Category Archives: Daily Market Update

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

Earnings, earnings and more earnings last week.

As opposed to the previous week when the earnings really matter, last week the market really did care about what the retailers had to say.

They cared, but they didn’t like what they heard, even as Friday’s Retail Sales report wasn’t that bad.

Something has to be amiss to account for a seeming disconnect between what the likes of Macy’s says and what the official government statistics say.

Maybe we’ll get some insight this week as there are lots more retailer earnings to come.

There is also the release of the previous month’s FOMC minutes, so maybe there may be some more insight there, as one Federal Reserve Governor just suggested that there still may be room for 2 or 3 rate increase still in 2016.

That comes now as the conventional wisdom is saying that a June 2016 rate hike is off the table.

I have some money and am willing to spend it on some new positions, but with about 8 contracts expiring this week, I’d much rather have a chance for some rollovers or see some assignments.

This morning futures are completely flat, even as there is some optimism over where oil is headed next.

Goldman Sachs has issued a positive outlook, calling for a $60 price, although 2 things should be considered.

The first is that Goldman Sachs has had a fairly abysmal track record on commodities over the past year, including oil.

The second is that the Goldman Sachs analysts have missed the 80% or so rise in West Texas Intermediate crude oil in 2016.

It may be a little bit like Stanley Druckenmiller coming out as a gold bull the previous week.

Maybe the easy money has already been made.

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

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

The following trade outcomes are possible today:

Assignments:   none

Rollovers:   none

Expirations:   none

Yesterday’s early rollover of the in the money position of Marathon oil was done in the hopes that shares may get assigned today in advance of Monday’s ex-dividend date. However, even if not, the position may represent a good opportunity for serial rollover at this price level and with this kind of volatility, leading to the high premium.

The following were ex-dividend this week:   none

The following will be ex-dividend next week:  MRO (5/16 $0.05)

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

Daily Market Update – May 12, 2016 (Close)

Yesterday the market lost 217 of the 222 points it gained the previous day.

I don’t think that the losses by some of the nation’s largest retailers yesterday had any kind of similar offsets the previous day and it’s pretty unclear when those may start getting better.

This morning the early futures were pointing higher, but there wasn’t too much reason for any conviction, as they seemed to be tied again to oil.

The lack of conviction and the continuing tie to oil was evident all day, through the ups, the downs and then the ups again.

Yesterday, that tie broke, as the overwhelmingly bad news from the retail sector just trumped everything else.

Today there was lots more retail pain, but oil may have saved the day.

There may be still more of that to come as more of the retailers are ahead over the coming weeks, but it is hard to imagine that some of them will go much lower, after being taken down by the big wave caused by Macy’s and now Nordstrom.

I had just a single position that was to expire this week and after a rocky start it was still fairly well in the money as the day was approaching the mid-point of the afternoon.

However, as I mentioned yesterday, I was interested in rolling that over, possibly even to a higher strike, if the premiums allowed, particularly as there is also a small dividend next week.

I did get that rollover, although staying at the same strike.

Now, with that done, I am actually hoping for an early assignment, since the premium is already pocketed.

Otherwise, I was expecting it to be a quiet day and it was.

Definitely the same tomorrow.

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

Yesterday the market lost 217 of the 222 points it gained the previous day.

I don’t think that the losses by some of the nation’s largest retailers yesterday had any kind of similar offsets the previous day and it’s pretty unclear when those may start getting better.

This morning the early futures are pointing higher, but there isn’t too much reason for any conviction, as they seem to be tied again to oil.

Yesterday, that tie broke, as the overwhelmingly bad news from the retail sector just trumped ebverything else.

There may be more of that to come as more of the retailers are still ahead over the next 2 weeks, but it is hard to imagine that some of them will go much lower, after being taken down by the big wave caused by Macy’s.

I have just a single position that expires this week and after a rocky start it’s fairly well in the money.

However, as I mentioned yesterday, I might be interested in rolling that over, possibly even to s higher strike, if the premiums allow, particularry as there is also a small dividend next week.

Otherwise, it will likely be another quiet day.

