Category Archives: Daily Market Update

Daily Market Update – November 16,  2015  (7:30 AM)

After last week’s terrible showing, the market needs some kind of positive news.

The weekend didn’t bring any happiness on the worldwide front that could spill over to begin the week and only injected more uncertainty into international affairs.

There is lots that could happen this week that hasn’t been discounted by investors and could be market disruptive.

With continuing earnings reports from national retailers this week, there isn’t very much reason to believe that what comes this week will be very different from the disappointments of last week that added onto the disappointment that came from the hawkish tones coming from FOMC members.

Both of last week’s major events were somewhat surprising.

While you could argue that retailer earnings , being backward looking, wouldn’t yet reflect recent improvements in the economy, it’s what came after earnings were reported that brought surprise. The real surprise was that forward guidance continued to be sour, with no suggestion that discretionary spending would pick up.

That didn’t seem to be a likely thing to be heard.

The FOMC, on the other hand, while it obviously will raise interest rates sometime in the future, surprisingly continued its hawkish comments, even will events on the ground didn’t seem to justify those comments.

Whatever wonders the market perceived in October came under assault as soon as November began and the market opens this week almost 6% below its all time high, after having mounted a recovery that brought it back to within about 1.5% of that level.

With such a sharp decline last week you could understand why there might be some kind of recovery this week, but based on the pre-opening futures it appears to be a fairly feeble attempt.

The only positive you might get from this morning’s open is that the futures did a terrible job last week in predicting market direction and magnitude.

With little expectation that the remaining earnings reports are going to buoy the market, the only reasonable possibilities for a rally into the end of the year would likely come from some FOMC decision, rather than continuing indecision.

The market could just as easily climb higher if and when the FOMC raises interest rates or climb higher if the FOMC announces it is delaying that increase until an improvement in the economy sufficient to warrant such an increase would finally occur.

Simply announcing that rates will remain unchanged without indicating a more dovish stance would not mollify investors and would keep them unnecessarily nervous.

The latter of those two FOMC actions might bring some happiness for traders, but it won’t last very long.

Meanwhile, with a number of positions set to expire this week, but with lots of uncertainty from last week, I may not be rushing in to make any new purchases.

I’d be very happy to have some chance to rollover existing positions expiring this week or see them assigned.

I plan to be watchful this morning, but as has been the recent case, may look more at ex-dividend trades and might consider expirations of more than a week’s duration, particularly if it looks as if there could be some assignments this week.

Daily Market Update – November 13,  2015  (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:  IP

The following were ex-dividend this week:  IP (11/12 $0.48)

The following are ex-dividend next week:  MRO (11/16 $0.05)

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

Daily Market Update – November 12,  2015  (Close)

Well, that was really bad news yesterday.

Macy’s had absolutely nothing good to say about itself nor its prospects for 2016, as it sunk to its lowest level in about 30 months.

It’s not that Macy’s is necessarily the harbinger of things to come or the leader in retail, but in many ways it can be and it is, respectively.

Even if it isn’t either of those, you would never know, based upon how most every other major national retailer followed suit, as Macy’s itself fell about 14%.

There’s still lots more to come from the retail sector, but you would have to think that most are going to follow Macy’s experience, although maybe some other, somewhat lower end retailers don’t count on foreign tourist’s spending quite as much as Macy’s may.

Just ask Nordstrom, which reported after today’s closing bell, and was about 21% lower in the after hours trades.

Still, their gloomy outlook for 2016, even when discounting decreased foreign tourist spending, doesn’t seem to be consistent with the idea of a resurging consumer with more money to spend than has been the case for the past few years.

Maybe they’re just spending it somewhere else, but we’ll find that out soon enough, unless everyone is losing substantial market share to on-line retailers, as Amazon has surprised everyone with profits the past two quarters.

