Issue 321

Posted: August 30th, 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

August 30, 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

Market Laboratory – Weekly Changes
( Prices taken from Barrons and may be incorrect )

FUNDAMENTAL NEWS

Uncle Ben to the rescue helped stem the downside momentum with the promise early Friday that the Fed is ready to step in to keep credit flowing if necessary with unconventional methods. GDP was revised much lower, but higher than forecasted ( 1.6% vs 1.3%-1.4% ) The markets opened higher, but then plummeted on huge short selling and Put buying which was rebuffed by Bernanke’s comments. The markets quickly rallied erasing all loses as the markets rallied sharply over 25 SPP points to the top of the S&P 10.56-65 resistance band. ( closed 1064.59 ) Bernanke further assuaged the markets when he stated the economy wasn’t so bad now to need any remedy. The bellwether 10 yr Note fell 1 ½ points ( $ 15 per $ 1,000 bond ) lifting its yield to 2.652%, a sharp increase from 2.531% the previous week. Bonds lost twice as much the yield rising to 3.696% from 3.595% last week.

All ten Dow Industrial groups were higher Friday but only two were able to mount enough rebound to be ahead for the week. Utilities were number one gaining 1.88%, the first time in a year they were on top. High yields have sparked interest from investors. Telecomm was next plus 1.04%, followed by Oil and Gas up 0.26%. The other seven remained lower on the week in spite of the big rally Friday. Consumer Goods was down the least off 0.36%; Financials fell 0.38% and Basic Materials 0.41%. Consumer Services lost 0.64% and Health Care 0.66%. Industrials fell 1.21% and Technology was the worst acting group down 2.01%.

Both the Dow and S&P appear to have put in a “Gann” type four legged bottom; However Technology is usually stronger when the market is ready to rebound, but now seems lackluster making forecasting even more difficult..

Issue 320

Posted: August 23rd, 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

August 16, 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

Technical

Last week we wrote that the advance/decline oscillator was slightly oversold and the put/call option ratio had turned slightly bullish (put option buying picked up the previous week but not at the extreme levels seen at bottoms). Hence, a snap back rally was likely last week especially since last week was option expiration week which frequently has a bullish bias because shorts and option writers often get squeezed (this does not happen as often during down trends as compared to up trends- so caution was advised). The market rallied after making intraday lows last Monday and the rally lasted into Wednesday, after which the selling resumed. On Friday the DOW and S&P 500 made lower intraday lows at DOW 10,147 and S&P 500 1063 below Monday’s lows while the QQQQ held above Monday’s low (44.54 compared to 44.30). This is a possible bullish divergence that could result in a rally or which would be negated when the QQQQ trades below 44.30. The advance/decline oscillator is only slightly oversold and put/call ratios have increased with increased put option buying last week but are not at the extreme levels usually seen at bottoms. This means that the market could rally a bit early this week to work off the oversold condition and then selloff again or continue lower immediately to a more oversold condition and then rally into early September (the latter is our preferred scenario). We had an intermediate cycle in mid-late August (plus or minus a week) and we expected it to be a high. It now looks like the high came in slightly early on August 9 (just within our cycle time frame). The next short term cycle is in mid-September which we expect to be a low after a rally into early September. Initial resistance is at the August 9 highs at DOW: 10,720, S&P 500: 1129 and QQQQ: 47.19 and market will remain in a short term/intermediate term downtrend as long as the indices hold below the June 21/August 9 (for DOW) highs (at DOW: 10,720, S&P 500: 1132 and QQQQ: 47.61). Closes above those levels would indicate that the August high is not in yet and that a larger rally was taking place. Initial support is at the July 20 lows (at: DOW: 10,007, S&P 500: 1056 and QQQQ: 43.86) and closes below these lows would indicate a test of the July 1 lows was in progress. The parameters to watch are thus very clear and let the support and resistance levels govern your trading and your stops.

We are in a secular bear market that appears to be far from over and we expect another big selloff this year. However, every bear market has several good rallies that can last from a few weeks to many months. We had one of those rallies (called a cyclical bull market in a secular bear market) which lasted into the April-May time frame (exactly as we predicted based on longer term cycles). It looks like the expected top came in on April 26. It is now likely that the secular bear market has resumed. Only closes above the April 26 highs would negate the resumed bear market scenario.

The support and resistance levels to watch now are: S&P 500: support is at 1056, then 1040 and then 1010 while resistance is at 1129-1132 and then 1175 for the QQQQ: support is at 43.86, then 43.23-43.59 and then 41.77 while there is resistance at 47.19, then 47.58-47.68 and the 48.79 and for the DOW: support is at 10,007, then 9,757 and then 9,614 while there is resistance at 10,702, then 10,920 and then 11,258.

Issue 319

Posted: August 16th, 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

August 16, 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

LINC- Lincoln Educational Services- 12.07- provides career-oriented post-secondary education services in the United States. It offers degree and diploma programs for high school graduates and working adults in the areas of health sciences, automotive technology, skilled trades, hospitality services, and business and information technology. Has dropped from 22 to 12 in three weeks, mainly due to pending federal regulation of the for profit schools. Is selling at around 5 times company guidance earnings for 2010. Is extremely oversold and dirt cheap. We will try to play that bounce. Place a stop at 9 and take half profits at 16.

LEI- Lucas Energy- 1.70- a small producing independent Oil & Gas company. We have played this one before with great success. It has now pulled back to support so we will buy it again. Place a stop at 1.40 and take half profits at 2.20.

• Each stock is allocated a $ 5,000 share of the portfolio unless otherwise indicated. We recommend a double position in ENZ and MTBR.