If the past year or so is any indication, these sharp losses, as were seen across the board in retail yesterday, will take much longer to recover, than has been the case in the past.

I don’t think I’m going anywhere, although I haven’t checked with my actuary, so I’m prepared to wait.

And wait.

Daily Market Update – May 11, 2016 (Close)

While Europe opened yesterday much higher and our own market ended the day right on its highs, with a 222 point gain on the DJIA, it was still oil that led the way there.

Oil was much higher yesterday and the market had some follow up to its relative strength on Monday, when it didn’t succumb to the sharp turnaround that sent oil lower.

There was really no substantive news, otherwise.

This morning the futures were mildly lower, as was oil, but that was all at risk change as retail earnings for the major national retailers really get underway today.

And change it did. In a really big way.

Expectations have kept going lower and that sector has been hit very hard in the past week on some bad numbers from two retailers whose fortunes had been going in opposite directions for quite some time.

Today the rumors really became reality, as Macy’s got it all going in the wrong direction.

Most believe that if Macy’s isn’t able to make a go of things, most other retailers aren’t going to be able to do much better in an increasingly competitive environment that only seems to benefit Amazon.

The pall cast by Macy’s today had a really wide reach.

I was expecting to be an onlooker today, as I didn’t expect to spend very much, if any money.

With only a single position set to expire, I may still be interested in seeing if that position could be sustained with a rollover, rather than letting it get assigned.

With a really high premium due to the overall volatility in the oil sector, it may be much easier to try and roll that position over and take the chances on a continued wild ride, while attempting to keep collecting an enriched premium.

It also happens to be the case that Marathon Oil, the single position in question, is ex-dividend next week.

Even though that dividend has been reduced, it still amounts to an additional $0.05 on an initial investment of less than $12, so that alone may be worthwhile.

Plus, it also gets me to do something and there haven’t been many of those opportunities in 2016.

Hopefully next week, as the May 2016 option cycle comes to an end, there will be some more of those opportunities as we head toward the second half of the year.

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

While Europe opened yesterday much higher and our own market ended the day right on its highs, with a 222 point gain on the DJIA, it was still oil that led the way there.

Oil was much higher yesterday and the market had some follow up to its relative strength on Monday, when it didn’t succumb to the sharp turnaround that sent oil lower.

There was really no substantive news, otherwise.

This morning the futures are mildly lower, as is oil, but that could change as retail earnings for the major national retailers really get underway today.

Expectations keep going lower and that sector has been hit very hard in the past week on some bad numbers from two retailers whose fortunes had been going in opposite directions for quite some time.

It will be interesting to see how Macy’s gets things going, but if Macy’s isn’t able to make a go of things, the general feeling is that most other retailers aren’t going to be able to do much better in an increasingly competitive environment that only seems to benefit Amazon.

I’m probably going to be an onlooker today, as I don’t expect to spend very much, if any money.

With only a single position set to expire, i may be interested in seeing if that position could be sustained with a rollover, rather than letting it get assigned.

With a really high premium due to the overall volatility in the oil sector, it may be much easier to try and roll that position over and take the chances on a continued wild ride, while attempting to keep collecting an enriched premium.

It also happens to be the case that marathon Oil, the single position in question, is ex-dividend next week.

Even though that dividend has been reduced, it still amounts to an additional $0.05 on an initial investment of less than $12, so that alone may be worthwhile.

Plus, it also gets me to do something and there haven’t been many of those opportunities in 2016.

Hopefully next week, as the May 2016 option cycle comes to an end, there will be some more of those opportunities as we head toward the second half of the year.

Daily Market Update – May 10, 2016 (Close)

Yesterday was one of those days that the market was pretty undecided about which direction to take, but to its credit it didn’t follow oil in its course reversal.

Futures had started strongly yesterday, but were eroding even as oil was doing well.

When oil strongly reversed course, the expectation might have been that stocks would have followed, but they didn’t.

This morning’s futures had both oil and stocks heading in the same direction, with the DJIA futures in triple digit gain territory.

It stayed that way all through the day, never looking back and actually finishing just a few points away freom its high for the day.

This time oil stayed healthy all day and so did stocks, as they followed up on Europe’s strong day.

