Category Archives: Daily Market Update

Daily Market Update – May 3, 2016 (Close)

Last week wasn’t a very good week unless you were long oil and commodities.

As this morning’s futures were shaping up, it’s hard to know whether to root for oil or against it, if you also have a portfolio with lots of other things.

Yesterday, as the market gained more than 100 points, it did so while moving opposite the direction of oil and commodities.

This morning, it looked as if the market wanted to give back everything in gained yesterday and get reacquainted with an old friend.

Both were moving lower this morning although there isn’t much in the way of news.

In the case of oil, even if you eliminate the supply and demand parts of the equation, you could understand why some would be thinking about taking profits after a nearly 80% gain in 2016.

I know that I’d be tempted, regardless of what the fundamentals were saying.

This week, at least until we get to Friday’s Employment Situation Report, there really isn’t very much to get excited about.

Earnings keep pouring in, but it has been a while since Clorox held the key to anything.

It’s nice that they beat, but they are as systemically important as is Facebook.

Banks, home sellers, retailers and industrials really matter.

Clorox with better than expected earnings? 

Not so much.

As it would turn out, oil stayed lower and so did the market, giving back a little more than it gained on Monday.

There was only one basically bright spot today, and that was Apple.

I watched Tim Cook’s interview yesterday evening and wondered who is now telling the truth.

He avowed no such fears about China as did Carl Icahn and I was inclined to put more faith in his statements, as were traders today, even while everything else went south.

With that, I may still consider opening a position in Apple before it is ex-dividend this week, as it gets ready to move beyond 8 straight losing sessions.

Otherwise, even as more bargains may have appeared today, I never felt overly anxious to jump into the water, as I hold on tight to cash until something suggests its reasonably safe to get into the water and easy to get out.

Daily Market Update – May 3, 2016 (8:30 AM)

Last week wasn’t a very good week unless you were long oil and commodities.

As this morning’s futures are shaping up, it’s hard to know whether to root for oil or against it, if you also have a portfolio with lots of other things.

Yesterday, as the market gained more than 100 points, it did so while moving opposite the direction of oil and commodities.

This morning, it looks as if the market wants to give back everything in gained yesterday and get reacquainted with an old friend.

Both are moving lower this morning although there isn’t much in the way of news.

In the case of oil, even if you eliminate the supply and demand parts of the equation, you could understand why some would be thinking about taking profits after a nearly 80% gain in 2016.

I know that I’d be tempted, regardless of what the fundamentals were saying.

This week, at least until we get to Friday’s Employment Situation Report, there really isn’t very much to get excited about.

Earnings keep pouring in, but it has been a while since Clorox held the key to anything.

It’s nice that they beat, but they are as systemically important as is Facebook.

Banks, home sellers, retailers and industrials really matter.

Clorox with better than expected earnings? 

Not so much.

I watched Tim Cook’s interview yesterday evening and wondered who is now telling the truth.

He avowed no such fears about China as did Carl Icahn and I’m inclined to put more faith in his statements.

With that, I may still consider opening a position in Apple before it is ex-dividend this week, as it gets ready to trade today after 8 straight losing sessions.

Otherwise, even as more bargains may be appearing today, I don’t think that I’ll be overly anxious to jump into the water, as I hold on tight to cash until something suggests its reasonably safe to get into the water and easy to get out.

Daily Market Update – May 2, 2016 (Close)

Last week wasn’t a very good week unless you were long oil and commodities.

I can’t complain personally, but that’s because I wasn’t complaining when oil and commodities were leading the market and more importantly, me,  lower.

For now, the trend is higher, but what has me somewhat concerned is that the stock market may finally be deciding that it’s time to break the irrational association it has had with input prices for quite a while.

It may be thinking that over as the S&P 500 was only about 3% away from its all time high as the day began..

That puts it within easy reach of anything. Easy reach of a new all time high as well as easy reach of another 10% correction.

Today it chose to get closer to that all time high and it did so as oil was falling.

Go figure.

But as we watch oil and the markets, you just knew that sooner or later the market would realize that rising energy and commodity prices weren’t a good thing.

