Author Archives: TheAcsMan

Daily Market Update – June 27, 2014 (8:30 AM)

The Week in Review will be posted by 6:00 PM and the Weekend Update will be posted by noon on Sunday:

Today’s possible outcomes include:

Assignment:  LVS

Rollover:  BBBY (puts),  DOW, MA

Expiration:   C, EBAY, HFC, PFE

Trades, if any, will be attempted to be made prior to 3:30 PM EDT

Daily Market Update – June 26, 2014 (Close)

Yesterday was really a day that had government imprints on just about everything from before the opening bell until after the closing bell.

It started with a government decision regarding oil exports that significantly hurt the refiners across the board.

Then came the Supreme Court decision that may have killed off Aereo and its technology while boosting the networks and local broadcasters.

Finally, there came an IRS ruling in favor of Iron Mountains quest to be considered a REIT. That battle and open question had been going on for at least three years and the sudden spike in its option premiums suggested that some kind of decision was forthcoming.

It would otherwise likely have been a very quiet day if not for those stories that continue this morning with allegations by the New York State Attorney General against Barclays and its “dark pools,” Most people would believe that whether a violation of the law or not, Barclays wouldn’t be the only one involved.

Like they say, there’s usually more than one cockroach, so that may explain some weakness to all of the others that wouldn’t be likely to let a good scheme go unused. They certainly wouldn’t let Barclays be the only one to prosper from doing something of questionable ethics or legality.

The latter two of yesterday’s decisions were known to be coming, it just wasn’t exactly clear when they would be announced, nor what the decisions would be. The oil exporting rules came as a complete surprise, not just in timing, but in content, as well.

Ultimately, whether you’re on the right side of the wrong side of a government decision it’s an unsettling way to go about things. You really can’t get any closer to pure gambling as you’re fully dependent on a decision that is going to move markets in one direction or another, with very little chance of leaving the stock unchanged.

Even worse, there are no leaks or well placed rumors to give any ideas of what is to come. Watching SBGI in the days before the decision was released was pretty laughable as the shares alternated between going higher and going lower on multiple occasions on an intraday basis. People were simply guessing and rushing to place their bets.

While that may have been the case for IRM and SBGI, it wasn’t really part of the equation for those with positions in the oil refiners. Doing a quick glance at four of the major refiners there was a market capitalization decline of more than $10 billion on yesterday’s unanticipated news and then its unexpected content.

Today doesn’t seem as if yesterday’s theme will have legs, as it’s a new day and one beginning to appear as if it will have no catalysts nor any new big stories, save what may further develop from the Attorney General’s office.

Unfortunately, lately bad news and the over the top reactions are much slower in rebounding than I can remember during any upward moving market.

While government intervention is certainly needed it can raise havoc with markets whether through direct intervention or indirect. It’s much easier to navigate the markets when the intervention is below the radar and more geared toward creating a liquid and credible environment for trading.

Yesterday was a bit heavy handed. In the case of Aereo, it’s not even very clear that the Justices understand technology nor considered the history of the development of television, its transmission and reception. Their decision, as reflected in Justice Breyer’s eyes, was as much about definitions and drawing parallels to existing models as through an interpretation of the law.

For those old enough to remember “rabbit ears.” the Aereo is essentially a  new iteration of rabbit ears that allows transmission through public airwaves to be delivered through an internet connection. They charge a monthly fee for that service. The broadcasters claim that they are pirating protected content and charging for that content.

Go back 60 years as television was being introduced and those broadcasts over the public airwaves were worthless without antennae. The only difference between Aereo and those antennae makers of days past is that the latter didn’t lease out their products. They sold them. Had they chosen to follow a leasing model today Aereo would be nothing more than a mobile version of an old product and sales model. You paid for the product that captured protected content back then and Aereo was just evolving the relationship to a new device, unforeseen 60 years ago.

But because the past was as it was the future will likely be deprived of a new technology and some businesses suffer and others prosper, as a result.

