Author Archives: TheAcsMan

Daily Market Update – May 5, 2014 (9:45 AM)

I like getting the week off to a start with cash in reserve, especially when the market looks as if it may be opening up on the weak side.

What I don’t like is one of those subtle areas of discrimination that don’t allow for a level playing field.

I’m not referring to this LA Clipper and Donald Sterling story, but instead to the discrimination that allows an option contract holder the opportunity until after the market closes to elect not to participate in automatic assignment.

In this case it was JP Morgan, which closed at $55.58 and was destined for assignment at $55.50. t least that’s what any normal person would have expected to be the case.

That is until it announced some adverse news regarding forward revenues and risk in Russia.

While normally shares closing a penny or more above the strike price are automatically assigned, that’s really not accurate. Contract holders have the right to tell their brokerages not to assign shares on their behalf. The automatic assignment is referred to as “exercise by exception.” They can request an exception to that exception.

Sometimes they make that decsion because they just don’t have the money to pay for the shares. Other times they just think that there’s something better they can do with their money and leverage it, to boot.

When JP Morgan shares then dropped after hours to about $55 at first I felt relieved, but then I realized it’s not a fair world.

What’s galling is that brokerages have a different time cut-off for option contract holders to make that automatic assignment decision. The cut-off is after the closing bell, so that they can react to news that you can’t.

This was the second time that’s happened to me.

Once it resulted in shares being assigned that I expected to still be with me on Monday and this time it resulted in shares going unassigned.

The first time resulted in missing out on nice after hour gains and this time taking on the losses that I expected someone else would carry as a burden.

At some point I’ll get over it, especially if I can put the cash from those that were rightfully assigned to good use.

With cash up to 35%, which is down a couple of percentage points after finding JP Morgan still in my account, I’m willing to get down to about 20% this week.

Again, with a fair number of positions set to expire this week, I may instead look at next week, which happens to be the end of the May 2014 cycle for my new expirations.

In the meantime,as the market has opened with a triple digit loss, it’s not necessarily a time to just immediately jump in, even with the cash in hand,

I plan on sitting and watching a bit, listening for news and looking for any signs of stability.

What bothers me, watching JP Morgan this morning, is that it may be the likely first trade of the week.

That would have made me happy if the shares were replacement for the assigned ones, but I suppose I could get some satisfaction by simply booking a profit on the new shares and getting an opportunity to sell options on the old and unwanted ones.

It’s beginning to sound like something out of a soap opera.

Daily Market Update – May 2, 2014 (9>00 AM)

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

Today’s possible outcomes include:

Assignments:  AIG, BBY, CMCSA, DOW, MOS, PM

Rollovers:  GM, GPS, JPM, KSS, UNH

Expirations:  BX, COH, FDO, LOW

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

Daily Market Update – May 1, 2014 (Close)

With only the Employment Situation Report left to go for the week, this was a relatively busy one on the news front compared to recent weeks and even months.

The market’s gains for the week are already enough for a really good week and there are still two days to go, including that one hurdle. Knowing that the remaining hurdle hasn’t been much of a hurdle puts focus on today as being an important one for the remainder of the week.

Today didn’t do very much to get us well past the finish line as the market just bided time all through the session, alternating between new record highs and retreats from those highs, but certainly not related to any kind of program generated activity.

It was all just aimless.

While already having some new hedge positions opened for the week I would have been very happy seeing additional ones join them, particularly as it was another slow week as far as opening new positions goes and those are the usual source of income flow for each week. Of course, then there’s always the hope to see some combination of rollovers and assignments to round out the income stream and create the seeds for the coming week.

I’ve learned over the years, especially after an FOMC Wednesday that left me looking to be in good position to end the week, not to assume or expect that will be the way it all ends.

If I had been superstitious I would have made some comment about jinxing things, but some things are just better left unsaid.

The morning’s pre-trades were pointing to a lackluster kind of open and that would certainly be acceptable if that was the tone for the rest of the week. Anything would be better than the kind of sell-off that ended last week.

However, since you never know and since tomorrow has the potential to have some volatility due to the data release, whatever opportunities appear to pop up today for rollovers may end up being done today rather than taking chances with an unpredictable report or more likely, an unpredictable reaction from the market.

