The Arena
Have the markets finally reached the bottom of this 2022 decline or is this just the beginning? Well, honestly who knows! That said, I do think there is a case to be made that the “crash” everyone’s been calling for may not actually occur. In truth, It could, but wasn’t it just as likely to crash 2 months ago, or 2 years ago? Oh wait it did but then it came back, so again, I don’t know.
My opinion is, and please excuse any stupidity, there just doesn’t seem to be a better place to park large sums of money at this time. I guess traditionally, placing it in bonds during periods of uncertainty was the answer, maybe gold was another solution, or even just under your mattress could have been safer. However, that just makes me wonder how many kids, or Uncle Larry, found out Mom and Dad was hiding money under the bed before that trend faded.
Basically, I’m of the belief as of today, like right now, that stocks will continue a slow grind higher, because tomorrow could be something entirely different. Furthermore, if my own history is any indication then I’m absolutely wrong-ish. It seems to do the exact opposite of what I thought it should do immediately, then the exact thing I thought it was going do initially, before turning again to do exactly what I thought it would never do, then we hit an all time high!?!?!?!
In any case, I apologize for the rambling. Long story short, everything’s a mess, trust Jesus, and live like tomorrow will be better than today! Afterall, with volatility rampant in virtually every market from commodities to bonds, equities almost seem like risk off assets right now.
The Coach
International Paper (Ticker: IP) caught my eye recently as I scanned for possible dividend stocks I wanted to hold. After some review and consideration I’ve decided I’ll start to add it to my portfolio incrementally. First, its price has been beaten up since May of last year and price has returned to its pre covid level. Yes, the price level before it crashed and also before it visited the moon. Second, at the current price they offer an earnest 4.1% dividend yield that may be difficult to source elsewhere. Could this be the time for buyers to once again take notice?
The counter argument here is of course, trend. The trend on this little guy couldn’t be uglier. Over the past year even the slightest rally is quickly met with a wave of selling pressure to force the stock lower. Currently IP is priced just under the point of control and in laymen’s terms, its at a volume derived midpoint. Additionally, the last time price fell below this point was in 2018 and it didn’t return above it until late 2020, so there’s that.
Fundamentally they seem to be ok, technically, they seem to be a mess. Will IP grow wings and fly, or will the cat drag it up on the front porch? We will see.
Here is an article from Zacks.com that may share some insight into the next phase for International paper.
The Attack
If you agree International Paper is ready to turn bullish then easing out into “International” waters may just be the right move. Afterall, its difficult to know if or when a tide will come in. Conversely, this boring paper company may have been overplayed even in 1942 and its best days could be well behind it. If you think this stock screams sell then a short position or a put may ring the bell. Time will tell, and we’ll be watching.
Bullish assumption
| Buy To Open | Entry Order | Total Risk |
| 3 Shares | $45.00 Limit order | $135.00 |
| 4 Shares | $40.00 Limit order | $160.00 |
| 5 Shares | $35.00 Limit order | $175.00 |
Bearish assumption
| Sell To Open | Entry Order | Total Credit |
| 3 Shares | $45.00 Limit order | $135.00 |
| 4 Shares | $50.00 Limit order | $200.00 |
| 5 Shares | $55.00 Limit order | $275.00 |
God Bless,
Jeff
