Category Archives: Daily Market Update

Daily Market Update – October 22,  2015  (8:30 AM)

The earnings keep coming as this week and next are traditonally the busiest ones for earnings of the DJIA members and key S&P 500 players.

For the most part the results have been pretty underwhelming with the same tired story of companies reporting beats on earnings, but having missed on revenues.

I still don’t quite understand what investors get so hung up on the EPS metric, especially when it is so easily manipulated, as has been the case for the past couple of years with an avalanche of stock buy backs.

There has to be some better way of comparing relative performance from one time period to the next and to your peers.

More importantly, there has to be some measure that’s less easy to bend through the use of investor’s cash that’s sitting in the corporate bank vault.

Granted, there are always different accounting tools that can be used to accentiate certain aspects of both items in the assets and liabilities columns, but there should be some replicable measure that simply looks at operating revenues and operating expenses that strips out all of the fudge factors that creep in to those numbers.

That’s too easy and makes management too accountable for performance, so that will never happen. Part of it is also due to the IRS code that allows for periodic manipulation and difficulty in making those quarterly comparisons.

One thing that you rarely hear anymore when earnings are being reported is the phrase “clean number.” There are just so many adjustments from quarter to quarter that investors are often left to shoot blindly when earnings are released, so it’s no wonder why you so often see incredibly wild gyrations immediately after the earnings are released, although they are also accentuated by the low trading volume seen in the after hours or prior to the market’s opening.

Maybe there should simply be a freeze on trading from the time earnings are reported to the end of the conference call.

Right. As if that’s ever going to happen, as gambling is still a big part of “investing” and there are many who play for the big moves and very quickly take profits or cut losses, if they can find someone on theother side of the trade,

This morning looks like another relatively quiet one, although the futures have been slowly working their way higher, especially the DJIA which is getting a very big pop from McDonalds as its earnings have surprised everyone and its shares are taking their single biggest one day move that I can ever recall.

With no really consistently positive news coming from earnings, there doesn’t appear to be anything to convince the FOMC that this is the time for them to raise rates next week.

They are no doubt paying attention and they have no doubt listened to the views of overseas central banks and the IMF.

While there may be no partying this week on the floors of the stock exchanges, that may change next week in anticipation of free and easy money policy continuing, even though the anticipated rate increase would still leave us in the same kind of environment.

But until then the rest of this week will likely be just sitting back and seeing what opportunities may present themselves or get taken away, with regard to those positions expiring this week. After having opened 3 new positions and with only a single position expiring next week, I’d like to have some opportunity to raise cash through assignments in order to create new positions next week and keep the income generating cycle moving forward.

Daily Market Update – October 21,  2015  (Close)

The earnings are continuing to flow in this morning and there’s still not much reason to pout or to be overjoyed, as far as the broader market goes.

There is a pattern and it is continuing the same one that we’ve seen the past couple of quarters as companies are beating earnings on a per share basis, but still falling short on revenues, due to currency exchange.

Bad winters and currency exchange have been the predominant themes of the past couple of years as this recovery has been moving forward at a glacial pace and even those who remember the 70s and early 80s would welcome some cause for an interest rate increase.

Meanwhile, those positive earnings statistics may be getting ready to complete their run as all of that money for stock buybacks is beginning to run dry. Caterpillar and IBM weren’t alone in buying back their shares at their price peaks, as so many companies have decided that there’s no reason for them to use their money to expand when there’s no foreseeable increase in the businesses.

You really can’t blame a CEO for wanting to go along for that rocket ride higher, especially when their own contract may offer incentives that are closely tied to share performance and simply using all of that spare cash to buyback shares instead of doing something constructive with it.

As a shareholder, I’d much rather get a dividend increase or even a special dividend, than to see money being spent on something that really has no value and creates nothing of real value, all in the name of share price optics.

So what if that performance may be fueled by using other people’s money and doing so without regard to value?

But sooner or later those quarter to quarter comparisons aren’t going to be looking so good, unless there’s a real increase in revenue.

After a long period of driving earnings per share by cost reductions and share buybacks, there’s not much left, other than actual performance.

