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June 29, 2015
Market Strategies Newsletter
Sample Issue
Covering High Return Balanced Investing Strategies To
Make Money In Up Or Down Markets
A Publication of Princeton Research, Inc. (www.PrincetonResearch.com)
Contributing Staff: Michael King, Charles Moskowitz
Where To Invest In 2015
Stock Options Trading Newsletter Covering:
Where to Invest July 2015
Best Stocks To Buy July 2015
Stock Market Investing Strategies
Stock Options Trade Alerts
Options Trading Strategies
How To Trade Options
Year To Date Profits $ 4,790
Over 47% Returns
2014 Profits = $ 20,443
Over 204% Returns
For Free Where To Invest Your Money Now
High Return Investments Trade Alerts
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NOTE: This is a Sample Issue Only!
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Market Strategies
$10,000 Trading Account Traders Comments
WHAT IS A BUBBLE ???
We have only $640 of our funds in use. The reason is simple; the markets have been turning on a dime for several years now and almost every time I have been in Index puts it has cost us money. For that reason, my preferred method of risk control continues to be smaller positions and shying away from the indexes.
Last week I mentioned the Cyber security stocks and felt that they were going to continue higher based on the fundamental fact that every day we are hearing about another hack-attack, sending them higher. Several times early in the week I was waiting for a little pullback and a little less “overbought” reading from this group. I was ready to buy them on Tuesday but a (not so) funny thing happened….they weren’t following the market higher, so I held off. Every day I watched and wanted to be a buyer but just couldn’t pull the trigger, and then they closed down on the day after failing to make new highs. CYBR traded $75.24 and closed lower by $1.54 @ $71.86. Wednesday it was down another $1.97 and it closed the week @ $65.78 only $ .20 from the low and $10.00 from the weekly high. FTNT was lower and left a very ugly gap down Wednesday. QLYS was $41.59 after trading $48+ and the ETF I mentioned (HACK) had a relatively calmer week trading $33.91 Monday and closed out the week @ $32.20 down only $1.25 (4.4%). The point is, that once everyone
loves a group, it’s usually over for at least the short term. This group will definitely recover and move to new highs and we will participate. Just not too heavily.
The definition of a bubble is: a surge in asset prices to levels that are substantially higher than the fundamental value of those assets. However, that would imply that anyone has a clear vision about what that real value might be…Another more important issue is that the buyers need to be over-leveraged in order to drive those prices higher. The best examples of actual bubbles are the Dutch Tulip Mania, the 1711-1720 British South Sea bubble and of course most recently the sub-prime induced Housing bubble. All these are actual bubbles that came along with massive public participation and dramatic over leverage.
In case you don’t know where I’m going with this, I’ll tell you that it’s actually a fairly common
rant of mine in this space. The “talking heads” continue to label every dramatic rise in the
price of any commodity or stock a “bubble.” Sort of the way the media took to calling any and
every scandal since 1972 a “GATE.” Watergate right up to “Deflategate.”
Different assets rise in value at different times and at different rates. They are not all bubbles.
They are, and will continue to be a feature of any capitalistic marketplace. There are certainly
plenty of “crowded” trades where people get involved. Cyber security was one, Biotech is another and the jury is still out on the bond market and how it works out. But not everything is either a bubble or a gate….Even if it does sell more papers or bring more viewers to the tube.
As often said here, “Everybody is NEVER right!!” And if you follow that logic, you have a much better chance of financial survival.
…CAM
Market Strategies $10,000 Trading Account Trade Table
| DATE | TRADES | PRICE | COST | PROCEEDS | RESULTS |
| 06/25 | This information is for Members
To Get The Best |
0.95 | 380 | 228 Loss | |
| 06/15 | 0.36 | 540 | |||
| 06/15 | 1.52 | 608 | |||
| 06/12 | 0.60 | 300 | 150 Gain | ||
| 06/05 | 1.05 | 420 | |||
| 05/29 | 0.30 | 300 |
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
NOTE: In texting we have a limited amount of words. In the interest of brevity:
The Quantity and Strike Price for each trade is specific. 1=January, 2=February
Trading is hypothetical. We may trade weekly options and they are noted: SPY 1/25 147 for
SPY Jan 25th 147 Calls or Puts.
