I can’t believe it’s not butter!
To the frustration of both bulls and bears the market made little progress this past week, up or down. This continues to be consistent with a consolidation of the current trend, and is reflected in the weekly trend analyses of all of the major indices, which are now all in sync showing a mixed, but still mostly green, status.
The churning action of the market also made for a frustrating week of trying to sell puts into market downdrafts, which so far have been brief and limited in degree. I still think it’s likely that there will be opportunities at lower levels from here – perhaps closer to 1180 in the S&P 500 and 2000 in the NASDAQ.
However, if the market moves higher first, it wouldn’t be the first time I’ve waited and ended up selling puts into a correction from higher levels. In any case, I’ve found it usually pays to be patient and wait for clearer opportunities. And regardless of the overall market, there are almost always opportunities in individual stocks.
I did end up selling some July covered calls on the Dupont (DD) shares that I was assigned last month. If I hadn’t already owned the stock I would have been looking to sell puts on it here, since it’s showing signs of possibly bottoming around these levels. If I had only waited until Friday I could have sold the calls for a lot more when the stock rallied on news that JP Morgan had added it to their Analyst Focus List, with a price target of $55.
This week I added Aflac (AFL), Avon Products (AVP), Burlington Northern Santa Fe (BNI), Clorox (CLX), PPG Industries (PPG), Steel Dynamics (STLD), and UBS AG (UBS) to my watchlist. All but AFL are substantially down from their highs and will attract my interest on further weakness – but not too much! – from here.