While the DJIA did set a new record in the closing seconds of trading, the S&P 500 is within easy reach of doing the same, perhaps being the equivalent of another 50 Dow points away from its top.

The past two years has shown that as the market approaches a new record it doesn’t shy away. It does more than just test the level, as technicians would put it. It tends to go through and usually does so without fanfare. As opposed to those kinds of records in the past when the market would make a forceful statement and surge past those technical resistance points, these days it just shrugs as it passes and simply moves higher.

That may be why we don’t see much in the way of corrections. There isn’t much in the way of gap moves higher. Such slow and steady for the most part.

That’s not a bad way to go, whether with individual stocks or markets.

Daily Market Update – May 1, 2014 (9:15 AM)

With only the Employment Situation Report left to go for the week, this was a relatively busy one on the news front compared to recent weeks and even months.

The market’s gains for the week are already enough for a really good week and there are still two days to go, including that one hurdle. Knowing that the remaining hurdle hasn’t been much of a hurdle puts focus on today as being an important one for the remainder of the week.

While already having some new hedge positions opened for the week I would be very happy seeing additional ones join them, particularly as it was another slow week as far as opening new positions goes and those are the usual source of income flow for each week. Of course, then there’s always the hope to see some combination of rollovers and assignments to round out the income stream and create the seeds for the coming week.

I’ve learned over the years, especially after an FOMC Wednesday that left me looking to be in good position to end the week, not to assume or expect that will be the way it all ends.

If I had been superstitious I would have made some comment about jinxing things, but some things are just better left unsaid.

The morning’s pre-trades are pointing to a lackluster kind of open and that would certainly be acceptable if that was the tone for the rest of the week.

However, since you never know and since tomorrow has the potential to have some volatility due to the data release, whatever opportunities appear to pop up today for rollovers may end up being done today rather than taking chances with an unpredictable report or more likely, an unpredictable reaction from the market.

While the DJIA did set a new record in the closing seconds of trading, the S&P 500 is within easy reach of doing the same, perhaps being the equivalent of another 50 Dow points away from its top.

The past two years has shown that as the market approaches a new record it doesn’t shy away. It does more than just test the level, as technicians would put it. It tends to go through and usually does so without fanfare. As opposed to those kinds of records in the past when the market would make a forceful statement and surge past those technical resistance points, these days it just shrugs as it passes and simply moves higher.

That may be why we don’t see much in the way of corrections. There isn’t much in the way of gap moves higher. Such slow and steady for the most part.

That’s not a bad way to go, whether with individual stocks or markets.

Daily Market Update – April 30, 2014 (Close)

A bad first quarter GDP and mediocre earnings were the news  items to open the morning that would  have its crescendo a few hours later when the FOMC announcement was to be made.

As it would turn out , that crescendo was pretty muted.

While the announcement itself wasn’t too likely to have much in the way of new news it was likely to be interpreted by traders through the lens of this morning’s GDP statistic, with those wondering whether a slowing GDP will be a reason for the Federal Reserve to slow down its tapering, battling with those who believed the GDP number simply reflected awful weather and nothing systemic.

Those are usually the battles that are best watched from the sidelines, but since today is a Wednesday that’s already the default position. There has been very little rational basis behind the reactions following these FOMC releases lately, so default isn’t a bad way to go, otherwise you can’t expect anything other than even odds.

Instead, the battle itself came to a complete draw as there was barely a peep from anyone, not even much in the way of the usual knee jerk reaction that has become so common and laughable.

With new weekly options appearing tomorrow, based on the experience of the past couple of weeks I may again look for opportunity to execute rollovers on Thursday, rather than waiting until Friday. Hopefully today will be a positive kind of day although the pre-open is looking very non-committal, as that’s usually the case in advance of the afternoon announcement.

In last week’s case rolling over positions on Thursday was really serendipitous, as it avoided the impact of the market plunge on Friday, that I never would have otherwise expected. No matter how you dissect things, it never hurts to have luck on your side.

With lots of positions set to expire this week and a fair number looking as if they are in a position to be assigned, I would love to see that be the case, but not only is the challenge of the FOMC ahead, but also Friday’s Employment Situation Report. I would very much like to see cash reserves increased after a few weeks of drawing down reserves, although this week was one of conservation.

Having cash makes it unnecessary to be defensive.