But that still leaves tomorrow, Thursday and Friday.

With some preliminary retail data last week and some early earnings already reported this week, it looks as if retailers may not have much in the way of good news and those may dominate the news for the next couple of days.

While we’ve gotten used to a year’s worth of disappointments from The Gap, hearing the same from The Limited caught just about everybody by surprise.

This week and next the major national retailers report earnings and what is likely to be key is what kind of optimism or pessimism they’re going to express for the rest of 2016.

The expectations are already low, but there isn’t likely to be any reward for trying to lengthen out the period of low expectations.

So far, this earnings season has punished companies that may have been lowered expectations, but still cast a negative tone on their guidance.

With a single new purchase yesterday, I’m still open to the possibility of more this week, but am still looking forward to seeing the end of the May 2016 option cycle and having a chance to move forward.

With so few weekly options in hand and more of them with monthly or beyond expirations, the trading has slowed down so much. For some of those positions I was just happy to get any kind of opportunity to sell a contract and I would still take some more of those opportunities while trying to wait out some precipitous declines.

With the market pointing nicely higher this morning, I would have gladly given up some opportunity to add new positions in exchange for being able to sell some calls on uncovered positions, or at least get the chance to either roll over the single expiring position this week.

Those are just my own lowered expectations, but maybe tomorrow.

Daily Market Update – May 10, 2016 (7:30 AM)

Yesterday was one of those days that the market was pretty undecided about which direction to take, but to its credit it didn’t follow oil in its course reversal.

Futures had started strongly yesterday, but were eroding even as oil was doing well.

When oil strongly reversed course, the expectation might have been that stocks would have followed, but they didn’t.

This morning’s futures have both oil and stocks heading in the same direction, with the DJIA futures in triple digit gain territory.

With some preliminary retail data last week and some early earnings already reported this week, it looks as if retailers may not have much in the way of good news.

While we’ve gotten used to a year’s worth of disappointments from The Gap, hearing the same from The Limited caught just about everybody by surprise.

This week and next the major national retailers report earnings and what is likely to be key is what kind of optimism or pessimism they’re going to express for the rest of 2016.

The expectations are already low, but there isn’t likely to be any reward for trying to lengthen out the period of low expectations.

So far, this earnings season has punished companies that may have been lowered expectations, but still cast a negative tone on their guidance.

With a single new purchase yesterday, I’m still open to the possibility of more this week, but am still looking forward to seeing the end of the May 2016 option cycle and having a chance to move forward.

With so few weekly options in hand and more of them with monthly or beyond expirations, the trading has slowed down so much. For some of those positions I was just happy to get any kind of opportunity to sell a contract and I would still take some more of those opportunities while trying to wait out some precipitous declines.

With the market pointing nicely higher this morning, i would gladly give up some opportunity to add new positions in exchange for being able to sell some calls on uncovered positions, or at least get the chance to either roll over the single expiring position this week.

Those are just my own lowered expectations.

Daily Market Update – May 9, 2016 (Close)

There really isn’t too much in the way of economic news this week, but some of the important components of the GDP will be releasing their earnings reports this week and next.

With GDP estimated to be composed nearly 70% of consumer spending, it may be a big deal when the major national retailers begin to report their earnings.

Last week’s monthly sales data from The Limited cast a pall on retailers and many are talking about rising inventories and big sales as the winter was coming to its close.

With expectations already fairly low, it seems that people are looking for further disappointment.

The one thing that we have seen this earnings season is that when those lowered expectations aren’t met or when continued weak guidance is given, there isn’t a lot of forgiveness offered.

In the meantime, the futures trading in oil was higher, but stocks were seeing their early gains erode as the opening bell was approaching. 

In a very positive note, even as the DJIA fell by 35 points and the S&P 500 actually added a point, they both did so while oil was completely turning around from its morning trading to see it close the day much, much lower.

But stocks didn’t follow.

With disappointing employment numbers and increasing oil prices, it’s hard to see where the good news is going to come from or where the FOMC is going to draw its data to warrant their acting on another interest rate increase.

