October 28, 2013

Options Trading Strategies

Balanced Investing Newsletter

Market Strategies Newsletter

Sample Issue

Covering High Return Balanced Investing Strategies To

Make Money In Up Or Down Markets

Read the October 28, 2013 

Market Strategies Newsletter – 

Investing Strategies Where To Invest Now

Newsletter in pdf format:

http://www.princetonresearch.com/10-28-2013-Market-Strategies.pdf

A Publication of Princeton Research, Inc. (www.PrincetonResearch.com)

 

Market Strategies Stock Options Trading

$10,000 Account

There are five open positions:

10 CSCO November 23 Calls

10 NBG January 2015, $7 Calls

8 MOS November 47.50 Calls

5 SPY November8th 175 Calls

5 XOM November 87.50 Calls

6 AGQ Nov 16^th 22 Calls

Funds in Use $ 4,400

or 11% of equity.

 

We had a gain of $3,533 this week

having taken profits in our open positions

in VLO, SPY, and of course, the earnings driven gain in DECK.

 

This brings our YTD performance to a

new high of $29,726

with equity of almost $40,000 

Returns of Over 297%

NOTE: This is a Sample Issue Only!

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THE COMPLETE VIP MEMBERS ONLY

MARKET STRATEGIES NEWSLETTER ISSUES

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PrincetonResearch.com/investment-strategies.htm

 

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Market Strategies Stock Options Trading

$10,000 Account

Traders Comments 

This week was a great one for follow-thru in the averages.  However, a couple of areas give me pause.  First was the Tuesday reversal in many of the high-priced momentum stocks.

PCLN, NFLX, TSLA and others looked like balloons that might have sprung a leak.

NFLX traded $389.16 before closing out the week @ $325.85 and finishing the week @$328.03.  Unless you bought it Tuesday morning, you still had a hefty gain since the stock is up from $90 or so….Not much to complain about….

 

Some of the others, like TSLA (up from $30s to $195 /share) has had some topping action for the last month and has had some technical damage and could easily pull back to the next major support around $140.  Not terrible, unless you own it @ $185-190. Some of the others, like AMZN which started to come in from $320 to $195 found good support when they reported earnings and ran from $305 to $365 on Friday.

 

Remember how heavily weighted the NASDAQ Composite is by these high-priced names, and the fact that everyday we hear “another new 13 year recovery high”  for the comp….

 

The other concern is with the A.A.I.I. consensus number listed in the lab on the next page.

Bullish consensus is 30% over its long term average of 39%, but bearish consensus has collapsed 7.3 % to 17.6, about 50% lower than its LT average.  This is a contrary indicator and these are fairly extreme readings.  As you have heard here repeatedly…”Everyone is never right,” and only 17.6% bearish says it all…

 

Since we are using $4,400 in open positions, I am only adding the Yahoo 11/33 puts on what I expect to be an up open tomorrow.  I will be keeping a sharp eye and an “itchy” trigger finger on the open positions this week.  Please watch for text messages for further updates.

Market Strategies Stock Options Trading Chart

$10,000 Account

New Trades

Buy 6 YHOO November 33 Puts @ 1.03

 

 

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

See the market Lab Table in the pdf format issue:

http://www.princetonresearch.com/10-28-2013-Market-Strategies.pdf

 

New Stock Recommendations

Market Strategies $100,000 Trading Portfolio

We were stopped last week on ETAK and bought SOHO using a TEXT.

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.

 

Market Strategies $100,000 Trading Portfolio

Recommendations And Overall Comments

New Trades:

Buy 12 YHOO November 33 Puts @ 1.03

 

We gained 5,332.00 in closed out positions last week

increasing our profits for the year to a hypothetical $ 60,834

 

Returns Of Over 60%

 

not counting open positions losses of about $ 10,511

 

We also have not counted dividends received on stocks like Apple and JP Morgan.

 

We have six long options positions:

The Stock table has the following 19 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 $ 8,800 in six options positions

and $ 60,371.00 in 19 stock positions

totaling $ 69,171.00 with
$ 30,829.00 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 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.

 

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

 

This Weeks’ Market Strategies

Economic Numbers and Media Data

Market Strategies Trading Fundamentals

Amazon ( AMZN: $363.39 ) + $ 34.46 or 10.5% on the week made new all-time highs reporting a loss of nine cents a share, but with top line sales of $ 17.09B up from $ 13.8B,  or 23.8% better than a year ago.

