Where To Invest December 2015
November 30 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 December 2015
Best Stocks To Buy December 2015
Stock Market Investing Strategies
Stock Options Trade Alerts
Options Trading Strategies
How To Trade Options
Gain For The Week $236
2015 YTD Profits $ 8308
Over 83% Returns
2014 Profits = $ 20,443
Over 204% Returns
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$10,000 Trading Portfolio
Charles Moskowitz Discussion
We have 4 Open Long Positions:
CCOI Jan 35 Calls
HOG Dec $ 50 Calls
GILD Dec 110 Calls
MAR Dec 75 Calls
Funds in Use = $1,686
Week 48 produced only one closed out trade in GILD. We ended the holiday shortened week with a gain of $236 and YTD gains of $8,308. There are 4 open positions in GILD, MAR, HOG, and CCOI using a total of $1,686.
As is usually the case, trading both ahead of and on the half day after Thanksgiving are dramatically slow and with no real range. Wednesday really lived up to this with the Dow having only a $53 total range.
In my quest for new names to trade I went over in excess of 600 charts and what I found really surprised me. The number of big name, large cap stocks with extremely constructive charts, looking like they can put on another leg up is very encouraging. MMM and PG have both gone through month long consolidations with MMM resting on top of the 200 day MA and PG just under. This goes directly to the issue of where the next move up comes from. These kind of names have not been included in the current narrowed list of what has been holding us near the highs. It would actually help the overall tone of the market if the public would lose focus on AAPL, NFLX, AMZN and GOOG and look to some of the “value” names that haven’t moved 40% YTD. MSFT, RE, and DOV also fall into this group as good consolidations, all looking for a direction to favor.
The political sideshow continues on…I can’t believe we have another 11 months to go. The ads for these guys (and girls) are so predictable as to make me question why they would even waste the time and money to produce such drivel.
World events have gone from bad to worse and there is plenty to worry about. I will remind you that while the market loves to climb the “wall of worry,” Humpty Dumpty does actually fall from time to time and geopolitical events can be a real game changer.
China’s weakness at the weeks end was shrugged off by our markets. They were down 5% and we just went on as if nothing happened. I took that as a good thing. We’ll see if we get a continuing move to the upside for our Santa Claus rally……CAM
Market Strategies $10,000 Trading Account Trade Table
New Trades Options account:
( 1 ) Buy 6 DOV December 65 Calls @ $ 1.20
( 2 ) Buy 8 MSFT December 54 Calls @ $ 0.74
DATE |
TRADES |
PRICE |
COST |
PROCEEDS |
RESULTS |
11/27 |
Sold 4 GILD December 110 Calls |
1.58 |
632 |
236 Gain |
|
11/24 |
Bought 8 GILD December 110 Calls |
0.99 |
792 |
||
11/23 |
Bought 6 CCOI January 35 Calls |
0.85 |
510 |
||
11/23 |
Bought 4 MAR December 75 Calls |
0.90 |
360 |
||
11/20 |
Sold 4 HOG Dec 50 Calls ( 100% Profit Rule ) |
1.60 |
640 |
320 Gain |
|
11/17 |
Bought 8 HOG December 50 Calls |
0.80 |
640 |
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
MARKET Laboratory – Weekly Changes
Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect.