But while knowing that had to be the case, there was a time when you just knew that the stock market would finally realize that falling input prices were a good thing, but it didn’t really work out that way for the longest time

This morning, the market, was slightly higher, as oil was going nowhere.

We’ll see what that means as the week progresses. Today it meant that the market wanted a reason to make up for the weakness in the latter half of last week.

With 3 ex-dividend positions this week, but no expiring positions, I’d like to add to the list of income producing stocks for the week, but would much rather be able to sell calls on any uncovered positions, even if tying them down for a while with the use of longer term expiration dates.

I’m definitely not adverse to spending money and dipping into a depleted cash reserve, but some of the uncertainty about how the market will react if oil does go higher and Friday’s employment Situation Report, do have me concerned about risk and reward.

Last week stocks decided not to follow oil higher, as it began to approach $50/barrel.

This week, there are lots of earnings reports, but not many of real consequence, as retailers begin to report next week.

Instead, what we do have is another Employment Situation Report where we may get to find out if there are even more people who can decide not to spend the money that they now have.

And of course, we still have oil.

With talk now of a possible interest rate increase coming at the June 2016 FOMC Statement release, it will be very interesting to see the market’s reaction if there is a strong employment number on Friday, particularly as a rational person would try to square that away with the lackluster GDP number.

Of course, that won’t happen, because all anyone cares about anymore is the latest number and not how the pieces all fir or don’t fit together.

I’m expecting a strong report on Friday and would think that the market might take it well, in the realization that they would still have nearly 2 months at current rates.

That, of course, presupposes that the FOMC would wait until June, as it had given some hint that they wouldn’t rule out an interim increase.

That, I think, would spook markets.

For now, I don’t see much to act as a catalyst in either direction, unless oil continues its march higher and higher.

On the other hand, if oil continues lower, the market may finally realize that low oil prices can only be good under these circumstances.

Daily Market Update – May 2, 2016 (8:30 AM)

Last week wasn’t a very good week unless you were long oil and commodities.

I can’t complain personally, but that’s because I wasn’t complaining when oil and commodities were leading the market and more importantly, me,  lower.

For now, the trend is higher, but what has me somewhat concerned is that the stock market may finally be deciding that it’s time to break the irrational association it has had with input prices for quite a while.

It may be thinking that over as the S&P 500 is only about 3% away from its all time high.

That puts it within easy reach of anything. Easy reach of a new all time high as well as easy reach of another 10% correction.

But as we watch oil and the markets, you just knew that sooner or later the market would realize that rising energy and commodity prices weren’t a good thing.

But while knowing that had to be the case, there was a time when you just knew that the stock market would finally realize that falling input prices were a good thing, but it didn’t really work out that way for the longest time

This morning, the market, is slightly higher, as oil is going nowhere.

We’ll see what that means as the week progresses.

With 3 ex-dividend positions this week, but no expiring positions, I’d like to add to the list of income producing stocks for the week, but would much rather be able to sell calls on any uncovered positions, even if tying them down for a while with the use of longer term expiration dates.

I’m definitely not adverse to spending money and dipping into a depleted cash reserve, but some of the uncertainty about how the market will react if oil does go higher and Friday’s employment Situation Report, do have me concerned about risk and reward.

Last week stocks decided not to follow oil higher, as it began to approach $50/barrel.

This week, there are lots of earnings reports, but not many of real consequence, as retailers begin to report next week.

Instead, what we do have is another Employment Situation Report where we may get to find out if there are even more people who can decide not to spend the money that they now have.

And of course, we still have oil.

With talk now of a possible interest rate increase coming at the June 2016 FOMC Statement release, it will be very interesting to see the market’s reaction if there is a strong employment number on Friday, particularly as a rational person would try to square that away with the lackluster GDP number.

Of course, that won’t happen, because all anyone cares about anymore is the latest number and not how the pieces all fir or don’t fit together.

I’m expecting a strong report on Friday and would think that the market might take it well, in the realization that they would still have nearly 2 months at current rates.

