Out of the woods
Unfortunately this doesn’t refer to the market – which is definitely not out of the woods – but to my (now former) position in a forest products company (see below). As far as the market is concerned, the weekly trend analysis is continuing to show further deterioration in all of the major indices.
This is reflected most clearly by the almost complete lack of green (up) trend periods for both the S&P 500 and Dow Jones Industrials indices, which are now awash in red. The NASDAQ and Russell 2000 have also weakened further, with more and more previously green up trend periods changing over to red down trends.
As I alluded to above, I exited my long position in Weyerhaeuser (WY) last week. I wasn’t thrilled with the action of the stock and felt it could too easily drop to the 55 to 60 level, so I sold my shares at the open last Monday for a net return of almost 6% (including one dividend payout) since I first sold puts on the stock last June 23.
Last Monday I also sold some September 45 calls against my long position in Anheuser Busch (BUD). I contemplated simply selling this position too, for what would have been breakeven, but decided I wanted to still keep a certain amount of my account “working” in dividend-paying stocks.
With the market acting as weak as it has recently, it’s always interesting to see what stocks on my watchlist have been bucking the trend. Some of last week’s strongest performers include Hewlett Packard (HPQ), Johnson Controls (JCI), Kerr McGee (KMG), Office Depot (ODP), Papa John’s (PZZA), St. Paul Travelers Companies (STA), and Toyota Motor (TM).