| Dow
17,798.49 -25.32 -0.14% |
Nasdaq
5127.52 +22.61 |
S&P 500
2090.11 +0.94 +0.04% |
Transportation
8301.80 +291.53 +3.64% |
Russell 2000
1202.38 +27.22 +2.32% |
Nasdaq100
4680.47 -5.89 -0.13% |
| Gold (spot)
1056.20 -20.20 -1.9% |
Silver
1409.6 -10.8 -0.8% |
Crude
41.71 +1.32 +3.3% |
Heating Oil
137.81 -1.88 -1.4% |
Unleaded Gas
1.3367 +0.0696 +5.5% |
Natural Gas
2.212 -0.079 -3.5% |
| VIX
15.47 -4.61 -23.0% |
Put/Call Ratios
S&P 100 174/100’s +42/100’s |
Put/Call Ratios
CBOE Equity 75/100’s -16/100’s
|
Bonds
155-08 +26 3.00% -0.02% |
10 Yr. Note
127-024+13 2.22%-0.04%
|
Copper
205.50 -11.30 -5.2% |
| CRB Inflation
Index 183.24 -0.49 -0.3% |
Barron’s* Confidence
73.3 -1.4 |
S&P100
931.53 -1.46 -0.16% |
5 Yr. Note
119-077 +063 1.65% -0.03%
|
Dollar
100.08 +0.47 +0.5% |
DJ Utilities
563.02 -8.07 -1.41% |
| AAII
Confidence Index
Long Term Average |
Bullish
32.4% +1.6%
38.74% |
Bearish
26.0% -4.5%
30.30% |
Neutral
41.6% +2.9%
30.96% |
M1 Money Supply
+8.83% Nov 16th
|
M-2 Money
Supply +6.27% Nov 16th
|
* 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 2069 2048 2115
Dow 17,683 17480 18,088
QQQ 112.10 115.90
Transports 81.03 8457
NASDAQ 5050 4929 5178
$100,000 Trading Portfolio Stock Positions and Trades
Each stock is allocated a theoretical $ 5,000 share of the portfolio unless otherwise indicated.
|
Stock
|
Purchase Price | Purchase Date | Stop/Loss | Price/Date Sold | Profit/
(Loss) |
||
| GLW 100 | 18.78 | 11/24 | |||||
| LVLT 100 | 50.81 | 11/23 | |||||
| SPXU 100 | 30.08 | 11/02 | |||||
| TWTR 200 | 28.51 | 10/28 | |||||
| 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 Free Where To Invest Your Money Now
High Return Investments Trade Alerts
Go To: PrincetonResearch.com/alerts.htm
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 Account
New Options Trades :
( 1 ) Buy 12 DOV December 65 Calls @ $ 1.20
( 2 ) Buy 16 MSFT December 54 Calls @ $ 0.74
There was one closed option position:
16 GILD December 110 Calls bought at $ 0.99 with half or 8 lots sold at $ 1.58 made a $ 472 profit.
There were no closed out stock positions,
For the year to date we have gains of $ 22,235.
In addition there is a credit of $ 245 for the sold CRM Call.
Open position losses in the stock account increased by $ 1,171 to $ 16,722.
The options expire on the third Friday of each Month unless otherwise posted.
The Stock table has the following 19 positions:
AA, BAC.B.WS, BSBR( 2 ), CRM, CUBA, FCX, GLW, LVLT, MOS,
NBG (3), REPR, SAN, SPXU (2), TEXQY, TWTR
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
$ 61,721 for the 17 open stock positions. There is one long option position requiring
$ 640, which added to the stock longs total an outlay of
$ 62,361 leaving
$ 37,639 in cash.
The long option position in the table below are the profitable HOG Calls..
There is also the open sale of one CRM December $ 82.50 Call against the 100 shares long.
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.
