We have finally gotten to a level where we must put some bullish cash to work for fear of missing the rally, even though we don't believe in the rally in the first place. As I said in member chat today, I'm not fully on board with this market move until we see the September highs held at close (Dow 9,829, S&P 1,071, Nas 2,146, NYSE 7,047 and RUT 620) but that doesn't mean we can't start looking at some positions on stocks we're willing to scale into on a dip anyway.
The following stocks are from a list of stocks I feel are STILL undervalued and generally have not run up too much in the past year. These are not the popular names, mainly they are stocks that are under the radar and many are thinly traded so this is a members only list - keep in mind our own buying can move these stocks so chasing is not advised. Fortunately, with the buy/write strategy, we just need to get the right NET entry to initiate a position.
Even as great as these picks are, let's be cautious as nothing will survive a huge market sell-off intact and that's still a very real possibility. My top concern remains that Christmas will be a disaster for Retailers and that will begin a cascading failure that hits the REITs and the banks but, since that's not going to happen for another 75 days - why not party with the market for now?
Our last watch list was back on Sept 6th and our picks at the time were:
- GE, then $13.87, now $16.16. They went up so much we shorted them at $16 (and that was a bad idea).
- MHP, then $28 and we targeted Oct $25 puts for .70, now .55 but we've taken more bullish plays since.
- TASR, then $4.50, still $4.50.
