggered a risk-on trade that boosted equities and left Treasuries on the defensive to end the week.
The rally carried both the Nasdaq and the S&P above their 200-day price moving averages, the only two indexes to achieve that levitation. The Dow remained about 50 points below its benchmark number, while both the Russell and Tranny have a long way to go. Both the Russell and DJ Transportation averages need to hold above their 13-day M.A’s this week to preserve their tenuous gains.
The debt issue being unresolved will be a nagging problem to more forward progress this week in both stocks and treasuries. The delays have created more weakness in the front end of the curve. The –5 Yr Treasury Note rose 0.07% to 1.41% while the long bond was barely changed up 0.03%. The economy is strong despite adverse politics and a dysfunctional government Secretary Lew already warned that extraordinary funding measures are likely to run out November 3rd.
In August, China devalued its currency with no advance notice, causing an increase in speculation of the overall health of their economy. This caused a chain reaction of turmoil in world’s equity markets spilling over into the global equity, commodity, and corporate bond markets causing the crash that took the S&P 500 down to 1,867. The S&P has recovered 208 points above the low or 11%. The Yinn the Chinese 3x Direxion ETF has recovered 75%, from a low of 14.69 to 25.61, the close Friday.
The price of oil and other commodities continued to plummet falling as deflationary fears abound. Crude is down about 10% losing 5% in each of the last two weeks. The weak inflation prospects will allow the Federal Reserve to put off its interest rate hike, but it is still unclear if the global economy is truly slowing or just hitting a bump on its otherwise positive trajectory. This uncertainty will come into focus this week and will be a headwind for stocks. Meanwhile, the supply of oil and gas continues on the rise.
The demand for oil and gas has never been greater at current world usage of 1.8 mln barrels per day. All three energy oversight agencies predict a sharp drop in usage for the year 2016: The global demand for oil and gas has increased by 1.1% year over year from 1980 to 2015 as the standard of living continued to improve across the world. However, the International Energy Agency ( IEA ) forecasts global oil demand to fall in 2016 to 1.2 million barrels a day. OPEC, The Organization of Petroleum Exporting Countries expects demand to fall to 1.25 million bbls per day while the U.S. Energy Administration pegs demand in 2016 at 1.41 million barrels a day, the most bullish forecast but remaining well below current usage levels.
Market Strategies Economic Data
Housing starts increased 6.5% in September to 1.207 mln from an upwardly revised 1.132 mln (from 1.126 mln) in August. The Briefing.com Consensus expected housing starts to increase to 1.150 mln.
This was the second time in 2015 that total new housing starts topped 1.200 mln (1.211 mln in June), and the first time two months have exceeded that level in one year since 2007. New single-family home construction remained robust in September. These starts increased 0.3% to 740,000 from 738,000. Over the last three months, new single-family construction has averaged 745,667. That is nearly 100,000 more than the 2014 average.
Multifamily construction increased 18.3% to 466,000 in September from 394,000 in August. This sector is generally very volatile, and the big September increase is likely to be followed by a sizable pullback in October. The number of homes under construction increased 1.4% to 928,000 in September from 915,000 in August. The breakdown of the increase was about even between single-family and multifamily construction. This should help bolster Q3 2015 GDP growth
Despite the unseasonable cold winter that disrupted construction trends in the beginning of the year, housing starts are currently on pace to top 2014 levels by nearly 100,000.
| Category | SEP | AUG | JUL | JUN | MAY |
| Starts | 1206K | 1132K | 1152K | 1211K | 1072K |
| 1 Unit | 740K | 738K | 759K | 687K | 697K |
| Multi Units | 466K | 394K | 393K | 524K | 375K |
| Permits | 1103K | 1161K | 1130K | 1337K | 1250K |
Leading Economic Indicators:
The Conference Board’s Leading Economic Index declined 0.2% in September after a downward revision resulted in no change (from 0.1%) in August. The Briefing.com Consensus expected the index to decline 0.1%.Since 8 of the 10 components of the index are known prior to the release, the difference between the consensus forecast and the actual result are generally minor.
