But wait, there’s more!
At least that’s what some analysts are saying about the market’s current downtrend. I’m inclined to agree, although a bounce somewhere in here wouldn’t come as any surprise. Certainly the trend analysis charts I post each weekend at rpell.com aren’t looking too optimistic right now – they’re still awash in red, as they’ve been for the last month.
But I love market declines. Not because I’m a bear, but because I see them as opportunities to sell puts on some of the stocks on my watchlist at lower strike prices. For example, recently I’ve sold May puts on ChevronTexaco (CVX), DuPont (DD), Dow Chemical (DOW), Nucor (NUE), Union Pacific (UNP), and Weyerhaeuser (WY).
Other candidates on my watchlist right now include Abbott Labs (ABT), Eli Lilly (LLY), Exxon (XOM), and United Parcel Service (UPS). And I currently own some Bristol Myers Squibb (BMY), which was put to me earlier this year, but am holding off selling calls on it as it’s one of the few stocks currently showing up positive (green) on the weekly trend analysis.
All in all, a rally over the next week or two wouldn’t surprise me, but right now I would probably tend to view it as a prelude to another decline.