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) |
| GILD Dec 110
16 lots; 8 remain |
Calls
0.99 |
11/24/15 | 1.58 Sold Half | 11/27/2015 | $ 472 |
| CCOI Jan 35
12 lots |
Calls
0.85 |
11/23/15 | |||
| MAR Dec 75
8 lots |
Calls
0.90 |
11/23/15 | |||
| CRM Dec 82.50
1 Lot |
Call
2.45 |
11/20/15 | Wrote against Long | $ 245 Credit | |
| HOG Dec 50
16 lots 8 lots remain |
Calls
0.80 |
11/17/15 | 1.60
( 100% Profit Rule ) Sold half |
11/20/2015 | $ 640 |
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
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 | 58.com WUBA ( -0.83 vs 0.09 ) iDreamSky Technology DSKY ( 0.23 )
09:45 hrs Chicago PMI for November ( 55.0 vs 56.2 ) 10:00 hrs Pending Home Sales October ( 0.7% vs -2.3% ) The Federal Reserve Board of Governors meets on proposed amendments to the Dodd-Frank law. NQ Mobile NQ ( .01 ) Shoe Carnival SCVL ( 0.48 vs 0.54 ) TCP International TCPI ( 0.03 vs 0.16 ) Infoblox BLOX ( 0.06 vs 0.05 ) Thor Industries THO ( 0.83) vs (0.73 ) |
| TUESDAY | Bank of Montreal BMO ( 1.74 vs 1.63 ) Scotiabank NBS ( 1.44 vs 1.32 )
10:00 hrs Construction Spending Oct ( 0.7% vs 0.6% ) 10:00 hrs ISM Index Nov ( 50.4 vs 50.1 ) 17:00 hrs Auto Sales November ( NA vs 5.9Mln Units ) Truck Sales November ( NA vs 8.6Mln Units ) Defense Secretary Aston Carter testifies before a House committee on U.S. strategy for Syria and Iraq. Ascena Retail Group ASNA ( 0.28 vs 0.28 ) Apigee APIC -0.41 Bob Evans BOBE ( 0.39 vs 0.36 ) Qihoo 360 Tech QIHU ( 0.99 vs 0.63 ) Powell Industries POWL ( 0.47 vs 0.20 ) Universal Technical Institute UTI ( -0.03 vs 0.06 ) Ooma ( -0.14 )
|
| WEDNESDAY | Brown-Forman BF.B ( 1.00 vs 0.97 ) G-lll Apparel Glll ( 1.78 vs 3.09 ) Lightln LITB
( 0.14 vs -0.09 ) Royal Bank of Canada RY ( 1.64 vs 1.57 ) Science Applications SAIC ( 0.66 vs 0.77 ) Yingli Green Energy YGE ( -0.40 vs -0.10 ) 07:00 hrs MBA Mortgage Index 11/28 ( NA vs -3.2% ) 08:15 hrs ADP Employment Change Nov ( 185K vs 182K ) 08:30 hrs Productivity 3rd Qtr Revised ( + 2.2% vs +1.6% ) Unit Labor Costs 3rd Qtr ( + 1.2% vs + 1.4% ) 10:30 hrs Crude Inventories 11/28 ( NA vs +0.961Mln Bbls ) 14:00 hrs Fed’s Beige Book for December ( To Be Discussed )
Aeropostale ARO ( -0.34 vs -0.45 ) Avago Tech AVGO ( 2.38 vs 1.99 ) Synopsys SNPS ( 0.66 vs 0.64 ) PVH PVH ( 2.47 vs 2.56 ) Verint Systems VRNT 0.79 vs 0.84 |
| THURSDAY | Dollar General DG ( 0.87 vs 0.79 ) Kroger KR ( 0.39 vs 0.69 ) Medtronic MDT ( 1.00 vs 0.96 ) Michaels Stores MIK ( 0.36 vs 0.31 ) Toronto-Dominion Bank TD 1.13 vs 0.98 United Natural Foods UNFI ( 0.69 vs 0.66 ) Lands End LE ( 0.30 vs 0.56 )
07:30 hrs Challenger, Gray and Christmas Job Cuts Nov ( NA vs -14.0% ) 08:30 hrs Initial Claims 11/28 ( 267K vs 260K ) Continuing Claims 11/28 ( 2177K vs 2207K ) 10:00 hrs Factory Orders Oct ( + 1.1% vs -1.0% ) 10:00 hrs ISM Services Nov ( 58.3 vs 59.1 ) 10:30 hrs Natural Gas Inventories 11/28 ( NA vs 9 bcf ) Barnes and Noble BKS ( -0.32 vs 0.12 ) Cooper COO ( 2.11 vs 1.95 ) Marvell MRVL ( 0.13 vs 0.29 ) Sea Change SEAC ( -0.04 vs -0.07) Ulta Salon ULTA (1.05 vs 0.91 ) |
| FRIDAY | Big Lots BIG ( 0.00 vs -0.06 ) Genesco GCO ( 1.30 vs 1.28 ) Hovnanian HOV ( 0.10 vs 0.22 ) Medley Capital MCC ( 0.30 vs 0.37 )
Opec Ministers meet and are seen unlikely to change policies 08:30 hrs Nonfarm Payrolls Nov ( 196K vs 271K ) Nonfarm Private Payrolls Nov ( 185K vs 268K ) Unemployment Rate Nov ( 5.0% vs 5.0% ) Hourly Earnings Nov ( 0.2% vs 0.4% ) Average Workweek Nov ( 34.5 vs Same ) 08:30 hrs Trade Balance October ( -$42.7B vs -$40.8B )
|
Market Strategies Fundamentals
