Where To Invest Newsletter
Read the full June 13, 2016
Where To Invest Market Investing Strategies Newsletter in pdf format here
June 13, 2016
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 2016 Newsletter Covering:
Where to Invest June 2016
Best Stocks To Buy June 2016
Stock Market Investing Strategies
Stock Options Trade Alerts
How To Trade Options
Proven Profits Trading Success
Results From Our Recent Trade Alerts:
82% Profits on SLV June 15 Calls in 2 Days
51% Profits on AA June 9 Calls in 7 Days
49% Loss on TGT June 70 Calls in 12 Days
159% Profits on AA June 9 Calls
157% Profits on NEM June 35 Calls in 4 Days
6% Loss on XLF June 23 Puts in 12 Days
40% Loss NEM June 34 Calls in 5 Days
107% Profits on SIG May 105 Puts in 14 Days
28% Profits on NEM May 33 Calls in 13 Days
50% Loss on FB May 121 Calls 50 in 7 Days
105% Profits on SIG May 105 Puts in 14 Days
97% Profits on SJM May 125 Puts in 7 Days
27% Profits on QQQ May 109 Puts in 7 Days
53% Loss on MSFT May 52 Calls in 2 Days
365% Profits on SIG April 120 Puts in 10 Days
207% Profits on SIG April 120 Puts in 6 Days
70% Profits on GLD April 119 Calls in 1 Day
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$10,000 Trading Portfolio
Charles Moskowitz Discussion
There are 3 Open positions:
Long 6 HL Sept Calls
Long 4 PYPL July 38 Calls
Long 4 SPY June 209 Puts
Funds in Use $ 1207
The star performer was the liquidation of the SLV (silver ETF) position. The original position was started at $ .38 and the last liquidation was $1.42. As most of you know, I rarely hold options into their expiration since they carry no premium and they move penny for penny on any pullbacks. I don’t think that the move is over, but a nearly 10% move in the futures into resistance at around $17.75-80 (with the close of $17.33) generally doesn’t occur without a pullback or consolidation. I’m also concerned about the shift in polls about “Brexit” and the effect that we’ll see in the dollar. Clearly a strong US$ is bad for not only the metals, but rather anything denominated in US$ and traded internationally.
The A.A.I.I. sentiment is really worrisome to me, not because it is out of line in one direction or the other, but rather because the bulls and bears are exactly the same at 27.8%, both below long term averages and the neutral is 44.3% and is almost 50% above the average. While that might not look like much of a problem, any event in the political or geopolitical world can turn the market decidedly as all those sitting on the sidelines pile in to either bull or bear camp. At this time of the year we have some of the lowest volume days and greatest volatility that low volume brings along with it. The summer is especially notorious for exaggerated moves while many are vacationing, either in the Hamptons or otherwise occupied.
If this market is turning down from these lofty levels it can get very ugly very fast. The same can be said for upside surprises. Clearly the upside faces headwinds from some of the age-old measures. Three quarters of down (overall) earnings, even though they beat “lowered expectations” is a problem. Europe is a problem and China and Japan are problems. Since candidate Trump hasn’t been elected and turned us isolationist, and candidate Clinton hasn’t had the opportunity to follow the Obama “inaction model” we sit in limbo on trade and economics.
That leaves us without any real direction right under the all-time highs in the S&P500.
A break of 2085 and then a close below the breakout of 2075 on May 24th would signal at test of 2050. For this reason we added some balance with the SPY 6/209 puts. On a cash flow basis for trading purposes we made just over $600 last week and we used only $492 for the SPY position…..CAM
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Market Strategies $10,000 Trading Account Trade Table
| DATE | TRADES | PRICE | COST | PROCEEDS | RESULTS | |||||||
| 06/10 | Bought 4 SPY June 209 Puts | 1.23 | 492 | |||||||||
| 06/10 | Sold 4 SLV June 15 Calls | 1.42 | 568 | 416 Gain | ||||||||
| 06/10 | Sold 5 AA June 9 Calls | 0.55 | 275 | 40 Gain | ||||||||
| 06/08 | Sold 3 SLV June 15 Calls | 1.23 | 369 | 255 Gain | ||||||||
| 06/08 | Bought 4 PYPL July 38 Calls | 1.10 | 440 | |||||||||
| 06/08 | Sold 4 TGT June 70 Calls ( 50% Loss Rule ) | 0.24 | 96 | 100 Loss | ||||||||
| 06/03 | Sold 8 SLV June 15 Calls | 0.69 | 552 | 248 Gain | ||||||||
| 06/03 | Bought 4 TGT June 70 Calls | 0.49 | 196 | |||||||||
| 06/01 | Bought 15 SLV June 15 Calls | 0.38 | 570 | |||||||||
| 05/26 | Sold 5 AA June 9 Calls | 0.71 | 375 | 120 Gain | ||||||||
| 05/19 | Bought 10 AA June 9 Calls | 0.47 | 470 | |||||||||
| 05/03 | Bought 6 HL September 3.50 Calls | 0.85 | 510 | |||||||||
3rd Week expiration when the month is listed without a date
Previous closed out trades not listed here may be seen in previous market letters in the
VIP Subscribers Members Area.
