The Dow: Late to the party again
After another up/sideways week, the Dow Jones Industrials remains the only major average not yet trading at new 52-week highs – a condition that’s unlikely to last for long given the still strongly positive overall trend picture and the continuing market leadership of the technology sector (as represented by the NASDAQ). In the meantime, a pullback any time here would be both expected and even welcomed by many market participants (including me), but of course the market’s cooperation in this regard is not guaranteed. 
This past week while waiting for opportunities to sell puts on some of the stronger-performing stocks on my watchlists at lower prices, I initiated a new position in a familiar name on my “beaten-down” value list. I sold some December 27.5 puts on Merck (MRK) after it fell almost 5% following the company’s announcement of restructuring plans. On any further weakness I’ll start looking to sell some January puts.
In addition to the big pharmaceuticals (like MRK*, Pfizer (PFE), and Bristol-Myers Squibb (BMY)), other increasingly tempting “beaten-down” stocks include some of those in the auto sector (like Ford (F), General Motors* (GM), and Lear Corp. (LEA)) and some media stocks (like Gannett* (GCI), News Corp. (NWS), and Tribune (TRB)). I’ve also added a few new stocks to my watchlist: American Eagle Outfitters (AEOS), Conagra (CAG), General Maritime (GMR), and UST, Inc. (UST).
*I’m currently short December puts in this stock.