That, of course, presupposes that the FOMC would wait until June, as it had given some hint that they wouldn’t rule out an interim increase.

That, I think, would spook markets.

For now, I don’t see much to act as a catalyst in either direction, unless oil continues its march higher and higher.

Daily Market Update – April 29, 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:  M

Expirations:   none

The following were ex-dividend this week:  F (4/27 $0.15), Ms (4/27 $0.15), KMI (4/28 $0.125)

The following are ex-dividend next week:   INTC (5/4 $0.26), BP (5/4 $0.595)

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

Daily Market Update – April 28, 2016 (Close)

Yesterday, the market reacted positively to the FOMC Statement release.

Going from a mildly negative position to a mildly positive position pretty much reflected what was in that FOMC Statement.

Essentially, there was nothing, which itself wasn’t a surprise.

That was some suggestion of confidence in the path of the economy, which then ignited talk of a June 2016 interest rate increase.

This morning’s GDP may have given some clues as to how much the consumer is actually participating, but based on this morning’s futures, the market isn’t in a buying mood and apparently, neither were consumers.

Oil, for a change, didn’t appear to be a precipitating factor this morning and really wasn’t throughout the day.

Oil was absolutely flat to begin the morning, as the DJIA futures were down triple digits, with lots of earnings to come this morning.

Ultimately, none of that mattered.

All that really mattered was that Carl Icahn expressed his pessimism and revealed that he had sold his entire Apple position.

With the week nearing its end, I was just hoping to be able to see my lone expiring position either get assigned or rolled over.

Now, after the market sell off, that hope of assignment is more faint.

However, I continue not minding seeing some of those positions get rolled over, even if their in the money, rather than assigned.

Even as volatility falls, the rollover premiums are often good enough for select positions to make that a more lucrative, and perhaps less risky venture, than trying to find a new place to park money.

On the other hand, I wouldn’t mind parking some money in cash, even as the market hasn’t been swooning.

For now, it’s been mostly oil and commodities that have really lead the way for 2016, just as they led the other way for 2015.

With that going on, I don’t mind being on the long side for a change and am happy to continue watching those positions move higher, even as they really don’t spell anything good for the broader market nor for the economy.

Today ended up just being another day of out-performance thanks to some miserable performing positions that weren’t dumped.

I’ll take that as long as it can keep on going

Daily Market Update – April 28, 2016 (7:30 AM)

Yesterday, the market reacted positively to the FOMC Statement release.

Going from a mildly negative position to a mildly positive position pretty much reflected what was in that FOMC Statement.

Essentially, there was nothing, which itself wasn’t a surprise.

That was some suggestion of confidence in the path of the economy, which then ignited talk of a June 2016 interest rate increase.

This morning’s GDP may give some clues as to how much the consumer is actually participating, but based on this morning’s futures, the market isn’t in a buying mood.

Oil, for a change, doesn’t appear to be a precipitating factor.

It’s absolutely flat to begin the morning, as the DJIA futures are down triple digits, with lots of earnings to come this morning.

With the week nearing its end, I now just hope to be able to see my lone expiring position either get assigned or rolled over.

I continue not minding seeing some of those positions get rolled over, even if their in the money, rather than assigned.

Even as volatility falls, the rollover premiums are often good enough for select positions to make that a more lucrative, and perhaps less risky venture, than trying to find a new place to park money.

On the other hand, I wouldn’t mind parking some money in cash, even as the market hasn’t been swooning.

For now, it’s been mostly oil and commodities that have really lead the way for 2016, just as they led the other way for 2015.

With that going on, I don’t mind being on the long side for a change and am happy to continue watching those positions move higher, even as they really don’t spell anything good for the broader market nor for the economy.

Daily Market Update – April 27, 2016 (Close)

The market was fairly boring during yesterday’s regular trading session, only moving in a range of about 100 points all day long.

The fireworks may have started after the closing bell with some big disappointments in earnings.

Those may be mollified this morning in the futures as oil was again up in the 2-3% range.

Later, the really big news could have come as the FOMC Statement was released and we could all wonder about the nuanced meanings behind each and every word.