Stocks recovered from the geopolitical debacle last Tuesday on Turkey’s shooting down a Russian plane. The major averages tumbled to their 13 day moving averages all if which held with the exception on the Transportation Average which soon rebounded to recover its lost direction and then lead all indexes with a 3.64% gain, up 291.53 points to 8301.80. The Russell performed in similar fashion as the second best performing index up 2.32% or 27.22 points to 1202.38. The S&P 500 fell just to its 13 day M.A. and rebounded from there making at least a flat performance to 2090.11, up 0.94 or + 0.04%. With one day to go the S&P is up 0.52% for November and has risen 1.52% for the year. The Nasdaq gained 22.61 points to 5127.52, up 0.44%, while the Dow was the only index that could not make it back to plus territory falling 25.32 or -0.14% to 17,798.49. It was the first decline in the Dow Industrials in a Thanksgiving week since 2011.
Helping to support the indexes, some of the economic numbers were much better than expected; The GDP numbers reflecting dismal 3rd Qtr growth were improved to + 2.1% above expectations by Briefing.com of + 2% and well above the + 1.5% prior. Durable Goods orders rose a surprising 3% while Home Sales data rose to 495K up from 447K in September.
The high flying larger cap glamour stocks helped lead the market and especially support Nasdaq. Amazon ( AMZN : $ 673.26) + 4.81 or 0.7%; Alphabet Inc ( GOOG: $750.26) + $ 11.85 or + 2.2%; , Netfix ( NFLX: $ 125.44 ) + $ 1.60 or + 1.3% and Palo Alto Networks ( PANW: $ $ 185.91 ) + $ 14.94 or + 8.7% were strong, while lesser but well known quality stocks like Campbell Soup and Tyson Foods had superb numbers: Campbell Soup ( CPB: $ 53.10 ) + $ 4.28 or + 8.8% and Tysons ( TSN: $ 50.55 ) gained an impressive $ 6.90 or + 15.9% for the week.
Since World War 2 the S&P 500 stocks have risen in December 78% of the time versus 59% for the other months. The index has averaged a 1.8% gain for December.
You can see from the chart below, the average gain far outweighs the average loss. The interesting statistic here is how quickly those average drawdowns occur. On average, the maximum gains lasted 4.5 times longer than the maximum losses. Gains are incremental, but losses happen in a hurry. Greed builds up slowly, but fear can happen all at once.
There are also several significant appearances by Fed leaders, with an impending FOMC meeting December 15th-16th. The economic information suggests that all of the data reports will be tested against the potential for the start of Fed rate hikes. The combination of news, speeches, and speculation may provide both trading and investing opportunities. Volatility is likely to increase.
The third-quarter earnings reporting period came to an end on November 17th with Wal-Mart’s (NYSE:WMT) report. The earnings beat rate was just below average, but the top-line revenue beat rate was even weaker, coming in below the 50% mark at 47%. This was the weakest revenue beat rate seen since the bull market began in 2009.
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The Regional Banking ETF the ( KRE $ 45.69 ) have produced nice gains for investrors. We mentioned a list in last wee’s tabloid. The shareholders of Hennessy Small Cap Financial fund ( HSFNX: $ 25.10 ) as pointed out in an article on Barrons, has logged a gain of 17.3%, more than triple the 4.7% of the Power Shares S&P Small Cap Financials ( PSCF: $ 43.60 ) exchange traded fund and far outpacing the S&P 500 index. The Hennessy fund’s managers are David Ellison and Ryan Kelley.