While I ended yesterday thinking that there wasn’t too much likelihood of spending down some of that cash pile with what little remained this week, the sheer size of the decline in Macy’s has to make one at least curious about wondering just how much more short term risk could be involved if entering a position right now.

As it would turn out, just when you thought today’s market may have bottomed out at a 150 loss on the DJIA, that loss settled in at 254 points, with a final wave of selling beginning at 2 PM, although not in a crescendo kind of way.

As mentioned the past couple of days, with already a number of positions set to expire next week as the November 2015 cycle comes to an end, and as this week was nearing its own end, right now any new purchases would be more likely to look at a new definition of what constitutes “short term.” Instead of looking at weekly options, there may be reason to look at those expiring the week after the monthly expiration week.

That would take things to Thanksgiving week and beyond.

Of course, I though that the sale of puts on Seagate Technology might be an exception and went for the November 20 expiration, only to see Seagate follow the rest of the market in the final couple of hours, too.

The original idea was to take enough time to show some recovery, such as in retail, with Macy’s, at a time when even feeble recovery could be sufficient to get a decent return, particularly if also looking just a bit further out in time, as an ex-dividend date is at hand on December 11th, as well.

That was the plan executed with Macy’s today and an out of the money strike was used in an attempt to grab dividend, premium and share profits.

Time will tell, though.

Otherwise, with only a single position set to expire this week, there’s not too much else to be thinking about unless some other great opportunities may seem to pop up and find a way to be convincing enough to part with some cash at a time when the market seems to be pretty tentative and now could easily find a way to give back some more of what it had gained since the beginning of October.

Daily Market Update – November 12,  2015  (7:30 AM)

Well, that was really bad news yesterday.

Macy’s had absolutely nothing good to say about itself nor its prospects for 2016, as it sunk to its lowest level in about 30 months.

It’s not that Macy’s is necessarily the harbinger of things to come or the leader in retail, but in many ways it can be and it is, respectively.

Even if it isn’t either of those, you would never know, based upon how most every other major national retailer followed suit, as Macy’s itself fell about 14%.

There’s still lots more to come from the retail sector, but you would have to think that most are going to follow Macy’s experience, although maybe some other, somewhat lower end retailers don’t count on foreign tourist’s spending quite as much as Macy’s may.

Still, their gloomy outlook for 2016, even when discounting decreased foreign tourist spending, doesn’t seem to be consistent with the idea of a resurging consumer with more money to spend than has been the case for the past few years.

Maybe they’re just spending it somewhere else, but we’ll find that out soon enough, unless everyone is losing substantial market share to on-line retailers, as Amazon has surprised everyone with profits the past two quarters.

While I ended yesterday thinking that there wasn’t too much likelihood of spending down some of that cash pile with what little remained this week, the sheer size of the decline in Macy’s has to make one at least curious about wondering just how much more short term risk could be involved if entering a position right now.

As mentioned the past couple of days, with already a number of positions set to expire next week as the November 2015 cycle comes to an end, and as this week was nearing its own end, right now any new purchases would be more likely to look at a new definition of what constitutes “short term.” Instead of looking at weekly options, there may be reason to look at those expiring the week after the monthly expiration week.

That would take things to Thanksgiving week and beyond.

Perhaps enough time to show some recovery in retail, such as Macy’s, at a time when even feeble recovery could be sufficient to get a decent return, particularly if also looking just a bit further out in time, as an ex-dividend date is at hand on December 11th, as well.

Otherwise, with only a single position set to expire this week, there’s not too much else to be thinking about unless some other great opportunities may seem to pop up and find a way to be convincing enough to part with some cash at a time when the market seems to be pretty tentative and now could easily find a way to give back some more of what it had gained since the beginning of October.

Daily Market Update – November 11,  2015  (7:30 AM)

For a while, it looked like yesterday might serve to heap on to Monday’s significant loss.

There wasn’t too much of a reason for what was seen on Monday, but by mid-morning of Tuesday the decline seemed to run out of steam.