With absolutely no trades last week, I at least had some dividends to fall back upon.

That’s not the case this week, so I was anxious to make some trades once the session got underway and, as expected, I went after volatility and liquidity, trying to make up for lack of quantity of trading.

At the moment, I would just like this monthly option cycle to come to an end, as I do have some expiring positions next week and that may give an opportunity to at least do something to generate some income., even as that stock took some punishment before the day was over.

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

There really isn’t too much in the way of economic news this week, but some of the important components of the GDP will be releasing their earnings reports this week and next.

With GDP estimated to be composed nearly 70% of consumer spending, it may be a big deal when the major national retailers begin to report their earnings.

Last week’s monthly sales data from The Limited cast a pall on retailers and many are talking about rising inventories and gig sales as the winter was coming to its close.

With expectations already fairly low, it seems that people are looking for further disappointment.

The one thing that we have seen this earnings season is that when those lowered expectations aren’t met or when continued weak guidance is given, there isn’t a lot of forgiveness offered.

In the meantime, the futures trading in oil was higher, but stocks were seeing their early gains erode as the opening bell was approaching.

With disappointing employment numbers and increasing oil prices, it’s hard to see where the good news is going to come from or where the FOMC is going to draw its data to warrant their acting on another interest rate increase.

With absolutely no trades last week, I at least had some dividends to fall back upon.

That’s not the case this week, so I may be anxious to make some trades once the session gets underway and I’m likely going to go after volatility and liquidity, trying to make up for lack of quantity.

At the moment, I would just like this monthly option cycle to come to an end, as I do have some expiring positions next week and that may give an opportunity to at least do something to generate some income.

Right now I don’t ask for much, but any kind of a trade would be very welcome.

Daily Market Update – May 6, 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:   none

Expirations:   none

The following were ex-dividend this week:   BP (5/4 $0.595), INTC (5/4 $0.26), STX (5/6 $0.63)

The following are ex-dividend next week:   none

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

Daily Market Update – May 5, 2016 (Close)

Yesterday was another of those weak days that have been happening lately.

It looked as if oil was leading the way lower, but when ADP released some disappointing numbers, there was no real change.

It was, as I thought heading into that report and then heading into Friday’s Employment Situation Report, that no one really knows what to think and do in the event of either good news or bad news.

As some are beginning to question whether the FOMC is really driven by data, there is more reason for uncertainty.

It’s comforting to know that there are rules in place, even if you can’t understand the rules.

It’s a little more unsettling when there may be the appearance of arbitrariness.

For some, that explains the interest rate hike executed toward the end of 2015 and may be the basis for any other increase in 2016.

Yesterday’s ADP didn’t seem like very good news and with oil prices rising you do have to wonder where the spending will come from that will push a consumer led economy forward.

I wonder that.

Futures were sharply higher in the early part of the session as oil was much higher. However, as the session wore on, albeit still early in the session, those stock gains were getting smaller and smaller.

The triple digit gain in the DJIA futures had been cut in half while oil and precious metals were still climbing.

As the day wore on that gain disappeared in its entirety and then finally eked out a very small gain on the DJIA, while losing elsewhere.

With now only 1 days remaining in the week, it looks like this will be another that’s been seen all too often in 2016 for me.

No trades.

Luckily there were 3 ex-dividend positions as a source of cash, but that’s not really enough.

Next week there aren’t any on schedule, yet.

There just didn’t appear to be any really good entry opportunity this week and as we get ready to begin trading on Thursday, so far I’m glad that i didn’t go after anything.

It certainly would have been nice to have bought something, or even better to have sold calls on an existing positions, but the dynamic has been very week to this point.

Next week may be a bit more interesting as retailers start telling their stories. So far, there’s no reason to believe it will be any good, as today the retailers took a big blow.

This week was really just one boring story after another. Hopefully that will be different in just a few days, but at this point, I’d just like to see the May 2016 option cycle come to a close.

That’s only because I have a few positions in play and expiring at the end of the cycle and those could offer the only chances to get something meaningful done over the next 2 weeks.

Daily Market Update – May 5, 2016 (7:30 AM)

Yesterday was another of those weak days that have been happening lately.