While the Employment Situation Report tends to be a positive trading day, last month served as an exception to that rule, as the day snatched defeat from victory, with a mid-day sell-off after a nice opening gain. That might alert people to the possibility that a defensive position may not be altogether ridiculous, given some of the challenged faced this week and the remaining potential for international chaos.

In the meantime there continues to be an unraveling of the more speculative corner of the market and any rational person would have to be wondering whether that’s just an early warning signal, as it has been just that in the past. With more earnings yet to go there could easily be more of that kind of negative news coming to discourage people and create selling pressure.

Still, you can’t overlook the fact that the market is within striking distance of its all time highs.and as the day was winding to its close all eyes were on the DJIA which was just a few points away from that high point.

Again. The market just keeps doing that, despite all of the times that most everyone believed that it was finally ready to take a break.

Talk about mixed messages.

Daily Market Update – April 30, 2014 (9:15 AM)

A bad first quarter GDP and mediocre earnings are the news to open the morning that will have its crescendo a few hours later when the FOMC announcement is made.

While the announcement itself isn’t too likely to have much in the way of new news it will probably be interpreted by traders through the lens of this morning’s GDP statistic, with those wondering whether a slowing GDP will be a reason for the Federal Reserve to slow down its tapering, battling with those who believe the GDP number simply reflected awful weather and nothing systemic.

Those are usually the battles that are best watched from the sidelines, but since today is a Wednesday that’s already the default position. There has been very little rational basis behind the reactions following these FOMC releases lately, so default isn’t a bad way to go, otherwise you can’t expect anything other than even odds.

With new weekly options appearing tomorrow, based on the experience of the past couple of weeks I may again look for opportunity to execute rollovers on Thursday, rather than waiting until Friday. Hopefully today will be a positive kind of day although the pre-open is looking very non-committal, as that’s usually the case in advance of the afternoon announcement.

In last week’s case rolling over positions on Thursday was really serendipitous, as it avoided the impact of the market plunge on Friday, that I never would have otherwise expected. No matter how you dissect things, it never hurts to have luck on your side.

With lots of positions set to expire this week and a fair number looking as if they are in a position to be assigned, I would love to see that be the case, but not only is the challenge of the FOMC ahead, but also Friday’s Employment Situation Report. I would very much like to see cash reserves increased after a few weeks of drawing down reserves, although this week was one of conservation.

Having cash makes it unnecessary to be defensive.

While the Employment Situation Report tends to be a positive trading day, last month served as an exception to that rule, as the day snatched defeat from victory, with a mid-day sell-off after a nice opening gain. That might alert people to the possibility that a defensive position may not be altogether ridiculous, given some of the challenged faced this week and the remaining potential for international chaos.

In the meantime there continues to be an unraveling of the more speculative corner of the market and any rational person would have to be wondering whether that’s just an early warning signal, as it has been just that in the past. With more earnings yet to go there could easily be more of that kind of negative news coming to discourage people and create selling pressure.

Still, you can’t overlook the fact that the market is within striking distance of its all time highs.

Again. The market just keeps doing that, despite all of the times that most everyone believes that it is finally ready to take a break.

Talk about mixed messages.



Daily Market Update – April 29, 2014 (Close)

Investing should be easy this week.

After all it’s an Employment Situation Report Week that also happens to have a Tuesday in it.When the morning started I thought this week may be an interesting one.

While the recent string of Tuesdays looks as if it will be getting off on a positive note, the Employment Situation Report string was broken last month by a mid-day strong reversal, but the trend still remains, as for nearly the past 2 years both the week of the report and the actual day have been significantly more likely to end up on the positive side.

What more can you ask?

Well, you could have asked for a triple digit gain or at least something close.

While this morning was looking to continue some of the very impressive rebound from yesterday’s final hour I’m not fully ready to follow those odds of history repeating itself. On the other hand, when I see a company like Coach, which has been a prisoner of history and pattern, once again take a sharp dive when reporting earnings, I am prone to wanting to follow that pattern again. That pattern has been a fairly good formula to follow, although it has required some patience before jumping in, so even that trade isn’t too likely today.

Of course, those were my thought in the morning before being adequately caffeinated. Staring at the Coach 2 year chart made it difficult to resist waiting, although sometimes it’s just best to ignore those urges.