There wasn’t much reason for it to have continued and there wasn’t much reason for it to have stopped, although some technicians could point to a very minor point of support at about 17663 on the DJIA, although they would be hard pressed to find anything really similar on the S&P 500.

Sometimes things just happen.

This morning, in the early futures trading, it appeared as if the trend higher that started yesterday morning was going to continue, but there’s really nothing to cause any significant kind of move in either direction as we awaited the flow of national retailer earnings that really started this morning with Macy’s.

And is wasn’t good.

What was needed from those retailers is collective optimism and not just cheery optimism regarding the future coming from the more high end among those in that sector.

That definitely wasn’t the way the flow of earnings got off to its start. Macy’s painted a pretty bleak picture for itself and it hit retail across the board.

That cheeriness that I was really expecting to hear couldn’t  be based on higher per share profits, but rather from increasing revenue.

That’s not the picture that was painted today.

Investors might still be willing to accept lower earnings per share if there is some tangible increase on the top line, especially for those companies that can report relatively clean top line numbers and not have to drag currency exchange into the discussion.

For the market to take a cue from retailers offering a positive view of what awaits them in 2016 there has to be some good news across the board, but especially at the middle level retailers.

Maybe Macy’s is just a tad too high in the pecking order and maybe it doesn’t reflect what is really going on.

But it does. At least the market believed so today as it hit that sector so hard after the disappointing news.

In essence, we have to see people demonstrating that they are not only back at work and collecting a paycheck once again, but that they are also confident enough in being able to hold onto that job for a while, so that they could do something with those paychecks other than paying down debt.

That’s something that’s been missing from the equation even as the unemployment rate begins to fall close to the levels that we usually refer to as “structural.”

Following today, it now looks as if it’s definitely going to end up being a very quiet week for personal trading.

With the opportunities for some ex-dividend trades now gone, at this point, if there are going to become actual new position trades, the greatest likelihood is that they would be paired with call sales for Thanksgiving week or beyond.

That theme may continue through next week, with sights being set beyond next week’s monthly expiration and more toward December extended weekly options.

Daily Market Update – November 11,  2015  (7:30 AM)

For a while, it looked like yesterday might serve to heap on to Monday’s significant loss.

There wasn’t too much of a reason for what was seen on Monday, but by mid-morning of Tuesday the decline seemed to run out of steam.

There wasn’t much reason for it to have continued and there wasn’t much reason for it to have stopped, although some technicians could point to a very minor point of support at about 17663 on the DJIA, although they would be hard pressed to find anything really similar on the S&P 500.

Sometimes things just happen.

This morning, in the early futures trading, it appears as if the trend higher that started yesterday morning was going to continue, but there’s really nothing to cause any significant kind of move in either direction as we await the flow of national retailer earnings that really started this morning.

What is needed from those retailers is collective optimism and not just cheery optimism regarding the future coming from the more high end among those in that sector.

That cheeriness also can’t be based on higher per share profits, but rather from increasing revenue. Investors might even be willing to accept lower earnings per share if there is some tangible increase on the top line, especially for those companies that can report relatively clean top line numbers and not have to drag currency exchange into the discussion.

For the market to take a cue from retailers offering a positive view of what awaits them in 2016 there has to be some good news across the board, but especially at the middle level retailers. In essence, people have to demonstrate that they are not only back at work and collecting a paycheck once again, but that they are also confident enough in being able to hold onto that job for a while, so that they could do something with those paychecks other than paying down debt.

That’s something that’s been missing from the equation even as the unemployment rate begins to fall close to the levels that we usually refer to as “structural.”

It looks as if this going to end up being a very quiet week for personal trading.

While there are still some opportunities available with some ex-dividend positions, at this point, if those are going to become actual trades, the greatest likelihood is that they would be paired with call sales for Thanksgiving week or beyond.