In this case, the building permits data, which unexpectedly declined in September, was released after the consensus provided their forecast. That surprise caused the bigger-than-expected drop in the Leading Economic Index. Other negative contributors in September included the average workweek, ISM New Orders Index, and stock prices.The last time the Leading Economic Index declined was in February 2015.
| Category | SEP | AUG | JUL | JUN | MAY |
| Total Index | -0.2% | 0.0% | 0.0% | 0.6% | 0.5% |
| Manufacturing Workweek | -0.13% | 0.00% | 0.00% | 0.00% | 0.00% |
| Initial Claims | 0.10% | -0.09% | 0.09% | 0.00% | 0.05% |
| Cons. Gds Orders | 0.01% | 0.01% | 0.07% | 0.05% | -0.04% |
| ISM New Orders | -0.11% | -0.08% | 0.02% | 0.01% | 0.01% |
| Nondef. Cap Gds Orders, exc. Aircraft | 0.01% | -0.03% | 0.07% | 0.06% | -0.04% |
| Building Permits | -0.16% | 0.08% | -0.51% | 0.21% | 0.28% |
| Stock Prices | -0.19% | -0.10% | -0.01% | -0.02% | 0.03% |
| Leading Credit Index | 0.10% | 0.04% | 0.02% | 0.04% | 0.02% |
| Interest Rate Spread | 0.22% | 0.22% | 0.24% | 0.25% | 0.23% |
| Consumer Expectations | 0.01% | 0.04% | 0.03% | 0.07% | 0.01% |
Market Strategies Cycles
DJIA, S&P 500 and NASDAQ have bullishly traced out and completed the “W” or “1-2-3” swing bottom pattern we first started looking for at the end of September. DJIA and S&P 500 have climbed above their respective mid-September highs by the widest margin. As of Friday’s close, both the NASDAQ and S&P 500 have managed to close above their 200 day moving averages. .
However, another potential area of concern, which has been cited by other sources as well, is the laggard, nearly dismal performance of small-cap stocks. Small-cap performance, measured by the Russell 2000, has been lacking and it was lacking today as the index mustered only half the gains of either DJIA or S&P 500. At the moment, this laggard performance is not without precedent and not really as big of a deal as some may think. In fact, if you were to review page 110 of the Stock Trader’s Almanac 2015, you would find it is actually quite normal for small-caps to be lagging large-caps at this time of year. This laggard performance by small-caps typically starts in mid-September and lasts until late-November or mid-December when the “January Effect” usually begins to take hold. So even absent small-cap participation, according to STA, large-caps can continue to rally.
A mid-month market breather allowed the addition of three open ETF trade ideas by the Stock Trader’s Almanac: iShares NASDAQ Biotech (IBB) was added on October 7 when it traded below $300 per share. SPDR Financial (XLF) was added on the fourteenth at $22.90 and the short heating oil trade using PowerShares DB Energy (DBE) was executed when it broke down through support at $13.84.
With the exception of IYZ, XLB and DBE, the rest of the ETF Portfolio can still be considered on dips below their respective buy limits. A few of the buy limits, like the one applied to IYT, are currently well below current market prices. Be patient, they do not want to chase these positions. There is still ample uncertainty out there with increased volatility that can sway positions.
Due to recent gains, numerous stop losses have been updated. See table below for latest advice.
Undervalued Small Cap Stocks
Lower Priced stocks that look to be a buy:
Repro-Med Systems, Inc ( OTCQX: REPR 0.38 )*
REPR is now a member of the OTCQX, a leading U.S. Stock Exchange. Repro-Med Systems is a unique U.S. manufacturer of proprietary and patented medical devices world-wide which maintains offices and manufacturing facilities in Chester, NY. Principal products include the Freedom 60 Syringe Infusion System, RMS High-Flo Subcutaneous Safety Needle Sets and the RES-Q-VAC Medical Suctioning Pump. In addition to being regulated by the FDA which has the authority to approve medical devices for marketing in the U.S., RMS complies with ISO International standards for quality development and manufacturing. RMS Medical Products is a d/b/a of Repro-Med Systems, Inc which was founded in 1980.