While there are lots of earnings still to be reported this week, the market seems to be basically yawning. The real actions is in take over stories and the rest of the market is simply waiting for next week’s FOMC meeting.

Today was another day of yawning, although there were some big stories and some big moves. It’s just that the rest of the market wasn’t too interested.

The really important earnings may be those from the retail sector, but they won’t come until after the FOMC decides what to do about interest rates.

It’s looking more and more that the pleas from The IMF and the ECB for our Federal Reserve to delay a rate hike until 2016 may become the case, as there doesn’t appear to be too much suggesting that things are heating up more than can be handled.

As I mentioned yesterday, I think that the days before next week’s FOMC meeting may again be greeted by enthusiastic buying as traders acknowledge the continuing gift of low interest rates.

Of course, if that’s going to be the case, we might as well expect that when interest rates do finally look as if they’re going to be increased, traders will do what they did before and go into some sort of a panic, even though the new interest rates will still be among the lowest we’ve ever seen.

As long as you don’t apply logic to anything, it all makes lots of sense.

Daily Market Update – October 21,  2015  (8:45 AM)

The earnings are continuing to flow in this morning and there’s still not much reason to pout or to be overjoyed, as far as the broader market goes.

There is a pattern and it is continuing the same one that we’ve seen the past couple of quarters as companies are beating earnings on a per share basis, but still falling short on revenues, due to currency exchange.

Bad winters and currency exchange have been the predominant themes of the past couple of years as this recovery has been moving forward at a glacial pace and even those who remember the 70s and early 80s would welcome some cause for an interest rate increase.

Meanwhile, those positive earnings statistics may be getting ready to complete their run as all of that money for stock buybacks is beginning to run dry. Caterpillar and IBM weren’t alone in buying back their shares at their price peaks, as so many companies have decided that there’s no reason for them to use their money to expand when there’s no foreseeable increase in the businesses.

You really can’t blame a CEO for wanting to go along for that rocket ride higher, especially when their own contract may offer incentives that are closely tied to share performance and simply using all of that spare cash to buyback shares instead of doing something constructive with it.

AS a shareholder, I’d much rather get a dividend increase or even a special dividend, than to see money being spent on something that really has no value and creates nothing of real value, all in the name of share price optics.

So what if that performance may be fueled by using other people’s money and doing so without regard to value?

But sooner or later those quarter to quarter comparisons aren’t going to be looking so good, unless there’s a real increase in revenue.

After a long period of driving earnings per share by cost reductions and share buybacks, there’s not much left, other than actual performance.

While there are lots of earnings still to be reported this week, the market seems to be basically yawning. The real actions is in take over stories and the rest of the market is simply waiting for next week’s FOMC meeting.

The really important earnings may be those from the retail sector, but they won’t come until after the FOMC decides what to do about interest rates.

It’s looking more and more that the pleas from The IMF and the ECB for our Federal Reserve to delay a rate hike until 2016 may become the case, as there doesn’t appear to be too much suggesting that things are heating up more than can be handled.

As I mentioned yesterday, I think that the days before next week’s FOMC meeting may again be greeted by enthusiastic buying as traders acknowledge the continuing gift of low interest rates.

Of course, if that’s going to be the case, we might as well expect that when interest rates do finally look as if they’re going to be increased, traders will do what they did before and go into some sort of a panic, even though the new interest rates will still be among the lowest we’ve ever seen.

As long as you don’t apply logic to anything, it all makes lots of sense.

Daily Market Update – October 20,  2015  (Close)

The earnings were flowing in as the morning was ready to begin, but the biggest news and the biggest moves wee coming from companies with news unrelated to earnings. When stock prices are low corporate opportunists and activists take center stage and companies take actions that they probably should have taken before the barrel was placed against their head.

As far as the earnings go, so far they haven’t been terribly exciting and they haven’t had too much impact on the market. Companies are still attempting to mitigate bad news with announcements of share buybacks, but that’s having less and less impact, even as buybacks make much more sense at lower share prices and should be more applauded by investors now than when being undertaken at record highs.

