Category Archives: Daily Market Update

Daily Market Update – July 14, 2016 (8:00 AM)

This morning’s futures trading was suggesting that maybe a blowout could be in the cards.

I would have liked more than a single day’s respite before continuing the climb higher, as would most technicians.

Although if you’re buying stocks now and there is a blowout in store, as long as you can recognize that those blowouts don’t usually end well for those climbing aboard, then the blowout can be a good thing.

As long as you jump off soon enough.

Even as the morning’s gains were pared by almost half heading into the opening bell, the DJIA futures were pointing another 100 points higher.

The decline in the increase came as the Bank of England didn’t lower interest rates, however, it did hint that it would introduce some more easing in August.

In the meantime, the preliminary numbers from JP Morgan were good, although there has not yet been the opportunity to hear their forecasts of a British-less European Union.

For my part, heading into the close of the option cycle, the gains are good.

With some gains today I may want to look at any opportunity of selling calls on uncovered positions, particularly as earnings loom.

I wouldn’t mind extending ownership of those positions through the use of longer term options to avoid any earnings risk and to perhaps get another dividend or two out of some of those positions.

In the meantime, there are still some more Federal Reserve Governors set to speak, although the market hasn’t been paying too much attention.

That may be a good thing and maybe would drive them back a bit into the shadows, but that’s not likely to happen once you’ve gotten a taste of the attention.

MONDAY:   This morning’s futures are telling us that we are in store for a new all time record high, but we have to have it tested first. Sometimes it takes a couple of those tests to really mark a new high and to go well beyond

TUESDAY:   After breaking the all time record high yesterday, it looks as if the market isn’t interested in testing the old high and instead looks to move even higher. Sometimes when it seems that there are absolutely no good reasons to head in any particular direction, that is the only direction that makes sense.

WEDNESDAY:  More all time record highs, but today may be the time for a healthy break in the action

THURSDAY:  Yesterday’s pause looks like it’s giving way to another step toward a breakout as the monthly option cycle comes to an end tomorrow

FRIDAY:.  







Daily Market Update – July 13, 2016 (7:30 AM)

This morning’s futures trading is finally suggesting that it’s time to take a rest from the strong climb that has been underway for about 10 trading sessions.

From the Brexit lows, the climb has been pretty steep, but this morning everything is at the flat line as we still have lots more to hear from members of the Federal reserve, who are on a whirlwind talking spree this week.

So far, they haven’t said much.

With 2 nice gains to start the week the July 2016 option cycle comes to its end in just 3 trading sessions.

Yesterday was one of those rare days that just about every sector was higher and some were nicely higher.

As we get closer to the end of the monthly option cycle we will have the real beginning of the earnings season to contend with.

That now starts with JP Morgan, rather than Alcoa, which has already reported.

JP Morgan may hold the key for everyone else based on how it projects the Brexit vote to impact it’s businesses in the coming years.

For its part, whether out of social consciousness or maybe great business results, JP Morgan announced a large salary increase for its lowest paid earners, up to about 60%.

Maybe that’s a prelude to what may be very good current operations, but investors are more likely to focus on future prospects, particularly how they may be impacted by the British vote.

For my part, it’s likely to be more sitting around.

I did try to rollover the Marathon Oil short call position expiring this Friday, just as I considered closing the short put position.

I’m still of the mind to keep the call position open, even if assignment is in the cards, as I wouldn’t mind creating that 1% weekly annuity and may look for some more opportunity today.

Daily Market Update – July 12, 2016 (Close)

This morning’s futures trading was telling us to expect that the all time closing and intra-day highs on the S&P 500 were safe.

That’s pretty unusual behavior not to want to test those old highs, but the predominant wave of opinion was so strongly that of finding no justification for the market to go higher that there was probably no option to do anything than to go higher.

This morning’s futures were looking to do just that, but with some degree of moderation.

That moderation gave way as the day did, as well and the S&P 500 closed at almost their highs for the day.

Ultimately, if new highs are going to be sustained it’s far more likely to happen if the path comes through moderate moves higher, rather than a breakout.

Today may not have been a breakout, but if you add the last 3 days together, we are certainly getting there.

With earnings now about to get into gear in a couple of days, despite some early earnings having started at yesterday’s close, the question will become just how much of a dampening effect might come from Brexit related guidance, especially from the financial sector.

The financial sector really kicks things off on Thursday and we get some idea.

Rarely does a weak financial sector at the time of earnings put the market into a happy place.