The Freedom60 has a proprietary technology that makes it desirable for the delivery of medications in a variety of therapies. It is very popular for the delivery of subcutaneous immunoglobulin for the treatment of primary immune deficiency disease. The infusion pump uses “dynamic equilibrium” which safely adjusts the flow of medication in accordance with what the patient’s body can accept. This minimizes complications often encountered with other infusion systems which can lead to site reactions and discomfort for the patient. The portability and simple operation of the FREEDOM60 Improves quality of life for patients who otherwise might have to use a complicated electronic pump mounted to a cumbersome infusion pole. Patients then don’t have to be confined.
RMS High-Flo Subcutaneous Safety Needle Sets are being welcomed by healthcare providers and patients alike for their consistently high quality. The infusion sets are an ideal companion for the company’s FREEDOM 60 pump. The needle sets are patented and approved by the FDA. There has not been a new technology in needles other than Repro Med’s vastly better needle sets in quite some time.
RES-Q-VAC is a hand-held suction pump used to clear a patient’s airway or for other purposes when reliable hospital quality suctioning is needed. It uses patented technology to protect users from airborne pathogens and spillage of suctioned material. It is used by emergency service personnel and other first responders, as well as in hospitals and other institutions. There also is a version for use by dentists. RES-Q-VAC is invaluable in the event of disasters where power is lost because it doesn’t require electricity.
The Freedom 60 Syringe Infusion System is a method for administering medication through a small needle to the subcutaneous tissue, which is the fatty tissue just under the skin. Subcutaneous infusion allows medication into the vascular system more slowly. Combined with more frequent delivery this provides more consistent and stable blood levels. The elimination of large swings in these levels decreases side effects improving overall quality of life. RMS provides High-Flo needles to optimize liquid flow. Their smaller 26 gauge high flow needle flows at the same rate as the considerably larger 24 gauge needles, which are considerably less painful when entering the skin.
The Freedom 60 has had great success in Europe reflected in a huge sales increase of 47.8% first quarter 2015 up from same quarter 2014.
Repro-Med Systems, Inc has had an increase in sales each of the last four years. They finished the year of 2014 with $ 11.2 million in sales reflecting top line growth of 29% from 2013.In each of the previous two years they had a 12% increase in sales. The company has had at least $ 700 thousand of net income in each of the past four years and has no debt. The patented needle sets alone can give the company a huge growth potential. In my opinion, with new products coming on stream, the stock should trade between $ 3 and $ 8 in the next two years.
Enzo Biochem ( ENZ 3.79 ) Bought at our price of $ 2.78.
This turbulent market has had an effect on the price of Enzo Biochem. The markets, in my opinion, have been in a rotating correction and in some instances, a bear market for some months. It appears that the cause of this is China but I am sure that there are other factors. If you remember the ‘flash crash” of 2010 the market correction was over quickly and those that held through that market decline profited handsomely over the years after the crash. I think that the market is giving us another chance to buy Enzo Biochem at a bargain price. The Company’s fiscal year was over July 31. I would imagine the Quarter and Year results will be made available by mid-October. With the cash settlement in two litigations the cash position should show a major improvement. Top line revenues should also show an improvement. Depending on R&D expenses and litigation expenses the net loss should also show improvement. At today’s price of $2.90 the Company is valued at approximately $130 million and with revenues approaching $100 million or 1.3 times revenues. The last Craig Hallum report had a fair value of Enzo’s business of $6 per share. When AmpiProbe is approved and into the market that number is projected at $14 per share. There is always risk in the market so the investment is not without risk but if held over time should deliver handsome profits off of today’s price. Items to look forward to by the end of the year would be litigation news and an AmpiProbe decision all of which should have a positive impact on the stock price.
Premier Holding Corporation (PRHL: 0.067)* Shares Outstanding 189,218,861
We initiate coverage of the Premier Holding Corporation with an immediate target of $ 0.65, which would be 10x the current closing price which was also the bid price offered mostly at $ 0.07.
The deregulated energy business is estimated to be a $ 500 billion+ industry in the U.S. and is estimated to be 5-7 times larger than the lucrative telecom deregulation market launched in the early 1980’s.