Remember, these trades are based on your participation in the
Subscriber Members Only
TEXTING SERVICE TO RECEIVE ALL UPDATES.
New Trades Options Account:
1) Buy 4 HOG July 45 Puts @ $ 1.20
2) Buy 6 SUN July 30 Calls @ $ 0.65
NEW Trades $ 100,000 account:
1) Buy 8 HOG July 45 Puts @ $ 1.20
2) Buy 12 SUN July 30 Calls @ $ 0.65
MARKET Laboratory – Weekly Changes
Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect.
| Dow
17,865.34 +58.28 +0.33% |
Nasdaq
4894.55 -47.97 |
S&P 500
2096.07 -3.06 -0.15% |
Transportation
7764.85 +34.72 +0.45% |
Russell 2000
1163.93 -0.20 -0.02 % |
Nasdaq100
4461.05 -48.74 -1.08% |
| Gold (spot)
1273.40 +33.30 +2.7% |
Silver
1636.5 +9.6 +0.6% |
Crude
49.07 +0.45 +0.9% |
Heating Oil
151.60 +2.79 +1.9% |
Unleaded Gas
1.5596 -0.0479 -3.0% |
Natural Gas
2.556 +0.158 +6.6% |
| VIX
17.03 +3.56 +20.9% |
Put/Call Ratios
S&P 100 237/100’s +105/100’s |
Put/Call Ratios
CBOE Equity 67/100’s +7/100’s
|
Bonds
168-11 +1-24 2.44% -0.08% |
10 Yr. Note
131-17 +18 1.63%-0.08%
|
Copper
211.30 -0.10 flat |
| CRB Inflation
Index 192.89. +4.22 +2.2% |
Barron’s* Confidence
66.3 -0.1 |
S&P100
926.75 -0.71 -0.08% |
5 Yr. Note
121-064+124 1.16% -0.07%
|
Dollar
94.66 +0.79 +0.8% |
DJ Utilities
680.62 +8.27 +1.23% |
| AAII
Confidence Index
Long Term Average |
Bullish
27.8% -2.4%
38.74% |
Bearish
27.8% -1.3%
30.30% |
Neutral
44.4% +3.7%
30.96% |
M1 Money
Supply +8.59% May 30th
|
M2 Money
Supply +6.69% May 30th
|
* 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 2050 2075 2116
Dow 17,580 18,020
QQQ 106.60 110.00
Transports 7595 7835
NASDAQ 4800 49.40
$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) |
||
| PYPL 150 | 37.65 | 06/08 | |||||
| NVAX 1000 | 6.68 | 06/07 | 6.62 06/07 | ( $ 60 ) | |||
| BRKR 200 | 26.30 | 06/07 | 25.61 06/09 | ( $ 138 ) | |||
| SCO 20 | 89.28 | 05/13 | |||||
| HL 1000 | 3.95 | 05/03 | |||||
| MOS 200 | 27.53 | 05/02 | |||||
| NVAX 500 | 5.38 | 04/18 | |||||
| SCO 20 | 109.88 | 04/12 | |||||
| EYES 500 | 5.04 | 04/04 | |||||
| SUN 300 | 29.50 | 02/23 | Sold 3 32.50 Calls | $ 900 credit | |||
| EYES 1000 | 6.49 | 12/28 | |||||
| TWTR 200 | 28.51 | 10/28 | |||||
| MOS 100 | 43.55 | 08/14 | |||||
| NBGGY 600 | 1.40 | 02/17 | |||||
| SAN 600 | 8.40 | 12/16 | |||||
| AA 500 | 14.21 | 10/16 | |||||
| TEXQY* 200 | 6.56 | 7/11 | |||||
| REPR* 5000 | 0.22 | 10/22/12 | |||||
Recommendations will be both listed in this letter and texted to members.
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 Account
There were six closed option positions: The 15 SLV June 15 Calls were sold on two separate trades resulting in a substantial profit of $ 1,408. The Alcoa made $ 80 while the TGT Calls lost $ 200. The result for last week in options was a large gain of $ 1290. There were two closing stock trades. The BRKR lost $ 138 while the day trade of 1,000 NVAX lost $ 60. The net gain after accounting for $ 198 in stock losses was a net profit of $ 1,092. For the entire year on closed out trades, our hypothetical profits increased to $13,312.00.The options expire on the third Friday of each Month unless otherwise posted. The Stock table has the following 16 positions: AA, EYES(2), HL, MOS(2), NBGGY, NVAX,REPR, SAN, SCO(2),SUN,TEXQY, TWTR and short 3 SUN Calls.
