Author Archives: TheAcsMan

Daily Market Update – August 16, 2016 (7:30 AM)

The futures are pointing to a flat open this morning as the market finished yesterday off from its highs, but still managing to post all time closing highs once again in all three major indexes.

That grind higher has been continual ever since we got over the “Brexit” vote and learned to move the market higher even in the absence of news.

With retailer reports still coming in this week, the morning started with DJIA component Home Depot reaffirming guidance.

Based on the way the market received last week’s retail news in which retailers surged higher on basically flat earnings and downgraded guidance, you would think that there would be a push to go much higher this morning, at least in that one stock.

But so far that isn’t the case.

With tomorrow being the release of the FOMC minutes it’s hard to know where the real push to go higher will come from.

Other than the past 2 months Employment Statistics Reports, there really hasn’t been much news to validate the idea that the economy is expanding at a rate that might warrant the FOMC getting ready to roll out another rate hike.

For those that had good reason to expect multiple such rate increases in 2016, we are now facing the final 4 months of the year without having had a single one.

At the current record levels it’s hard to see anything other than disappointment as any kind of news comes in, given how the market has mostly been paradoxical in its responses over the past few years.

The only logical response at this point would be to drop that contrarian response to economic news and see the good as good and the bad, as bad.

I don’t know if that will start to happen this week.

After yesterday’s gain, but no real opportunity to do anything constructive, I don’t really know what the rest of the week will bring, other than having to watch two expiring positions.

I suppose I could do that from the beach.

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Daily Market Update – August 15, 2016 (Close)

Last week saw us hitting highs on all 3 major indexes, yet finishing basically unchanged on the week.

This week we could be facing a big push from earnings from national retailers once again.

Last week it was a strong push higher, but this week we really may be at an inflection point.

If the news is good, there may be reason to push the market even higher as there becomes a sense that perhaps the FOMC will act soon to raise interest rates.

If the numbers or the guidances are weak, then it’s really anyone’s guess.

My guess is that it would be hard to justify a market doing anything but going lower.

But if I was being judged on just today, that guess would have been pretty off base, as all 3 major indexes again hit new all time closing highs, as oil led the way, but retail was again strong.

For the coming week, coinciding with the end of the monthly cycle, there are 2 expiring positions and 2 ex-dividend positions.

While I do have money to spend, I really don’t see where the real attraction is going to come from, although there may be reason to consider the very small handful of choices this week.

I imagine that I’ll be doing a lot of watching this week.

The market looked as if it is going to open fairly flat, but you never do know what surprises there may be.

The only surprise today was more rebound strength in oil, but that was more than enough.

Last Thursday, for example, was a nice surprise higher, but it’s hard to imagine that this week’s retail earnings numbers will really continue to surprise.

That’s especially so when you consider that there really wasn’t anything very good to report last week.

Hopefully, that will change this week and we find a real reason to see the market take off.

In either direction.

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Daily Market Update – August 15, 2016 (7:30 AM)

Last week saw us hitting highs on all 3 major indexes, yet finishing basically unchanged on the week.

This week we could be facing a big push from earnings from national retailers once again.

Last week it was a strong push higher, but this week we really may be at an inflection point.

If the news is good, there may be reason to push the market even higher as there becomes a sense that perhaps the FOMC will act soon to raise interest rates.

If the numbers or the guidances are weak, then it’s really anyone’s guess.

My guess is that it would be hard to justify a market doing anything but going lower.

For the coming week, coinciding with the end of the monthly cycle, there are 2 expiring positions and 2 ex-dividend positions.

While I do have money to spend, I really don’t see where the real attraction is going to come from, although there may be reason to consider the very small handful of choices this week.

I imagine that I’ll be doing a lot of watching this week.

The market looks as if it is going to open fairly flat, but you never do know what surprises there may be.

Last Thursday, for example, was a nice surprise higher, but it’s hard to imagine that this week’s retail earnings numbers will really continue to surprise.

That’s especially so when you consider that there really wasn’t anything very good to report last week.

Hopefully, that will change this week and we find a real reason to see the market take off.

In either direction.

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Daily Market Update – August 12, 2016 (7:30 AM)

The Week in Review will be posted by 10 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments: none

Rollovers: MRO puts

Expirations:   none

The following were ex-dividend this week:   AZN (8/8 $0.44), IP (8/11 $0.44)

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

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Daily Market Update – August 11, 2016 (Close)

This morning’s futures, although only mildly higher, were already showing more of a move than the cumulative absolute value moves in the 3 previous days of this week.

When it was all over, all 3 of the major indexes closed at record highs.

When the morning started there was a chance that the move higher could grow if only retailer earnings that were set to begin in the morning could give some sense of hope that all was well on the consumer side of things.