 

Microsoft ( MSFT: $ 35.73 ) + $ 0.77 or up 2.2% on the week, but surprised the street which had been lower by the same amount prior to the release. Decker outdoor, which CAM accurately bought ( DECK: $ 69.99 ) + $ 10.48 or 17.6% was a big win for us, again which Charles had recommended. ( Make sure you get the texts )

 

Earnings across the board, continued to be outstanding, but even where not particularly good like Colgate ( CL: $ 63.60 ) + $ 0.79 or 1.3% on earnings of $ 0.73 vs $ 1.38 a year ago, outperformed market expectations. Apollo Group ( APOL: $ 27.63 ) + 6.63 or 31.6%;  issued weak forward guidance but beat top line expectations ( 3.22 Bln est vs 3 bil). Lesser known names like Flagstar Bancorp ( FBC:$ 16.59 ) + $ 1.38 or 9.1% performed well with mediocre results. Sherwin Williams, the well-known paint and chemical supplier was out of sight: ( SHW: $ 195.07 ) + 5.7% ). For their 3^rd quarter they beat estimates by 4 cents $2.68 vs $2.64 and well above the previous year $2.24.

 

On the negative side, United Technologies ( UTX: $ 107.52 ) – $ 2.02 or -1.8% beat slightly on both earnings and top line revenue but did not perform as well.

  

Market Strategies Economic Data

Nonfarm Payrolls for September fell to 148K from 193K in August, largely as a result of what was the looming shut-down of the government. Private Payrolls also fell to 126K from 161K in August.

The Unemployment Rate fell a bit to 7.2% and Hourly Earnings dropped to plus 0.1%.

Long Term TIC Flows also fell in August to an outflow of $ 8.9Bln, an unacceptable phenomenon as foreign bond buyers became dissatisfied. With the debt problem settled, employers will now be calculating increased costs from the new healthcare law and its application.

 

The U.S. Trade deficit widened slightly in August, increasing to $38.8 bln in August from a deficit of $ 38.6bln in July. The goods deficit increased by $ 0.1bln in August fo $ 58.2bln. There was no change in our services surplus. There were small declines in exports of petroleum products ( -$0.5bln ).

 

Durable Goods orders were up 3.7% all due to both civilian and military aircraft orders. The strong demand for aircraft contributed to a 12.3% increase in transportation which came from a 46% increase in both civilian and military aircraft orders.

                                           

Market Strategies Technical Information

Support Levels S&P 500    1727

Resistance S&P 500           1787

 

Support Levels DOW          15,374

Resistance DOW                 15,660

 

Support Levels QQQ           8086                  

Resistance QQQ                  8379

                  

Support Levels Nasdaq      3884

Resistance Nasdaq             4017

                                            

Market Strategies Cycles

We are in overbought territory with a probability for a small reaction to be forthcoming. The major trend, however is very strong. Fourth quarter market magic tends to do the trick in post-elections and leads to solid returns in midterm Q1, giving the two-quarter combo of post-election Q1 and midterm Q4 above average returns. The trend becomes murky again going into the later part of the first quarter.

 

Over the past five weeks, through yesterday’s close, S&P 500 and Russell 2000 had gained 1.2% and 3.2%.  Once again it was the Small-Cap Portfolio that provided the majority of the gains, advancing 8.5%. Mid -Caps were down slightly while Large Caps mustered a meager 0.5% gain.

The twist is the Fed of course. Is $85 billion a month it? So far QE has worked, stock assets are inflated, but will they continue to do so into perpetuity? In considering the QE∞ calculus here we think of the grains of sand in a pile as an analogy. The bigger the pile the less the impact each grain has. The Fed is buying in a relatively finite market. Treasury bonds are fairly finite, but growing slowly whereas the mortgage market has no limit. Static bond buying will eventually price itself out of the market. The dollar is being sacrificed. Will the Fed respond to data and ante up or pull out? This is the biggest question of 2014.

The anticipation of a favorable Fed should continue to foster a friendly atmosphere for stocks through the first half of 2014, pushing DJIA and the S&P 500 up 10% or so over the next 2 quarters with NASDAQ tacking on a bit ore, perhaps 12-15%, unless the new post-Bernanke Fed expands purchases or on the other end of the spectrum – the long shot here – tapers hard and raises rates. Democratic administrations have a far worse market track record in midterm years and bear markets tend to begin or end in midterm years as well. Ride the QE rally through the winter and into next spring, but be ready to bail fast if and when market conditions deteriorate.

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.

 

CONTACT

Please Direct All Inquiries To:

Mike King (702) 650-3000

mike@princetonresearch.com

Or

Charles Moskowitz (781) 826-8882

CAM@MoneyInfo-LLC.com

 

Princeton Research

3887 Pacific Street, Las Vegas, Nevada 89121

 

Phone: (702) 650-3000

 

Fax: (702) 697-8944

Options Trading Strategies

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