And investors, too.

Today, though, turned out to be one of those days that wasn’t any where near as bad as it could have been, as the market showed a nice recovery from early losses. Maybe that will have some legs and take us out for the week on a positive note.

At least today there was some opportunity to rollover some positions and get into decent position to maybe get some more accomplished tomorrow if there’s any residual strength left over to end the week.

Daily Market Update – June 26, 2014 (9:00 AM)

Yesterday was really a day that had government imprints on just about everything from before the opening bell until after the closing bell.

It started with a government decision regarding oil exports that significantly hurt the refiners across the board.

Then came the Supreme Court decision that may have killed off Aereo and its technology while boosting the networks and local broadcasters.

Finally, there came an IRS ruling in favor of Iron Mountains quest to be considered a REIT. That battle and open question had been going on for at least three years and the sudden spike in its option premiums suggested that some kind of decision was forthcoming.

It would otherwise likely have been a very quiet day if not for those stories that continue this morning with allegations by the New York State Attorney General against Barclays and its “dark pools,” Most people would believe that whether a violation of the law or not, Barclays wouldn’t be the only one involved.

The latter two of yesterday’s decisions were known to be coming, it just wasn’t exactly clear when they would be announced, nor what the decisions would be. The oil exporting rules came as a complete surprise, not just in timing, but in content, as well.

Ultimately, whether you’re on the right side of the wrong side of a government decision it’s an unsettling way to go about things. You really can’t get any closer to pure gambling as you’re fully dependent on a decision that is going to move markets in one direction or another, with very little chance of leaving the stock unchanged.

Even worse, there are no leaks or well placed rumors to give any ideas of what is to come. Watching SBGI in the days before the decision was released was pretty laughable as the shares alternated between going higher and going lower on multiple occasions on an intraday basis. People were simply guessing and rushing to place their bets.

While that may have been the case for IRM and SBGI, it wasn’t really part of the equation for those with positions in the oil refiners. Doing a quick glance at four of the major refiners there was a market capitalization decline of more than $10 billion on yesterday’s unanticipated news and then its unexpected content.

Today doesn’t seem as if yesterday’s theme will have legs, as it’s a new day and one beginning to appear as if it will have no catalysts nor any new big stories, save what may further develop from the Attorney General’s office.

While government intervention is certainly needed it can raise havoc with markets whether through direct intervention or indirect. It’s much easier to navigate the markets when the intervention is below the radar and more geared toward creating a liquid and credible environment for trading.

Yesterday was a bit heavy handed. In the case of Aereo, it’s not even very clear that the Justices understand technology nor considered the history of the development of television, its transmission and reception. Their decision, as reflected in Justice Breyer’s eyes, was as much about definitions and drawing parallels to existing models as through an interpretation of the law.

For those old enough to remember “rabbit ears.” the Aereo is essentially a  new iteration of rabbit ears that allows transmission through public airwaves to be delivered through an internet connection. They charge a monthly fee for that service. The broadcasters claim that they are pirating protected content and charging for that content.

Go back 60 years as television was being introduced and those broadcasts over the public airwaves were worthless without antennae. The only difference between Aereo and those antennae makers of days past is that the latter didn’t lease out their products. They sold them. Had they chosen to follow a leasing model today Aereo would be nothing more than a mobile version of an old product and sales model. You paid for the product that captured protected content back then and Aereo was just evolving the relationship to a new device, unforeseen 60 years ago.

But because the past was as it was the future will likely be deprived of a new technology and some businesses suffer and others prosper, as a result.

And investors, too.

Daily Market Update – June 25, 2014 (Close)

It’s often said that the market discounts the future and reflects the situation six months from now.

With another revision of the first quarter’s GDP now indicating a negative 2.9% GDP if you could go back in time by about 6 months, I would bet you that those investing would be pretty unhappy to discover that they were following a fantasy and plowing their money into that fantasy.

