I exited my last VNQ position in February when my covered calls expired and I sold my shares at the $55 strike. I waited a little while to make sure the wash rule passed and then kind of forgot about getting back in. I started watching the REIT again about a week ago when it was close to its upper trend line. I entered an alert to let me know when it got back to the bottom half of its trading channel and that alarm signaled today.
At the time the alert signaled, VNQ was in a tail spin heading lower. So I waited. I actually waited too long. With just over an hour into the trading day VNQ was back into positive territory for the day. I thought I might have missed my opportunity, but entered a limit order to last through tomorrow to see if we might get a dip this afternoon or tomorrow. (I don’t trust this market to run straight in any direction for too long.) While VNQ was trading at $61.12 my limit order hit and I sold one VNQ September $61 naked put for $2.00 and received $198.97 after commissions.
I almost didn’t make this trade today and I’ll probably wait before adding any more exposure. I’m waiting for the debt ceiling mess to take the next step towards a patch. At that point I fully expect to see the return of a strong rally, for how long depends on what the solution/patch is. From the beginning of this circus I thought it would go down to the final day so each side could claim they did as much as they could before they compromised. That day of truth is getting close and the markets are getting twitchy. Durable goods data looked bad and helped sink stocks, but today’s initial jobless claims looked better than expected and did the reverse for stocks. Whatever the solution is, stocks should rise with the risk of a shaky economy in mind. If we get another week of jobless claims under 400,000 it’ll be hard to remind the bulls that everything isn’t golden.
With such an “interesting” economy around us I’m looking at some stocks that seem to have it together better than others that I’ve been investing in. The first two that come to mind are GOOG and APPL. Both seem to be unstoppable with cult followings. I know this will end one day, just as all companies find a ceiling eventually. I’m just not convinced that time has come for these two yet. The only way I could open a position on either one is by selling or buying an option spread. I’m watching both for now, but you might see me in one or both before the end of the quarter. If I had a hedge on these, they’d have to be better for me than a dog like ITRI (down 8.9% right now).