With 2 big ones before the market’s open being interpreted as having been good news, despite word of 100 store closures at Macy’s and decreased guidance at Kohls, the market never looked back and was even buoyed by a bounce in oil later in the session.

As far as the news of the day goes, those retailers continue next week and oil is a potential issue day in and day out.

After we received reports from 3 key national retailers today, we also get the official retail Sales Report tomorrow morning.

The reasonably strong earnings reports today, even though not fueled by really positive guidance, could still be more meaningful to investors than tomorrow’s official numbers.

Even if earnings aren’t wonderful, if those upcoming retailers start to paint a brighter future for the quarters ahead, that guidance will likely be far more important than anything the government may have to report tomorrow, that will only be backward looking.

Strong guidance would give investors the belief that the FOMC is going to have more of a reason to raise interest rates sooner, rather than needing to wait until December, as is increasingly the consensus.

While yesterday was another in a series of flat days, wouldn’t you know it, the one position that did rally was the one going ex-dividend today?

I did get the opportunity to roll over that position for another month. The goal in that transaction was to get at least a premium as large as the dividend, in the event that the position would still be assigned early.

That was achieved and a bit more, as well, as the additional ROI for the rollover was about 1.3% versus an almost 1% quarterly dividend.

I actually would mind neither the prospect of an early assignment, which didn’t appear to be the case in the morning and was reported by no one as having been the case, or keeping the position alive and just adding to its cumulative ROI, even as the underlying security hasn’t gone very far. 

In this case, if the position does get assigned next month, the 10 month holding will yield an ROI of almost 19%, half of which is from dividends and premiums, while the comparable S&P 500 move was 3.6%, exclusive of dividends.

That’s the way it’s supposed to work, but those opportunities have been rare as the goal had been for shorter term holding periods. However, as markets have increasingly moved the strategy toward longer term holdings, the dual sources of income, dividends and premiums, have become increasingly welcome news.

With the one expiring position for the week that happens to be a short put, I do want to take assignment of shares as the position is ex-dividend on Monday.

Hopefully, if that does happen, there will be a quick and easy opportunity to sell some calls and then exit that new position or even continue rolling those calls over, as had been the case with some other recent new positions, whether short calls or puts.

Today, I actually came close to rolling the puts over as even factoring in the lost dividend, the net premium was pretty good. if that position continues to hover around the strike price, I may try it again tomorrow.

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Daily Market Update – August 11, 2016 (7:30 AM)

This morning’s futures, although only mildly higher, is already showing more of a move than the cumulative absolute value moves in the 3 previous days of this week.

That may become an even greater move as retailer earnings begin to get released this morning and continue after the day’s close to trading.

Those reports will also continue through next week.

After we receive reports from 3 key national retailers today, we also get the official retail Sales Report tomorrow morning.

Strong earnings today, coupled with strong guidance would likely be more meaningful to investors than tomorrow’s official numbers.

Even if earnings aren’t wonderful, if those retailers start to paint a brighter future for the quarters ahead, that guidance will likely be far more important than anything the government may have to report tomorrow, that will only be backward looking.

Strong guidance would give investors the belief that the FOMC is going to have more of a reason to raise interest rates sooner, rather than needing to wait until December, as is increasingly the consensus.

While yesterday was another in a series of flat days, wouldn’t you know it, the one position that did rally was the one going ex-dividend today?

I did get the opportunity to roll over that position for another month. The goal in that transaction was to get at least a premium as large as the dividend, in the event that the position would still be assigned early.

That was achieved and a bit more, as well, as the additional ROI for the rollover was about 1.3% versus an almost 1% quarterly dividend.

I actually would mind neither the prospect of an early assignment, which doesn’t appear to be the case so far this morning or keeping the position alive and just adding to its cumulative ROI, even as the underlying security hasn’t gone very far. 

In this case, if the position does get assigned next month, the 10 month holding will yield an ROI of almost 19%, half of which is from dividends and premiums, while the comparable S&P 500 move was 3.6%, exclusive of dividends.

That’s the way it’s supposed to work, but those opportunities have been rare as the goal had been for shorter term holding periods. However, as markets have increasingly moved the strategy toward longer term holdings, the dual sources of income, dividends and premiums, have become increasingly welcome news.

With the one expiring position for the week that happens to be a short put, I do want to take assignment of shares as the position is ex-dividend on Monday.

Hopefully, if that does happen, there will be a quick and easy opportunity to sell some calls and then exit that new position or even continue rolling those calls over, as had been the case with some other recent new positions, whether short calls or puts.

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Daily Market Update – August 10, 2016 (Close)

Yesterday and Monday both started the week very quietly and the futures this morning seemed as if they were going to carry on with that tradition of the past week.

And once again, they did.

Things may change in a big way if retail earnings start coming in and are surprisingly strong or surprisingly weak. Last week’s Employment Situation Report gave interest rate hawks a little more to believe in, but the GDP was an argument in favor of the other side.

