Covering High return 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
May 01, 2017
Charles Moskowitz Discussion
Week 17 had only one closed out trade in MSFT 5/52 calls. It was a 50% down rule closeout that included a small gap of $ .07 from when I sent out the text to sell at the market when we were trading @ $ .50. The loss of $196 brought YTD performance back down to a still very respectable $4575. We have two open trades in FXE puts and SIG puts for a total of funds in use of $955.
The FXE trade is approaching the 50% down area so you need to remember that we paid $1.00 so be alert to the $ .50 price for a sale. I’ve not gone ahead and issued a sell since we have been to this general area on a weekly basis 6 times since February of 2015 with moves back to the $106 area. We are in the June options which have a little more resilience than the shorter expirations.
For the past several weeks we have been talking about the race to the bottom for all of the world’s currencies and the need for some portion of your money to be invested in Gold. Trading in the options of GLD (the gold ETF) is somewhat difficult since many of the moves and pullbacks have occurred in the “overnight, electronic sessions” that we don’t have access to when we are in a market that only operates during the 9:30am to 4:00pm hours. This is why I made the recommendation to own some of the actual commodity in the form of non-numismatic coins. I still feel that way, but I want to take a minute to discuss the futures market. Commodities tend to trade for long periods of time in the direction of the underlying trend. The gold has clearly put in an important bottom a 5 year 50% decline between September 2011 and the lows made at yearend 2015. This was followed by a 24% rally from 1050 to 1299. There is some important overhead resistance between 1300 and 1400, but if the bottom is in fact in, this market can continue higher you several years.
I think we are due for a pullback, and for that reason I think that we can play with some long-dated calls on some of the better pure-play gold and silver companies. I would look at Hecla (HL), Harmony (HMY) and Newmont (NEM). All are overbought and vulnerable to 20-30% declines but that doesn’t negate their longer term potential to double assuming we continue to observe a real bull market in the futures.
So, I will be looking to take advantage of any moves lower in these 3 names. You will find some GTC orders under the market for both the stocks and the longer dated calls.
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: April 25th;18th;11th;4th; March 28th;21st;14th;7th; Feb 29th22nd; 15th; 8th; 1st;Jan 25th; 18th; 11th; 4th; Dec 28th;21st;14th; 7th; Nov30th; 23rd; 16th; 9th; 2nd:
3rd Week expiration When the month is listed without a date
New Trades Options Account:
( 1 ) Buy 6 HL September $ 3.50 Calls @ $ 0.85
( 2 ) Buy 4 NEM May 33 Calls @ $ 1.85
NEW Trades $ 100,000 Account:
( 1 ) Buy 12 HL September $ 3.50 Calls @ $ 0.85
( 2 ) Buy 8 NEM May 33 Calls @ $ 1.85
( 3 ) Buy 1000 HL @ $ 3.95 GTC
( 4 ) Buy 150 NEM @ $ 31.80 GTC
( 5 ) Buy 1000 HMY @ $ 3.15 GTC
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