For Free Where To Invest Your Money Now
High Return Investments Trade Alerts
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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) |
| This information is for Members
To Get The Best |
Calls
0.36 |
06/15/15 | |||
| Calls
1.52 |
06/15/15 | 0.95 | 06/25/15 | ( $ 456 ) | |
| Calls
0.30 |
05/29/15 | 0.60
Sold Half on 100% Profit Rule |
06/12/15 | $ 300 |
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
Earnings Reports Before the Open on Top of the Row;
After the Close are Below the Economics Numbers.
| Monday | 10:00 hrs Pending Home Sales May ( NA vs 3.4% )
The European Union and China hold a summit in Brussels. The U.N Security Council hold a meeting on Syria. Amira Nat foods ANFI ( 0.46 vs 0.47 ) Apollo Group APOL ( 0.47 vs 0.76 ) |
| Tuesday | ConAgra CAG ( 0.59 vs 0.55 )
Schnitzer Steel SCHN ( -0.08 vs 0.16 ) The deadline for six world powers and Iran to reach agreement on Teheran’s nuclear program. 09:00 hrs Case-Shiller 20 city Index April ( NA vs 5.0% ) 09:45 hrs Chicago PMI June ( NA vs 46.2 ) 10:00 hrs Consumer Confidence June ( NA vs 95.4 ) AeroVironment AVAV ( 0.16 vs 0.27 ) CalAmp CAMP ( 0.26 vs 0.19 ) |
| Wednesday | Acuity Brands AYI ( 1.35 vs 1.00 )
Gen Mills GIS ( 0.71 vs 0.67 ) 07:00 hrs MBA Mortgage Index 06/27 ( NA vs NA ) 07:30 hrs Challenger Grey and Christmas Job –Cut Report 08:15 hrs ADP Employment Change June ( NA vs 201K ) 10:00 hrs ISM Index June ( NA vs 52.8 ) 10:00 hrs Construction Spending May ( NA vs 2.2% ) 10:30 hrs Crude Inventories 06/27 ( NA vs 4.934 Mln Bbls ) 17:00 hrs Auto Sales June ( NA vs 5.9 Mln Units ) Truck Sales ( NA vs 8.4 Mln Units ) Amaya AYA ( 0.38 ) Franklin Covey FC ( 0.14 ) Global Power GLPW ( -0.07 vs 00 ) |
| Thursday | Interantional Speedway ISCA ( 0.46 vs 0.50 )
08:30 hrs Initial Claims 06/27 ( ?? vs 275K ) Continuing Claims 06/20 ?? vs 2247K ) 08:30 hrs Nonfarm Payrolls June ( ) Nonfarm private Payrolls ( % ) Unemployment Rate June ( Na vs 5.5% ) Hourly Earnings June ( NA vs 0.3% ) Average Workweek June ( NA vs 34.5 ) 10:00 hrs Factory Orders May ( NA vs -0.4% ) 10:30 hrs Natural Gas Inventories 06/27l ( NA vs 89 bcf )
|
| Friday | U.S. Markets Closed for Observance of Independence Day Saturday. |
Market Strategies Fundamentals
It has been all about Greece which has been like a socialist state in a world of capitalism.
The markets have continuously given back gains on the possibility of a Greek default, while at least on the surface they have become socialists supporting the left-wing Syriza party. Greece cannot pay back €324 billion ( $ 362 billion ) .Without continued funding from the European Union then will be unable to fund their aggressive pension programs in which only 43% of their 55 to 64-year olds were working vs 51% in Germany and 62% in the U.S. Syriza has behaved amateurishly by frightening away investors and antagonizing existing creditors.