So there may be a battle ahead for the hearts and minds of investors.

For my part, I just want to leave the July 2016 option cycle in a few days with some assignments and some rollovers.

I’m not thinking very much in terms of what awaits, but rather what is in the here and now.

With the chance of some of those assignments and rollovers and sufficient uncovered positions, I wouldn’t mind a breakout and would certainly take any opportunity to sell calls on those uncovered positions in the belief that any breakout would be only a blip.

For that reason, I might consider longer term call options on those uncovered positions and adding some dollars to the “at cost” strike levels.

In theory, that sounds good, but first we need that breakout.

With earnings ahead and the FOMC to follow in a couple of weeks, there may be lots to give the market something to think about and maybe lots to make it move in either direction.

I just want to be ready and not flatfooted as 2017 is not too far around the corner at this point.

Daily Market Update – July 12, 2016 (Open)

This morning’s futures trading was telling us to expect that the all time closing and intra-day highs on the S&P 500 were safe.

That’s pretty unusual behavior not to want to test those old highs, but the predominant wave of opinion was so strongly that of finding no justification for the market to go higher that there was probably no option to do anything than to go higher.

This morning’s futures are looking to do just that, but with some degree of moderation.

Ultimately, if new highs are going to be sustained it’s far more likely to happen if the path comes through moderate moves higher, rather than a breakout.

With earnings now about to get into gear in a couple of days, despite some early earnings having started at yesterday’s close, the question will become just how much of a dampening effect might come from Brexit related guidance, especially from the financial sector.

The financial sector really kicks things off on Thursday and we get some idea.

Rarely does a weak financial sector at the time of earnings put the market into a happy place.

So there may be a battle ahead for the hearts and minds of investors.

For my part, I just want to leave the July 2016 option cycle in a few days with some assignments and some rollovers.

I’m not thinking very much in terms of what awaits, but rather what is in the here and now.

With the chance of some of those assignments and rollovers and sufficient uncovered positions, I wouldn’t mind a breakout and would certainly take any opportunity to sell calls on those uncovered positions in the belief that any breakout would be only a blip.

For that reason, I might consider longer term call options on those uncovered positions and adding some dollars to the “at cost” strike levels.

In theory, that sounds good, but first we need that breakout.

With earnings ahead and the FOMC to follow in a couple of weeks, there may be lots to give the market something to think about and maybe lots to make it move in either direction.

I just want to be ready and not flatfooted as 2017 is not too far around the corner at this point.

Daily Market Update – July 8, 2016 (Close)

This morning’s futures trading was telling us to expect that the all time closing and intra-day highs on the S&P 500 were about to give way to new ones.

Before that happens, though, the previous highs, representing resistance levels have to be tested. At least, that’s usually the case.

Often, the market has to make more than one run at those levels before actually breaching them and establishing a new level of support.

Following Friday’s Employment Situation Report there was enough good news in terms of job creation to give logical reason for the market to celebrate and today, at least, there didn’t even seem to be any reason to test those resistance levels.

At some point all the logical people in the world should have eventually come to the conclusion that more people getting jobs is a good thing even as it might lead to some inflation and wage inflation.

That’s especially the case as we see so much of the rest of the world getting mired in such a low rate and even negative rate environment and unable to sustain any kind of growth, at all.

There’s nothing wrong with growth, especially if its in moderation and for the moment, our economy and our stock markets are the best in the world.

This week doesn’t have too much going on, although there are 13 different speeches being given by members of the Federal reserve and some of those are likely to get a response from traders.

Those come in advance of the July 2016 FOMC meeting and on the heels of last Friday’s Employment Situation Report, you do have to wonder whether that may be the trigger to finally go ahead with the increase that we’ve all been expecting for the past few months.

I do have some cash this week and was willing to spend it as the July 2016 option cycle comes to its end.

Spending it on the same thing over and over again suits me just fine

Although I do have a number of positions set to expire this week and with some assignment or rollover prospects, I wouldn’t mind adding even some more income, especially since there are no ex-dividend positions this week.

What I didn’t expect to do was to jump in if the market shows too much strength to open the week, although individual stock weakness could be a draw.

Otherwise, earnings begin anew this week and it will be interesting to keep an eye on the financials as they could set the tone in a bad way as the lower interest rate environment hasn’t been good for them and many will start guiding lower as thoughts of the impact of the “Brexit” vote crystallize.

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Daily Market Update – July 8, 2016 (9:00 AM)

This morning’s futures trading is telling us to expect that the all time closing and intra-day highs on the S&P 500 are about to give way to new ones.

