Market Direction continues to be under pressure which is creating a few more opportunities. My market direction technical analysis after the market closed yesterday showed a market that was set to pullback. I am not expecting anything major and I was interested to see that Doug changed his market direction portfolio based on my market direction call. That should be an interesting trade to watch.
Market Direction At Midday
At midday the Dow was down less than half a percent while the S&P was down a bit more than half. US retail sales in November rose 0.3 percent which is slightly above October but less than analysts had expected. Initial jobless claims were lower by 29,000 down to 343,000. This falls right into the market timing system that uses the weekly initial jobless claims so remember, these dips in my opinion are profit-making opportunities. Aside from the fiscal cliff issue, this market would be higher in a flash.
Speaking of the fiscal cliff House Speaker John Boehner worried investors when he said that the White House is not serious about cutting spending. Politicians are working behind the scenes but time is getting shorter for a deal.
In Europe, leaders agreed to make the European Central Bank the top banking supervisor within the union, which is an important move in taming the debt crisis. However, major European indexes ended lower: The U.K.’s FTSE 100 fell 0.3 per cent and Germany’s DAX index fell 0.4 per cent which is to be expected after the run-up they have had recently. This year the German Index is up over 25%. Surprising considering all the news out of Europe.
Jim Cramer on JNJ Stock
Jim Cramer this week was quoted as saying that Johnson and Johnson should split into separate companies to improve shareholder value among other reasons. Personally I am enjoying great returns with Johnson and Johnson Stock and would prefer it be left alone.
XOM Stock
XOM Stock is down over 1.22% and setting up for some great Put Selling again. XOM Stock has been just terrific all year!
Research In Motion Stock
Despite all the selling today, Research In Motion Stock is still climbing as investors contemplate whether subscribers will renew and in particular government agencies. A couple of test pilots are underway which look promising. I still think Research In Motion Stock is for trading and not buy and hold but at the lower levels last month maybe it was a buy. Personally I can make decent returns in all my other stocks so I am staying away but credit spreads have done well this month in Research In Motion Stock.
YUM Stock Looks Weak
I updated my YUM Stock Bollinger Bands Strategy Trade for FullyInformed Members. The trade was closed and I detailed out the strategy outline as to why it was closed at this point and not later.
Walgreens Stock
I got an email this morning from a friend asking questions about Walgreens Stock and doing covered calls at the money, one month out. The Walgreens Stock January $37 was trading for .98 when he wrote me. The run-up has been excellent in Walgreens Stock and fitted the Bollinger Bands Strategy Trade wonderfully well. For long-term holders of the stock like my friend I thought the trade looked pretty decent. By selling the $37 covered call, should the rally continue, he has time to buy back and roll out or up. I think $37 is a bit high for Walgreens Stock at this point in the recovery of the stock so it won’t be surprising to see it pull back. I will do a write-up on Walgreens Stock later today but in my portfolio I closed my Bollinger Bands Strategy Trade yesterday and I am waiting for the stock to pull back before doing any more Put Selling. Therefore this is probably a good spot to sell Covered Calls for long-term holders. Don’t forget you can also use the Hide and Seek Covered Calls Strategy on a stock like Walgreens Stock. It fits that strategy to a T.
Market Direction For The Day
I am not expecting any big sell-off in market direction unless something hits the markets from the fiscal cliff such as the President of the House announcing they are at an impasse and they cannot proceed further. That would send the market direction down. Aside from that I am looking for weakness into the midday and then a stronger close but still negative. I will update my market direction call after the market closes today.