This week, as retailers begin to report and as Retail Sales data is released on Friday, we can either find validation for the hawks or another nail in the coffin for those betting on an interest rate hike coming in 2016, which is rapidly coming to its end.

Otherwise, once the retail reports are in, there won’t be very much left in this earnings season to move markets and so we’re back to an FOMC watch as meandering economic data comes in and everyone gets back to work on fiscal policy once Labor Day has come and gone.

With a single expiring position this week that happens to be a short put position that also goes ex-dividend on Monday, I actually wouldn’t mind being assigned the position, even as the dividend is a paltry one. Because of that dividend, I don’t have too much interest in rolling the position over, unless the net from the rollover is still going to be 1% or higher.

In that case, it may be worth giving up on the dividend and continuing to collect the premiums on the position.

Either way, it would be nice to either milk that position for even more or at least get some cash out of the position through assignment, as long as there’s an opportunity to recycle it somewhere.

Right now, those opportunities seem slight, though.

It’s pretty sad when the most exciting thing for the week may end up being whether to consider rolling over a position that goes ex-dividend tomorrow in order to either get more premium in exchange for early assignment or simply add to the accumulation of premium while still getting that dividend.

But that’s all today was expected to bring and at least in that regard it didn’t disappoint.

With an opportunity, or even a need to roll over that position in International Paper, now I actually hope that it does get assigned early, but I’m not counting on it.

Going forward another month with a new expiration date in exchange for 1.3% in premium in exchange for possibly giving up a 1% dividend would be worth it if assigned tomorrow. Even if not, I wouldn’t mind rolling up more premiums in the position if having to take it beyond the September expiration.

Longer term is becoming the name of the game.

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Daily Market Update – August 10, 2016 (Close)

Yesterday and Monday both started the week very quietly and the futures this morning seem as if they’re going to carry on with that tradition of the past week.

Tings may change in a big way if retail earnings start coming in and are surprisingly strong or surprisingly weak. Last week’s Employment Situation Report gave interest rate hawks a little more to believe in, but the GDP was an argument in favor of the other side.

This week, as retailers begin to report and as Retail Sales data is released on Friday, we can either find validation for the hawks or another nail in the coffin for those betting on an interest rate hike coming in 2016, which is rapidly coming to its end.

Otherwise, once the retail reports are in, there won’t be very much left in this earnings season to move markets and so we’re back to an FOMC watch as meandering economic data comes in and everyone gets back to work on fiscal policy once Labor Day has come and gone.

With a single expiring position this week that happens to be a short put position that also goes ex-dividend on Monday, I actually wouldn’t mind being assigned the position, even as the dividend is a paltry one. Because of that dividend, I don’t have too much interest in rolling the position over, unless the net from the rollover is still going to be 1% or higher.

In that case, it may be worth giving up on the dividend and continuing to collect the premiums on the position.

Either way, it would be nice to either milk that position for even more or at least get some cash out of the position through assignment, as long as there’s an opportunity to recycle it somewhere.

Right now, those opportunities seem slight, though.

It’s pretty sad when the most exciting thing for the week may end up being whether to consider rolling over a position that goes ex-dividend tomorrow in order to either get more premium in exchange for early assignment or simply add to the accumulation of premium while still getting that dividend.

But that’s all today may bring.

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Daily Market Update – August 9, 2016 (Close)

Yesterday started the week very quietly and the futures this morning seemed as if they’re going to carry on with that tradition of the past day.

They did.

Later in the week things may change a bit as retail earnings start coming in and will continue into next week.

Otherwise, just as the paucity of Federal Reserve Governor appearances would indicate, it will be another quiet week on the news front.

Yesterday was interesting in that the previous few days there had seemed to be a conscious re-coupling between energy prices and stocks.

Not so yesterday, though.

Despite a rally in the energy sector, stocks didn’t follow.

Stocks really didn’t do much of anything.

It was one of those days that there wasn’t even a glimmer of a hope that I would get any trade done.

On most days, unless there is a strong shift downward, at least something may look as if there’s an opportunity for a sale of a call on an uncovered position. Not that those trades get made often enough, but at least there’s some consideration of making a trade on something.

Not so yesterday and not so today.

I didn’t send out a single trial balloon trade on either day. There was that little movement across the board.

This morning’s futures weren’t pointing toward anything different, but I was ready and motivated to get something done.

I just wasn’t able.

So now it’s just one day closer to this easily being a repeat of last week, with only a single trade to show for 5 days.

Even if net assets increase during the week I don’t really look at that as a success unless I can wring some cash out of the week and last week was as minimal of a success at doing that as can be the case, unless you also count this week.

Maybe tomorrow?

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Daily Market Update – August 9, 2016 (7:30 AM)

Yesterday started the week very quietly and the futures this morning seems as if they’re going to carry on with that tradition of the past day.

