Covering High return Balanced Investing Strategies To
Make Money In Up Or Down Markets
A Publication of Princeton Research, Inc. (www.PrincetonResearch.com)
March 13, 2016
Charles Moskowitz Discussion
Week 10 was yet another small gain of $216 and brings our YTD gain to $2633. Also again, we have no carryover positions so no funds in use.
My analysis of the position of the major indexes remains the same but my level of conviction has increased. After the fourth week of gains the markets are more overbought, the stochastics and on balance volume are stretched even further. While many see the process as the return to a healthier market with good rotation I see it as a shift to the more defensive industries and the traditional "non- traditional uncorrelated" asset groups. This clearly includes all of the commodities (stuff) as described here in the last several months. The two most obvious are the gold and oil markets. Gold is easy to explain since it is a haven for despair and the concerns of political unrest. The oil is less so since it has been driven by those same concerns plus the issue that the high prices can choke off economic growth and as we’ve seen can also cause dramatic overproduction and supply excesses.
One of the main differences is that the gold has been a “store of value” for an extended period of history while the oil is an industrial commodity that is consumed and must be replaced or an alternative found to serve the same purpose. The movement to find and utilize alternatives continues with the main issues being price and storage ability the biggest hurdles.
Another issue for the commodities markets is the fact that they can be played with dramatically small margin requirements. A contract for 100 ounces of gold worth roughly $125,000 can be traded for only $4000. That’s 3% margin as opposed to the 50% requirement for stocks and 100% for options. This means that once trending, these markets become money-driven instead of fundamentally driven. As we gain participants the price is driven in the direction of the trend. Gold here looks higher over the mid to longer term and we will look for a place to initiate a new position.
As far as new trades for this week, I favor the SPY 3/24 200 puts @ $1.50 ob. This is a quick trade and I will issue a stop or sell via text……..CAM
All trades were based on your participation in the texting service to receive updates. Previous closed out trades not listed here may be seen in previous market letters.
New trades $ 10,000 account...In Texting we have a limited amount of words. In the interest of brevity: OPTIONS ONLY: 1 January , 2 February. The Quantity and Strike Price for each trade is specific. 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 questions please call 702 650 3000. Closed out positions are found in previous letters dating back four years: Feb 29th22nd; 15th; 8th; 1st;Jan 25th; 18th; 11th; 4th; Dec 28th;21st;14th; 7th; Nov30th; 23rd; 16th; 9th; 2nd; Oct 26th;19th;12th; 5th;Sept th;21st;14th etc
3rd Week expiration When the month is listed without a date
New Trades Options Account:
( 1 ) Buy 6 SPY March 24th 200 Puts @ $ 1.50
( 2 ) Buy 6 JPM April 60 Calls @ $ 1.10
NEW Trades $ 100,000 account :
( 1 ) Buy 12 SPY March 24th 200 puts @ $ 1.50
( 2 ) Buy 12 JPM April 60 calls @ $ 1.10
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