Market Pulse and Income Ideas

Market Overview for 10/22: 

Yesterday morning I reported that Investors Business Daily placed the market in an uptrend. I have noticed over the years, just a casual notice nothing to back it up, but seems to me that right after a buy signal the market backs away. If the signal turns out to be a good one the back off provides an opportunity.

All down today, however five of the seven remain higher on a 5-day or weekly basis, then again only two better on a 21-day or monthly basis. Typical of base building.Overview

Sector Watch:

Of the 80 ETFs in this section only 5 managed a gain and one was unchanged. Basically Risk off sectors: Utilities, real estate, and staples. They are also green in all the time frames presented and that is important.

Screen Shot 2014-10-22 at 6.00.31 PMEnergy and gold back on the bottom of the lists. This is the problem trying to pick bottoms; catching falling knives can be injurious to your financial well being.

I like to sort reports such as above by different columns, see if anything pops out. If you sort, as a for instance If I sort on the RS ranking for today  The following are the top 3:

Screen Shot 2014-10-22 at 7.04.30 PM

Notice IHF iShares Dow Jones US Health Care Providers Index Fund ETF in the correction dropped to 13th place from 5th place a month ago and has now shot back up to 3rd, a very strong ETF.

ihf

Perhaps a gap cover would be a good buy.

Income Ideas:

As I mentioned yesterday instead of updating the portfolio tab of the Options for Income spreadsheet, I will be bringing forth ideas in these notes for anyone interested to ponder, research, and use the spreadsheet to calculate. Hopefully, in a few instances, an idea that you execute. With that being said lets begin today with three possibilities.

You know that I subscribe to Investors Business Daily. Today I will put forth an Idea from their Income Investor page; Paychex (PAYX)

If there is a way to describe Paychex, it is stability.  Earnings stability factor is 1 on a scale from 0 to 99 with 0 being the most stable. Most important for Income Investors is the company has raised the division steadily since 2000 though it remained unchanged during the great recession.

The annual dividend is $1.52 and the ex-dividend date according to Yahoo Finance (double check) is next week 10/31.

A Weekly Chart:

PAYX

Add to PAYX two utilities TE (4.8%) and SO (4.5%) and a REIT – SNH (7.2%).

Try the calculations for all the above on the Options Spreadsheet. Do any make sense for you? Some of the options for income stocks are thin and have wide spreads, caution is advised if you see that. It’s always good in these cases to buy the stock during a sell off and write the call on the next rally.

Todays Reports and Earnings:



Talking Points and How Barbara Corcoran Spots Success:

The world’s best market timers: the Federal Reserve (Marketwatch)
To Some, Stocks Always Stink (Eric Nelson)
The Top 10 U.S. States Where Chinese Are Investing in Real Estate (Real Time Economics)
Ebola, GDP & Markets (David Kotok)
Misery Widespread at Hedge Funds (WSJ)
Oil slump leaves Russia even weaker than decaying Soviet Union (Telegraph)
Enforcer at Treasury Is First Line of Attack Against ISIS (NYT)
Lies Investors Tell Themselves (Wealth of Common Sense)
Swedroe: Valuations And Asset Allocation (ETF.com)
Bipartisan Corporate Welfare  (National Review)
Pentagon Views Global Warming as an ‘Immediate’ Security Threat (Mashable)
Yahoo’s Dynamic C.E.O. and Her Boring Plan (New Yorker)
The Disruption Myth: The idea that businesses are more vulnerable to upstarts than ever is out-of-date—and that’s a big problem. (The Atlantic)
The bullish and bearish implications of the midterm elections (Cam Hui)
Investors Hiring: Mathematicians and Artists Need Apply (Institutional Investor)

How Barbara Corcoran Spots Success

I am sure most of you are familiar with Barbara Corcoran from the ABC series “Shark Tank”. What she talks about here is just as true with trading/investing.

Have a Great Day!