Except that there may now be much consequence for that kind of misrepresentation of the health of the economy. And if you didn’t believe that could possibly have been the case, just look at today’s market, which shook off early concerns about the revisions and closed with a decent gain, despite the lack of anything resembling good news.

With all of the reasons to believe that the economy had been growing, albeit slowly, the market chugged along in anticipation that it would keep going that way. Except it turns out that’s not really the way it had been going.

The real optimists would shrug this off and simply say that six months from now our economy will be even more robust than it is today and that alone makes it reasonable to invest in stocks, as it’s all about the future and not the past.

You do have to wonder whether such large revisions begin to put some seminal metrics into the same league as those provided, and regularly derided by us, by the Chinese government. Those numbers are routinely dismissed despite the fact that they will move the markets on the day of their release and then so frequently those moves are quickly reversed as investors remember that the data often has no basis in fact.

This morning as the revision came out the immediate response was negative, but that fairly quickly corrected itself. Coming off yesterday’s very surprising loss that accelerated into the close you might believe that any negative news would be magnified, but that’s not appearing to be the case.

Approaching mid-week, this is shaping up to be one of the slowest trading weeks that I can recall, especially when having so much to spend.

What I thought were relative bargains yesterday got caught up in the sell-off that characterized the afternoon and that has to be a concern for additional positions that may be considered for purchase. Given the current environment it would be nice to see something tangible to provide confidence that the market can sustain itself at these levels.

Today’s digestion of the bad news should have been one of those signs, but it just didn’t have a really positive feeling about it.

Despite assurances from the Federal Reserve that would favor stocks over bonds, the deluge of IPO offerings leaves a bad taste for many who remember that as being a clarion call for bad things to come. Certainly, for those who look at the need for confirmatory volume for any kind of move, there hasn’t been any of that sort of thing.

While there may be a basis for that belief the rise of the market has been fairly slow, regular and sustained and isn’t the kind that could be grouped together with past speculative bubbles, it’s hard to escape that feeling.

While the Employment Situation Report hasn’t been very important lately, I think that next week’s report may conceivably become a market mover if it doesn’t significantly advance the thought that there are many more people in a position to spend their money and support economic growth.

Although I think that retail is strengthening and that should reflect increasing consumer ability to make discretionary purchases, the numbers coming along haven’t done much to confirm that belief.

With what remains of this week, I hope that there is some opportunity to rollover positions or get some assignments, but my preference at this point would be to see rollovers as a means of generating income stream, rather than adding to the already ample cash reserve.

To its credit, given the horrible revision of this morning and sell-offs in Asia, the preliminary read on this morning’s market wasn’t terribly bad, so you can never really know what awaits. 

Turning away from the stock ticker may be done only at peril, but by the same token trying to apply a logical frame of mind in understanding what is going on may be equally perilous.

Daily Market Update – June 25, 2014 (9:00 AM)

It’s often said that the market discounts the future and reflects the situation six months from now.

With another revision of the first quarter’s GDP now indicating a negative 2.9% GDP if you could go back in time by about 6 months, I would bet you that those investing would be pretty unhappy to discover that they were following a fantasy and plowing their money into that fantasy.

Except that there may now be much consequence for that kind of misrepresentation of the health of the economy.

With all of the reasons to believe that the economy had been growing, albeit slowly, it was believed to be growing and the market chugged along in anticipation that it would keep going that way.

The real optimists would shrug this off and simply say that six months from now our economy will be even more robust than it is today and that alone makes it reasonable to invest in stocks.

You do have to wonder whether such large revisions begin to put some seminal metrics into the same league as those provided, and regularly derided, by the Chinese government. Those numbers are routinely dismissed despite the fact that they will move the markets on the day of their release and then so frequently those moves are quickly reversed as investors remember that the data often has no basis in fact.