Instead, the market traded in a range of only 150 points as no one was expecting the announcement of a rate increase, especially after the Atlanta Federal Reserve lowered its GDP forecast last month, but you never can know.

The FOMC didn’t change rates, but they did suggest the economy was worthy of their confidence.

Whatever that may mean.

Apparently, no one really knew, but the overall idea was that whatever happened wasn’t bad.

Maybe it was even good.

Tomorrow we have a GDP release, as well, and we may get some better insight into what the consumer is doing with all of that extra money coming from increased employment, living wages and lower oil prices.

So far, the answer has been a big, fat, “nothing.”

That’s also about how much I’ve done this week when it comes to trading, but some of the overnight declines in those reporting earnings last night could have made the morning an attractive one as the morning got ready for trading.

Oil, though, saved the day.

Part of this week’s strategy heading into the week was to consider some of those positions if they did fare poorly when announcing earnings.

In those cases, the hope is that the decline is an over-reaction and not the tip of the iceberg.

So often, the put premiums on such stocks are still very high, as the expectation is for the other shoe to drop.

With the FOMC looming overhead, though, there may have been reason to wait to consider any trade until after the announcement, so as to not also get caught up in a general market downdraft.

Ultimately, it didn’t matter. But if you are still long oil and commodities, it was another good day.

Daily Market Update – April 27, 2016 (7:30 AM)

The market was fairly boring during yesterday’s regular trading session, only moving in a range of about 100 points all day long.

The fireworks may have started after the closing bell with some big disappointments in earnings.

Those may be mollified this morning in the futures as oil is again up in the 2-3% range.

Later, the really big news may come or not come, as the FOMC Statement is released and we can all wonder about the nuanced meanings behind each and every word.

No one is expecting the announcement of a rate increase, especially after the Atlanta Federal Reserve lowered its GDP forecast last month, but you never know.

Tomorrow we have a GDP release, as well, and we may get some better insight into what the consumer is doing with all of that extra money coming from increased employment, living wages and lower oil prices.

So far, the answer has been a big, fat, “nothing.”

That’s also about how much I’ve done this week when it comes to trading, but some of the overnight declines in those reporting earnings last night may start becoming attractive as the morning gets ready for trading.

Part of this week’s strategy heading into the week was to consider some of those positions if they did fare poorly when announcing earnings.

In those cases, the hope is that the decline is an over-reaction and not the tip of the iceberg.

So often, the put premiums on such stocks are still very high, as the expectation is for the other shoe to drop.

With the FOMC looming overhead, though, there may be reason to wait to consider any trade until after the announcement, so as to not also get caught up in a general market downdraft.

Daily Market Update – April 26, 2016 (Close)

The market recovered nicely from a big loss yesterday as oil and commodities gave back some of the big gains they’ve made over the past two weeks.

Heading into Wednesday’s FOMC Statement release, you might have had reason to suspect that trading would be pretty quiet, but there’s still the matter of oil and lots of important earnings announcements this week.

This morning, the market again looked as if it will open flat, just as it looked yesterday, but some earnings are coming in that aren’t terrible.

That’s the way the bar is set right now.

The expectation is for terrible and if it’s anything better, well then there’s reason for exaltation.

This morning, not all of those numbers have looked better than the expectations, but more importantly, some companies were giving better guidance.

When oil companies start to give better guidance, such as BP did this morning, there’s reason for some excitement, even if their guidance is heavily dependent on workforce reductions.

History has shown that the market rewards those kind of things, even as they are bad for the overall economy.

Microeconomics versus macroeconomics.

It’s a story as old as Cain and Abel.

This morning’s flat market came the day before the FOMC Statement release, which for the past couple of years has been a day for markets to move strongly higher.

That wasn’t the case last month and may no longer be the case, as the countdown for an interest rate increase is really on full alert.

The market stayed flat all day, with the DJIA trading in a 100 point range.

While oil made a big move higher today, the market didn’t follow suit.

I have some money to spend this week and am still considering doing so, but am torn between the risk of earnings and the lure of dividends.

