Market top? Or pause that refreshes?
The market basically went sideways last week after initially testing near-term upside resistance levels, which is consistent with corrective behavior within the current intermediate-term uptrend. If so, this would imply a move up through those levels – about 11,800-12,000 on the DJIA and 1300-1320 on the S&P 500 – at some point after this pause.
On the other hand, a break below ~1260 on the S&P 500 and 11,300-11,400 on the DJIA would suggest the likely probability of a new downtrend.
New positions
No new positions were added this week.
Options Expiration Results
I had no option positions expiring this month. This was partly due to some recent portfolio repositioning and adjustments, and to travel/vacation demands during the past month. Still, I did place numerous limit orders to sell puts during this time, but none triggered.
In the meantime, the master limited partnerships (MLPs) I recently purchased all paid quarterly distributions this month (averaging ~7% annual yield), which added up to an amount that was 33% to 50% of my usual monthly option writing income. All of these MLPs recently announced increases in their distributions as well. I’m also expecting a dividend payment on my shares of Citigroup this week, which will add nicely to this month’s passive income (even after Citigroup’s dividend cut earlier this year).
Watchlists
The following stocks showed up on this week’s “upside strength” scans of quality stocks, suggesting that they may be headed higher and may represent good buying opportunities on weakness: Automatic Data Processing (ADP), Cintas (CTAS), Clorox (CLX), Piedmont Natural Gas Co. (PNY), Philip Morris Intl. (PM), Procter & Gamble (PG), and Washington Real Estate Investment Trust (WRE).
The following stocks showed up on this week’s “oversold” scans of beaten-down quality stocks, suggesting that likely further near-term weakness may represent a buying opportunity: American Electric Power (AEP), BP Prudhoe Bay Royalty Trust (BPT), ConocoPhillips (COP), Copano Energy, L.L.C. (CPNO)*, Enerplus Resources Fund (ERF), ONEOK (OKE), Pen West Energy Trust (PWE), and Pennsylvania Real Estate Investment Trust (PEI).
* I currently own and/or have an options position on this master limited partnership (MLP).