This morning was shaping up no differently and the excitement level is hard to find, as there is no pattern developing in the health, quality and forward looking nature of earnings being reported.

What does appear to be a continuing pattern is that the market is punishing unexpected bad news much more than it is rewarding unexpected good news.

With the FOMC getting ready to meet next week the days are dwindling to just a handful remaining for any meaningful economic data to be released that could reasonably be expected to lead to an FOMC decision to raise interest rates.

Given the way in which the market turned around its thinking and again decided that a delay in that rate hike was a good thing, I would imagine that as we draw closer to the FOMC meeting we could expect another in a series of higher moving days.

As long as there’s no overwhelmingly negative picture being painted by corporate earnings that next move higher may be coming. Ironically, even a sad earnings picture may end up being a good thing as far as minimizing the likelihood of a rate increase, so traders may actually be indifferent to earnings this time around.

That may explain the relatively listless trading of the past week.

I was happy to find some potential investment opportunities yesterday and now wouldn’t mind if that listlessness continued in order to have a better chance at seeing those positions either get assigned or be in position for rollovers.

With what has become the new normal for new positions opened in a week, maybe even a little bit higher than the new normal, I don’t expect to part with much more cash for the week. However, every time that I think that’s going to be the case it seems that something pops up to change my mind. Despite the market having impressively recovered most of the large correction since the end of August, there still appear to be opportunities. I don’t have too much free cash to explore those opportunities, but as I’ve done for the past few months, I don’t mind borrowing from myself with the intention of a quick repayment of those loans.

So far, that short term horizon has been working out since the market took its plunge some two months ago.

With only one position expiring next week, I’d like to see more assignments than rollovers, but either would be just fine. In fact, the one position expiring next week is one that I’ve been trying to rollover for the past week and am hopeful that I can still keep that trade alive, as it has been a classic revenue machine despite having had very little net movement in share price.

That trade didn’t end up going today, either.

Otherwise, this week, just as has been the case for the past month or so, has been dictated by energy and materials. Thus far, the past few days have been negative in those sectors, but as also has been the case over the past few months, that’s bound to change and then change again and again.

Daily Market Update – October 20,  2015  (8:45 AM)

The earnings are flowing in as the morning is ready to begin, but the biggest news and the biggest moves are coming from companies with news unrelated to earnings. When stock prices are low corporate opportunists and activists take center stage and companies take actions that they probably should have taken before the barrel was placed against their head.

As far as the earnings go, so far they haven’t been terribly exciting and they haven’t had too much impact on the market. Companies are still attempting to mitigate bad news with announcements of share buybacks, but that’s having less and less impact, even as buybacks make much more sense at lower share prices and should be more applauded by investors now than when being undertaken at record highs.

This morning is shaping up no differently and the excitement level is hard to find, as there is no pattern developing in the health, quality and forward looking nature of earnings being reported.

What does appear to be a continuing pattern is that the market is punishing unexpected bad news much more than it is rewarding unexpected good news.

With the FOMC getting ready to meet next week the days are dwindling to just a handful remaining for any meaningful economic data to be released that could reasonably be expected to lead to an FOMC decision to raise interest rates.

Given the way in which the market turned around its thinking and again decided that a delay in that rate hike was a good thing, I would imagine that as we draw closer to the FOMC meeting we could expect another in a series of higher moving days.

As long as there’s no overwhelmingly negative picture being painted by corporate earnings that next move higher may be coming. Ironically, even a sad earnings picture may end up being a good thing as far as minimizing the likelihood of a rate increase, so traders may actually be indifferent to earnings this time around.

That may explain the relatively listless trading of the past week.

I was happy to find some potential investment opportunities yesterday and now wouldn’t mind if that listlessness continued in order to have a better chance at seeing those positions either get assigned or be in position for rollovers.