That’s a story as old as Cain and Abel, too.

This morning’s futures did have oil weaker, but the market wasn’t following very closely. It now seems to be more reactive to larger kind of moves in oil, but today’s big move higher didn’t do the trick.

Oil now appears to be getting comfortable above $40 and the next level that had to be broken was $45.

After today, sights are beginning to get set on $50

At some point, someone is going to look at increase gasoline prices, up about $0.08 last week and make note of how that’s going to hurt the summer travel season.

True, but logic hasn’t worked any of the way down in the price, so we’ll see what role logic may play if the optimistic outlook for the price of oil is correct.

I, for one, who suffered on the way down, would like to see the association continue, even if it is illogical.

With a few ex-dividend positions this week, one potential rollover and the sale of calls on an uncovered position, I’d still like to see some more activity this week.

The idea of a surprise from the FOMC doesn’t seem too likely, but I assume that they use very different criteria than the rest of us when interpreting data, especially the data that we don’t have access to, yet.

Such as Thursday’s GDP.

Meanwhile, the stiff wind before tomorrow’s FOMC may come from earnings releases after the market’s close, as there were some big and prominent losers that may catch some by surprise tomorrow morning, as one man’s buying opportunity is another man’s need to sell.

Daily Market Update – April 26, 2016 (7:30 AM)

The market recovered nicely from a big loss yesterday as oil and commodities gave back some of the big gains they’ve made over the past two weeks.

Heading into Wednesday’s FOMC Statement release, you might have had reason to suspect that trading would be pretty quiet, but there’s still the matter of oil and lots of important earnings announcements this week.

This morning, the market again looks as if it will open flat, just as it looked yesterday, but some earnings are coming in that aren’t terrible.

That’s the way the bar is set right now.

The expectation is for terrible and if it’s anything better, well then there’s reason for exaltation.

This morning, not all of those numbers have looked better than the expectations, but more importantly, some companies are giving better guidance.

When oil companies start to give better guidance, such as BP did this morning, there’s reason for some excitement, even if their guidance is heavily dependent on workforce reductions.

History has shown that the market rewards those kind of things, even as they are bad for the overall economy.

Microeconomics versus macroeconomics.

It’s a story as old as Cain and Abel.

This morning’s flat market comes the day before the FOMC Statement release, which for the past couple of years has been a day for markets to move strongly higher.

That wasn’t the case last month and may no longer be the case, as the countdown for an interest rate increase is really on full alert.

I have some money to spend this week and am still considering doing so, but am torn between the risk of earnings and the lure of dividends.

That’s a story as old as Cain and Abel, too.

This morning’s futures do have oil weaker, but the market isn’t following very closely. It now seems to be more reactive to larger kind of moves in oil.

Oil now appears to be getting comfortable above $40 and the next level that has to be broken is $45.

At some point, someone is going to look at increase gasoline prices, up about $0.08 last week and make note of how that’s going to hurt the summer travel season.

True, but logic hasn’t worked any of the way down in the price, so we’ll see what role logic may play if the optimistic outlook for the price of oil is correct.

I, for one, who suffered on the way down, would like to see the association continue, even if it is illogical.

With a few ex-dividend positions this week, one potential rollover and the sale of calls on an uncovered position, I’d still like to see some more activity this week.

The idea of a surprise from the FOMC doesn’t seem too likely, but I assume that they use very different criteria than the rest of us when interpreting data, especially the data that we don’t have access to, yet.

Such as Thursday’s GDP.

Daily Market Update – April 25, 2016 (Close)

There’s so much going on this week, that it may only make sense that the market might start the week taking a break to get things underway.

In addition to lots and lots of systemically important earnings reports during the course of the week, there is an FOMC Statement release and the GDP release the following day.

Add to that the continuing creep higher of oil and commodities and there shouldn’t be too much of a shortage of events that could catalyze movements in either direction.

What we know so far from earnings is that it’s alright to have mediocre numbers, as long as those mediocre numbers at least had the decency to meet already lowered expectations.