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
$ 100,000.00, using a total of $65,092.00 for the 15 open long stock positions plus a credit for the covered writes of $900 for the SUN written Calls which reduces the requirement to $ 64,192.00. The Open Option Positions require $ 2884. This increases the margin requirement to $ 67,076.00, leaving
$ 32,924.00 in cash. These figures are approximate and there might be errors. We have not counted the dividends received from many previous trades such as Apple, Colgate Palmolive, JP Morgan, Mosaic, North American Tankers, STNG, Santander, which pays over 5%, their Brazil affiliate BSBR and Blue Capital Reinsurance which was sold for a profit and many others.
The trading is hypothetical and we do not count commission costs.
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) |
| SPY June 209
8 lots |
Puts
1.23 |
06/10/16 | |||
| PYPL July 38
8 lots |
Calls
1.10 |
06/08/16 | |||
| TGT June 70
8 lots |
Calls
0.49 |
06/03/16 | 0.24 ( 50% Loss Rule ) | 06/08/2016 | ( $ 200 ) |
| SLV June 15
15 lots sold |
Calls
0.38 |
06/01/16 | 0.69 Sold 15
1.23 Sold 8 1.42 Sold 7 |
06/03/2016
06/08/2016 06/10/2016 |
$ 465
$ 680 $ 728 |
| AA June 9
10 lots Open |
Calls
0.47 |
05/19/16 | 0.71 Sold 10 lots
0.55 Sold 10 Balance |
05/26/2016
06/10/2016 |
$ 240
$ 80 |
| HL Sept 3.50
12 lots |
Calls
0.85 |
05/03/16 | |||
| SUN June 32.50
3 lots written |
Calls
|
3.00 | 02/23/2016 | $ 900 credit
Covered write |
Recommendations will be both listed in this letter and texted to members.
Previous closed out stock and option positions can be found in past Market Strategies Newsletter issues available in the VIP Subscribers Members Area.
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 | Science Applications SAIC ( 0.74 vs 0.73 )
Markets receive China’s previous Day data on retail sales, and industrial production Apple’s Worldwide Developers Conference begins in San Francisco. Gran Tierra Energy hosts a capital markets day. Laredo Petroleum conducts a field tour and investor meeting. Digital Turbine APPS ( -0.07 vs -0.22 ) Profire Energy PFIE ( 0.00 vs -0.01 ) |
| TUESDAY | John Wiley & Sons JW.A ( 0.67 va 0.81 ) Isle of Capri ISLE ( 0.59 vs 0.58 )
The Small Business Optimism Index for May is reported. Nato defense ministers begin a two-day meeting. MSCI decides if it will reclassify China’s A shares under emerging markets. FOMC begins its two-day meeting on rates. Secretary of State Kerry meets with Iranian and European counterparts to discuss Iranian Nuclear deal and other issues. House Foreign Affairs Committee holds a hearing on U.S. policy toward Putin’s Russia. 08:30 hrs Export Prices ex-ag May ( NA vs + 0.5% ) 08:30 hrs Import Prices ex-oil May ( NA vs +0.1% ) 08:30 hrs Retail Sales May ( +0.3% vs + 1.3% ) 08:30 hrs Retail Sales ex-auto May ( +0.4% vs +0.8% ) 10:00 hrs Business Inventories April ( +0.2% vs +0.4% ) Bob Evans BOBE ( 0.43 vs 0.56 ) Itron ITRI ( 0.34 vs 0.24 ) Liberty Tax TAX 2.24 |
| WEDNESDAY | Eros International EROS 0.04 vs 0.30
07:00 hrs MBA Mortgage Index 06/11 ( NA vs +9.3% ) 08:30 hrs PPI May ( +0.2% vs +0.2% ) CORE PPI May ( +0.1% vs +0.1% ) 08:30 hrs Empire Manufacturing June ( -4.7 vs -9.0 ) 09:15 hrs Capacity Utilization May ( 75.2% vs 75.4% ) Industrial Production May ( -0.2% vs +0.7% ) 10:30 hrs Crude Inventories 06/04 ( NA vs -1.366 MlnBbls ) 14:00 hrs FOMC Rate Decision June ( NA vs 0.37% ) Fed Chair Yellen holds a news conference which will be closely watched. 16:00 hrs Net Long Term TIC Flows April ( NA vs $ 78.1B ) Jabil Circuit JBL ( 0.15 vs 0.49 ) Ctrip CTRP ( -0.06 vs 0.04 ) Korn/Ferry KFY 0.54 vs 0.51 CLARCOR CLC ( 0.68 vs 0.76 ) NantKwest NK -0.13 Qunar QUNR ( -0.38 vs -0.96 ) |
| THURSDAY | Kroger KR ( 0.69 vs 1.25 ) Rite Aid RAD 0.04 vs 0.04 Exterran Corp EXTN (– 0.27)