It looked as if oil was leading the way lower, but when ADP released some disappointing numbers, there was no real change.

It was, as I thought heading into that report and then heading into Friday’s Employment Situation Report, that no one really knows what to think and do in the event of either good news or bad news.

As some are beginning to question whether the FOMC is really driven by data, there is more reason for uncertainty.

It’s comforting to know that there are rules in place, even if you can’t understand the rules.

It’s a little more unsettling when there may be the appearance of arbitrariness.

For some, that explains the interest rate hike executed toward the end of 2015 and may be the basis for any other increase in 2016.

Yesterday’s ADP didn’t seem like very good news and with oil prices rising you do have to wonder where the spending will come from that will push a consumer led economy forward.

I wonder that.

Futures were sharply higher in the early part of the session as oil was much higher. However, as the session wore on, albeit still early in the session, those stock gains were getting smaller and smaller.

The triple digit gain in the DJIA futures had been cut in half while oil and precious metals were still climbing.

With now only 2 days remaining in the week, it looks like this will be another that’s been seen all too often in 2016 for me.

No trades.

Luckily there were 3 ex-dividend positions as a source of cash, but that’s not really enough.

There just didn’t appear to be any really good entry opportunity this week and as we get ready to begin trading on Thursday, so far I’m glad that i didn’t go after anything.

It certainly would have been nice to have bought something, or even better to have sold calls on an existing positions, but the dynamic has been very week to this point.

Next week may be a bit more interesting as retailers start telling their stories.

This week was really just one boring story after another. Hopefully that will be different in just a few days, but at this point, I’d just like to see the May 2016 option cycle come to a close.

That’s only because I have a few positions in play and expiring at the end of the cycle and those could offer the only chances to get something meaningful done over the next 2 weeks.

Daily Market Update – May 4, 2016 (Close)

Yesterday wasn’t a very good day as the market decided to once again follow the path of oil.

This morning looked no better, as the losses were mounting and it got no better as the hours mounted.

The past two days come as lots of inconsequential earnings were being released.

Unfortunately, those are the ones that have been better than expected and were offering some decent guidance.

But being inconsequential, they’re inconsequential.

This week we may get something of consequence as the Employment Situation Report is released on Friday after seeing some disappointing numbers as the ADP Report was released.

It’s hard to even take a guess as to how the market would elect to receive good or bad news, although this morning the reaction was actually fairly muted as the market was already sharply down before ADP.

We all know what the FOMC wants and we all expect that it has to happen sooner or later, but will traders get enthused if the economy isn’t performing up to expectations and we get to continue along with these historically low interest rates?

That’s been the case for years now and it has to be both tiring and exasperating.

It’s like wanting your young child to always remain nothing more than someone with potential, but always being happy when the chance to pursue that potential is thwarted or never even arrives.

Watching the futures this morning was portending what I’ll likely be doing the rest of the day.

Watching.

Maybe I should have taken the time to go out and get some new glasses and at least make the day worthwhile to a small degree.

Daily Market Update – May 4, 2016 (7:30 AM)

Yesterday wasn’t a very good day as the market decided to once again follow the path of oil.

This morning looks no better, as the losses are mounting.

The past two days come as lots of inconsequential earnings are being released.

Unfortunately, those are the ones that have been better than expected and are offering some decent guidance.

But being inconsequential, they’re inconsequential.

This week we may get something of consequence as the Employment Situation Report is released on Friday and maybe even something this morning as the ADP Report is released.

It’s hard to even take a guess as to how the market would elect to receive good or bad news.

We all know what the FOMC wants and we all expect that it has to happen sooner or later, but will traders get enthused if the economy isn’t performing up to expectations and we get to continue along with these historically low interest rates?

That’s been the case for years now and it has to be both tiring and exasperating.

It’s like wanting your young child to always remain nothing more than someone with potential, but always being happy when the chance to pursue that potential is thwarted or never even arrives.

Watching the futures this morning is portending what I’ll likely be doing the rest of the day.

Watching.

Maybe I’ll take the time to go out and get some new glasses and at least make the day worthwhile to a small degree.