Issue 307

Posted: May 24th, 2010 | Author: WMS

Market Strategies

Covering Investing Success Strategies For
Stocks – Bonds – Interest Rates – Natural Resources – Currencies – Venture Capital – Gold

A Publication of Princeton Research, Inc. (www.PrincetonResearch.com)
Contributing Staff: Michael King and Dr. Jan Vandersande

May 24, 2010; Market Strategies Guide To Successful Trading

We give great entries Trading Options are a timely event, Since we can only report weekly, Your Own Money Management on Options Trading may be more timely to Take your Profits/Losses

New Stock Recommendations

LEI- Lucas Energy- 1.59- we are long a half position in this stock already but we will add another half position to play a bounce back to the 2 area. Place a stop at 1.20 and take profits at 2.20.

FUNDAMENTAL NEWS

The markets do what they want to do and then we all search for reasons why it happened.

All ten Dow Industrial groups were down sharply led by Industrials off a whopping 5.71% for the week. Basic Materials lost 5.70%; Oil and Gas fell 5.59% It could have been worse as they were off much more intra-day Thursday, but came back substantially off the lows. Even Utilities fell 4.9% and then Technology 4.57% followed by Health Care, off 4.15% and then Financials 4.09%.
Consumer Services fell 3.50% and Consumer Goods 3.29%. Telecommunications was off the least, losing 2.31%.

Stocks were further hindered by plummeting below their noteworthy 200-day moving averages, which occurred in the big three, the Nasdaq composite ( 2225 ), Dow Industrials ( 10,252 ) and S&P 500 ( 1105 ). The Dow and S&P both had a ‘ key reversal day but still closed below the mark, while the Composite closed just above. Both the DJ 20 Transportation Average and the Russell 2000 fell to their 200-day moving averages but bounced hard ending well above them.,

Oil in general is hampered by a sudden avalanche of supply at key delivery points not the least of which is Cushing, Oklahoma. Cash Prices have plummeted from a high of $ 87 to a ‘panic’ low even below $ 65 ( intraday Thursday ) in a matter of two weeks. Many oil stocks including EOG Resources, Inc ( EOG: $ 100.59 ) + $ 4.30 on the day Friday, but down $ 5.50 for the week, closed $ 7.31 above the low for the day. Lucas ( LEI: $ 1.59 ) fell from $ 1.98 where it closed last week to $ 1.20 low, but rebounded to $ 1.59. Both stocks are well above their 200-day moving averages.

The Euro got much of the blame for the huge price swings for both commodities and equities. The Euro began the week at $ 1.23, fell to a four-year low of $ 1.2144 before rebounding to $ 1.2672 and finally settling at $ 1.2574. The recovery in the euro was due partly to short-covering but largely due to Central Bank Intervention to help renew confidence. Equities remain in lock-step with the dollar.

Australian Mining companies will have to dig deep to pay the new 40% profits tax following the government announcing such plans. Both the Aussie dollar and Australian owned mining companies plummeted in anticipation of and after the news. Stock traders are anticipating something similar in America to help pay down the deficit.