Market Strategies

Covering High Return Balanced Investing Success Strategies For

Stocks ■ Bonds ■ Interest Rates ■ Natural Resources ■ Currencies ■ Venture Capital ■ Gold

 

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

 

May 07, 2012,

Market Strategies Newsletter

Where To Invest Now

To subscribe to the Options Only Acct Trades simply TEXT the word

UPDATES to 69302

and you will automatically be included.

 

To Read This Market Strategies Newsletter In Adobe PDF Version – CLICK HERE – http://www.princetonresearch.com/5-7-2012-Market-Strategies.pdf 

 

$10,000 OPTIONS

TRADING ACCOUNT

 

New Trades for this week:

 

BUY 5 PRGO JUNE 105 CALLS @ $1.05

BUY 5 DD JUNE 50 CALLS @ $1.80

BUY 5 ROK JUNE 70 PUTS @ MKT

 

The $10,000 Options Only account had a Loss last week of $205 decreasing our gains for the year from $2,496 to $2,291.

 

Two positions remain:

The GLD May 162 Calls and FDX May 87.5 Puts.
The Open positions are highlighted in the options table below. 

Approximately $ 992 funds are in use.

Activity this week will answer the question: Are we buying dips or selling rallies?

 

As mentioned before we have been in the process of building a “Bear Flag” that has now

given way under its own weight.  The flag was getting a bit long in the tooth but in

checking my Edwards & Magee, they should not last more than 4 weeks.  Bingo, 19 days

from its break of the long-term uptrend line of the SPY, it broke again.  Could it simply hold

at the base of consolidation around 136.70, absolutely…but the “Wall of Worry” we’ve been climbing

looks to me like there is barbed wire at the top.  Sarkozy has lost in France and the new socialist president, Francois Hollande has threatened a 75% tax on the rich. This benefits the dollar short term but can’t hurt our gold position with an aversion to restraint as expressed the French election.

 

Liquidation in Oil, commodities, and the flight back into treasuries may tell the story.  We will

continue to look for good companies that are not as exposed to Europe, but my overwhelming

concern is still the U.S. political situation and the uncertainty around the tax situation changing

at the beginning of the new year….CAM

 

Remember, these trades are based on your participation in the

TEXT MESSAGE TRADE ALERTS SERVICE TO RECEIVE ALL UPDATES.

TEXT the word UPDATES to 69302 To Get In Now

 

Previous closed out trades not listed here may be seen in the March, February and January weekly newsletters. See past issues at http://www.princetonresearch.com/market-strategies-newsletter/

 

 

DATE	TRADE	PRICE	COST	PROCEEDS	RESULTS
4/30	Bought 4 GLD May 162 Calls	1.30	520
4/30	Bought 4 FDX May 87.50 puts	1.18	472
5/4	Sold 5 CSCO May 20 Calls	.41		205	205 Loss
4/19	Bought 5 CSCO May 20 Calls	.82	410

New trades $ 10,000 account…In Texting we have a limited amount of words. In the interest of brevity: OPTIONS ONLY: 5 May, 6 June . The Quantity and Strike Price for each trade is specific.

 

For any questions please call 702 650 3000

 

MArket Laboratory – Weekly Changes

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

M1…all money in hands of the public, Time Deposits Traveler’s Checks, Demand Deposits

M2 adds Savings and Money market Accounts both compared with the previous year.

 

                        New Stock Recommendations
BUY 50 PRGO @ $96.40

            Last week we were stopped on EXM and with a TEXT we bought and sold LULU 

 Each stock is allocated a theoretical $ 5,000 share of the portfolio unless otherwise indicated.

Note: Previous closed out stock and option positions can be found in the April 30 and newsletters dating back to July 20, 2009.  Stay alert on the free texting service for new trades and exits.

 

Model Portfolio Comments/Changes:         

 

                                     INDEX OPTION RECOMMENDATIONS

 

For those of you who do not buy puts to protect your portfolio, there are many ETF’s that are the inverse of the DOW. The symbols are DOG, SDS and RWM, whichgo up when the DOW, S&P 500 and Russell 2000 go down and down when they go up. The DZZ goes up double when gold goes down.

 

New Stock Option Recommendations

Option and overall Comments

We had a Loss last week of $ 391.70 in a down week. Our gain for the year was $10,094.75 and with last week’s Loss has decreased to $9,703.05. We have Four long options positions remaining, the GLD May 162 Calls, FDX May 87.5 Puts, LULU June 70 Put and CSCO Jan 20 Calls. The Stock table includes Thirteen long stock positions: FAZ, RWM, SIRI, AAPL (a double), TXGE, CWTR, IYT, AIVN, SNTS, CISG, LEI, LEOM and XBOR (a double). FAZ and RWM are inverse ETF’s.

In the past several weeks we have been “pairing” trades to reflect both balance and the opportunity to profit from the push and pull within industries.  This week we took another step forward by taking a position in LULU, and pairing it with a put.  This was done to take advantage of the potential of a breakout over the highs in the stock, while protecting the capital in use.  If you follow Weekly Strategies, you know that we have traded LULU before, but you need to take additional steps when

trading a stock that has just run 60% in Q1. As the trade progresses the market weakened.

It is VERY difficult to trade opposite the overall market.  We took a profit on Thursday @ $80.39

while keeping the put to capitalize on the potential for a pullback.  The profit of over $425 means that the option costs us nothing and the profit is assured. We will continue to use this strategy when our risk/reward can be improved…CAM

 

The options call for a $ 2,500 investment unless otherwise started, while each stock position requires $ 5,000 unless specifically stated.