Bank stocks could be a major beneficiary of Fed policies, especially regional banks. The S&P spider that represents regional banks gained sixty cents last week which seems to be on a tear closing in on its all-time high made November 6th which was $ 46.33. The KRE is now up 6.6% in November. It rose 4.1% in October. For the year to date it is up 10.8%. The regional banks could gain substantially from forward Fed policies. Over the past five years it is up a meager 16%. The outlook for banks has turned brighter as the expected Fed interest rate hike will widen bank’s net interest margins.
Market Strategies Economic Data
The second estimate for third quarter GDP showed an upward revision to 2.1% from the advance estimate of 1.5%. That was slightly higher than the Briefing.com consensus estimate, which was pegged at 2.0%. The GDP Deflator was unchanged at 1.3% versus the Briefing.com consensus estimate, which was estimated at 1.2%. The upward revision was the result of the decrease in private inventory investment being smaller than previously estimated. Accordingly, the change in private inventories subtracted only 0.59 percentage points form third quarter GDP growth versus 1.44 percentage points as indicated in the advance estimate.
There was a downward revision to personal consumption expenditures, which increased 3.0% versus a previously estimated 3.2%. That culled the contribution to third quarter growth to 2.05 percentage points from 2.19 percentage points. Similarly, a smaller than estimated increase in exports and a higher than estimated increase in imports subtracted 0.22 percentage points from third quarter growth versus subtracting just 0.03 percentage points in the advance estimate. Government spending was basically unchanged from the advance estimate with 1.7% growth, which contributed 0.30 percentage points to third quarter GDP growth.
Real final sales, which exclude the change in inventories, were up 2.7% versus a previously estimated 3.0% increase. The 2.1% growth rate for third quarter was right in-line with the average growth rate for the preceding 12 quarters.
| Category | Q3 | Q2 | Q1 | Q4 | Q3 |
| GDP | 2.1% | 3.9% | 0.6% | 2.1% | 4.3% |
| Inventories (change) | $90.2B | $113.5B | $112.8B | $78.2B | $79.9B |
| Final Sales | 2.7% | 3.9% | -0.2% | 2.1% | 4.3% |
| PCE | 3.0% | 3.6% | 1.7% | 4.3% | 3.5% |
| Nonresidential Inv. | 2.4% | 4.1% | 1.6% | 0.7% | 9.0% |
| Structures | -7.1% | 6.3% | -7.6% | 4.2% | -1.8% |
| Equipment | 9.5% | 0.3% | 2.3% | -4.9% | 16.5% |
| Intellectual Property | -0.9% | 8.3% | 7.4% | 6.9% | 6.5% |
| Residential Inv. | 7.3% | 9.4% | 10.1% | 9.9% | 3.4% |
| Net Exports | -$544.1B | -$534.6B | -$541.2B | -$463.6B | -$429.1B |
| Export | 0.9% | 5.1% | -6.0% | 5.4% | 1.8% |
| Imports | 2.1% | 3.0% | 7.1% | 10.3% | -0.8% |
| Government | 1.7% | 2.6% | -0.1% | -1.4% | 1.8% |
| GDP Price Index | 1.3% | 2.1% | 0.1% | 0.1% | 1.6% |
Existing home sales declined 3.4% in October to a seasonally adjusted annual rate of 5.36 million units from an unrevised 5.55 million units in September. That was below the Briefing.com consensus estimate, which was pegged at 5.50 million. Notably, sales didn’t increase in any region.
Median sales prices, meanwhile, were up in all regions year-over-year. The West led the way there with an 8.0% gain followed by the South (+6.2%), the Midwest (+5.7%), and the Northeast (+1.3%). Overall, the median price of an existing home increased 5.8% to $219,600. The Northeast was unchanged, the Midwest was down 0.8%, the South was down 3.2%, and the West was down 8.7%. The October sales decline featured a 3.7% drop in sales of single-family homes to a seasonally adjusted annual rate of 4.37 million. These sales were impacted by limited inventory, financial market volatility, and affordability conditions even though mortgage rates remained below 4 percent for the third straight month.