If there are no new positions opened today, that theme may continue through next week, with sights being set beyond next week’s monthly expiration and more toward December extended weekly options.

Daily Market Update – November 10,  2015  (Close)

For people who like to track such things, yesterday’s very unexpected and unwarranted market decline brought the DJIA. on a YTD basis to a loss.

The S&P 500 wasn’t very far behind and stood only about 20 points, or 1% away from the flat line, with only about 7 weeks left to go in 2015.

It’s really hard to say what was responsible for yesterday’s sharp decline, which was actually less of a sharp decline after it all settled.

It could be that some finally came to the realization that we’re about to enter into an era that we haven’t seen in about 9 years, as the FOMC has to be getting as ready as it ever has to institute that very first interest rate hike.

However, given the fact that no one believes that rate increase will be more than 0.5%, with most in the 0.25% camp, it’s equally hard to understand what the logical basis is for the belief that even the larger end of that rise would result in any meaningful slowing of any economic expansion.

That’s generally the fear, but it usually only becomes a real issue when in hindsight you come to the realization that the cumulative interest rate hikes over time have tipped the economy.

That’s just not likely to occur with the first in a series, especially when there’s no indication of a really heated up economy that’s in danger of boiling.

Besides, history shows that the early stages of interest rate increases are during a healthy economy and a healthy stock market.

That’s what you would expect if the market is looking at fundamentals and is also discounting the future 6 months, as is widely believed to be the case.

Who knows what accounted for yesterday, but this morning shows some moderation as the futures are trading, although they showed the same thing yesterday and then the bottom just dropped out when the bell finally rang.

With yesterday’s decline I wasn’t as enthused about spending money from cash reserves as I might have been had the decline been more moderate. I just like to have some idea of why a market is climbing strongly or declining strongly, especially the latter.

The exercise of hindsight may demonstrate that it would have been a good idea to dip further into cash reserves, as most declines since the August correction began have represented some good entry points.

The difference here, perhaps, is that even with yesterday’s decline, the S&P 500 is now only down about 3% from its all time highs. That leaves plenty of room for more downside, especially given the uninterrupted climb higher since the beginning of October.

For a little while, at least for the first hour of trading, it looked as if that decline might grow, but then some buying came into play.

Although I was still on the lookout for anything that may seem like a bargain today and would be especially attracted to more dividend paying positions, caution still felt like it would be warranted, although the buying that crept in eventually erased all of the first hour’s loss..

At this point, now coming to the half way point in the week, I’m more concerned with positions expiring next week and am hopeful that among them will be some assignments and rollovers. I don’t really want to add much to that list if buying any other new positions this week and would like to get much better diversified in terms of expiration dates.

That will be played by ear as the week plays itself out.

Daily Market Update – November 10,  2015  (7:30 AM)

For people who like to track such things, yesterday’s very unexpected and unwarranted market decline brought the DJIA. on a YTD basis to a loss.

The S&P 500 isn’t very far behind and stands only about 20 points, or 1% away from the flat line, with only about 7 weeks left to go in 2015.

It’s really hard to say what was responsible for yesterday’s sharp decline, which was actually less of a sharp decline after it all settled.

It could be that some finally came to the realization that we’re about to enter into an era that we haven’t seen in about 9 years, as the FOMC has to be getting as ready as it ever has to institute that very first interest rate hike.

However, given the fact that no one believes that rate increase will be more than 0.5%, with most in the 0.25% camp, it’s equally hard to understand what the logical basis is for the belief that even the larger end of that rise would result in any meaningful slowing of any economic expansion.

That’s generally the fear, but it usually only becomes a real issue when in hindsight you come to the realization that the cumulative interest rate hikes over time have tipped the economy.

That’s just not likely to occur with the first in a series, especially when there’s no indication of a really heated up economy that’s in danger of boiling.

Besides, history shows that the early stages of interest rate increases are during a healthy economy and a healthy stock market.