Meanwhile things were definitely not so rosy in China as local indexes plunged 7.4%. So nervousness isn’t just confined to Greece. The Shanghai Stock Exchange Composite Index closed at 4,192.873 off 334.906 points. However, it remains up 29.6% for this year 2015. Over the past full year since June 2014, it is up 110.17%. The YINN, a triple ETF, has plunged 23 points to 44.96, since it made its highest closing level April 27th at 68.03, a steep drop of 34% in a relatively short period of time.
The Dow closed down 69.27 points for the week or 0.38% but was buoyed by Nike and United Health Group on Friday, which led the thirty blue chips with gains of 4.27% and 2.7% respectively. Only three of the 10 Dow Industrial Groups were higher: Telecommunications, up 0.97%; Health Care + 0.27% and Consumer services adding just 12%. Seven were in the red led by Utilities, off 2.39%; Basic Materials fell 1.67%; Technology was off 1.24%; Industrials down 1.12%; Consumer Goods 0.28%; Financials minus 0.26% and Oil and Gas losing 0.21%.
The S&P 500 ( 2101.49 – 8.50 ) did not fare as well down 0.40% for the week and crossed convincingly below both its 13 and 50—day price moving averages. The MACD indicator is slightly bearish while the OBV, On Balance Volume indicator is very bearish. The S&P had made a weekly high at 2,124, short of the all-time high reached last month at 2,131. Greek issues aside, the tape action for the week was quite negative, especially with such friendly Michigan Sentiment consumer confidence numbers. However, short term indicators aside,
On a weekly basis all indicators, the thirteen, and fifty week barometers are all in- tact. Therefore, Transports not- withstanding, we remain in a decent bull market.
The markets are in the control of big names: Just 10 Dow stocks control the index by their power and weight. Apple of course and then Boeing, Disney, Home Depot, Goldman, IBM, 3M, Nike, United Health and United Technologies. They are more formidable than most other countries notwithstanding their newly minted exchanges. Goldman is up 12% year to date which added 174 points to the Dow. United Health, up 21% added 164 points. None of them are in a bubble. Any bear market will be led by problems with those names.
The Russell Indexes were rebalanced last week which created a lot of excitement and volume. More than $4 trillion in capital is benchmarked to the Russell Indexes. Friday’s volume on the NYSE was the year’s third highest. For the entire week, the Russell was down 4.87 points or 0.38%.
Market Strategies Economic Data
First quarter GDP declined 0.2% in the third estimate. That is up from a previously reported 0.7% decline in the second estimate. GDP increased 2.2% in Q4 2014. The Briefing.com Consensus expected GDP to be revised down to -0.2%. The upward revisions had a positive effect on real final sales, but it wasn’t enough to change the overall outlook. Real final sales were revised up to -0.6% from -1.1%.Several upward revisions made GDP growth look better in the third estimate for Q1 2015. However, GDP still declined for the first time since Q1 2014.
| Category | Q1 | Q4 | Q3 | Q2 | Q1 |
| GDP | -0.2% | 2.2% | 5.0% | 4.6% | -2.1% |
| Inventories (change) | $99.5B | $80.0B | $82.2B | $84.8B | $35.2B |
| Final Sales | -0.6% | 2.3% | 5.0% | 3.2% | -1.0% |
| PCE | 2.1% | 4.4% | 3.2% | 2.5% | 1.2% |
| Nonresidential Inv. | -2.0% | 4.7% | 8.9% | 9.7% | 1.6% |
| Structures | -18.8% | 5.9% | 4.8% | 12.6% | 2.9% |
| Equipment | 2.6% | 0.6% | 11.0% | 11.2% | -1.0% |
| Intellectual Property | 4.9% | 10.3% | 8.8% | 5.5% | 4.7% |
| Residential Inv. | 6.5% | 3.8% | 3.3% | 8.8% | -5.3% |
| Net Exports | -$548.0B | -$471.4B | -$431.4B | -$460.4B | -$447.2B |
| Export | -5.9% | 4.5% | 4.6% | 11.1% | -9.2% |
| Imports | 7.1% | 10.4% | -0.9% | 11.3% | 2.2% |
| Government | -0.6% | -1.9% | 4.4% | 1.7% | -0.8% |
| GDP Price Index | 0.0% | 0.1% | 1.4% | 2.1% | 1.3% |
Consumption spending was revised up from a 1.8% gain in the second estimate to 2.1% in the third estimate. Goods spending was revised up to 1.0% from 0.5% on an upward revision to nondurable goods spending (to 0.8% from 0.1%). Services spending was revised to a 2.7% gain Despite the upward revision, that was still the smallest increase in consumption since a 1.2% gain in Q1 2014. Despite the upward revision, that was still the smallest increase in consumption since a 1.2% gain in Q1 2014. Total fixed investment was revised up to -0.3% from -2.8%.