This morning as the revision came out the immediate response was negative, but that fairly quickly corrected itself. Coming off yesterday’s very surprising loss that accelerated into the close you might believe that any negative news would be magnified, but that’s not appearing to be the case.

Approaching mid-week, this is shaping up to be one of the slowest trading weeks that I can recall, especially when having so much to spend.

What I thought were relative bargains yesterday got caught up in the sell-off that characterized the afternoon and that has to be a concern for additional positions that may be considered for purchase. Given the current environment it would be nice to see something tangible to provide confidence that the market can sustain itself at these levels.

Despite assurances from the Federal Reserve that would favor stocks over bonds, the deluge of IPO offerings leaves a bad taste for many who remember that as being a clarion call for bad things to come.

While there may be a basis for that belief the rise of the market has been fairly slow, regular and sustained and isn’t the kind that could be grouped together with past speculative bubbles.

While the Employment Situation Report hasn’t been very important lately, I think that next week’s report may conceivably become a market mover if it doesn’t significantly advance the thought that there are many more people in a position to spend their money and support economic growth.

With what remains of this week, I hope that there is some opportunity to rollover positions or get some assignments, but my preference at this point would be to see rollovers as a means of generating income stream, rather than adding to the already ample cash reserve.

To its credit, given the horrible revision of this morning and sell-offs in Asia, the preliminary read on this morning’s market isn’t terribly bad, so you never really do know what awaits.

Turning away from the stock ticker may be done only at peril.

Daily Market Update – June 24, 2014 (Close)

There wasn’t too much that gave any reason to think that the market would behave much differently today than it did to begin the week.

My hope was that wouldn’t extend itself into my personal actions, because I can’t really recall the last time a week started without a single trade of any kind being made.

With the appearances of another flat start to the trading day it was hard to see where the contrast to yesterday was going to come from.

Any one who has a reason to give for the strong sell-off that materialized and then picked up steam in the early afternoon is just making it up. Nothing changed, although someone will surely point to some obscure signal on the charts and try to make everybody believe that they are idiots.

Ultimately the ending market change for the day isn’t very significant, as it’s what transpired in-between that has much in the way of importance. Yesterday was one of those days where there wasn’t much going on in-between the opening and closing bells.

Today was one of those days when there was lots of intra-day movement. If you’re selling options your favorite scenario is when there’s lots of movement but you don’t really go anywhere, especially if it happens all in the same day and you also happen to be lucky enough to have timed it just right.

When talking about volatility it also is not simply a case of looking at the beginning and at the end. It is really a measure of the variation that takes place in going from Point A to Point B. Yesterday was one of those days when the distance between those two points was nearly a straight line and with very little variance from the path.

Part of the reason that it was difficult making any trades yesterday was the lack of clarity regarding any short term directional move. Directly related to that was the extremely low premiums that were being offered for contracts of any kind. Neither call buyers nor put buyers had any real commitment or strongly held belief in their thesis and they surely weren’t willing to pay and put their money where their silent mouths used to be.

Trying to seek out decent premiums by looking at expanded weekly options, such as for next week’s shortened trading week, didn’t really offer anything worth pursuing, although news like an 8% drop in Dubai overnight could have some trickle down effects, such as necessitating sale of US assets in order to meet Dubai asset margin requirements.

But that’s pretty farfetched for the moment, although it could increase the uncertainty that feeds premiums.

Not that I want to be the guy that offers a reason for today’s sell-off, but that’s at least something to consider. It’s not an obscure technical, but it’s the best I could do.

For the remainder of the week I’m still hopeful that something will occur or at least some opportunities will make themselves known, but it may end up being an unusually slow week from every perspective.

Having money to invest makes it difficult to accept that fact, although as long as the portfolio does well it’s a little easier to have some patience when it comes to deploying that cash, although I and many others do like the flow of income that’s generated from activity and won’t simply generate itself, other than from the occasional dividend payment that finally gets credited to the account.

