Category Archives: Daily Market Update

Daily Market Update – February 24, 2016 (7:30 AM)

Everyone knows that at some point things are going to change.

Ar some point oil is going to start moving consistently higher.

Also, at some point, the market will stop following oil.

At least it will stop following in the same direction.

The questions are when all of this happens and particularly when does the stock  disassociate itself from its direct relationship to oil?

Hopefully, the answer to that last question is that the stock market makes that disassociation fairly late after oil has started its reversal.

If the stock market comes to the realization that an increase in the price of oil is bad for growing consumer participation then we end up with the worst of all worlds.

That would mean that the market followed oil lower and at some point started going lower as oil went higher.

This morning, though, it looks as if the world that we’ve come to know is still intact.

Just as yesterday oil futures carried the market sharply lower, this morning oil futures are again carrying the market sharply lower.

If the early futures trading in oil holds, it would mark a 2 day decline of nearly 10%. Fortunately, while oil and stocks have been traveling in the same direction for far too long, the magnitudes haven’t been in a one to one relationship.

It looks as if this week is going to end up being a very, very quiet one.

Hopes that I had on Monday of being able to sell some calls this week on uncovered positions are getting less and less likely of becoming reality.

With a little bit of cash in hand, I still don’t feel compelled to put it to work in what appear to be bargains.

At least not until there’s real reason to believe that those bargains are going to be transitory.

The previous week’s worth of gains has by far been the best for the past 3 months, but even weekly options couldn’t have withstood the pressures of the market’s need to return those mid-week gains.

So, for now, it’s more sitting and waiting for some evidence that there is a reason to feel some sense of optimism.

There don’t appear to be any catalysts awaiting, but we also need to get rid of some over hangs, like the fear of another interest rate increase.

Maybe Friday’s GDP release will help us move on.

But I doubt that will be the case so quickly.

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Daily Market Update – February 23, 2016 (Close)

Yesterday was just like almost all of the rest of the days in 2016 and for many in 2015, too.

Oil went higher.

So stocks went higher.

Why oil went higher is anyone’s guess, as it was actually more than 7% higher at one point yesterday, with absolutely no change in anything in the supply – demand part of the equation.

While precious metals were lower yesterday, there was also a rebound in commodity prices, very notably in copper.

Those commodity price increases, if sustained, could be a big part of a justification to institute another interest rate increase.

Commodity cycles are often where it all begins, but there also has to be consumer demand and consumer ability to actually pay for the things that they demand.

With wages moving higher and unemployment falling and rents rising, you can see a scenario where demand for homes increases and basic building commodities follow.

Ordinarily the stock market would pounce on that kind of early news of an economy heating up, but recent past history says otherwise.

Maybe Friday’s GDP report will shed some light on what the consumer is demanding and paying for.

This morning the market looked as if it is going to give back some of yesterday’s gains, but again, 2 steps back for every 3 forward isn’t a bad way to get up the mountain.

That was the formula used last week and it wouldn’t be a bad idea to do the same this week if the summit is the goal.

While I’m not eager to trade when the market is showing a real move higher and prefer to do so on down days, I wouldn’t mind of few days of consolidation as an alternative and would make trades if some of the recent gains can be digested.

The fact that prices aren’t at the same bargain level that they were at a week ago doesn’t necessarily mean that they still aren’t at bargain levels, but a small sale would still be welcome or at least a slow down in the price increase.

Of course, today wasn’t really a small sale, but the market never had a chance.

Oil fell and the market fell.

It was that simple.

With that in mind, I don’t think that I’ll be doing much tomorrow, either, but I still wouldn’t have minded seeing some of yesterday’s big winners added to some of those gains, just to get a better opportunity to sell some calls on uncovered positions.

There were a number of trades that i was trying or at least hoping to make yesterday, but today wasn’t going to be the day, either.

Maybe tomorrow can become that day?

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Daily Market Update – February 23, 2016 (7:30 AM)

Yesterday was just like almost all of the rest of the days in 2016 and for many in 2015, too.

Oil went higher.

So stocks went higher.