According to the U.S. Energy Information Administration the deregulated retail electric supply market in the northeast alone is over $ 75 billion annually and the current New York market is approximately $ 7.7 billion.
Fundamental Analysis Stocks To Buy with Stops
The HDGE continued to decline last week falling well-below our 11.04 buy level, the barrier between bear and bull markets. We would look to buy with a stop loss at 10.28. It is high risk but a possible hedge against some of our successful longs like LUV and URI.
HDGE is the BEAR hedge. We now want to be long stocks at their respective limits. Buy Intel on dips and Arcelor Mital. We want to buy CVS and Kroger, Try to buy on a downside reaction as volatility will persist in October. Use stops. Keep losses small.
We are long Southwest Air (LUV) at 30.50 United Rentals at 64.34 and Sunoco at 36.08 We bought Virgin Air (VA) at 32.20. Please check on the previous weekly market letters if there are questions. We are long in Diana Shipping at 6.60. DSX is a bear market opportunity with a small risk.
We want to be long Bank of America above 15.65. and would use 15.02 as a stop loss if filled. BAC looks to have made a double bottom at the 14.63 area.
Heavy Black italicized indicates Execution
| Symbol | Name | Business Description | PE | P/S | MV mln | Price | Buy Limit | Stop Loss
Or sold |
| SUN | Sunoco | Retail Sale Fuels | 14 | 0.26 | 3B | 35.41 | 36.08 | 32.71x |
| URI | United Rentals | Equipment Rental | 8 | 1.13 | 15B | 73.96 | 64.34 | 62x |
| DE | Deere | Farm and Construction equipment | 13 | 0.84 | 26.3B | 80.26 | 77.50 | 76.77x |
| KR | Kroger | Food Mfg and Processing | 18 | 0.33 | 37B | 37.82 | 36.76 | 33.40x |
| CVS | CVS Health | Pharmacy Sundries and drug store | 18 | 0.79 | 116B | 103.38 | 102.35 | 99x |
| MT | Arcelor Mittal | Integrated Steel mining and manufacturing | 16.8 | 0.14 | 11.10B | 6.01 | 5.80 | 5.22x |
| INTC | Intel | Technology chips platforms processors | 13.6 | 2.8 | 152.83B | 33.04 | 30.48 | 28.50 |
| VA | Virgin Air | Regional Airlines | 7.2 | 1.0 | 1.5B | 35.12 | 32.20 | 29.50 |
| LUV | Southwest Air | Regional Airlines | 16 | 1.15 | 22.6B | 45.23 | 33 | 32.31sco |
| HOG | Harley Davidson | Consumer Goods | 14 | 1.87 | 11.6B | 55.41 | 54 | 51.50 stopped out |
| ENZ | Enzo Biochem | Life Sciences | NA | 1.35 | 134M | 3.79 | 2.78 | 3.28x |
| BAC | Bank of America | Commercial Bank | 10 | 2.02 | 165.3B | 16.52 | 15.65sco | 15.02x |
| HDGE | Advisor Shares | Ranger Bear ETF | 10.59 | 11.04 X | 11.00X | |||
| DSX | Diana Shipping | Dry Cargo Shipping | N/A | 3.7 | 611 | 6.55 | 6.60 | 5.90 |
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Rule 17B Attestations and Disclaimers
Princeton Research, Inc. has approximately 2,581,578 shares of AIVN both free and restricted and represents them for Investor relations. 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 was paid $ 2,500 to write a report on Xinergy. Princeton has signed a contract with CBLI to be paid $ 2500 for July and August for investor relations. Princeton has been engaged by Target Energy. No contract is currently in place. Princeton was paid about 500,000 restricted shares of Leo Motors.
When there is no movement in penny stocks, even though there is none or very small losses, we will liquidate ( sold AIVN on stop ) even though we like the company, if money is needed for better opportunities.
We now believe REPR represents upside opportunity. The Target ADR trades at about $ 4.50 in U.S. vs 0.05 in Australia. Princeton owns 400,000 Australia shares and about 900 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 e-mail issue. Princeton may buy or sell its free-trading shares in companies it represents at any time.
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