While no trades were made yesterday I still had my eyes on both Deere and Dow Chemical in order to capture those dividends. Unfortunately, my preference would have been looking at the July 3, 2014 expiration, but neither offered expanded weekly options and the monthly options weren’t offering the kind of reward that warranted the 4 week commitment. In fact, if bullish and shares do climb in value, those low premiums could end up being costly while awaiting expiration or a chance to close the positions early.

More unfortunately the market decided to accelerate its losses after the purchase of Dow Chemical shares, but there’s still tomorrow and many days after.

So with today in the books and it being a rare one sided day to the downside it will likely begin all kinds of speculation as to whether this is finally the correction that we’ve all been waiting for.

I for one really don’t want to hear any potential retreat in prices being referred to as “healthy,” at this point.

Even with lots of cash still looking for redeployment, I’d rather see some lack of health as long as that translated into a growing bottom line. If today was healthy I really don’t want any part of it.

.

Daily Market Update – June 24, 2014 (9:15 AM)

There’s not too much that gives any reason to think that the market will behave much differently today than it did to begin the week.

Hopefully that doesn’t extend itself into my personal actions, because I can’t really recall the last time a week started without a single trade of any kind being made.

With the appearances of another flat start to the trading day it’s hard to see where the contrast to yesterday is going to come from.

Ultimately the ending market change for the day isn’t very significant, as it’s what transpired in-between that has much in the way of importance. Yesterday was one of those days where there wasn’t much going on in-between the opening and closing bells.

When talking about volatility it also is not simply a case of looking at the beginning and at the end. It is really a measure of the variation that takes place in going from Point A to Point B. Yesterday was one of those days when the distance between those two points was nearly a straight line and with very little variance from the path.

Part of the reason that it was difficult making any trades yesterday was the lack of clarity regarding any short term directional move. Directly related to that was the extremely low premiums that were being offered for contracts of any kind. Neither call buyers nor put buyers had any real commitment or strongly held belief in their thesis and they surely weren’t willing to pay and put their money where their silent mouths used to be.

Trying to seek out decent premiums by looking at expanded weekly options, such as for next week’s shortened trading week, didn’t really offer anything worth pursuing, although news like an 8% drop in Dubai overnight could have some trickle down effects, such as necessitating sale of US assets in order to meet Dubai asset margin requirements.

But that’s pretty farfetched for the moment, although it could increase the uncertainty that feeds premiums.

For the remainder of the week I’m still hopeful that something will occur or at least some opportunities will make themselves known, but it may end up being an unusually slow week from every perspective.

Having money to invest makes it difficult to accept that fact, although as long as the portfolio does well it’s a little easier to have some patience when it comes to deploying that cash, although I and many others do like the flow of income that’s generated from activity and won’t simply generate itself, other than from the occasional dividend payment that finally gets credited to the account.

While no trades were made yesterday I still do have my eyes on both Deere and Dow Chemical in order to capture those dividends. Unfortunately, my preference would have been looking at the July 3, 2014 expiration, but neither offered expanded weekly options and the monthly options weren’t offering the kind of reward that warranted the 4 week commitment. In fact, if bullish and shares do climb in value, those low premiums could end up being costly while awaiting expiration or a chance to close the positions early.

Of course, if today ends up like yesterday and no trades are made, I’ll still get some solace from looking at the bottom line, as yesterday was worthwhile compared to the S&P 500, but that sort of thing can’t really be expected to continue in a passively held portfolio unless you’re either very lucky or very well informed.

I can’t count on either so my hope is that some activity will return before I no longer have any excuse to keep putting off the vegetable garden weeding.

Daily Market Update – June 23, 2014 (Close)

Not a single trade to start the week.

When did that last happen? I’ll save you the need to check your archives. It just hasn’t happened. I even had new trades coming out on the Monday after my heart attack when I basically had to hijack a wireless heart monitor to get a signal in a London hospital.