Why oil went higher is anyone’s guess, as it was actually more than 7% higher at one point yesterday, with absolutely no change in anything in te supply – demand part of the equation.

While precious metals were lower yesterday, there was also a rebound in commodity prices, very notably in copper.

Those commodity price increases, if sustained, could be a big part of a justification to institute another interest rate increase.

Commodity cycles are often where it all begins, but there also has to be consumer demand and consumer ability to actually pay for the things that they demand.

With wages moving higher and unemployment falling and rents rising, you can see a scenario where demand for homes increases and basic building commodities follow.

Ordinarily the stock market would pounce on that kind of early news of an economy heating up, but recent past history says otherwise.

Maybe Friday’s GDP report will shed some light on what the consumer is demanding and paying for.

This morning the market looks as if it is going to give back some of yesterday’s gains, but again, 2 steps back for every 3 forward isn’t a bad way to get up the mountain.

That was the formula used last week and it wouldn’t be a bad idea to do the same this week if the summit is the goal.

While I’m not eager to trade when the market is showing a real move higher and prefer to do so on down days, I wouldn’t mind of few days of consolidation as an alternative and would make trades if some of the recent gains can be digested.

The fact that prices aren’t at the same bargain level that they were at a week ago doesn’t necessarily mean that they still aren’t at bargain levels, but a small sale would still be welcome or at least a slow down in the price increase.

With that in mind, I don’t think that I’ll be doing much today, but wouldn’t mind seeing some of yesterday’s big winners add to some of those gains, just to get a better opportunity to sell some calls on uncovered positions.

There were a number of trades that i was trying or at least hoping to make yesterday, so maybe today or tomorrow can become the day.

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Daily Market Update – February 22, 2016 (Close)

This week doesn’t have too much on the economic news front until we get to Friday and the GDP is released.

That report may be more important than usual as last week’s Consumer Price Index was suggesting upward price pressures which could justify an increase in interest rates.

While the CPI’s increase was mostly from health care costs and rents, if the GDP shows much in the way of a consumer led increase in demand, we could be set for the next small interest rate increase.

Based on the way the market has been behaving, that wouldn’t be a very good thing.

This morning, though, the market was behaving as it has for quite some time.

It’s just moving along with oil.

This morning those oil futures were sharply higher and so were stocks, as they dutifully followed without real regard as to the implication of oil getting more and more expensive.

With a little bit of cash generated from last week’s assignment, the very first for 2016 I would have been interested in adding some new positions but not with an impending 200 point gain in the DJIA this morning that became the real thing all throughout the trading session.

There was never even the slightest pretense of erasing the gain that came right out of the chute with the opening bell.

With no ex-dividend positions this week and with no positions to be rolled over nor assigned, I would have liked to have gotten something done, though, to generate some income.

In the meantime, I didn’t mind watching the market continue to go higher, but I would still prefer that it do so like it did last week and take some time to breathe and digest the gains.

Those gains have been considerable over the past week and could use some digesting.

Otherwise, I’m prepared for a quiet week, but would still welcome any opportunity to sell some calls on uncovered positions, even if that continues to mean looking at more distant expiration dates and trying to lock in some volatility enhanced premiums, dividends and maybe some capital gains on those shares, as well.

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Daily Market Update – February 22, 2016 (9:00 AM)

This week doesn’t have too much on the economic news front until we get to Friday and the GDP is released.

That report may be more important than usual as last week’s Consumer Price Index was suggesting upward price pressures which could justify an increase in interest rates.

While the CPI’s increase was mostly from health care costs and rents, if the GDP shows much in the way of a consumer led increase in demand, we could be set for the next small interest rate increase.

Based on the way the market has been behaving, that wouldn’t be a very good thing.

This morning, though, the market is behaving as it has for quite some time.

It’s just moving along with oil.

This morning those oil futures are sharply higher and so are stocks, as they dutifully follow without real regard as to the implication

With a little bit of cash generated from last week’s assignment, the very first for 2016 I would be interested in adding some new positions but not with an impending 200 point gain in the DJIA this morning.