That’s what you would expect if the market is looking at fundamentals and is also discounting the future 6 months, as is widely believed to be the case.

Who knows what accounted for yesterday, but this morning shows some moderation as the futures are trading, although they showed the same thing yesterday and then the bottom just dropped out when the bell finally rang.

With yesterday’s decline I wasn’t as enthused about spending money from cash reserves as I might have been had the decline been more moderate. I just like to have some idea of why a market is climbing strongly or declining strongly, especially the latter.

The exercise of hindsight may demonstrate that it would have been a good idea to dip further into cash reserves, as most declines since the August correction began have represented some good entry points.

The difference here, perhaps, is that even with yesterday’s decline, the S&P 500 is now only down about 3% from its all time highs. That leaves plenty of room for more downside, especially given the uninterrupted climb higher since the beginning of October.

I’ll still be on the lookout for anything that may seem like a bargain today and would be especially attracted to more dividend paying positions, but caution may still be warranted.

At this point, I’m more concerned with positions expiring next week and am hopeful that among them will be some assignments and rollovers. I don’t really want to add much to that list if buying any other new positions this week and would like to get much better diversified in terms of expiration dates.

That will be played by ear as the week plays itself out.

Daily Market Update – November 9,  2015  (Close)

Last week was another in a series of weeks with the market moving higher as it now seems as if it is fully ready to accept an increase in interest rates, maybe as early as this December.

This week may provide more of the data that the FOMC is seeking in order to justify their decision, but after last week’s Employment Situation Report that came in about 80% higher than what the FOMC indicated would be a level sufficient to warrant such an increase, it seems fairly certain that decision will be made very soon.

The data that’s coming this week will be from a number of national retailers and it will continue through to next week. Very much on an anecdotal level, I went into two big box retailers yesterday and they were packed

Also coming this week, at the very end of the week, will be the official Retail Sales figures. The government’s data never seems to be as compelling as what the CEOs and CFOs of those national big box retailers have to present.

What may really be key this week is not so much the top and bottom lines for retailers, although it would be nice to see some improvement on the top lines and a bottom line that is less manipulated by stock buy backs, but forward guidance. Most retailers tend to move on their forward guidance, which typically compounds the impact of the earnings that were just reported.

Insofar as the data being reported is already at least 3 months old, what may be far more important is what trends those retailers may be seeing in their stores.

They tend not to be overly optimistic when providing guidance, so any positive tone should be a signal that personal spending is finally on the move higher and the FOMC is sure to take note.

What we’re looking for is that inflection point that takes CEOs from cautious to optimistic as they finally see a consumer that feels confident that their new job has some security and now they are willing to make up for lost time not having done much in the way of discretionary spending.

As long as the market is going to continue interpreting good economic news as being good for the market, that should be a signal to move higher.

This morning, the pre-open futures were on the weak side, but only mildly so. Following last week, there was not too much reason to pay attention to the early direction of trading. What wasn’t terribly expected was the ferocity of the sell-off that started right at the opening bell and then lasted until noon.

After a quiet week of adding new positions last week and with no positions expiring this week, I would have liked to take cash reserves and do something with them, but when you see such a sharp decline and for no real reason, it usually doesn’t make too much sense to go on a spending spree.

After 2 assignments last week I’m at my highest cash level in quite a while, although I’d like to see it get even higher. However, that has to be balanced with a desire to generate some weekly income.

With any weakness to open the week, as opposed to last week, I would have been happy to part with some of those cash reserves, but as it would turn out, I was more reluctant than I would have expected.

With volatility remaining at such low levels after another week of the market having moved higher, I’d again like to focus on positions also paying dividends this week or next in an effort to supplement the cash stream in the coming weeks. Today’s new position stayed laser focused.

With a number of positions set to expire next week, the likelihood is that any new purchases this week will continue use either weekly options or seek to bypass the coming week and go straight to the first week of the December 2015 option cycle.