Based on the economic calendar it looked as if this may be a quiet week as the new monthly option cycle begins, but I wasn’t expecting a start like this one. Not only is there little of importance, but maybe because this is the first week of summer, there’s just very little in general. A big part of that is that not a single Federal Reserve Governor is giving a speech this week, so there is less likelihood of having someone in a position to actually impact policy saying something that’s either a slip of the tongue or gets to be mis-interpreted by anyone with a nervous finger or algorithm.

In addition, earnings season is pretty much at its end as the next season will get set to begin in about two weeks. While any given company can do as Intel did a couple of weeks ago and unexpectedly announce improved guidance that can propel markets or severely diminished guidance to shock markets, it’s not too likely that will happen.

Unless there are some real unforeseen surprises the only thing that may upset the market will be continued unraveling in Iraq and a significant rise in oil prices.

While growing US energy production makes us less hostage to oil, the reality is that our prices are still part of a worldwide market and if supply dries up in a world that’s increasingly thirsty for crude oil it will drive up our prices, as well, and slow things down on our end. While it would take a while for that to really show up on our economy the fears would begin immediately and could easily dampen the enthusiasm that Janet Yellen rekindled last week when she made it pretty clear that stocks were the way to go for now.

Not in so many words, but if you live in a world where the choice is between stocks and bonds, she gave little reason to believe that interest rates would be heading higher in 2014. Considering that much of the stock market weakness in 2014 has been related to the 10 year rate approaching 3%, you can draw a conclusion that if rates stay low then the market has reason to keep moving up even as Federal Reserve tapering continues.

This week I’m holding more cash than in about 3 months and put not even the slightest dent into that cash, but more importantly did nothing to generate any income, either.

The combating forces this week are much like they seem to be most every week.

With the market at more new highs and with so many stocks near their personal highs just how much do you believe that the pattern keeps continuing? Where do you find value?

Any effort in second guessing the forward movement of the market has proven wrong and I’ve definitely been on that side of things. Despite being pessimistic about the ability of the market to continue that pattern that hasn’t meant hibernating and completely abdicating the need to participate.

With money, but not to burn, in hand, I don’t envision this week being any different in terms of my willingness to let some of it go and try to generate some revenue.

The past few weeks have been relatively slow ones in opening new positions, but I expected this one would be somewhat more active, as I was willing to take cash down to about 25%. As a defensive move I wouldn’t be completely adverse to seeking July contracts instead of weekly ones, but with volatility still so low and the short term prospects seeming positive, it’s hard to justify tying up assets.

In hindsight I may believe differently, but for the moment it makes more sense to live for today.

With that said, but already having a number of positions set to expire this week, there may at least be some reason to look for a little diversification, perhaps toward next week’s shortened trading contracts.

In addition to that bit of defensiveness I wouldn’t mind continuing to look for dividend opportunities although those two will frequently find their stocks at or near their yearly highs.

But given all of these considerations none of them, nether individually nor in combination, have been unique. They have been the ones faced nearly early week for about the past two years.

That makes it a little easier to approach this coming week if only there’s something to get me to be able to push the “Submit” button.

Daily Market Update – June 23, 2014 (9:00 AM)

Based on the economic calendar it looks as if this may be a quiet week as the new monthly option cycle begins. Not only is there little of importance, but maybe because this is the first week of summer, there’s just very little in general. A big part of that is that not a single Federal Reserve Governor is giving a speech this week, so there is less likelihood of having someone in a position to actually impact policy saying something that’s either a slip of the tongue or gets to be mis-interpreted by anyone with a nervous finger or algorithm.

In addition, earnings season is pretty much at its end as the next season will get set to begin in about two weeks. While any given company can do as Intel did a couple of weeks ago and unexpectedly announce improved guidance that can propel markets or severely diminished guidance to shock markets, it’s not too likely that will happen.

Unless there are some real unforeseen surprises the only thing that may upset the market will be continued unraveling in Iraq and a significant rise in oil prices.