We are basing money management on a hypothetical $ 100,000.00 and are using $2508 in the
options positions and $ 71,000 in the 13 long stock positions for a total of $ 73,508 with $ 26,492 in cash. These figures are approximate. We do not count commission costs and there may be errors.

 

Executions that have occurred at or near the open or close of trading sometimes vary from our actual numbers.  For example, when something opens down and it is through our price, we take the next trade whether it is an uptick or continues lower.  This sometimes results in a 50% trade that is slightly above or below the exact number…

Previous Week’s Recommendations and Rules for the $ 100,000 account

• Text UPDATES to 69302.
• All options count for about $ 2,500.00 for model portfolio calculations unless otherwise stated.
• When the option has doubled sell half the position.
• Stop Loss protection is either half or offered with each trade.
• The cost of the option is the asking price (or the price between the bid and ask, whichever is more realistic)
• The options will be followed until closed out.
• Option Symbols are stock symbol with expiration month and strike price
• Subscribers can follow us on Twitter or call  702 650 3000 for up to date information.

 

 

 

Note: Previous closed out stock and option positions can be found in the April 30 and newsletters dating back to July 20, 2009.                                                                                                    

 

                                This Weeks’ Economic Numbers and Media Data

Economic Data

The April Payroll report was a disappointment with an increase of 115,000 new jobs as opposed to a consensus of 167,000. March numbers were revised higher from 121,000 announced to 166,000 which becomes an almost equal offset. But further disappointing was the drop in the labor force of 342,000 who just stopped looking. The unemployment rate fell to 8.1% from 8.2% in March. Services added 116,000 jobs. Manufacturing gained 16,000. The average workweek was unchanged at 34.5 hours while there was no gain in wages. Government employment declined 15,000. More than 225,000 workers applied for social security benefits and nearly 90,000 were enrolled according to new data from the Social Security Administration.

 

The week began with a disappointing Chicago Purchasing Manager’s Report Monday. However, Tuesday, with the whole street expecting another dismal report, the bullish ISM Report changed all that with a 54.8% improvement from both a consensus of 53.0 and last month’s 53.4 number. The shorts were run in and the Dow made a new yearly high at 13,338.66. The all-time high is 14,198, November 2007.The week ended with the Dow at 13,038.27, clearly a key reversal week. It was an economically numbers driven affair.

 

Fundamentals (previous letters may be seen at www.princetonresearch.com

 

The key reversal with the new high put in Last Tuesday followed by three consecutive down-days has put equities on the defensive. Only one of the ten Dow Industrial groups was higher, Telecommunications, up 0.06%. utilities fell the least, just 0.56%. An avalanche of selling was led by Basic Materials, off 3.9%, followed by Technology minus 3.69% and Oil and Gas down 3.63% Industrials lost 3.09% and Financials 2.73%.

 

The dollar advanced a full 1% and Treasuries were also much higher as the yield on the benchmark 10-year Note fell to a three-month low of 1.88%. Oil prices were down aggressively to a three-month low of $ 98.48/bbl as supplies continue to surge while production in Iraq has expected to increase.

 

Technical Information

 

      Support Levels:   S&P 500           1346; 1334                 Resistance S&P 500   1383; 1399

                                        DOW            12,890; 12,680           Resistance DOW         13,100; 13,340

                                        QQQ             6417; 6337                 Resistance QQQ         6577; 6659                     

                                       Nasdaq          2928; 2874                 Resistance Nasdaq      2990; 3045                                          

                                         

                        CYCLES

 

Cycles suggest continued weakness beginning of the week.. The Arms Index is published in Barrons. If the value of this is less than 1, then it is considered to be a very bullish indicator. The Index ended the week at 2.30 Nasdaq and 2.07 NYSE, both quite bearish. Taking all of this into consideration, we are comfortable taking a defensive posture only after big rallies for the “Worst Six Months”, May through October. And although we are wary for defense, this does not mean we anticipate a significant bear market to develop. The robust start of election-year 2012, combined with bullish election year forces are likely to reduce solid full-year gains, but the path to full-year gains is likely to continue to be rough going.

 

                    Rule 17B requires disclosure of payment for investor relations*

 

Princeton Research has received about $ 2,500 per month from Lucas ( LEI ) marked with an asterisk.    Princeton has been paid for investor relations in the past and has negotiated a contract to be paid 100,000 restricted shares from Leo Motors. In addition Princeton has bought shares. Princeton is paid by Baron Energy ( BROE ) to do investor relations in the amount of 300,000 shares. Princeton has also bought separate shares about 327,600 and owns the shares for its own account. Cross Border paid us 25,000 restricted shares several months ago. We do not currently represent Cross Border. Princeton has 2,225,000 shares of AIVN.

 

Pursuant to the provisions of Rule 206 (4) of the Investment Advisers Act of 1940, readers should recognize that not all recommendations made in the future will be profitable or will equal the performance of any recommendations referred to in this Email issue. Princeton may buy or sell shares in companies it represents at any time.

 

CONTACT

 

Please Direct All Inquiries To:

 

Mike King

Princeton Research

3887 Pacific Street, Las Vegas, Nevada 89121

Phone: (702) 650-3000

Fax: (702) 697-8944

mike@princetonresearch.com

Visit: www.princetonresearch.com

 

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