I hope that tomorrow turns out to be another of these week days to let the market take a little bit of a breath after its very impressive gains of the past 5 weeks. Sometimes it has to do so in big chunks, though.

Daily Market Update – November 9,  2015  (7:30 AM)

Last week was another in a series of weeks with the market moving higher as it now seems as if it is fully ready to accept an increase in interest rates, maybe as early as this December.

This week may provide more of the data that the FOMC is seeking in order to justify their decision, but after last week’s Employment Situation Report that came in about 80% higher than what the FOMC indicated would be a level sufficient to warrant such an increase, it seems fairly certain that decision will be made very soon.

The data that’s coming this week will be from a number of national retailers and it will continue through to next week. Very much on an anecdotal level, I went into two big box retailers yesterday and they were packed

Also coming this week, at the very end of the week, will be the official Retail Sales figures. The government’s data never seems to be as compelling as what the CEOs and CFOs of those national big box retailers have to present.

What may really be key this week is not so much the top and bottom lines for retailers, although it would be nice to see some improvement on the top lines and a bottom line that is less manipulated by stock buy backs, but forward guidance. Most retailers tend to move on their forward guidance, which typically compounds the impact of the earnings that were just reported.

Insofar as the data being reported is already at least 3 months old, what may be far more important is what trends those retailers may be seeing in their stores.

They tend not to be overly optimistic when providing guidance, so any positive tone should be a signal that personal spending is finally on the move higher and the FOMC is sure to take note.

What we’re looking for is that inflection point that takes CEOs from cautious to optimistic as they finally see a consumer that feels confident that their new job has some security and now they are willing to make up for lost time not having done much in the way of discretionary spending.

As long as the market is going to continue interpreting good economic news as being good for the market, that should be a signal to move higher.

This morning, the pre-open futures are on the weak side, but only mildly so. Following last week, there’s not too much reason to pay attention to the early direction of trading.

On the other hand, after a quiet week of adding new positions last week and with no positions expiring this week, I would like to take cash reserves and do something with them.

After 2 assignments last week I’m at my highest cash level in quite a while, although I’d like to see it get even higher. However, that has to be balanced with a desire to generate some weekly income.

With any weakness to open the week, as opposed to last week, I would be happy to part with some of those cash reserves.

With volatility remaining at such low levels after another week of the market having moved higher, I’d again like to focus on positions also paying dividends this week or next in an effort to supplement the cash stream in the coming weeks.

With a number of positions set to expire next week, the likelihood is that any new purchases this week will use either weekly options or seek to bypass the coming week and go straight to the first week of the December 2015 option cycle.

Daily Market Update – November 6,  2015  (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:  MS, WMT

Expirations:  BBY, F

The following were ex-dividend this week:  BP (11/4 $0.60), INTC (11/4 $0.24)

The following are ex-dividend next week:  IP (11/12  $0.44)

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

Daily Market Update – November 5,  2015  (Close)

So far, this week hasn’t really had anything terribly newsworthy, at least as far as the markets are concerned.

That didn’t stop the first 2 days of the week from showing nice gains, despite having had lackluster pre-opening futures sessions that offered no predictive guidance.

This morning looked to be another of those quiet opens, but today it may made more sense for the market to keep a relative lid on things, just as it did yesterday.

For a change, it actually did what it made sense to do.

While the week has been a quiet one on the news front, that can all change tomorrow as the Employment Situation Report is released before the market’s open.

It really is anyone’s guess how the market will respond to any kind of number, but most people are of the belief that the FOMC’s new guideline of 150,000 newly created jobs will be easily surpassed, although last month could prove to be something other than an aberration.

The real question is what will now be the new “disappointment.”

Will traders be disappointed if that employment number from last month proves not to have been an aberration or will they revert back to their old selves and look at such bad news as prolonging a sort of free money environment.

For the longest time I’ve been waiting for traders to be of the more rational mindset that good economic news, especially at the beginning of a tangible up slope, has to be good for the market and for corporate profits.