While growing US energy production makes us less hostage to oil, the reality is that our prices are still part of a worldwide market and if supply dries up in a world that’s increasingly thirsty for crude oil it will drive up our prices, as well, and slow things down on our end. While it would take a while for that to really show up on our economy the fears would begin immediately and could easily dampen the enthusiasm that Janet Yellen rekindled last week when she made it pretty clear that stocks were the way to go for now.

Not in so many words, but if you live in a world where the choice is between stocks and bonds, she gave little reason to believe that interest rates would be heading higher in 2014. Considering that much of the stock market weakness in 2014 has been related to the 10 year rate approaching 3%, you can draw a conclusion that if rates stay low then the market has reason to keep moving up even as Federal Reserve tapering continues.

This week I’m holding more cash than in about 3 months.

The combating forces this week are much like they seem to be most every week.

With the market at more new highs and with so many stocks near their personal highs just how much do you believe that the pattern keeps continuing?

Any effort in second guessing the forward movement of the market has proven wrong and I’ve definitely been on that side of things. Despite being pessimistic about the ability of the market to continue that pattern that hasn’t meant hibernating and completely abdicating the need to participate.

With money, but not to burn, in hand, I don’t envision this week being any different in terms of my willingness to let some of it go and try to generate some revenue.

The past few weeks have been relatively slow ones in opening new positions, but I expect this one will be somewhat more active, as I’m willing to take cash down to about 25%. As a defensive move I wouldn’t be completely adverse to seeking July contracts instead of weekly ones, but with volatility still so low and the short term prospects seeming positive, it’s hard to justify tying up assets.

In hindsight I may believe differently, but for the moment it makes more sense to live for today.

With that said, but already having a number of positions set to expire this week, there may at least be some reason to look for a little diversification, perhaps toward next week’s shortened trading contracts.

In addition to that bit of defensiveness I wouldn’t mind continuing to look for dividend opportunities although those two will frequently find their stocks at or near their yearly highs.

But given all of these considerations none of them, nether individually nor in combination, have been unique. They have been the ones faced nearly early week for about the past two years.

That makes it a little easier to approach this coming week.

Daily Market Update – June 20, 2014 (8:30 AM)

The Week in Review will be posted by 6 PM and the Weekend Update will be posted by Noon on SUnday.

The possible outcomes today include:

Assignments: BX, CY, CY, FAST, GME, IP, LO, MET, RIG

Rollovers: LB, LOW

Expiration:  DRI, WY

Trades, if any, will be attempted to be executed prior to 3:30 PM EDT

Daily Market Update – June 19, 2014 (Close)

With the market getting a nice boost from Janet Yellen during her press conference, as it seemed as if interest rates would continue to stay low until at least the end of 2014, all that needs to be done now is maintain those gains to be able to end the June 2014 option cycle in good position.

While it’s never a good idea to begin spending the money that may never materialize it again is the question of where the next catalyst is going to come from. Of course, the question of when is also important, especially since it can pop up at any moment.

The precious metals, for example, showed today just how true that can be. Why it elected to do so on such a delayed basis is pretty unclear, if you’re like most others that are some how trying to associate it with yesterday’s news. More likely it’s associated with world instability that is heading toward a crescendo, rather than an interlude.

With another S&P 500 record close being established yesterday and with volatility, as expected, hitting another new low, it’s hard to envision anything adversely impacting the current path, even though any rational person should know better.

The old expression “don’t fight the Fed” has lots of truth to it and gives reason to believe that there will be some continuation of market strength.

The challenge, if there are widespread assignments this Friday is to know just how strongly to embrace a market that just doesn’t seem to know how to give anything back.

With potentially lots of money available for re-investment you have to wonder just how aggressively to throw it back into the market at these levels and place it at risk.

In many ways it’s not much different from inheriting a big chunk of money. Usually the worst thing to do is to go and put it all at one time to work. While doing so may mean having the good fortune of entering at a market low, it could also have the bad luck of entering at a market high.