The October Durable Goods Orders report showed a 3.0% gain in durable orders and a 0.5% increase in durable orders excluding transportation. Briefing.com consensus estimates for those measures were 1.5% and 0.5%, respectively. The flow of orders reflects some normal volatility for the durable goods segment as many categories bounced back from declines in the prior month while other areas that saw increases in September saw a drop in orders in October.
| Category | OCT | SEP | AUG | JUL | JUN |
| Total Durable Orders | 3.0% | -0.8% | -2.9% | 1.9% | 4.1% |
| Less Defense | 3.2% | -1.6% | -2.1% | 0.8% | 4.2% |
| Less Transport | 0.5% | -0.1% | -0.9% | 0.4% | 1.0% |
| Transportation | 8.0% | -2.2% | -6.9% | 4.9% | 10.8% |
| Capital Goods | 11.8% | -4.4% | -7.0% | 3.0% | 9.9% |
| Nondefense | 13.2% | -6.0% | -4.6% | 0.6% | 10.7% |
| Nondefense/nonaircraft (core cap gds) | 1.3% | 0.4% | -1.4% | 1.9% | 1.5% |
| Defense Cap Goods | 1.0% | 10.7% | -23.8 | 24.4% | 2.8% |
The October report was driven primarily by transportation orders, which featured an 81% increase in nondefense aircraft and parts orders that followed on the heels of declines in both August and September. Outside of the transportation sector, order activity was more modest but still positive. To that end, machinery orders increased 1.6% after a 0.3% decline in September, primary metals orders jumped 0.4% after falling 2.5% in September, computer and electronic products orders rose 1.8% after a 0.3% drop in September,and communication equipment orders jumped 1.8% on top of a 2.0% increase in September.
Order declines were seen for fabricated metal products (-0.8% after a 2.0% increase in September), electrical equipment, appliances and components (-1.1% after a 1.6% decline in September); and motor vehicles and parts (-2.9% after a 1.0% increase in September).
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Market Strategies Cycles
Market action over the past months has been quite in line with historical and seasonal trends. October 1st began the seasonal strength mostly technical disregarding geopolitical and domestic economic events. The October performance is the sixth best for the S&P 500 since 1930. November opened strong as usual the first two trading days, then sold off sharply due mostly to geopolitical events before rebounding for the seasonal strength the week before Thanksgiving.
With last week’s gain the week before Thanksgiving is now up 18 of the past 23 years on DJIA. Last week’s 3.27% on the S&P 500 500 was its best weekly gain of 2015. However, November as a whole is currently quite flat as pre-election November’s tend to be, averaging 0.3% on the S&P versus the usual 1.5%. Small caps are also beginning to firm up as they tend to do this time of year.
Next month’s FOMC Meeting is arguably one of the most anticipated economic release events of all time. However, as we pointed out earlier this month, whether or not the Fed actually raises rates this time around is still an open discussion, but if they do, it would remove one large uncertainty that has held the market in check for the better part of a year. At which point, it would not be surprising to see the market make another run at record highs sometime in Q1 or early Q2 2016.
In addition to the Fed rate hike question, December packs its usual full docket of seasonal influences. Yearend tax-loss selling tends to create early month weakness, but unlike November, pre-election Decembers are much stronger on average, up 3.2% on the S&P since 1950 versus 1.7%.
Around mid-December the so-called January Effect usually begins where small caps outperform large caps into Q1. Much of the gain used to be taken place the last two weeks of the year. This year it might be earlier as losses in metals and oil have lingered for longer periods of time and tax losses which can be taken until the last trading day of the year were probably already executed. December’s Triple Witching Week and the week after will be closely watched. The DJIA was up 19 of the last 24 TWW and 17 of the last 24 weeks after. The Stock Traders Almanac will make selections of stocks that apply from the list of stocks making new 52-week lows. The list is usually compiled over the second or third December weekend and delivered to subscribers before the following Monday’s open.
