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Market weak but still on path higher

The market was weak today again. Spooked investors afraid of Trump’s trade war, slowing economy, technicals lagging, retails lagging, inventory too high, supplies too low, dollar too weak, yen too strong, infrastructure this, cash flow that, debt too high, oil higher today but lower tomorrow, and who knows what else which will be totally unimportant tomorrow and forgotten next week.

It is stunning how short time frame obsession of Wall Street is.

But it is good for you no matter where you are. If you are an investor, you must love this weakness as your stocks are cheaper to buy. I have my own watch list of stocks I want to buy using 50% of my options trading proceeds and I love it seeing high quality dividend stocks getting cheaper so I can buy them!

For example Boeing (BA). For several last weeks, Boeing was a Wall Street’s darling and everybody was praising the company and its stock. Until today. Wall Street forgot everything and the stock is being sold by those same people who loved it just a few days ago.

And just today, my fair value calculation showed this stock as undervalued!
 

Boeing’s stock sinks again, heads toward biggest weekly loss in over 2 years
Boeing tops Airbus on deliveries in February
Boeing Is Still A Buy, This Is Why
Boeing expects more 777 Freighter orders as air cargo market surges

 

One of the largest military/civil aircraft manufacturer in the entire world and Wall Street is obsessed and spooked about a temporary event of tomorrow! I do not know what about you but if I decide to buy Boening, it is for the next 20 years! Will this company prosper in the next 20 years? Will it keep paying and increasing the dividend in the next 20 years? Or will it go bust? Of course, everything is possible. Maybe Boeing will go belly up tomorrow and Airbus will take over!

 

As a trader I love volatility! Anytime this market goes up and then spooked investors go and sell it all down, I am happy about it. You know why? Because I make a few bucks riding this market up and down.

 

However, despite the weakness, this market is still on its path higher. We are still trending higher and creating new higher highs and higher lows. Today, we also re-tested a 50 day MA. Will it hold? Maybe. But from a technical perspective, we are probably heading lower. Possibly to 2705 level.

 
S&P bear market
 

Honestly, I would prefer the 50 day MA to hold, but if the stock market goes lower, so be it. I will be converting my put spreads into call spreads and ride the market down.

 

 · Trading activity today

 

Last night, when a new member of our trading group told me that I was no longer in compliance with my own rules, I decided to stop trading and reduce my exposure to SPX and AMZN which lately became my significant position.
 

Here are the results of my decision:
 

A summary of opening and closing trades.
(balance + $417.00)
 

Well, I just did adjustments to existing trades, either closing them or adding call spreads as needed to improve cost basis and allowing me to roll those trades which were in bad shape
 

S&P bear market

 

 · Dividend stocks to buy

 

Out of our watch list of 36 dividend stocks the following ones are a good buy at today’s prices (03/14/2018):
 

AGNC
AWK
BA
CVX
HD
KMB
MCD
OXY
PG
XOM
 

What are your expectations of this stock market? How are you preparing yourself for a potential bear market?
 





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