There are probably very few people, despite the recent endorsement by the Federal Reserve, who would consider the market to be at it lows and would probably believe that we are closer to near term highs than we are to near term lows.

So that has to color any ideas of how that money, if it is indeed realized this Friday, gets used beginning next week.

Basically, I’m not expecting a wild spending spree, but I would like to see some more activity than over the past few weeks, although I would like to get back to one of my goals of reducing the total number of open positions, as well as the number of uncovered positions.

With the FOMC statement out of the way the only known remaining challenge for the week is tomorrow’s quadruple witching day.

Unlike 20 or more years ago when the process wasn’t as orderly as it is these days, those were really frightening days and huge moves were expected.

These days they tend to be pretty tame, but the slightest little snfu could have really magnified effects that quickly ripple through the markets.

As a precursor to tomorrow, today looks to get off to a sedate start and there’s no good reason to overlook opportunities that may occur today because eyes are on tomorrow’s expiration.

I don’t expect too much action today, but you never know and so having learned to never be surprised, it seemed as if today there was some opportunity to add shres of MasterCard and maybe, more importantly, close the SInclair Broadcasting position.

That one is all speculative, in that it is a good, solid company that has lots of growth ahead of it, but it may fall prey to some short term pressure if the Supreme Court decision, which may come as early as today opr tomorrow, finds in favor of Aereo, the start up that captures broadcast television transmissions and charges people for the use of their mobile device.

With the contract ending tomorrow and worth the chance that an adverse decision could come tomorrow, it just wasn’t worth a roll of the dice.

Sometimes you just have to take your profits and live for another day.

Note: Price updates will be delayed today

Daily Market Update – June 19, 2014 (8:30 AM)

With the market getting a nice boost from Janet Yellen during her press conference, as it seemed as if interest rates would continue to stay low until at least the end of 2014, all that needs to be done now is maintain those gains to be able to end the June 2014 option cycle in good position.

While it’s never a good idea to begin spending the money that may never materialize it again is the question of where the next catalyst is going to come from. Of course, the question of when is also important, especially since it can pop up at any moment.

With another S&P 500 record close being established yesterday and with volatility, as expected, hitting another new low, it’s hard to envision anything adversely impacting the current path, even though any rational person should know better.

The old expression “don’t fight the Fed” has lots of truth to it and gives reason to believe that there will be some continuation of market strength.

The challenge, if there are widespread assignments this Friday is to know just how strongly to embrace a market that just doesn’t seem to know how to give anything back.

With potentially lots of money available for re-investment you have to wonder just how aggressively to throw it back into the market at these levels and place it at risk.

In many ways it’s not much different from inheriting a big chunk of money. Usually the worst thing to do is to go and put it all at one time to work. While doing so may mean having the good fortune of entering at a market low, it could also have the bad luck of entering at a market high.

There are probably very few people, despite the recent endorsement by the Federal Reserve, who would consider the market to be at it lows and would probably believe that we are closer to near term highs than we are to near term lows.

So that has to color any ideas of how that money, if it is indeed realized this Friday, gets used beginning next week.

Basically, I’m not expecting a wild spending spree, but I would like to see some more activity than over the past few weeks, although I would like to get back to one of my goals of reducing the total number of open positions, as well as the number of uncovered positions.

With the FOMC statement out of the way the only known remaining challenge for the week is tomorrow’s quadruple witching day.

Unlike 20 or more years ago when the process wasn’t as orderly as it is these days, those were really frightening days and huge moves were expected.

These days they tend to be pretty tame, but the slightest little snfu could have really magnified effects that quickly ripple through the markets.

As a precursor to tomorrow, today looks to get off to a sedate start and there’s no good reason to overlook opportunities that may occur today because eyes are on tomorrow’s expiration.

I don’t expect too much action today, but you never know.