Finally, there is the vaunted Santa Claus Rally. Yale Hirsch defined the SCR in 1972 as seven-trading-day period that spans the last 5 trading days of the year and the first two of the New Year. The S&P has averaged 1.4% over the period. But, the real significance is when it does not appear. As we remind in the headline on page 114 of the 2016 Almanac, “If Santa Claus should fail to call, bears may come to Broad and Wall. In the table below you can see that the last four time SCR was negative the year was either flat or suffered a bear market. The S&P was down -3.0% on the S&P this year and 2015 is on pace for a flat year.
Undervalued Small Cap Stocks
Lower Priced stocks that look to be a buy:
Repro-Med Systems, Inc ( OTCQX: REPR 0.35 )*
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 4.51 ) 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.
ProtoKinetix, Incorporated ( PKTX: 0.09 8)
ProtoKinetix (www.protokinetix.com) trading at $ 0.0521 low and 0.0969 high on Friday has a huge upside potential. They are in collaboration with the James Shapiro laboratory at the University of Alberta. The sole intention of the collaboration is to develop a commercial product pipeline of therapeutic applications for the AAGP™ family of molecules.
Dr. Shapiro is presenting his work at a symposium in Australia tonight and we should see some reaction to his work…We will also try to have him give us an update to the story for our radio show in the next few weeks.
Professor James Shapiro is Professor of Surgery, Medicine and Surgical Oncology, and Director of the Clinical Islet Transplant Program and the Living Donor Liver Transplant Program at the University of Alberta in Edmonton, Canada. He has a busy hepatobiliary surgical practice in HPB oncology, and in liver and kidney-pancreas transplant surgery. His center carries out 80 liver transplants per year, and has done around 80 living donor liver transplants. The University of Alberta just celebrated their 1000th liver transplant.
Dr. Shapiro directs the largest clinical islet transplant program worldwide with almost 170 patients treated, and led the clinical team that developed the “Edmonton Protocol” – the first trial to achieve consistent 100% insulin independence in a series of islet-alone transplant recipients with Type 1 diabetes (published in the NEJM 2000). Before Dr. Shapiro’s trial, the success rate with islet transplantation was less than 8%. He led an international multicenter trial to replicate these findings in 9 international centers (published in NEJM 2006).
Over the last 32 months Dr. Shapiro and his team have been extensively testing the AAGP™ molecule in allogeneic transplants using human islet cells as the model. As regenerative medicine is rapidly becoming adopted in the treatment of degenerative diseases, the protection of the transplanted cells, tissues, and organs is of paramount importance. Transplanted cells and tissues are subjected to extreme stress factors that, unless protected, could cause failure to graft or premature death. The success of the tests conducted in Edmonton have demonstrated that AAGP™ has the potential to be widely adopted in many areas of regenerative medicine.
Immune Therapeutics ( OTCQB: IMUN $ 0.22 ) Appears ready to go: get Long. This biotechnology company is seeking to commercialize patented therapies in emerging nations that combat chronic, life-threatening diseases by rebalancing the immune system.
iSign Media Solutions ( ISDSF: $ 0.14 ) ISD in Canada (0.17-0.18 )
The beauty of buying the stock in the USA ..You get a discount of 35-40% because the dollar is much stronger than the Canadian dollar.
iSIGN Media Solutions Inc is public company trading on the Toronto Stock Exchange Venture market under the symbol ISD (TSX-V: ISD), and in the United States on the OTC BB under the symbol of ISDSF. iSIGN became a public entity in September 2009. They signed a deal with Rich Multi-Media a privately held California company to include iSign technology in over 9,000 kiosks to be delivered to airports. The revenue is estimated to be approximately $ 10 million in 2016.
iSIGN is a Software as a Service (“SaaS”) company whose US patented software (patent # 8,781,887 B2, received in July 2014) is a unique ‘push and pull’ technology that utilizes Bluetooth and Wi-Fi to ‘push’ messages in any language to mobile devices within a 300 ft (100 meter) radius of our technology, while gathering valuable information from the interaction of our technology with mobile devices within range of our hardware.