Before that happens, though, the previous highs, representing resistance levels have to be tested. At least, that’s usually the case.

Often, the market has to make more than one run at those levels before actually breaching them and establishing a new level of support.

Following Friday’s Employment Situation Report there was enough good news in terms of job creation to give logical reason for the market to celebrate.

At some point all the logical people in the world should have eventually come to the conclusion that more people getting jobs is a good thing even as it might lead to some inflation and wage inflation.

That’s especially the case as we see so much of the rest of the world getting mired in such a low rate and even negative rate environment and unable to sustain any kind of growth, at all.

There’s nothing wrong with growth, especially if its in moderation and for the moment, our economy and our stock markets are the best in the world.

This week doesn’t have too much going on, although there are 13 different speeches being given by members of the Federal reserve and some of those are likely to get a response from traders.

Those come in advance of the July 2016 FOMC meeting and on the heels of last Friday’s Employment Situation Report, you do have to wonder whether that may be the trigger to finally go ahead with the increase that we’ve all been expecting for the past few months.

I do have some cash this week and am willing to spend it as the July 2016 option cycle comes to its end.

Although I do have a number of positions set to expire this week and with some assignment or rollover prospects, I wouldn’t mind adding some more income, especially since there are no ex-dividend positions this week.

What i don’t expect to do is to jump in if the market shows too much strength to open the week, although individual stock weakness could be a draw.

Otherwise, earnings begin anew this week and it will be interesting to keep an eye on the financials as they could set the tone in a bad way as the lower interest rate environment hasn’t been good for them and many will start guiding lower as thoughts of the impact of the “Brexit” vote crystallize.

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

The Week in Review will be posted b y 10 PM and The Weekend Update will be posted by noon on Sunday.

The following trade outcomes are possible today:

Assignments:  none

Rollovers:  MRO

Expirations:   none

The following were ex-dividend this week:   CSCO (7/5 $0.26)

The following will be ex-dividend next week:   none

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

Daily Market Update – July 7, 2016 (Close)

Yesterday would have been a good day to take a little bit of a break.

It did do just that until about noon and then it just became another day of gains and another day getting closer to the resistance points that reside ahead.

This morning, following those gains, which left the market closing at its highs, looked as if it was going to take another break.

This time, if it did, but only after oil reversed course.

Still it may have been a pragmatic break, because tomorrow brings what could be an important bit of economic news.

With the release of the Employment Situation Report we can either confirm the last shockingly low number which definitely scuttled plans for an interest rate increase or we can disavow those numbers as either a one time or maybe even erroneous data set, as revisions are always possible.

Either way, that could mean some significant activity.

Of course, there’s also the possibility that tomorrow’s numbers will be mediocre and the market may continue to be of a mindset to think of that as good news for stock investors, as interest rates will continue to decline.

With only a single position set to expire this week, and a highly volatile one at that, it’s again another situation of not minding if I could roll that single position over, rather than seeing it get assigned.

With some positions set to expire next week as the July 2016 option cycle comes to its end, but no ex-dividend positions, I may still want to free up some additional funds, 

So there may not be much trading left in me for this already trade shortened week, although if the market does react negatively to the news on Friday, I may want to get a head start on the consideration of new positions for the following week, especially if that single expiring position is still in line for assignment.

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

Yesterday would have been a good day to take a little bit of a break.

It did do just that until about noon and then it just became another day of gains and another day getting closer to the resistance points that reside ahead.

This morning, following those gains, which left the market closing at its highs, looks as if it is going to take another break.

This time, if it does, it may be a pragmatic break, because tomorrow brings what could be an important bit of economic news.

With the release of the Employment Situation Report we can either confirm the last shockingly low number which definitely scuttled plans for an interest rate increase or we can disavow those numbers as either a one time or maybe even erroneous data set, as revisions are always possible.

Either way, that could mean some significant activity.

Of course, there’s also the possibility that tomorrow’s numbers will be mediocre and the market may continue to be of a mindset to think of that as good news for stock investors, as interest rates will continue to decline.

With only a single position set to expire this week, and a highly volatile one at that, it’s again another situation of not minding if I could roll that single position over, rather than seeing it get assigned.

With some positions set to expire next week as the July 2015 option cycle comes to its end, but no ex-dividend positions, I may still want to free up some additional funds, 

So there may not be much trading left in me for this already trade shortened week, although if the market does react negatively to the news on Friday, I may want to get a head start on the consideration of new positions for the following week, especially if that single expiring position is still in line for assignment.