Nonresidential investment declined 2.0% in the third estimate, which was up from a previously reported 2.8% decline in the second estimate. Intellectual property product investment was revised up to 4.9% from 3.6%.
Residential investment was revised up and increased 6.5% from an originally reported 5.0% gain. That was the fourth consecutive quarterly increase and the largest gain since an 8.8% increase in Q2 2014. The change in inventories was revised up from $95 bln to $99.5 bln.
The export deficit was virtually unchanged at $548.0 bln.
The 30-year bond yield has made a new 9-month high and the 10-year is within 1 basis point of a 9-month high. The yield curve is steepening because of the Fed’s accommodations. The dollar is higher by just 0.34% for the day Friday or 1.4% for the week. The TBT, the Ultra Short 20+ Yr Treasury (TBT: 51.95 ) gained 3.18 on the week or + 5.48 points for the month of June. The yield ignored mostly any weakness in equities. Yields appear poised for more upside.
The University of Michigan Consumer Sentiment Index was revised up to 96.1 in the final June reading from a preliminary reading expectations of 94.6. That is up from a reading of 90.7 in May. The Briefing.com Consensus expected the Consumer Sentiment Index to remain at 94.6.
The gain in sentiment was likely a reaction to large improvements in labor market conditions. That offset concerns about higher gasoline prices.
The Expectations Index increased to 87.8 in June from 84.2 in May. The Current Conditions Index increased to 108.9 from 100.8. Gains in consumers sentiment do not necessarily translate into consumption growth. Consumption relies on income growth. As long as income continues to push higher, consumption growth should follow.
Market Strategies Cycles
Signs of a divergent and confused overall market continue to be present in the number of NYSE Weekly Advancers and Decliners. Flat to negative weeks are accompanied by more decliners than advancers, but in positive weeks, like last week, advancers just barely outnumber decliners. This is possible a sign that fewer and fewer stocks are actually participating in rallies by the major indices. Further compounding the confusion, New 52-Week Lows have outnumbered New Highs for three straight weeks even as New Highs climbed higher. A healthy market advance would have major indices moving higher, together, more Weekly Advancers than Decliners and a more robust number of New Highs.
While the markets have been ambivalent without evidence of a solid trend, trading volatility has worked three out of every four trading days. Selling rallies in the VIX, UVXY or VINX has been a solid winning strategy. It is unlikely the markets will have any kind of serious break while volatility continues to trend lower. Volatility remains very low and all rallies in volatility indexes remain a sale which negates the bear theory.
S&P 500 and NASDAQ have fallen into a similar pattern as DJIA. Despite being up in five of the last seven weeks, S&P 500 (4) is essentially unchanged since the start of May. NASDAQ’s recent weekly record (5) is weaker, but it’s up week gains have exceeded down week losses resulting in a few percentage points of gains since the start of May. However, as of current trading, the NASDAQ is on course for its fourth minor weekly loss in the last five weeks.