With no ex-dividend positions this week and with no positions to be rolled over nor assigned, I would like to get something done, though, to generate some income.

In the meantime, I wouldn’t mind watching the market continue to go higher, but I would still prefer that it do so like it did last week and take some time to breathe and digest the gains.

Otherwise, I’m prepared for a quiet week, but would still welcome any opportunity to sell some calls on uncovered positions, even if that continues to mean looking at more distant expiration dates and trying to lock in some volatility enhanced premiums, dividends and maybe some capital gains on those shares, as well.

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Daily Market Update – February 19, 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:  EBAY

Rollovers: HPE

Expirations: F, UAL

The following were ex-dividend this week: AZN (2/17 $0.30)

The following are ex-dividend next week:  none

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

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Daily Market Update – February 18, 2016 (Close)

After yesterday’s gain, which came on top of Friday’s 300+ points and Tuesday’s 200+ points, February 2016 has gone from having started last week as even worse than January 2016 to actually being in the black.

That’s quite an achievement.

The real test is how the market handles such gaps higher.

798 points on the DJIA in just 3 trading sessions is pretty good by all measures.

What it has done is to bring the DJIA to some near term resistance.

While the S&P 500 is also at a near term resistance level, it does have another minor resistance level about 12 points higher.

After that, if you believe in charts, it’s do or die, as the next resistance level for both indexes is much higher.

On the DJIA it’s about 1200 points higher and for the S&P 500 it’s about 150 points higher.

What would be good would be to see the gains coming in smaller sizes and taking a day off every now and then to digest those gains.

But that would be the rational thing to do.

And today the market did the rational thing.

Although I had hoped that the gains would keep going for at least the final 2 days of the week.

Although it does look like there will finally be an assignment, the first in 2016, I’d love the idea of actually also being able to roll anything within the small number of expiring positions. Even going out a few months would be nice and also a nice change of pace.

Unfortunately,with the market taking the day off today, it wasn’t the time to find those opportunities popping up.

The futures were mildly higher this morning, with again, no real news to account for anything, although Asian markets were again nicely higher.

As the day progressed the market gave up its gains as oil led the way also giving up its gains.

The story seems to still be one of oil, but more and more the lessened possibility of increasing interest rates seems to be having a calming effect on traders.

At some point and I thought that point would have been here at least a quarter ago, there has to be some evidence that earnings are getting better in organic terms.

At some point there has to be a real reason for the market to go higher and not just on paradoxical reactions to bad news or from stock buybacks.

That would be nice, but I’ve waited a long time for the past to return.

In the stock market it usually does, but usually much more quickly than this macro-cycle has been doing.

For now, I’m still patient. Who knows, even oil may make some kind of a meaningful comeback.

Stranger things have happened.

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Daily Market Update – February 18, 2016 (7:30 AM)

After yesterday’s gain, which came on top of Friday’s 300+ points and Tuesday’s 200+ points, February 2016 has gone from having started last week as even worse than January 2016 to actually being in the black.

That’s quite an achievement.

The real test is how the market handles such gaps higher.

798 points on the DJIA in just 3 trading sessions is pretty good by all measures.

What it has done is to bring the DJIA to some near term resistance.

While the S&P 500 is also at a near term resistance level, it does have another minor resistance level about 12 points higher.

After that, if you believe in charts, it’s do or die, as the next resistance level for both indexes is much higher.

On the DJIA it’s about 1200 points higher and for the S&P 500 it’s about 150 points higher.

What would be good would be to see the gains coming in smaller sizes and taking a day off every now and then to digest those gains.

But that would be the rational thing to do.

I just hope that the gains keep going at least for the next 2 days.

Although it does look like there will finally be an assignment, the first in 2016, I’d love the idea of actually also being able to roll anything within the small number of expiring positions. Even going out a few months would be nice and also a nice change of pace.

The futures are mildly higher this morning, with again, no real news to account for anything, although Asian markets are again nicely higher.

The story seems to still be one of oil, but more and more the lessened possibility of increasing interest rates seems to be having a calming effect on traders.

At some point and I thought that point would have been here at least a quarter ago, there has to be some evidence that earnings are getting better in organic terms.