Later in the week things may change a bit as retail earnings start coming in and will continue into next week.

Otherwise, just as the paucity of Federal Reserve Governor appearances would indicate, it will be another quiet week on the news front.

Yesterday was interesting in that the previous few days there had seemed to be a conscious re-coupling between energy prices and stocks.

Not so yesterday, though.

Despite a rally in the energy sector, stocks didn’t follow.

Stocks really didn’t do much of anything.

It was one of those days that there wasn’t even a glimmer of a hope that I would get any trade done.

On most day, unless there is a strong shift downward, at least something may look as if there’s an opportunity for a sale of a call on an uncovered position. Not that those trades get made often enough, but at least there’s some consideration of making a trade on something.

Not so yesterday.

I didn’t send out a single trial balloon trade. There was that little movement across the board.

This morning’s futures may not be pointing toward anything different, but I’m ready and motivated to get something done.

Otherwise, this could easily be a repeat f last week, with only a single trade to show for 5 days.

Even if net assets increase during the week I don’t really look at that as a success unless I can wring some cash out of the week and last week was as minimal of a success at doing that as can be the case, unless you also count this week.

Maybe tomorrow?

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Daily Market Update – August 8, 2016 (Close)

Last week ended on a really high note, but didn’t do too much to change the overall tone of the week, despite the market finishing at another record high.

All of that sounds a little contradictory, but the week was still one of ennui, despite the week ending Employment Situation Report.

With retailers beginning to report their earnings this week, it remains to be seen whether the consumer is really coming alive and whether they will serve as the catalyst that will really give the FOMC a reason to raise interest rates.

Markets generally agreed on Friday that it was time for those rates to go higher.

But while they’re increasingly comfortable with the idea, there still has to be the kind of data that supports an increase.

That wasn’t the case back in December 2015, when the FOMC very likely mis-read the future prospects of the economy.

With abysmal GDP numbers it would really help the FOMC out quite a bit if national retailers had something good to say.

Even if they have nothing good to report for the quarter just passed, if only they could find the silver lining heading into the final half of 2016.

I don’t have too much cash to invest this week and only have a single position expiring and 2 ex-dividend positions.

That combination would make me want to seek out some opportunity, but after Friday’s strong move higher it really awaits to be seen if there’s anything left at the moment.

Futures this morning seemed to suggest that we’re back to the listless trading that characterized most of the past 2 weeks in which the market had a consecutive losing streak while not really going down very much.

I’m likely to again be an observer, as much as I would like to open some new positions and that may again be the case tomorrow as the market stayed flat all throughout the session.

For those short the Marathon Oil puts, the company is ex-dividend next Monday.

For that reason, if faced with an assignment, I’m probably going to be more willing to take assignment rather than to roll it over, unless it’s very close to the strike.

In that case, the enhanced premium from rolling over of a volatile position may exceed the value of the dividend.

Otherwise, as is always the case, I would welcome the opportunity to sell calls on some uncovered positions and some more are within the price range where it may become possible, even as volatility is so very low.

Maybe tomorrow.

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Daily Market Update – August 8, 2016 (7:30 AM)

Last week ended on a really high note, but didn’t do too much to change the overall tone of the week, despite the market finishing at another record high.

All of that sounds a little contradictory, but the week was still one of ennui, despite the week ending Employment Situation Report.

With retailers beginning to report their earnings this week, it remains to be seen whether the consumer is really coming alive and whether they will serve as the catalyst that will really give the FOMC a reason to raise interest rates.

Markets generally agreed on Friday that it was time for those rates to go higher.

But while they’re increasingly comfortable with the idea, there still has to be the kind of data that supports an increase.

That wasn’t the case back in December 2015, when the FOMC very likely mis-read the future prospects of the economy.

With abysmal GDP numbers it would really help the FOMC out quite a bit if national retailers had something good to say.

Even if they have nothing good to report for the quarter just passed, if only they could find the silver lining heading into the final half of 2016.

I don’t have too much cash to invest this week and only have a single position expiring and 2 ex-dividend positions.

That combination would make me want to seek out some opportunity, but after Friday’s strong move higher it really awaits to be seen if there’s anything left at the moment.

Futures this morning seem to suggest that we’re back to the listless trading that characterized most of the past 2 weeks in which the market had a consecutive losing streak while not really going down very much.

I’m likely to again be an observer, as much as I would like to open some new positions.

For those short the Marathon Oil puts, the company is ex-dividend next Monday.

For that reason, if faced with an assignment, I’m probably going to be more willing to take assignment rather than to roll it over, unless it’s very close to the strike.

In that case, the enhanced premium from rolling over of a volatile position may exceed the value of the dividend.

Otherwise, as is always the case, I would welcome the opportunity to sell calls on some uncovered positions and some more are within the price range where it may become possible, even as volatility is so very low.

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