Psychological: Distracted. Summer has officially begun, although many have been enjoying a lighter schedule since Memorial Day, the unofficial start of summer. Family vacations, three (or four) day weekends seem to have become the norm. As a result, the market is just meandering along. Sentiment indicators lean bullish, but not dangerously so. Investor’s Intelligence latest survey reported bull advisors at 51.6% and bearish advisors at 15.4%. This is well within the range going back until last December. If bullish advisors shot up to or above 60%, then there would be real cause for concern.
Fundamental: Mixed. Corporations and the stock market are doing ok, but Q1 GDP was a disappointment, declining 0.2%. This is being dismissed as an aberration due to weather. Relative stability in the housing and labor markets does tend to support Q1 as being a fluke, at least for now as full-year growth estimates are still predominately in the 2-3% range. Should Q2 GDP disappoint, what can that be blamed on? Let’s blame summer. It was too nice out to work.
Technical: Range bound. Although NASDAQ and Russell 2000 have been able to extend the top end of their respective trading ranges with modest new all-time highs, a meaningful and lasting breakout has yet to materialize. Stochastic, MACD and relative strength indicators applied to NASDAQ and Russell 2000 were stretched when they peaked on Tuesday, but are now heading back into neutral territory just like those applied to DJIA and S&P 500. A meaningful pullback, perhaps back to 200-day moving averages would likely clear the road to new-highs, but until that happens more sideways drift is expected.
Monetary: 0-0.25%. “When will the Fed raise rates?” is still an unanswered question. From recent FOMC statements and individual comments it is apparent the Fed would like to raise rates. The problem is growth is rather pathetic, especially when compared to historical data, and inflation, measured by CPI, is zero on a year-over-year basis. In fact, CPI has been less than or equal to zero for five straight months. Other than the Feds desire to return to something close to normal monetary policy, the argument for withdrawing stimulus is rather weak right now. Sure all forecasts suggest great things are coming, but that has been the case since roughly 2010. Are today’s forecasts any more likely to be accurate than those of the past 5 years?
Seasonal: July is best month of the third quarter for the Dow and S&P, but performance for the other two months, August and September, makes comparisons easy. Two recent “hot” Julys in 2009 and 2010 have boosted July’s average gains since 1950 to 1.2% and 1.0% respectively. Such strength inevitability stirs talk of a “summer rally”, but beware the hype, as it has historically been the weakest rally of all seasons (page 72, Stock Trader’s Almanac 2015). Pre-election-year Julys are not so hot, ranking #6 DJIA, #8 S&P 500 and #10 for NASDAQ and Russell 2000.
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Undervalued Small Cap Stocks
Enzo Biochem ( ENZ 2.89 )
Today completed the Russell Index rebalance. Enzo, because their market capitalization was under $180 million was dropped from the index. The short position had risen to 2.155 million shares as of June 15 and probably 1-200,000 more by today. I would suspect that the 2.574 million shares traded today was the Russell 2000 Index fund and funds mirroring the Russell delivered their long position against the short position exiting the stock with a net neutral trade (lots of volume without much price movement). This pressure has been against the stock since May so it is now over. I would expect the stock to start to recover its earlier price range of $5-6 per share. When AmpiProbe is approved the top line revenue should start to show a increase within 3-4 months of approval (product rollout, packaging, etc..). Enzo should be included in the Russell next year if all of this comes to pass. Upside pressure is likely for the stock.
RMS Medical Systems, Inc ( REPR 0.42 )*
Has doubled this year already and can double again .
RMS designs, markets, manufactures portable easy to operate infusion devices, including needles and tubing. It is easy to handle by patients. The Freedom 60 is being marketed in Europe as well as gaining a footing among home-care professionals in America. The RescueVac is used in ambulances and planes for emergency suction.
Immune Therapeutics, Inc. (IMUN 0.06 )* Buy now. IMUN
is a specialty pharmaceutical company formed by patients funded by patients involved in the manufacturing, distribution and marketing of patented therapies to combat chronic, life-threatening diseases through the activation and modulation of the body’s immune system.