At some point there has to be a real reason for the market to go higher and not just on paradoxical reactions to bad news or from stock buybacks.

That would be nice, but I’ve waited a long time for the past to return.

In the stock market it usually does, but usually much more quickly than this macro-cycle has been doing.

For now, I’m still patient. Who knows, even oil may make some kind of a meaningful comeback.

Stranger things have happened.

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Daily Market Update – February 17, 2016 (Close)

What was good about yesterday was much more than the fact that the market climbed more than 200 points.

What was also good was that the climb higher was also a broad one, but even that wasn’t what was really good about yesterday.

What was really good was that the market, which may have been buoyed by early reports of an OPEC agreement to cut oil production, didn’t fall apart when the realization came that the agreement was complete rubbish.

Instead of following oil much lower when traders began to come to their senses that a production cut was going to be impossible, the market briefly reduced some of its gains, but never made an assault on the flat line.

Instead, it went higher and higher and finished the day nicely.

The bad part is that if the market realizes that its estrangement from oil price is a good thing, it may start to act properly if oil does start a sustained move higher.

At some point oil will have to do that and at some point the market will have to react in kind.

Today wasn’t going to be that day, though.

The problem still ahead becomes whether or not the market will come to that realization too soon and be unable to recoup its losses as it foolishly followed oil lower.

As with many things, we’ll see.

This morning, the futures were again pointing higher, even though there was really nothing very different about the world this morning.

In a rear view mirror the past days do look pretty good, but it’s hard to see whether there is anything up ahead that can convince the market that it’s time to approach the December 2015 recovery highs or maybe even beyond.

What today did bring, maybe thanks to oil’s strength, or maybe to the release of the FOMC minutes which gave some sense that there was a chance that 2016 might just not be a year of a series of interest rate increases, but rather maybe only a single such increase, was another 250+ point gain.

As is usually the case, it’s easy to get taken in when you see some of those strong moves higher as was the case yesterday and last Friday and now again today. However, 2016 has been filled with days like those and they only led to disappointment.

This time may be different, but for now, I’d be happy just to get a trade or two in for the week or maybe just an assignment.

For now, those aren’t overly lofty aspirations, but it would be nice to finally see 2016 get on track.

Maybe today, was that day, as February 2016 is now in the black.

Unbelievable.

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Daily Market Update – February 17, 2016 (7:30 AM)

What was good about yesterday was much more than the fact that the market climbed more than 200 points.

What was also good was that the climb higher was also a broad one, but even that wasn’t what was really good about yesterday.

What was really good was that the market, which may have been buoyed by early reports of an OPEC agreement to cut oil production, didn’t fall apart when the realization came that the agreement was complete rubbish.

Instead of following oil much lower when traders began to come to their senses that a production cut was going to be impossible, the market briefly reduced some of its gains, but never made an assault on the flat line.

Instead, it went higher and higher and finished the day nicely.

The bad part is that if the market realizes that its estrangement from oil price is a good thing, it may start to act properly if oil does start a sustained move higher.

At some point oil will have to do that and at some point the market will have to react in kind.

The problem becomes whether or not the market will come to that realization too soon and be unable to recoup its losses as it foolishly followed oil lower.

As with many things, we’ll see.

This morning, the futures are again pointing higher, even though there is really nothing very different about the world this morning.

In a rear view mirror the past days do look pretty good, but it’s hard to see whether there is anything up ahead that can convince the market that it’s time to approach the December 2015 recovery highs or maybe even beyond.

As is usually the case, it’s easy to get taken in when you see some of those syrong moves higher as was the case yesterday and last Friday. However, 2016 has been filled with days like those and they only led to disappointment.

This time may be different, but for now, I’d be happy just to get a trade or two in for the week or maybe just an assignment.

For now, those aren’t overly lofty aspirations, but it would be nice to finally see 2016 get on track.

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Daily Market Update – February 16, 2016 (Close)

Well, maybe it was a good thing to have had a day off yesterday to honor those dead Presidents who are very unlikely to find themselves replacing a non-President on the $10 bill.