08:30 hrs CPI May ( +0.3% vs +0.4% ) CORE CPI May ( +0.2% vs ( +0.2% ) 08:30 hrs Initial Claims 06/11 ( 270K vs 264K ) Continuing Claims ( 266K vs 264K ) 08:30 hrs Continuing Claims 05/28 ( 2098K vs 2095K ) 08:30 hrs Philadelphia Fed June ( 1.2 vs -1.8 ) 08:30 hrs Current Account Balance Qtr 1 ( -$125.0Bln vs -$125.3Bln ) 10:00 hrs NAHB Housing Market Index Junel ( NA vs +58 ) 10:30 hrs Natural Gas Inventories 06/11 ( NA vs 65bcf ) Oracle ORCL ( 0.81 vs 0.78 ) Marvell MRVL 0.09 vs 0.25 Finisar FNSR ( 0.25 vs 0.25 ) Smith and Wesson SWHC ( 0.54 vs 0.40 ) Determine DTRM ( -0.14 ) |
| FRIDAY | 08:30 hrs Housing Starts May ( 1155K vs 1172K )
08:30 hrs Building Permits May ( 1147K vs 1116K ) U.S. Oil Rig Count increased the second week in a row. Nat Gas rig count increased by 3 to 85. The oil rig count also grew by 3 to 329 making a total US rig count of 414. July Crude closed at $ 49.07 up 0.45 for the week. Natural Gas closed the week at $ 2.576, plus 0.158. Last year at this time crude was at $ 50.78, while N.G. traded at $ 2.880. Oil drillers had 635 rigs online at this time last year after reaching a peak of 1,609 in October 2014. |
Market Strategies Fundamentals
Stocks were mixed last week with very little change. The Dow Jones rose by 58 points or +0.33%, while the D.J. Transportation Index gained 34.72 or + 0.45%. The other indexes had small losses. The S&P 500 lost just 3 points; the Russell fell 0.20, a fraction of a point or -0.02%. However, tech stocks were hard hit and made quite a mid-week downside reversal.
The Nasdaq ended off 47.97 or 0.97% to 4895, after challenging the 5000 level, reaching 4980 midweek. Brexit seemed to be an excuse for the profit-taking. The European markets weakened as concerns flared on confusion from the plethora pf polls many of which show a majority in England will vote to leave the EU. This caused the Pound and Euro to weaken and gave strength to the dollar. The British Pound sold off sharply after an ORB poll for the Independent showed 55% of respondents favoring leaving the EU while 45% favored remaining. The poll was done online, which has caused some observers to question its credibility.
Gold rose along with the stronger dollar to $ 1273.40, up $ 5 or 0.44% on the day or up $ 33.30, or +2.7% for the week.
U.S. Treasury yields dropped sharply on Friday as European yields fell to record lows while global equities declined. The 10 yr yield fell to 1.6%, while the 30 yr Treasury yield fell to 2.44%, both three-month lows. WTI crude fell 3.05% to $ 49.07, still up slightly for the week. The 10-year German Bund yield and the 10-year U.K. Gilt yield made record lows of 0.00% and 1.21% respectively.
The markets appear range-bound with the Fed protecting on declines with low rates, while at the top there is a valuation ceiling where the economy is too weak to help earnings growth to get stocks higher.
The JOLTS report released this week was unique, in that total job openings tied the July 2015 numbers for the largest on record during the recovery. More than 100,000 openings were added, bringing the total to 5 straight months of adds. However, total hires for April fell to 5.1 million down from 5.3 million the month before.
It appears that there may be a disconnect between total openings and the lower hires as corporations are having a hard time matching skill sets to their open positions. So from that standpoint there are plenty of jobs out there, but not many qualified to fill them. Therefore, this is not a reflection of a weakening economy as some are suggesting. In fact wage gains are at the best level since the 2007 cyclical peak which will help improve spending.
The University of Michigan’s Consumer Sentiment index edged lower in June but the Fed will focus on long-term inflation expectations of households falling to 2.3%, the lowest rate since at least 1979. While various members of the FOMC have downplayed the significance of falling market-based measures of inflation expectations in the past, corroboration from survey-based measures like this one may stay the Fed’s hand until it has more confidence that inflation will return to the 2% target.