The Company’s technology platform is built on two different immunotherapies, Low Dose Naltrexone (LDN) and Methionine-Enkephalin (MENK). These proprietary technologies exploit the power of the body’s own immune system to find and kill diseased cells. We have bought the shares.
Low Dose Naltrexone (LDN) is a proprietary immunotherapy for the treatment of autoimmune diseases, HIV/AIDS, opportunistic infections, cancer and a range of other serious diseases. LDN works by boosting levels of endorphins (peptides produced in the brain and adrenal glands). These natural peptides are also powerful modulators of the immune system.
In order for the body to maintain good health and wellness, there is a balance of the immune system between the cellular (Th1) and the humoral (Th2) immune systems. Immune balance is regulated through T-helper cells that produce cytokines. The Th1 lymphocytes help fight pathogens that are within cells like cancer and viruses through activation of interferon-gamma and macrophages. The Th2 lymphocytes target external pathogens like parasites, allergens, toxins through the activation of B-cells
In order for the body to maintain good health and wellness, there is a steady state of balance of the immune system between the cellular and humoral immunity as well as the regulatory T-cells that keep things under control.
When there is an excess of Th1 responses or cellular immunity conditions such as Crohn’s disease, Type 1 diabetes mellitus and graft versus host diseases result. When there is over activity of the humoral immune system the body over reacts to allergens or even itself (autoimmunity). And with less cellular surveillance cancer can occur. What the body needs to remain healthy is a balance of the immune system. LDN is a compound that works on the body’s natural opioid system to restore immune balance.
Spanish bank Banco Santander (SAN: 7.53)
is disappointing right now. In the last six months, this $98 billion banking play has shed 30% of its market value, dragged lower by ongoing issues in the Eurozone financial system. But things could be about to change for long-suffering shareholders. SAN is starting to show signs of a bottom here. They will have better earnings having cut dividends.
Santander is currently forming a massive bottom pattern, a bullish reversal pattern that looks just like it sounds. The double bottom is formed by a pair of swing lows that find support at approximately the same price level. The buy signal comes on a breakout through the peak that separates though two troughs. For SAN, the stock needs to close above the $7.60 breakout level.
Stocks and ETF’s bought over the past few weeks:
The heavy black marks indicate execution. We remain well away from getting buy stopped into the HDGE. Buy the HDGE on a stop above 11.04. It only got to 11.02 the first week of May. HDGE is the BEAR Financial Services ETF. We went long XOM. Please check on the previous weekly market letters if there are questions. We are long in Diana Shipping at 6.60. The Scorpio Tankers were not ever filled as the market never got to our price. Try to buy a scale down on this move. The tanker shippers like NAT and GLNG have done much better than dry shippers like Diana Shipping. However, DSX had a nice week and you should buy now if not already long now. We would buy Bank of America if not already commited and continue to like the banking sector.
| Symbol | Name | Business Description | PE | P/S | MV mln | Price | Buy Limit | Stop Loss
Or sold |
| ENZ | Enzo Biochem | Life Sciences | NA | 1.35 | 134M | 2.89 | 2.78 | 2.44x |
| BAC | Bank of America | Commercial Bank | 10 | 2.02 | 165.3B | 17.41 | 16.45 | 15.22x |
| HDGE | Advisor Shares | Ranger Bear ETF | 10.63 | 11.04 X | 10.60X if filled | |||
| XOM | Exxon Mobil | Oil and Gas | 11 | 0.96 | 351B | 83.86 | 84.20 | 82 |
| GLNG | Golar | Liquefied N.G. Hedging | NA | 30.39 | 3.14B | 48.73 | 32.44 | 30.50 |
| SAN | Santander | Banking world-wide | 14 | 2.34 | 91.6B | 7.53 | 7.10 | 6.80 |
| DSX | Diana Shipping | Dry Cargo Shipping | N/A | 3.7 | 611 | 7.48 | 6.60 | 5.90 |
| STNG | Scorpio Tankers | Oil Transportation | 26 | 5.6 | 1.47B | 10.14 | 7.46 unable | 7.48 |