Yesterday’s rebound really was impressive, although it’s not the first such to have occurred over the past couple of weeks. Normally, those kind of rebounds carry with them a very bullish kind of message, but those messages have become obscured and haven’t really found themselves to be accurate predictors of the market’s direction.

That direction has been equally obscure of late and market health has really been called into question as the NASDAQ, and especially the greatest of the “Momentum” stocks have come under attack.

Just as those had been sure things during their climbs higher, most every sure thing sees its time come to an end. In the case of these kind of high fliers it gets a little unnerving when the word “bubble” starts being tossed around with such great frequency.

Generally, the more that climb onto the bandwagon the more sense it makes to just walk, the bubble thing is often very prescient, because it’s just not talk, but it’s also recognition of a pattern. That is the sudden reversal of fortunes in stock moves among the faddiest of stocks and the size of those movements.

As with many stocks that see reversals, such as Coach, there’s enough of a history to suggest that shares will recover in some short time frame, or at least trade in a stable fashion at a new lower level. It’s usually not correct to refer to such stocks as value traps, because their value tends to return or be re-established.

But in the case of these high fliers, there is no such individual history. Yet people believe that when they experience large drops it’s a chance to get in at a reasonable price.

History shows that many of these don’t recover and when taken in their totality, they may be a harbinger for things to come in the broader market.

As I mentioned yesterday, this will be an interesting week.

Yesterday was an appropriate start for that kind of a week and there’s more to come as earnings start coming our way.

Stay tuned and stay patient.



Daily Market Update – April 29, 2014 (9:30 AM)

Investing should be easy this week.

After all it’s an Employment Situation Report Week that also happens to have a Tuesday in it.When the morning started I thought this week may be an interesting one.

While the recent string of Tuesdays looks as if it will be getting off on a positive note, the Employment Situation Report string was broken last month by a mid-day strong reversal, but the trend still remains, as for nearly the past 2 years both the week of the report and the actual day have been significantly more likely to end up on the positive side.

What more can you ask?

While this morning is looking to continue some of the very impressive rebound from yesterday’s final hour I’m not fully ready to follow those odds of history repeating itself. On the other hand, when I see a company like Coach, which has been a prisoner of history and pattern, once again take a sharp dive when reporting earnings, I am prone to wanting to follow that pattern again. That pattern has been a fairly good formula to follow, although it has required some patience before jumping in, so even that trade isn‘t too likely today.

Yesterday’s rebound really was impressive, although it’s not the first such to have occurred over the past couple of weeks. Normally, those kind of rebounds carry with them a very bullish kind of message, but those messages have become obscured and haven’t really found themselves to be accurate predictors of the market’s direction.

That direction has been equally obscure of late and market health has really been called into question as the NASDAQ, and especially the greatest of the “Momentum” stocks have come under attack.

Just as those had been sure things during their climbs higher, most every sure thing sees its time come to an end. In the case of these kind of high fliers it gets a little unnerving when the word “bubble” starts being tossed around with such great frequency.

Generally, the more that climb onto the bandwagon the more sense it makes to just walk, the bubble thing is often very prescient, because it’s just not talk, but it’s also recognition of a pattern. That is the sudden reversal of fortunes in stock moves among the faddiest of stocks and the size of those movements.

As with many stocks that see reversals, such as Coach, there’s enough of a history to suggest that shares will recover in some short time frame, or at least trade in a stable fashion at a new lower level. It’s usually not correct to refer to such stocks as value traps, because their value tends to return or be re-established.

But in the case of these high fliers, there is no such individual history. Yet people believe that when they experience large drops it’s a chance to get in at a reasonable price.

History shows that many of these don’t recover and when taken in their totality, they may be a harbinger for things to come in the broader market.

As I mentioned yesterday, this will be an interesting week.

Yesterday was an appropriate start for that kind of a week and there’s more to come as earnings start coming our way.

Stay tuned and patient.

Daily Market Update – April 28, 2014 (Close)

When the morning started I thought this week may be an interesting one.

Well, if today is an indication, I’ve had enough interesting stiff to last me for the week.

The movements today wewn’t the kind that we see very often. Where the market got back its confidence in the final hour is really a mystery.

For starters, nothing happened over the weekend on the international scene, as was the fear on Friday and may have accounted for the weakness to end last week. Even those used to having seen these kind of brinksmanship games may have thought that something, perhaps unintentional, was going to result in an adverse event and subsequent fall-out in the markets.