Granted, it does appear that central banks – the Federal Reserve, Bank of England, Bank of Japan, People’s Bank of China, European Central Bank – will collectively agree to stay accommodating for longer. Yet if the Fed can only achieve a single rate hike after a 10-year hiatus, what does it say about central bank dependency on a stock, bond and real estate-generated wealth effect? What does that tell one about the true extent of economic weakness?
The Treasury Budget for May showed a deficit of $ 52.5 bln versus a deficit of $ 84.1bln in May 2015. Total receipts in May were $ 224.6bln while outlays were $ 277.1bln. Receipts were $ 12.2bln more than receipts from May 2015. Total outlays, meanwhile, were $ 19.3 bln less than the same period a year ago. The 12-month deficit narrowed to $ 479.3 bln from $ 51.9 bln in April.
The ISM report corroborates that the economy is struggling.
PE ratios are at a very high level
Market Strategies Economic Data
Nonfarm business sector labor productivity decreased at a 0.6% annual rate in the first quarter, as expected, versus an originally reported decrease of 1.0%. On a year-over-year basis, unit labor costs are up 3.0%.
Unit labor costs, in turn, were revised higher, logging an increase of 4.5% (Briefing.com consensus 4.0%) versus an originally reported increase of 4.0%.
The revised productivity number was the result of output increasing 0.9% and hours worked increasing 1.5%. On a year-over-year basis, first quarter productivity increased a lowly 0.7%. The revised unit labor costs number flowed from the 0.6% decline in productivity and a 3.9% increase in hourly compensation.
Productivity gains help keep cost-push inflation pressures from rising wages in check, and over the long term, it is productivity gains that provide the increase in output that has led to consistent gains in living standards in free market economies. While the upward revision to first quarter productivity is nice to see, the fact remains that productivity is weak.
| Category | Q1 | Q4 | Q3 | Q2 | Q1 |
| Nonfarm Business Sector | |||||
| Productivity Q/Q | -0.6% | -1.7% | 2.0% | 3.1% | -0.8% |
| Unit Labor Costs Q/Q | 4.5% | 5.4% | 0.4% | 2.0% | 2.6% |
| Productivity Y/Y | 0.7% | 0.6% | 0.6% | 0.9% | 0.7% |
| Unit Labor Costs Y/Y | 3.0% | 2.6% | 2.7% | 2.6% | 1.2% |
The preliminary University of Michigan Consumer Sentiment report for June checked in at 94.3 (Briefing.com consensus 94.0), down slightly from the final reading of 94.7 for May and down from the 96.1 reading seen in June 2015.
This dip in sentiment was entirely related to a downturn in the Index of Consumer Expectations, which slipped from 84.9 to 83.2. Consumers don’t think the economy is as strong as it was last year and they don’t expect it to enjoy the same financial health in the year ahead as they thought it might a year ago.
The Current Economic Conditions Index jumped from 109.9 to 111.7.
The takeaway from those respective readings is that consumers are feeling a little better about their current situation, yet have grown more concerned about the outlook.
The report itself said wage gains aided in consumers’ assessment of their current financial situation, which is at the best level since the 2007 cyclical peak. Sentiment is important but secondary to income gains which ultimately controls spending.
| Category | JUN | MAY | APR | MAR | FEB |
| Sentiment | 94.3 | 94.7 | 89.0 | 91.0 | 91.7 |
| Outlook | 83.2 | 84.9 | 77.6 | 81.5 | 81.9 |
| Present conditions | 111.7 | 109.9 | 106.7 | 105.6 | 106.8 |
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Market Strategies Cycles
In response to a week ago Friday’s jobs report, the U.S. dollar weakened briskly. A weaker dollar tends to support commodities in general and especially precious metals. Gold continued its bullish pattern and rallied sharply again last week even though the dollar was stronger. The Gold chart is very bullish with Stochastic, relative strength and MACD indicators confirming strength.
As of the market’s close today, both the faster and slower moving MACD indicators applied to NASDAQ are turning negative from what had been positive. The Nasdaq made a sharp negative reversal on Friday. Both the faster and slower moving MACD indicators applied to a normally bullish seasonal pattern for the NASDAQ had been positive but seem to be slipping away into a neutral- bearish pattern.
The UUP, the dollar index bullish fund rose above its 50 day price moving average. The slower MACD indicator is poised to confirm and the stock markets are now more likely to be lower over the next two weeks. When NASDAQ’s MACD Sell indicator becomes negative, the Stock Trader’s Almanac will issue its NASDAQ Seasonal MACD Sell signal and begin clearing out remaining technology and small-cap positions held in the Almanac Investor ETF Portfolio. We would not wait for that signal and begin preparing short positions on any further rallies.
This is a flat top pattern. Flat tops create market drops.
