1) I believe U.S. housing has bottomed. Inventory is down. Foreclosures are down. The number of failing banks is decreasing. Mortgage interest rates are still at record lows. The government is all in. Real estate is a hard asset unlike funny money paper currency. Builder stocks are up. Home improvement stocks are up. Financials have stabilized and are rising. Relevant stocks on my watchlist are Lowe's, Bank of America, Caterpillar and Freeport-McMoran Copper and Gold. Copper is used a lot in building.
2) There remains great out of the money put selling opportunities on Intel. At the 22 strike or below the price is buoyed by a 4% (and rising) dividend. Can sentiment get much lower?
3) After the Fed, the initial frenzy of precious metals buying has occurred. I will be looking to enter positions in GDX, FCX, GLD, SLV or GDXJ on the dips. Silver Wheaton (SLW) will probably be added to my watchlist as well. FCX makes it on two lists...
4) I really want to trade GE and Bank of America. I think both are on the rise. A couple of down market days and I'll probably pull the trigger. The start today looks to be in the red so I'll be keeping my eyes open.
5) I like Waste Management (WM). As municipalities overspend they are able to provide less resources. We aren't going to stop/slow down on our trash emission anytime soon. WM has a 4% dividend that is rising. I'm waiting for some weakness, preferably down to the 33 range before writing some out of the money puts.
6) Unrest in the Middle East brings war back into play. Beaten down defense stocks could be a good bet. I watch General Dynamics and Lockheed Martin. Lockheed pays a hefty dividend.
7) Fullyinformed.com is an amazing blog and an amazing resource. This woman really understands money and trading. She never ceases to impress me. She is a great teacher as well.
8) Have a great day. Laugh a lot and don't let the negative emotions of others diminish your joy!
Love the blog. Keep it up.
ReplyDeleteThoughts are not random.
Deletea quick add for your site? maybe when you write about a stock, you imbed a link that will allow readers to quickly view where the stock sits?
ReplyDeleteCore - that would call for some technological prowess, which I lack :) Thanks for the suggestion anyway. And thanks for the nice comment Mr. Anonymous :)
ReplyDeleteBP worked out well again last week as BP ended the week right at 43, which was where my short strike was sitting. It was tempting to resell the 43 for this week for max TV but I want to make sure it doesn't drop down without catching the losses in the short call.
ReplyDeleteSo I sold the 42.5 for this Friday for .68 ($1368 on 20 contracts). This is $368 in time value and my spread is reduced by $1000...but now I have it to use so the basis is lowered. Over the course of the trade I've averaged .22/week in TV. If I keep that up my basis will get down to about $4000 by January. The spread is at $13000.
BP again ended the week at my strike. This time at 42.5. With it getting closer to the bottom of the channel I didn't want to drop down too far and have it get away from me on the upside. So I stuck with the 42.5 which brought in .40 in TV after BTC last weeks 42.5 (about $800) If it continues down I should still be close enough to capture good premium (assuming it stays in its channel). On the other side it can go up and if I have to will roll up to stay close behind it.
ReplyDeleteBasis is now reduced to $9595 with the spread at $13000.
Chester, you on vacation? Haven't seen anything from you lately....
Hey gbarbs, i've been tied up with work and family obligations...i also haven't seen any great opportunities out there...not enough down days/fear lately
ReplyDeletegood luck with your bp trade
just about done jeff cohen's book. thanks for the recommendation. definitely will be adding that to my strategies. a great way to trade great companies. im about half in cash right now waiting for opportunities as well. still working BP. with it sitting towards the bottom of its channel and also the 50 and 200 day MA's I was either going to not sell a call this week and ride up the long call or get ahead of it. i decided to sell the 43 for .10. i figured if i'm wrong and it stays down i'll collect something. and it can head up a little and not break 43, AND even if it does i'm adding to the long term spread.
ReplyDeletethe reversal signals are there so i bet on it moving up.