But for the longest time those traders have looked at anything reflecting an improving economy as being bad for them.

Historically, that’s been true in the later phases of an expansion, but not really true in the early phases.

Despite slow and steady climbs in employment over the past few years, there still hasn’t been that obvious upswing in the economy that’s usually fueled by people going back to work and believing that they will be in work for some time to come.

Maybe tomorrow will finally get traders to believe that the economy is growing enough to begin their focus on such things as revenues and real profits, not the kind that are manufactured through stock buybacks or cost cuts.

With a number of positions set to expire tomorrow, I may be a little defensive if some offer an opportunity to rollover. That would be the case if I thought they would be less likely to be assigned, especially with tomorrow’s overhang.

As with last month, you can’t discount the possibility of a strong market reaction to the report’s release and then a strong counter- reaction to that reaction.

I would just like to end the week with some money to move forward next week and maybe some extra income.

That’s the case every week, but for now we may be held hostage by tomorrow.

Daily Market Update – November 5,  2015  (7:30 AM)

So far, this week hasn’t really had anything terribly newsworthy, at least as far as the markets are concerned.

That didn’t stop the first 2 days of the week from showing nice gains, despite having had lackluster pre-opening futures sessions that offered no predictive guidance.

This morning looks to be another of those quiet opens, but today it may make more sense for the market to keep a relative lid on things, just as it did yesterday.

While the week has been a quiet one on the news front, that can all change tomorrow as the Employment Situation Report is released before the market’s open.

It really is anyone’s guess how the market will respond to any kind of number, but most people are of the belief that the FOMC’s new guideline of 150,000 newly created jobs will be easily surpassed, although last month could prove to be something other than an aberration.

The real question is what will now be the new “disappointment.”

Will traders be disappointed if that employment number from last month proves not to have been an aberration or will they revert back to their old selves and look at such bad news as prolonging a sort of free money environment.

For the longest time I’ve been waiting for traders to be of the more rational mindset that good economic news, especially at the beginning of a tangible up slope, has to be good for the market and for corporate profits.

But for the longest time those traders have looked at anything reflecting an improving economy as being bad for them.

Historically, that’s been true in the later phases of an expansion, but not really true in the early phases.

Despite slow and steady climbs in employment over the past few years, there still hasn’t been that obvious upswing in the economy that’s usually fueled by people going back to work and believing that they will be in work for some time to come.

Maybe tomorrow will finally get traders to believe that the economy is growing enough to begin their focus on such things as revenues and real profits, not the kind that are manufactured through stock buybacks or cost cuts.

With a number of positions set to expire tomorrow, I may be a little defensive if some offer an opportunity to rollover. That would be the case if I thought they would be less likely to be assigned, especially with tomorrow’s overhang.

As with last month, you can’t discount the possibility of a strong market reaction to the report’s release and then a strong counter- reaction to that reaction.

I would just like to end the week with some money to move forward next week and maybe some extra income.

That’s the case every week, but for now we may be held hostage by tomorrow.

Daily Market Update – November 4,  2015  (Close)

After 2 days of really nice gains, despite some give back in yesterday’s trading, the S&P 500 was sitting only about 1.5% below its all time high as the day started.

There was certainly nothing to suggest that the market would have taken the opportunity to spend the past 2 days in a celebratory mode, especially since the final day of this week could be an antidote to the happiness.

It’s really hard to understand how the market will react to Friday’s Employment Situation Report, but it seems that everyone is again willing to accept the fact that the FOMC will either be really ready to raise rates very soon, or at the very least will increase their hawkish tone, as there’s little reason to believe that the upcoming Employment Situation Report won’t reach the fairly feeble threshold that was just set.

The difficulty in predicting what may happen at the end of the week is that there could be a “buy on the rumor, sell on the news” kind of situation being set up if the number is well above 150,000, as it had been for much of the past 3 years, other than last month.

