Stocks have exceeded expectations so far this year. The S&P has rallied 20% from the October bottom and is up over 9% YTD. But there is a plethora of issues in the way of a further rally.

Even if we get past this debt ceiling issue without consequence, there’s inflation and the Fed. There’s also an increasing possibility of a recession later this year or early next year. The market rarely performs well ahead of a recession. A bear market rally should be about out of gas. And it’s difficult to see how stocks can soar into the next bull market until there is more clarity on these issues.

It still makes sense at this point to only buy the defensive stocks that are below the targeted price as well as sell covered calls for income when a stock gets near the top of the recent range.

In this issue, I highlight a covered call in a solid defensive stock that has recently rallied near the high point of the recent range. It’s a terrific way to get a high level of current income at a time when the market isn’t giving much else.

The market is up for the year. That’s promising after last year’s debacle. But stocks have been going sideways since the beginning of April and can’t seem to decide on the next decisive direction.


On the one hand, the market has shown inspiring resilience amid the troubling headlines. On the other hand, there is a strong chance that the next significant move is lower after stocks have rallied 20% from the October low.

Sell USB November 19th $60 calls at $2.30 or better