Commodities, $USD down = stocks up?
Last week’s market gains confirmed an ongoing uptrend and reinforced the likelihood that a retest of the May highs – at least for the DJIA and S&P 500 – appears to be underway.
In fact, the only markets with negative trend spectrums on the current weekly trend analysis page are the Commodity Research Bureau Index (CR-Y.NYB), the 10-yr Treasury Bond Yield (^TNX), the U.S. Dollar Index (DX-Y.NYB), and the Energy Sector SPDR ETF (XLE).
New positions
Unilever (UN) – Last Monday I sold some September 22.5 calls against my long position in UN:
Like an increasing number of stocks, UN has reached short-term “overbought” levels and I wanted to lock in some gains just in case it backs off from these levels (23 1/2 – 24) over the next few weeks. That said, it looks like it could easily continue higher from here as well.
Verizon (VZ) – Last Wednesday I sold some September 35 calls against my long position in VZ (purchased 7/05) as the stock traded over 35:
It too is now short-term “overbought,” which could indicate an imminent pause or pullback, or portend more strength on the upside – perhaps to the 38 – 39 level.
Watchlist
As the market moves higher there have been more stocks showing up on my “upside strength” scans. In addition to many of those mentioned in recent weeks, I’ve added China Petroleum & Chemical (SNP), Sanderson Farms (SAFM), and Safeco (SAFC) to the list.
New oversold” stocks of interest this week include Rockwell Automation (ROK) and Washington Mutual (WM).
