Options Trading Strategies

Where To Invest Now

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)

 June 25, 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/6-25-2012-Market-Strategies.pdf

Options Trading Strategies

$10,000 Options Trading Portfolio

New Options Trades for this week:

BUY 6 WPRT JULY 33 CALLS @ $1.05

BUY 6 MCD JULY 87.50 CALLS @ $1.45

BUY 4 PG JULY 57.50 CALLS @ $1.75

The $10,000 Options Only account had a Gain last week of $84 increasing our gains for the year from $4,574 to $4,658.

One position remains: The BAC warrants.

The Open positions are highlighted in the options table below. Approximately $ 705 funds are in use.

We spent most of this week on the sidelines looking for some consistent direction. We made a nice profit trading Facebook this week.  As I have noted in the past, when EVERYONE is on one side they tend to be wrong.  Everybody has piled on to the “Facebook is overpriced and cannot possibly work” bandwagon.  This means that there probably isn’t anyone left to sell it.  We bought the FB 7/32 calls and had to sell half only a couple of  hours later on our up 100% up rule.  While we sold out, we not only kept the original stock position in the big account but actually added to our position on Thursday. The Russell rebalancing calls for a 15 million share purchase.

The rest of the economic numbers from both here and abroad were terrible and sent us down last Thursday for the second biggest one day loss of the year.  The Goldman comments may have been self – motivated for them to purchase the Russell rebalancing “ buys.” Friday seemed pretty good, but it was an “inside day” in most indexes except the Transports which continued lower. After running into resistance in the DJIA and S. & P. 500 I am only going to add to positions that are below the current market and try to get as close to the underlying support of the 200 day Moving Averages….CAM

DATE	TRADE	PRICE	COST	PROCEEDS	RESULTS
6/21	Sold 6 IWM July 80 Calls	.63		372	366 Loss
6/18	Sold 3 FB July 32 Calls	1.75		525	300 Gain
6/18	Sold 2 FB July 32 Calls	1.50		300	150 Gain
6/18	Bought 5 FB July 32 Calls	.75	375
6/11	Bought 6 IWM July 80 Calls	1.24	744
5/23	Bought 1000 BAC.WS.B	.705	705

Remember, these trades are based on your participation in the

TEXT MESSAGE TRADE ALERTS SERVICE TO RECEIVE ALL UPDATES.

TEXT the word UPDATES to 69302 To Get In Now

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/

 

Market Laboratory – Weekly Changes

Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect

    CBOE Equity

64/100’s

-12/100’s

Bonds

148-03 -1-18

2.76% +0.07%

10 Yr Note

133-00 -0-25                                               1.67% +0.08%

Copper

330.60

-7.75

-2.3%

CRB Inflation

Index

267.97

-4.26

-1.56%

Barron’s Confidence

67.6.%

-0.4%

S&P100

611.73

-3.11

-0.51%

5 Yr Note

123-247 -0-12                                                   0.75% +0.07%

Dollar

82.44

        +0.48

+0.59%

DJ Utilities

472.06

-10.99

-2.28%

AAII

Confidence

Index

Bullish

32.9

-1.1%

Bearish

35.9%

+0.1%

Neutral

31.2%

+1.0 %

M1 Money  Supply

+16.83%June11th

M-2 Money

Supply

+9.84%June11th

 

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

Please follow the free text updates for new trades this week.

Last week we bought FB and with TEXT Alerts we Bought FB and AGQ and stopped out AGQ.

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 the June 18 and newsletters dating back to July 20, 2009.  Stay alert on the free texting service for new trades and exits.

Model Portfolio Comments/Changes:

Last weeks market performance was not great.  Headline driven markets really didn’t give us much in the way of directional guidance.  While many of the stocks mentioned here had nice rallies there were just as many that looked very sloppy.  AAPL, AMZN, CMG performed well, but there are some other names like GDI, CMI, GOOG, JOY and LULU that look like they have nowhere to go but lower.

So, I think we will stick to some of the more defensive names like MCD (traded twice two weeks

ago profitably) and PG which should find support between $57.25 and $58.25. I may look for some shorts if we go higher and run into the overhead resistance…..CAM

INDEX OPTION RECOMMENDATIONS

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 WPRT JULY 33 CALLS @ $1.05

BUY 12 MCD JULY 87.50 CALLS @ $1.45

BUY 8 PG JULY 57.50 CALLS @ $1.75

Option and Overall Comments

We had a Loss last week of $ 87 in a down week. Our gain for the year was $15,350.85 and with last week’s Loss has decreased to $15,263.85.

We have One long options position remaining, the CSCO Jan 20 Calls.

The Stock table includes Eleven long stock positions: FB, SNSS, SIRI, AAPL (a double), TXGE, AIVN, CISG, LEI, LEOM, XBOR (a double) and BAC warrants.