Daily Market Update – July 6, 2016 (Close)

Yesterday was a day to take a little bit of a break.

After such strong gains following the large post-Brexit decline, it was probably a good thing to take that kind of a break and to set up a floor from where to make an attack on intermediate and all time highs on the S&P 500.

Both were a little bit further away as this morning was ready to get started, but both were still easy within reach and that reach got even easier by the day’s close as the market made a big turnaround and started posting gains by Noon.

Even more positive is that the market again closed right near its high for the day. 

That was a trend that actually started last week, even on the solitary down day to begin that week.

The market now seems even pretty well positioned to start to attack those support levels at about 2112 and 2137.

The expectation would be that the 2112 may be breached fairly easily at this point, but may still need to be tested.

The 2137 will be more difficult, but days of consolidation of gains, such as yesterday and maybe again today can make it easier to make those assaults as a new level of support is created after the recent large gains.

Yesterday had the usual culprits for a weak market.

Oil was very weak, gold was strong and interest rates went even lower.

Add to that the strength in the US Dollar and you had the equation that would lead to stock selling.

This morning oil wasn’t very weak, but nothing else has really changed in the world, otherwise.

What did change was that oil reversed its direction and took the market along with it.

While the futures were again pointing to some weakness, I would have preferred that over the way the day finally worked out. Some modest declines may not have been such a bad thing, as the big picture evolves.

Today we got some more insight into what the FOMC had been thinking and we may continue to have reason to question the health of our own economy, although the doubts could be set aside with a rebound in the Employment Situation Report numbers on Friday.

That would certainly confuse things and probably further test support.

I don’t expect to be doing much more this week, having made a single purchase and with the big question marks that serve as overhangs.

That will all bring us to the following week and the beginning of another earnings season where we may begin hearing a lot about the risks associated with Brexit.

Those could serve as real headwinds to stocks as guidance may be pessimistic, but next week is still an eternity away.

Daily Market Update – July 6, 2016 (7:30 AM)

Yesterday was a day to take a little bit of a break.

After such strong gains following the large post-Brexit decline, it was probably a good thing to take that kind of a break and to set up a floor from where to make an attack on intermediate and all time highs on the S&P 500.

Both are a little bit further away as this morning is ready to get started, but both are still easy within reach.

The market seems pretty well positioned to start to attack those support levels at about 2112 and 2137.

The expectation would be that the 2112 may be breached fairly easily at this point, but may still need to be tested.

The 2127 will be more difficult, but days of consolidation of gains, such as yesterday and maybe again today can make it easier to make those assaults as a new level of support is created after the recent large gains.

Yesterday had the usual culprits for a weak market.

Oil was very weak, gold was strong and interest rates went even lower.

Add to that the strength in the US Dollar and you had the equation that would lead to stock selling.

This morning oil isn’t very weak, but nothing else has really changed in the world, otherwise.

The futures are again pointing to some weakness, but that may not be such a bad thing, as the big picture evolves.

Today we get some more insight into what the FOMC has been thinking and we may have reason to question the health of our own economy, although the doubts could be set aside with a rebound in the Employment Situation Report numbers on Friday.

That would certainly confuse things and probably further test support.

I don’t expect to be doing much more this week, having made a single purchase and with the big question marks that serve as overhangs.

That will all bring us to the following week and the beginning of another earnings season where we may begin hearing a lot about therisks associated with Brexit.

Those could serve as real headwinds to stocks as guidance may be pessimistic, but next week is still an eternity away.

Daily Market Update – July 5, 2016 (Close)

I used to not like it when the markets were closed on Mondays, but these days I welcome the chance to take a breather, even as I do less trading than in the past 10 years.

That’s not by design, as I would much rather be an active trader than a passive one.

Still, I do enjoy the one day respite from staring at a screen and a ticker crawl, particularly if neither are going to lead to anything worthwhile.

This week opened after a remarkable turnaround following a decline that probably shouldn’t have happened to the extent that it did.

This morning, just as the manner in which the previous week came to its close, it looked as if the market may have been ready to  take a little bit of a breather.

That’s likely a good thing as those all too rapid climbs that are still below resistance levels have a way of not holding up unless some new support levels are established.

A few days of quietude may be just the thing to go and surpass the previous high on the S&P 500.

This week does have a couple of important events, though and as the first day of trading came to its end, those important events come with the need to dig out from some moderate losses, that were less than they could have been.