Alternatively, if the number continues on the very low side and maybe teeters near 150,000 again, there may be some concern.

If the number is really strong and especially if there are revisions to last month’s low number, there could be reason for even more buying on the basis of “good news is again good news,” with traders believing that rates could possibly be raised even as early as December.

Friday will be a big day, but next week, as national retailers report, could be even bigger, if the top line numbers are strong.

While the bottom line is important, right now the real focus is on whether people are spending money and not as much on how businesses are managing their businesses.

With only a single purchase for the week and with all of those prospective dividend plays being ex-dividend today, I don’t think there will be too much more activity for the week, other than to keep an eye on those positions due to expire in a few days.

With the unknown of Friday’s Employment Situation report coming up and with volatility back down to its usual low levels, there’s very little reason now to think about taking the risk of 3 day options, as the reward is so very low. Any new purchase now would really have to look at an extended or a monthly option to be remotely appealing. But with big news looming on Friday, I don’t have much reason to get in front of that news.

At this point, I would have much rather seen the market continue the week’s trend and move higher. I didn’t mind going along for the ride, especially if energy was part of it, as it was yesterday and being able to roll over existing positions or see them assigned.

Maybe tomorrow.

But, if that’s the case, then the pattern starts over again and the wish is for some pullback to start next week, perhaps with more cash in hand to pick up relative bargains, as the evidence will continue coming in to suggest that the economy is heating up and may perhaps serve as the most appropriate catalyst for the market to begin testing and exceeding its highs.

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Daily Market Update – November 4,  2015  (7:30 A.M.)

After 2 days of really nice gains, despite some give back in yesterday’s trading, the S&P 500 is now sitting only about 1.5% below its all time high.

There was certainly nothing to suggest that the market would have taken the opportunity to spend the past 2 days in a celebratory mode, especially since the final day of this week could be an antidote to the happiness.

It’s really hard to understand how the market will react to Friday’s Employment Situation Report, but it seems that everyone is again willing to accept the fact that the FOMC will either be really ready to raise rates very soon, or at the very least will increase their hawkish tone, as there’s little reason to believe that the upcoming Employment Situation Report won’t reach the fairly feeble threshold that was just set.

The difficulty in predicting what may happen at the end of the week is that there could be a “buy on the rumor, sell on the news” kind of situation being set up if the number is well above 150,000, as it had been for much of the past 3 years, other than last month.

Alternatively, if the number continues on the very low side and maybe teeters near 150,000 again, there may be some concern.

If the number is really strong and especially if there are revisions to last month’s low number, there could be reason for even more buying on the basis of “good news is again good news,” with traders believing that rates could possibly be raised even as early as December.

Friday will be a big day, but next week, as national retailers report, could be even bigger, if the top line numbers are strong.

While the bottom line is important, right now the real focus is on whether people are spending money and not as much on how businesses are managing their businesses.

With only a single purchase for the week and with all of those prospective dividend plays being ex-dividend today, I don’t think there will be too much more activity for the week, other than to keep an eye on those positions due to expire in a few days.

With the unknown of Friday’s Employment Situation report coming up and with volatility back down to its usual low levels, there’s very little reason now to think about taking the risk of 3 day options, as the reward is so very low. Any new purchase now would really have to look at an extended or a monthly option to be remotely appealing. But with big news looming on Friday, I don’t have much reason to get in front of that news.

At this point, I would much rather see the market continue the week’s trend and move higher. I don’t mind going along for the ride, especially if energy is part of it, as it was yesterday and being able to roll over existing positions or see them assigned.

If that’s the case, then the pattern starts over again and the wish is for some pullback to start next week, perhaps with more cash in hand to pick up relative bargains, as the evidence will continue coming in to suggest that the economy is heating up and may perhaps serve as the most appropriate catalyst for the market to begin testing and exceeding its highs.

.