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 $240 in the options position and $ 64,600 in the 11 long stock positions for a total of $ 64,840 with $ 35,160 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.

 

Note: Previous closed out stock and option positions can be found in the June 18 and newsletters dating back to July 20, 2009.

This Weeks’ Economic Numbers

and Media Data

10:00 hrs Consumer Confidence Jun (  64.0 vs 64.9 )Wednesday07:00 hrs MBA Mortgage Index 06/23 ( NA vs -0.8% )

08:30 hrs Durable Orders May  ( 0.5% vs 0.0% )

08:30 hrs Durable Orders -ex Transportation May( 0.7% vs -0.9%)

10:00 hrs Pending Home Sales May ( 0.5% vs -5.5% )
10:00 hrs Crude Inventories 06/23   ( NA vs 2.861M )

Lennar reports earningsThursday08:30 hrs Initial Claims 06/23 ( 385K vs 387K )
08:30 hrs Continuing Claims 06/16 ( 3290K vs 3299K )
08:30 hrs GDP – Third Estimate Q1  ( 1.9% vs 1.9% )
08:30 hrs GDP Deflator – Third Estimate  Q1 ( 1.7% vs 1.7% )
Two Day European Summit in Brussels Begins
Nike reports earnings Friday08:30 hrs Personal Income May ( 0.1% vs 0.2% )
08:30 hrs Personal Spending May (  0.1% vs 0.3% )

08:30 hrs PCE Prices – Core May ( 0.2% vs 0.1% )
09:45 hrs Chicago PMI Jun  ( 52.4 vs 52.7 )

09:55 hrs Michigan Sentiment – Final Jun  ( 74.1 vs 74.1 )

Mexico conducts Presidential Elections on Sunday

Fundamentals

It was a news oriented week dominated by European woes and Fed FOMC announcements. The Greece election was seen as positive as they voted for compliance and to remain in the EU. In fact on Monday the Dow closed right smack on its 50-day moving average 12,741.82. Tuesday opened strong and rallied all the way to 12,898.94 as market participants were prepared for the Fed to put their shoulder to the wheel and announce some major incentives. But their news fell short of expectations causing a loss on the Dow to 12,741.82.

Then on Thursday, poor economic news; anticipation of Moody’s downgrades in addition to a bearish call by well-known banking guru Goldman Sachs. ( who said the S&P would collapse immediately to 1280, which would be breaking the 200 day moving average ) The Dow fell 250.82 points or 1.96% something similar to the decline June 1^st when the Dow fell 274.88. Keep in mind the Dow rallied 286.84 on June 6^th.

The Fed moved to extend “ Operation twist” through year’s end  Chairman Bernanke did say that additional purchases of ‘assets’ would be considered but he seemed in no hurry to rush to the market’s expectations. The Fed did lower GDP growth expectations from 2.4%-2.9% down 0.5% to 1.9%-2.4%.

The Russell rebalancing, a once a year occurrence will take place next Friday and it wouldn’t be surprising for Goldman traders to be snapping up “ buy stocks” on the index since the list is well known. Facebook is one of the stocks to be bought ( FB: $ 33.05 ) and is slated to have 15 million of its shares purchased on Friday. We can send you a copy of the list. Just email to me and you will have it.

Economic Data

Economic News was especially gloomy. The June Philadelphia Fed at -16.6 was the worst reading since August 2011 during the period of S&P downgrades. Housing Starts at 708K were below the consensus of 719K; Initial Unemployment Claims at 387K were above most estimates averaging 380K. Crude Inventories rocketed again adding 2.86 mln bbls. Existing Home Sales for May at 4.55M annualized were below the 4.62M in April, but close to the consensus of 4.56M.

Internationally, Purchasing manager’s numbers in China declined for the eighth consecutive month and Germany’s fell to 52.9 the worst number in eleven months.

The one bright reading was May Leading Economic Indicators, up 0.3% vs 0.0% expected.

Technical Information

Support Levels:   S&P 500           1322; 1310

Resistance S&P 500   1346; 1362

DOW            12,530;12,380 

Resistance DOW        12,740;12,890

QQQ             6257; 6165

Resistance QQQ         6417; 6483                     

Nasdaq          2874; 2820

Resistance Nasdaq      2928; 2990                                          

                                         

CYCLES

Cycles suggest a sideways to soft market early in the week, a mid-week low and a steady to firm end of week.

 

                    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.

CONTACT

Please Direct All Inquiries To:

 Mike King

Princeton Research

3887 Pacific Street, Las Vegas, Nevada 89121

 

Phone: (702) 650-3000

Fax: (702) 697-8944

 mike@princetonresearch.com

Visit: www.princetonresearch.com

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