Tomorrow, we get a release of the FOMC minutes for the last meeting. That was the meeting that we were beginning to expect an interest rate increase, but following the abysmal Employment Situation Report, it was really hard to justify.

Then, as the week comes to an end we have another Employment Situation Report and if it continues to disappoint, I think the market will look at it in the context of predictions for a recession in Great Britain and mindful of JP Morgan economists projections for here in the US.

But, if the numbers are good, especially if there’s a revision in the previous month, it may be off to the races.

Even as traders have in the past looked at the potential for an interest rate increase as being a bad thing, I think anything that says that the economy is healthier than we thought would be a good thing.

With a few assignments last week and only a single ex-dividend position this week and no expiring positions, I would still like to make some trades, even after opening one new position today.

As I did have my eye on some new positions this week, as outlined in the weekly Weekend Update, I was inclined to look at last week’s assignments as possible re-purchases, if they followed the market somewhat lower today.

At least one of those fit the bill and maybe the other will, as well.

As has been the case lately, with what few purchases I’ve been making, I like the idea of getting a high premium for a position that I think is near a bottom.

Those declines make people think that more are forthcoming and that drives up premiums.

While the market was only modestly lower this morning and oil down fairly sharply, I was very willing to part with some money, but will again be looking for short term positions as next week ushers in another earnings season.

The news today was just like old times. 

Weaker oil, a stronger dollar and worries about European banks.

Maybe the first two will be better by tomorrow, but the latter has had a tendency to remain as a weight on the market for more than just a day at a time.

As always, we’ll see.

Daily Market Update – July 5, 2016 (8:00 AM)

I used to not like it when the markets were closed on Mondays, but these days I welcome the chance to take a breather, even as I do less trading than in the past 10 years.

That’s not by design, as I would much rather be an active trader than a passive one.

Still, I do enjoy the one day respite from staring at a screen and a ticker crawl, particularly if neither are going to lead to anything worthwhile.

This week opens after a remarkable turnaround following a decline that probably shouldn’t have happened to the extent that it did.

This morning, just as the manner in which the previous week came to its close, it looks as if the market may be taking a little bit of a breather.

That’s likely a good thing as those all too rapid climbs that are still below resistance levels have a way of not holding up unless some new support levels are established.

A few days of quietude may be just the thing to go and surpass the previous high on the S&P 500.

This week does have a couple of important events, though.

Tomorrow, we get a release of the FOMC minutes for the last meeting. That was the meeting that we were beginning to expect an interest rate increase, but following the abysmal Employment Situation Report, it was really hard to justify.

Then, as the week comes to an end we have another Employment Situation Report and if it continues to disappoint, I think the market will look at it in the context of predictions for a recession in Great Britain and mindful of JP Morgan economists projections for here in the US.

But, if the numbers are good, especially if there’s a revision in the previous month, it may be off to the races.

Even as traders have in the past looked at the potential for an interest rate increase as being a bad thing, I think anything that says that the economy is healthier than we thought would be a good thing.

With a few assignments last week and only a single ex-dividend position this week and no expiring positions, I would like to make some trades.

Even as I do have my eye on some new positions this week, as outlined in the weekly Weekend Update, I would be inclined to look at last week’s assignments as possible re-purchases, if they follow the market somewhat lower today.

AS has been the case lately, with what few purchases I’ve been making, I like the idea of getting a high premium for a position that I think is near a bottom.

Those declines make people think that more are forthcoming and that drives up premiums.

While the market is only modestly lower this morning and oil down fairly sharply, I am very willing to part with some money, but would again be looking for short term positions as next week ushers in another earnings season.

MONDAY:   Happy and safe Fourth of July to all

TUESDAY:   The markets, including oil, may be taking another breather today as the holiday shortened trading week ends with an Employment Situation Report and is interrupted mid-week with FOMC minutes

WEDNESDAY:  Oil was down yesterday, gold higher, interest rates lower and the dollar higher. All made for an environment to send the market lower for the first time in a week. This morning futures are again lower, although the market closed yesterday well off from its lows, but there isn’t much in the early going to give reason to continue yesterday’s relative late strength

THURSDAY:  A nice recovery yesterday afternoon and now the futures are flat, as we await tomorrow’s Employment Situation Report. That could do what it did last time and set off some fireworks or sow some confusion ahead of the next FOMC meeting.

FRIDAY:.  The Employment Situation Report comes this morning and a big bounce from last month is expected. What the reaction to that bounce will be is leading to some tentativeness in the futures this morning