So without that overhang it’s getting off to a push higher with word of increased merger and buy out activity and a sense of relief. The relief, could still, however, be short-lived..

Then later in the week are the FOMC announcement and the Employment Situation Report. The last time around both of those saw surprising strong turnaround sell-offs following initially positive responses. In both cases neither the initial responses nor the reversals were very rational because neither really introduced any new news.

Also this morning, just before the opening bell came word that some further sanctions will be levied against Russia, but like the previous ones, they are directed toward individuals, so it remains to be seen how the market looks at them. Basically, the more biting the sanctions the more bearish the market reaction.

This is another week that I would be content to let prices move higher even if that was without much in the way of new purchases for the week. I would like to see the higher prices open up opportunities to just sell more calls on existing positions.

As with some previous weeks, with enough positions set to expire this Friday, where possible I’d like to begin populating next week or even the monthly expiration with expiring contracts, rather than adding to the already lengthy list this week.

With a handful of assignments my cash reserves are higher but they are so after coming off from a recent low point. I would very much like to see that level get even higher so I’m not likely to chase after new positions and may return to the low level of buying activity from two and three weeks ago.

As long as there are opportunities to generate income from existing positions that’s acceptable, but only for so long.

With the market pointing toward a higher open this morning I will sit and see if it has any legs before getting overly excited. With news of some additional sanctions against Russia will certainly come some response which may have its own impact, so I plan to tread softly this morning.

After a few weeks of really nothing going on it’s actually nice to see some many different factors entering into the equation, although I may end up regretting that feeling, as sometimes boredom is better than unnecessary excitement.

While anything can bring opportunity too much of the unknown isn’t something that really benefits anyone.

Hopefully some clarity and some rational thought returns to the market and lets it simply concentrate on earnings and fundamentals, although hoping for that may itself be fairly irrational, given past history.

Today’s market did nothing to add to the clarity but at least you have to have a little more confidence heading into tomorrow after the really nice reversal of the reversal.

Then again, there’s always tomorrow to throw a wrench into well thought out plans, but it is a Tueday and we all know what that means.

Daily Market Update – April 28, 2014 (9:45 AM)

This week may be an interesting one.

For starters, nothing happened over the weekend on the international scene, as was the fear on Friday and may have accounted for the weakness to end last week. Even those used to having seen these kind of brinksmanship games may have thought that something, perhaps unintentional, was going to result in an adverse event and subsequent fall-out in the markets.

So without that overhang it’s getting off to a push higher with word of increased merger and buy out activity and a sense of relief. The relief, could still, however, be short-lived..

Then later in the week are the FOMC announcement and the Employment Situation Report. The last time around both of those saw surprising strong turnaround sell-offs following initially positive responses. In both cases neither the initial responses nor the reversals were very rational because neither really introduced any new news.

Also this morning, just before the opening bell came word that some further sanctions will be levied against Russia, but like the previous ones, they are directed toward individuals, so it remains to be seen how the market looks at them. Basically, the more biting the sanctions the more bearish the market reaction.

This is another week that I would be content to let prices move higher even if that was without much in the way of new purchases for the week. I would like to see the higher prices open up opportunities to just sell more calls on existing positions.

As with some previous weeks, with enough positions set to expire this Friday, where possible I’d like to begin populating next week or even the monthly expiration with expiring contracts, rather than adding to the already lengthy list this week.

With a handful of assignments my cash reserves are higher but they are so after coming off from a recent low point. I would very much like to see that level get even higher so I’m not likely to chase after new positions and may return to the low level of buying activity from two and three weeks ago.

As long as there are opportunities to generate income from existing positions that’s acceptable, but only for so long.

With the market pointing toward a higher open this morning I will sit and see if it has any legs before getting overly excited. With news of some additional sanctions against Russia will certainly come some response which may have its own impact, so I plan to tread softly this morning.

After a few weeks of really nothing going on it’s actually nice to see some many different factors entering into the equation, although I may end up regretting that feeling, as sometimes boredom is better than unnecessary excitement.

While anything can bring opportunity too much of the unknown isn’t something that really benefits anyone.

Hopefully some clarity and some rational thought returns to the market and lets it simply concentrate on earnings and fundamentals, although hoping for that may itself be fairly irrational, given past history.