A good solution to protect long positions that sophisticated investors may prefer hedging with options, but for most people ETFs are an easier way. Here is an example of a dividend portfolio hedged by a short position in SPY when the aggregate EPS estimate of S&P 500 companies for the current year is below its value 3 months ago. This solution is neither perfect, nor unique. You can choose a different hedging ratio and a different timing indicator. You have also various ETFs to short the S&P 500. The first table lists the most liquid ones.
| Ticker | ETF Type | Position* | Size/stock portfolio* |
| SPY | Long 1x | Sell Short | 100% |
| SH | Short 1x | Buy | 100% |
| SSO | Long 2x | Sell Short | 50% |
| SDS | Short 2x | Buy | 50% |
| UPRO | Long 3x | Sell Short | 33.3% |
| SPXU | Short 3x | Buy | 33.3% |
Traders are selling Bank of America (NYSE:BAC) this week on the idea of lower rates for longer. The share price is down 9% or $1.30 since May 25th. Twice in the last few weeks, the stock has made a run, cracking the $15 level only to break back to the downside. It appears poised to fill the gap from April 12th at $ 13.33.
Internet, once again, drags tech down Tech once again experienced an internet-led pull back. Over $37 billion in market value was lost over the past trading week. Just like last week, these numbers suggest that the market seems to have taken a conservative approach to investing in tech, selling off names with high P/Es, high EPS growth and low dividend yields.
The stock of wireless telecom company Vodafone (NASDAQ:VOD) was the biggest loser of them all, giving up 7.8% in value on the week that it went ex-dividend. Internet giants Netease (NASDAQ:NTES), Baidu (NASDAQ:BIDU) and Facebook (NASDAQ:FB) lost a total of $10 billion in market value.
Partially offsetting the softness, the hardware subsector was up 0.08%, or $5.6 billion in market cap terms. Hewlett Packard Enterprise (NYSE:HPE) was up 4.2%, the biggest gainer in percentage terms, while Apple (NASDAQ:AAPL), up $5 billion in market cap and now worth $98.83/share, continued to recover from its YTD low of $90.32 reached less than a month ago.
The top 20 tech losers of the week have a median forward P/E of 18.3x, slightly below the previous period’s median of 19.1x, and lower than the S&P 500’s current trailing P/E of 24.2x. This week’s top 20 group is expected to grow EPS in 2017 aggressively, by 18.9% (vs. 17.3% last week), and the companies generate a negligible dividend yield (less than half of the 20 companies on the list are dividend-payers).
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Undervalued Small Cap Stocks
Lower Priced stocks that look to be a buy:
Repro-Med Systems,Inc ( OTCQX: REPR 0.36 )*
Fourth quarter preliminary net revenues will exceed $3.2 million, representing a slight increase over the $3.1 million of the previous quarter. Sales are led by the Company’s proprietary infusion products. The Company’s fiscal year ended February 29, 2016.
Andy Sealfon, Company President and CEO commented, “The military has expressed interest in our products for utilization in emergency applications as well as use in VA hospitals. We believe that because of our performance standards and the reliability of our products, we will provide them with great value and benefits.”
The Company manufactures medical products used for infusions and suctioning. The Infusion product portfolio currently includes the FREEDOM60(R) and the newer FreedomEdge™ Syringe Infusion Pumps, RMS Precision Flow Rate Tubing(TM) and RMS HIgH-Flo(TM) Subcutaneous Safety Needle Sets. These devices are used for infusions administered in professional healthcare settings as well as at home. The Company’s RES-Q-VAC line of medical suctioning products is used by emergency medical service providers in addition to a variety of other healthcare providers.
NHIA is a trade association representing the interests of entities providing infusion and specialty pharmacy products and services to home-based infusion patients.
The Company’s website is RMSMedicalProducts.com.
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.
Gold Mining USA OTC: GMUI ( 0.03 ) Has both mining activities in Australia and the U.S. Gold Mining USA Inc is an emerging natural resources company focused on developing metallurgical and mining projects. The Company’s business model is to acquire projects with the potential to provide significant resources through exploratory drilling and generate value through their development, joint venture or divestment. GMUI has a team of experts who will manage all mining operations available on their website. In addition GMUI has an Offtake Agreement with a prestigious Swiss-based Gold buyer and Refiner to purchase its gold production at the spot price at the London Bullion Market ( LBMA ) on the day gold is collected.
GMUI Strategy: The company uses strict investment criteria for project acquisitions and focuses on available tenements in proximity to operating mines, or in areas with proven or potential in-ground resources in regions suitable for short-term development. Projects are selected based upon historical drilling or sampling results combined with robust geological mining concepts and financial models. The projects are explored, analyzed and where required, brought into compliance to JORC/NI 43-101.