While we were celebrating Presidents Day, the Nikkei and Shanghai indexes were having a real party and today we joined them, despite some party poopers trying to put a damper on things.

The Nikkei rose a wild 7% over the weekend, although that came after having lost a near amount earlier in the week.

Our own futures were up strongly yesterday while awaiting the real thing this morning.

Instead of bursting the bubble of a rally that wanted to exist, this morning also came word that OPEC has agreed on an oil production freeze and that sent those futures higher, as well.

As goes oil, so has gone the US stock market, although there should be a big caveat with that OPEC agreement.

It was done without Iran and Venezuela in attendance and the OPEC agreement calls for all members to abide.

So, it may not be very likely that there will actually be a reduction in production, particularly as Iran has already announced that it would be happy to abide by the resolution for a freeze.

Oh, one thing that came along with that agreement was a further caveat that they would do so once they got back to their own pre-embargo levels of production.

So that increase in the oil futures was overly optimistic if it’s actually predicated on some kind of cooperative spirit coming out of OPEC.

It took the oil futures market a few hours to come to that realization, but this time, the stock market didn’t follow oil lower once reality hit.

What in the world were oil traders thinking?

Last Friday’s stock market close and another strong day today come along at a good time.

While I have some positions set to expire this week, most aren’t going to be candidates for rollover, following an extended downward move by the market that is still far from getting back to normal.

If, however, any of those stocks of mine facing expiration this week do show some marked strength, there may be reason to continue to consider some longer term option sales, as I’ve been doing for a few months, including with some of those positions expiring this week.

Otherwise, my one new position opened last week did come as a surprise, considering how quiet 2016 has been in that regard.

I don’t know if it will be joined by any other new purchases this week, as I would much rather go along for a ride higher with the market and maybe get some opportunity to sell calls on uncovered positions as has been the case the past two weeks.

There isn’t too much economic news this week, although there are a number of Federal Reserve Governors scheduled to give speeches, so there may be some knee jerk reactions to the interpretations given to the words that will be used during the course of the week.

For his part, Neel Kashkari, the newest Federal Reserve Governor, made a splash with his very first speech today suggesting that a big overhaul of Wall Street was likely.

If the past is any indication, those interpretations will go back and forth as one Governor is construed as having said something dovish, while the next was a hawk. From the looks of today’s market it didn’t appear as if anyone paid any attention to the new Minneapolis Federal reserve Governor.

So as has been the case for 2016, I’ll probably sit and watch and hope for an occasional opportunity to do something to make some income this week.

Today got that off to a good start, so I could enjoy sitting a few more days as we await the arrival of the March 2016 option cycle.

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Daily Market Update – February 16, 2016 (7:00 AM)

Well, maybe it was a good thing to have had a day off yesterday to honor those dead Presidents who are very unlikely to find themselves replacing a non-President on the $10 bill.

While we were celebrating Presidents Day, the Nikkei and Shanghai indexes were having a real party.

The Nikkei rose a wild 7% over the weekend, although that came after having lost a near amount earlier in the week.

Our own futures were up strongly yesterday while awaiting the real thing this morning.

Instead of bursting the bubble of a rally that wanted to exist, this morning also came word that OPEC has agreed on an oil production freeze and that sent those futures higher, as well.

AS goes oil, so has gone the US stock market, although there should be a big caveat with that OPEC agreement.

It was done without Iran and Venezuela in attendance and the OPEC agreement calls for all members to abide.

So, it may not be very likely that there will actually be a reduction in production, particularly as Iran has already announced that it would be happy to abide by the resolution for a freeze.

Oh, one thing that came along with that agreement was a further caveat that they would do so once they got back to their own pre-embargo levels of production.

So that increase in the oil futures may be overly optimistic if it’s actually predicated on some kind of cooperative spirit coming out of OPEC.

Last Friday’s close and potentially another strong day today come along at a good time.

While I have some positions set to expire this week, most aren’t going to be candidates for rollover, following an extended downward move by the market.

If, however, any of those do show some marked strength during the week, there may be reason to continue to consider some longer term option sales, as I’ve been doing for a few months, including with some of those positions expiring this week.