If there were even worse than what was expected or the company continued to guide lower for the next quarter, there was a whole world of hurt awaiting.

Lots of stocks reporting earnings fell into that latter category last week and there were some really big movers.

What there wasn’t much of were really big movers to the upside, even as the market did finish higher for the week.

This week I do have some cash and am willing to dip into the smaller cash reserve than I would like to have.

With 3 ex-dividend positions and one contract expiring this week there is already some income, but as is usually the case, I’d like more.

There are some uncovered positions that may be ready to finally find some cover. For those, I’m not necessarily looking to make a killing, even as their holding periods may have been far too long.

Mostly, I just want to either add to my cash reserve or have some other opportunity to generate regular income from dead money.

I did get a small chance to do that today, happily selling calls on those Seagate Technology puts that were assigned last Friday. With its earnings coming up this week and a need to hold one’s breath over the dividend announcement, I elected to go out a few weeks, just in case the market reacted poorly to whatever news may come its way.

While doing so and looking for other opportunities to nake money from dead positions, I’d at least like it to be the case that the position, once closed lost only in terms of opportunity.

While even that is too much, it’s better than losing in the absolute.

With some big events for the week occurring after we pass the mid-way mark, I’m not too keen on putting more at risk, but some of the earnings related trades have some appeal.

There’s not too much reason, for example, to think that Facebook is going to be even more adversely impacted by the FOMC Statement or the GDP.

You and I might be adversely impacted, and maybe advertisers will cut back a little, but is Twitter or Facebook really that sensitive to the kinds of events that investors try to game?

We’ll findf out, although today oil was once again the reason markets went anywhere, whether related to oil or not.

So if you’re still looking for reason and logic, you may need to go elsewhere.

Daily Market Update – April 25, 2016 (9:00 AM)

There’s so much going on this week, that it may only make sense that the market may be taking a break to get things underway.

In addition to lots and lots of systemically important earnings reports during the course of the week, there is an FOMC Statement release and the GDP release the following day.

Add to that the continuing creep higher of oil and commodities and there shouldn’t be too much of a shortage of events that could catalyze movements in either direction.

What we know so far from earnings is that it’s alright to have mediocre numbers, as long as those mediocre numbers at least had the decency to meet already lowered expectations.

If there were even worse than what was expected or the company continued to guide lower for the next quarter, there was a whole world of hurt awaiting.

Lots of stocks reporting earnings fell into that latter category last week and there were some really big movers.

What there wasn’t much of were really big movers to the upside, even as the market did finish higher for the week.

This week I do have some cash and am willing to dip into the smaller cash reserve than I would like to have.

With 3 ex-dividend positions and one contract expiring this week there is already some income, but as is usually the case, I’d like more.

There are some uncovered positions that may be ready to finally find some cover. For those, I’m not necessarily looking to make a killing, even as their holding periods may have been far too long.

Mostly, I just want to either add to my cash reserve or have some other opportunity to generate regular income from dead money.

While doing so, I’d at least like it to be the case that the position, once closed lost only in terms of opportunity.

While even that is too much, it’s better than losing in the absolute.

With some big events for the week occurring after we pass the mid-way mark, I’m not too keen on putting more at risk, but some of the earnings related trades have some appeal.

There’s not too much reason, for example, to think that Facebook is going to be even more adversely impacted by the FOMC Statement or the GDP.

You and I might be adversely impacted, and maybe advertisers will cut back a little, but is Twitter or Facebook really that sensitive to the kinds of events that investors try to game?

Daily Market Update – April 22, 2016 (7:30 AM)

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

The following trade outcomes are possible today:

Assignments: none

Rollovers: M

Expirations: STX puts**

**I may try to roll STX puts over, if the ex-dividend date is confirmed before today’s close. It is possible that the ex-dividend date could be as early as next week, in which case, I’d rather hold shares and potentially sell calls.

The following were ex-dividend this week:  FAST (4/22 $0.30)

The following will be ex-dividend next week:  F (2/27 $0.15), MS (2/27 $0.15), KMI (2/28 $0.125)

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