Australia and Nevada provide the opportunities to exploit smaller, undeveloped or previously mined gold resources that are of no interest to the large mining companies. In addition, there are numerous small hard rock and alluvial gold mines which have viable gold resources but are unable to raise the funds to start up or continue operations.
An initial target acquisition, Mt Tymn, provides an opportunity to enter the gold mining arena in Australia on a small scale with the confidence of total outlay recovery and good profits, sufficient to expand operations by acquisition of similar nearby deposits to continue positive cash flow mining and commence an exploration program capable of even greater rewards.
Oakridge Global Energy Solutions, Inc. (OTCQB:OGES 0.40) *
Oakridge global energy is a developer, designer and manufacturer of proprietary energy storage solutions. The Company is based out of Florida’s “space coast” near Kennedy Space Center. They make premium quality, proprietary batteries, battery systems and lithium ion cells that are built for maximum performance over the traditional lead/acid batteries. OGES, proudly manufacturing in America since 1986, produces batteries for military, consumer, government, and industrial applications. Target market priorities include golf cars and other recreational vehicles, electronics, and devices requiring rechargeable batteries.
Oakridge Energy produces highly reliable, sustainable and dependable batteries for mobile power sources. Based on size and weight, OGES products deliver a higher capacity than comparable competitor batteries. OGES batteries are higher in quality, longer lasting and safer to use. These batteries have undergone and passed rigorous military testing in underwater and aerial vehicles proving to be high/low pressure tolerant. Most significant, OGES batteries are superior performing yet competitive in the market.
Martac Maritime Tactical Systems, Inc., MARTAC recently conducted very successful field trials on the Inter-coastal waterway in Palm Bay, Florida. MARTAC is a Melbourne, Florida based company that designs and produces the Man-Portable Tactical Autonomous Systems (MANTAS) that can reach extreme high speeds and operate anywhere in the world. These vehicles are designed to be used in numerous applications including naval fleet protection, mine warfare, port and harbor security patrol, antipiracy, search and rescue, and many others. shows our high quality and high performance gets us into the military space at a time when made in USA is of critical strategic importance.
Freedom Trucks shows that Oakridge can outperform Tesla and the “Tesla of trucks” – trucks are much more difficult and laborious to power than cars – because of the Oakridge high power high energy
dense batteries, we need only 180 OGES batteries to power the interstate truck that pulls an
80,000 lb trailer, whereas it would take 208,000 Tesla/Panasonic
Lithium ion batteries deliver twice the energy of nickel cadmium batteries and are the fastest growing battery segment. Their growth and demand dynamically forward trending. They are lightweight and easy to maintain. They deliver superior electro-chemical output and provide highest energy density for weight, non-metallic and are rechargeable. In 2015, the OGES Pro Series golf car was launched at the annual PGA show, the largest golf show in the world. OGES plans to have a new factory producing its patented thin film solid state lithium ion batteries by 2017. OGES is commencing delivery of a small format prismatic to help several smart card customers reach the next generation. Their growth will be serviced by the new factory. These batteries are also in a rapidly growing demand for a variety of applications.
Oakridge has recently continued expansion of its ISO certified manufacturing facility and warehouse in Palm Bay, with the support of Florida Governor Rick Scott. The new facility represents a $270 million investment, increasing the size of the manufacturing plant to 70,000 sq-ft to accommodate the growing demand for OGES batteries. Production is expected to increase from 250,000 to 25 million cells per year by 2018. The company’s growth will provide 1000 Americans with new jobs; this is part of the company’s commitment to support domestic employment. Overseas, Oakridge Global Energy Solutions Limited (Hong Kong) is a subsidiary company that operates for sales and service in Asia.
Gold Mining USA OTC: GMUI ( 0.01 ) Has both mining activities in Australia and the U.S. Gold Mining USA Inc is an emerging natural resources company focused on developing metallurgical and mining projects. The Company’s business model is to acquire projects with the potential to provide significant resources through exploratory drilling and generate value through their development, joint venture or divestment. GMUI has a team of experts who will manage all mining operations available on their website. In addition GMUI has an Offtake Agreement with a prestigious Swiss-based Gold buyer and Refiner to purchase its gold production at the spot price at the London Bullion Market ( LBMA ) on the day gold is collected.
Australia and Nevada provide the opportunities to exploit smaller, undeveloped or previously mined gold resources that are of no interest to the large mining companies. In addition, there are numerous small hard rock and alluvial gold mines which have viable gold resources but are unable to raise the funds to start up or continue operations.