Technology Overview
The technology is housed within hardware devices build for the commercial market; are waterproof and fully tested to operate within extremely temperature ranges of -40° to +185° Fahrenheit. Our technology does not involve apps and related downloads in order to receive and view messages and, as messages are delivered by Bluetooth and Wi-Fi, there is no cost to the recipient.
The current hardware units, the Smart Antenna, was introduced in the summer of 2012. Our previous hardware was only capable of delivering messages via Bluetooth, which prevented this units from communicating with iPhones, as Apple does not allow for Bluetooth messaging interaction. Our Smart Antenna, which utilizes both Bluetooth and Wi-Fi to communicate with mobile devices, is now capable of interacting with all smartphones.
The second hardware unit, the Smart Player, contains all the features of the Smart Antenna, while adding the ability to manage content on digital screens at the same time.
As our messaging requires the recipient to accept an opt-in message prior to receiving messages, we are not considered to be ‘spam’.
As we ‘push’ messages, we are ‘pulling’ information into our back-end reporting system, that allows for real-time reporting to our clients. The ‘pulled’ information is completely anonymous, in that it cannot in any way identify the individual that our technology is interacting with. Some of the information gathered includes the make and model of the mobile device; acceptance or rejection of messages;, date, time and location of each interaction; and time spent within range of our system. All of which is information that is considered to be ‘Big Data’ is of considerable interest to users of our technology, as well as to data integrators.
Mission Statement
To create a National and International Mobile Network allowing for location-based interactive proximity mobile marketing; thus providing brands, stores and third party data aggregators a data mining machine that allows for trends and activity to be viewed and analyzed.
Fundamental Analysis Stocks To Buy with Stops
We bought Corning GLW. It is an excellent long sition. We are looking to buy regional banking stocks on a pull-back. They have already had a huge rally anticipating Fed Rate hikes. We took sizable profits on the United Rentals URI. The Enzo Biochem ENZ has made sizeable gains. Continue to hold. Be nimble. Volatility will increase.
We always use stops. Keep losses small. We are long Southwest Air (LUV) at 30 and we bought Virgin Air (VA) at 32.20. Please check on the previous weekly market letters if there are questions. We are long Bank of America at 15.65. and would buy more on any further consolidation. Use 16.12 as a stop loss . BAC looks to have made a double bottom at the 14.63 area. The HDGE collapsed last week as the markets forged ahead. The HDGE is a buy when the market goes into periods of weakness.
Heavy Black italicized indicates Execution
| Symbol | Name | Business Description | PE | P/S | MV mln | Price | Buy Limit | Stop Loss
Or sold |
| MSFT | Microsoft | Technology Software, Services, Devices | 17 | 4.7 | 431B | 53.93 | 53 | 51 |
| BANR | Regional Bank | Offers Banking Products | 18 | 7.12 | 1.8B | 52.51 | 50.70 | 47 |
| KRE | Regional Spider | Investments in Small Banks | 2.4B | 45.69 | 45.05 | 43 | ||
| GLW | Corning | Optical Technologies
Glassware, Ceramics |
12.5 | 2.4 | 22.5B | 18.76 | 18.78 | 16.45 |
| DE | Deere | Farm and Construction equipment | 13 | 0.84 | 26.3B | 77.50 | 75.77x | |
| KR | Kroger | Food Mfg and Processing | 18 | 0.33 | 37B | 38.01 | 36.76 | 33.40x |
| INTC | Intel | Technology chips platforms processors | 13.6 | 2.8 | 152.83B | 32.11 | 30.48 | 29.50 |
| VA | Virgin Air | Regional Airlines | 7.2 | 1.0 | 1.5B | 36.16 | 32.20 | 33;50 |
| LUV | Southwest Air | Regional Airlines | 16 | 1.15 | 22.6B | 45.82 | 33 | 42.31sco |
| ENZ | Enzo Biochem | Life Sciences | NA | 1.35 | 134M | 4.63 | 2.78 | 3.28x |
| BAC | Bank of America | Commercial Bank | 10 | 2.02 | 165.3B | 17.48 | 15.65sco | 16.92x |
| HDGE | Advisor Shares | Ranger Bear ETF | 10.42 |
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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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Where To Invest December 2015