Otherwise, my one new position opened last week did come as a surprise, considering how quiet 2016 has been in that regard.

I don’t know if it will be joined by any other new purchases this week, as I would much rather go along for a ride higher with the market and maybe get some opportunity to sell calls on uncovered positions as has been the case the past two weeks.

There isn’t too much economic news this week, although there are a number of Federal reserve Governors scheduled to give speeches, so there may be some knee jerk reactions to the interpretations given to the words that will be used during the course of the week.

If the past is any indication, those interpretations will go back and forth as one Governor is construed as having said something dovish, while the next was a hawk.

So as has been the case for 2016, I’ll probably sit and watch and hope for an occasional opportunity to do something to make some income this week.

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Daily Market Update – February 12, 2016 (7:00 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 (2/10 $0.60), IP (2/10 $0.44), MAT (2/12 $0.38), MRO (2/12 $0.05)

The following will be ex-dividend next week: AZN (2/17 $0.30)

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

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Daily Market Update – February 11, 2016 (Close)

The market initially thought that it got Janet Yellen to say what it is that they wanted to hear.

Market investors are now convinced that further interest rate increases have to be off the table for 2016.

The initial reaction to Janet Yellen’s suggestion on Wednesday that such rate increases would be deferred was enthusiastically accepted, until realizing that even a March rate increase wasn’t really off the table.

That lead to a large turnaround in the DJIA, but the broader S&P 500 didn’t end the day faring as badly as the DJIA had done.

This morning, though, as the futures were preparing us for the opening bell, you had your choice of culprits to blame for the large losses looming.

You could point at Janet Yellen, who still had a chance to mollify her comments as she continued her Congressional testimony today.

Or you could blame the meltdown in European banks and the very idea that negative interest rates could be a possibility in more than just Japan.

Of course, there was also that issue of further steep declines in oil this morning and gold soaring past important resistance levels after a couple of years of doldrums.

So you could take your pick.

This was again, then, a day that started out as being very likely to be a day of sitting and watching the various tantrums play themselves out and then seeing who, if anyone, is left standing by the closing bell.

The answer was that no one was really left standing, although yet again the market found a way to bounce fairly higher from its big losses to finally end the day with only a big loss and not a much bigger loss.

So that’s good. Right?

For one, I’m just glad to have gotten some trades in early in the week, although it will remain to be seen whether finally adding a new position yesterday after a prolonged buying boycott was a good idea.

Like lots of other people, I was watching the gyrations as Janet Yellen’s session with Congress was televised and wondering why there is so much uncertainty among those who are supposed to know what they’re doing.

Today didn’t deliver that answer.

I don’t think tomorrow will, either.

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

The market initially thought that it got Janet Yellen to say what it is that they wanted to hear.

Market investors are now convinced that further interest rate increases have to be off the table for 2016.

The initial reaction to Janet Yellen’s suggestion that such rate increases would be deferred was enthusiastically accepted, until realizing that even a March rate increase wasn’t really off the table.

That lead to a large turnaround in the DJIA, but the broader S&P 500 didn’t end the day faring as badly as the DJIA had done.

This morning, though, as the futures are preparing us for the opening bell, you have your choice of culprits to blame for the large losses looming.

You could point at Janet Yellen, who still has a chance to mollify her comments as she continues her Congressional testimony today.

Or you could blame the meltdown in European banks and the very idea that negative interest rates could be a possibility in more than just Japan.

Of course, there’s also that issue of further steep declines in oil this morning and gold soaring past important resistance levels after a couple of years of doldrums.

So take your pick.

This will again, then, likely be a day of sitting and watching the various tantrums play themselves out and then seeing who, if anyone, is left standing by the closing bell.

For one, I’m just glad to have gotten some trades in early in the week, although it will remain to be seen whether finally adding a new position yesterday after a prolonged buying boycott was a good idea.

Like lots of other people, I’ll be watching the gyrations as Janet Yellen’s session with Congress is televised and wondering why there is so much uncertainty among those who are supposed to know what they’re doing.

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