Mt Tymn is located approximately 125kms southwest of Darwin, 1km east of the Stuart Highway and 18kms south of the Adelaide River. As part of this acquisition, GMUI will also own the MLs relating to Ringwood which is situated approximately 120 kms southeast of Darwin, in the Pine Creek area. The minimum gold resource at Mt Tymn is conservatively estimated at 227,000 ounces with large potential for further drilling and assessment. Gross revenue is estimated to be in excess of $ 300 million with a gross profit expected to exceed 45%.
iSIGN Media Solutions Inc ( ISDSF: $ 0.107 ) 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 under the symbol of ISDSF. The web site is www.isignmedia.com
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. Recently one of the largest insurance companies in the world categorized the smart antenna as a security device and has given an amusement park a 15-20% discount on their insurance premiums. Please go to “ priority posts” to view recent events.
Technology Overview
The patented and proprietary 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, is capable of interacting with all cell phones including I Phones and androids. 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.
Recent Developments
In late October 2015 iSIGN signed a Licensing/Original Equipment Manufacturer Agreement with Rich Multimedia Technologies (“RMT”) to integrate iSIGN’s Smart Antenna into RMT’s Tele-Digital Store Front Kiosk (essentially a digital signage kiosk). iSIGN will receive a licensing fee based on built units and will also receive a data management fee once the Kiosk is activated. The total fee per Kiosk is $3 US per day. RMT is immediately constructing 5,000 Kiosks for Mexico (airport, transit system and government offices) and has a roll-out plan for a further 3,600 Kiosks into various international airports in the US and Canada by the end of calendar 2016. Based upon a $3 US per day per kiosk fee, the revenue opportunity from this one installation is $9.417 million annually, once all 8,600 Kiosks are build and activated. The profit margins are 60-70 percent of revenues. Rich Multi Media is presently in five airports in the United States and is presently integrating approximately 600 Isign’s Smart Antenna in all there kiosks.
Fundamental Analysis Stocks To Buy with Stops
Using fundamentals the following are stocks to buy and they have done well.
The table is hypothetical. We have taken numerous profits as indicated on the table below.
Kroger ( KR: $ 36.25 ) was bought at $ 35.71. We bought the HOG at $ 45. Don’t like the pattern. If you are long , consider liquidating. We bought the Sunoco at $ 29.50. Sell July $ 30 Calls against the position
Buy Enzo Biochem with a 40 cent risk. The Russell rebalancing could be interesting for ENZ.
The HDGE should now be bought. The HDGE goes Up when the market goes Down. It is a good hedge against long positions.
We are still interested in buying the Flushing Financial as it did not reach our theoretical buy limit.
| Name | Business Description | PE | P/S | MV mln | Price | Buy or Sell Limit | Stop Loss
Or offset |
|
| BA | Boeing | Aerospace, commercial jetliners, military systems | 14 | 0.85 | 81B | 131.14 | Sell Short
132.95
|
134.40x
|
| KR | Kroger | Processor and Retailer Foods | 15 | 0.31 | 34B | 36.25 | 35.71 | Stop not entered |
| HL | Hecla Mining | Basic Materials | 44 | 3.61 | 1.7B | 4.49 | 3.95 | 4.27x |
| FFIC | Flushing Financial | Bank Holding company Savings and loans | 13 | 3,5 | 592Mln | 20.90 | 19.10 | Buy on a dip |
| SUN | Sunoco | Oil and Gas Refining and marketing | 10 | 0.2 | 2.1B | 29.48 | 29.50 | Short Calls against position |
| AA | Alcoa | Aluminum Processing and Technology | N/A | 0.4 | 9.5B | 9.49 | 7.05 | Sell
|
| SBH | Sally Beauty Holdings | Specialty Retailer and distributor beauty supplies | 16 | 1 | 4B | 30.35 | 27.30 | 30x stopped out at 30 |
| HOG | Harley Davidson | Motorcycles and related products | 11 | 1.32 | 8B | 44.47 | 45 bought June 10th
|
Sold at 51.66 on 4/4 new stop at 43 |
| CHD | Church & Dwight | Consumer Products Sodium bicarbonate Arm and Hammer | 25 | 3 | 10.6B | 99.88 | 79.80
01/26/16 |
Sold at 94.20 |
| T | AT&T | Communications | 36 | 1.54 | 211.7B | 40.33 | 34.10 | 37.78x |
| VA | Virgin Air | Regional Airlines | 7.2 | 0.9 | 1.5B | 56.02 | 30.30
Bought |
Merging with Alaska |
| ENZ | Enzo Biochem | Life Sciences | NA | 1.35 | 134M | 5.99 | 6.05
Originally bought at $ 2.78 8/24/15 |
5.78x |
| BAC | Bank of America | Commercial Bank | 10 | 2.02 | 165.3B | 14.42 | 11.86 | 13.80x stopped out 6/10 |
| HDGE | Advisor Shares | Ranger Bear ETF | 10.40 | Buy | 9.88x |
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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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