With what has become the new normal for new positions opened in a week, maybe even a little bit higher than the new normal, I don’t expect to part with much more cash for the week. However, every time that I think that’s going to be the case it seems that something pops up to change my mind. Despite the market having impressively recovered most of the large correction since the end of August, there still appear to be opportunities. I don’t have too much free cash to explore those opportunities, but as I’ve done for the past few months, I don’t mind borrowing from myself with the intention of a quick repayment of those loans.

So far, that short term horizon has been working out since the market took its plunge some two months ago.

With only one position expiring next week, I’d like to see more assignments than rollovers, but either would be just fine. In fact, the one position expiring next week is one that I’ve been trying to rollover for the past week and am hopeful that I can still keep that trade alive, as it has been a classic revenue machine despite having had very little net movement in share price.

Otherwise, this week, just as has been the case for the past month or so, has been dictated by energy and materials. Thus far, the past few days have been negative in those sectors, but as also has been the case over the past few months, that’s bound to change and then change again and again.

Daily Market Update – October 19,  2015  (Close)

This will be a big week for earnings, as about 20% of the S&P 500 reports and with a large number of DJIA components from among them.

The week is getting started with a really disappointing earnings report from Morgan Stanley which I thought might make it an attractive financial stock to consider buying , after not having owned it for a while.

Short story?

It did.

The market also woke up this morning to the news of nearly 7% GDP growth in China.

Depending upon who you listen to, the spin is either that the reported growth is disappointing or it’s better than expected.

The one thing that you can probably count on is that it may be more deserving of revision than our own imperfect reports. While we occasionally hear people claim that our economic reports are cooked, especially immediately before a Presidential election, there’s not too much reason to believe that the Chinese economic reports aren’t manipulated on a very regular basis in order to fulfill political needs.

Considering that there’s a fair amount of pressure from within and outside, you could understand why there might be some undeserved optimism being reflected in official data.

This morning the market looked as if it may be taking a little rest and looking for some kind of cue in order to decide where to go next.

Short story?

It did.

While the FOMC will probably be paying some attention to earnings and to matters in China, it’s not too likely that there will be enough coming from any sources, reliable data or otherwise, to give a really good reason to push forward with an interest rate increase.

Now, sitting at the end of October, it’s actually hard to believe that we may not get that rate hike until 2016, as that kind of delay had been widely urged by most of the world. Not that long ago that smart money had been on an increase in March 2015, then June, then July and even October.

While traders aren’t looking at that delay as being bad news, it really is bad news, as our own economy can’t seem to get the kind of traction to create any meaningful heat. It’s now been a while since Quantitative Easing has ended and there has been lots of time for something to take hold, but growth has been elusive, even as expectations for it have been widespread.

Basically, the smart money doesn’t know much more about things than anyone else.

With a decent amount of cash freed up by assignments last week and with only a small number of positions set to expire this week, I was inclined to want to spend some of that cash or at the very least look for some rollovers from among the upcoming week’s expirations in order to generate some income.

As has been a successful strategy over the past few weeks, not because there’s been anything new about the strategy, but more because that’s just how things have worked out, I’d have loved to have see a down Monday to start the week so that new positions could be added on weakness.

Short story?

It didn’t happen that way, but neither did it run loose higher.

While it’s generally a good idea to buy low, lately Mondays have offered that opportunity more than they had in the past year, treading water seemed good enough today, especially for those positions that have already had their own personal plunges lately.

Daily Market Update – October 19,  2015  (8:30 AM)

This will be a big week for earnings, as about 20% of the S&P 500 reports and with a large number of DJIA components from among them.

The week is getting started with a really disappointing earnings report from Morgan Stanley which may be making it an attractive financial stock to consider buying , after not having owned it for a while.

The market also woke up this morning to the news of nearly 7% GDP growth in China.

Depending upon who you listen to, the spin is either that the reported growth is disappointing or it’s better than expected.

The one thing that you can probably count on is that it may be more deserving of revision than our own imperfect reports. While we occasionally hear people claim that our economic reports are cooked, especially immediately before a Presidential election, there’s not too much reason to believe that the Chinese economic reports aren’t manipulated on a very regular basis in order to fulfill political needs.

Considering that there’s a fair amount of pressure from within and outside, you could understand why there might be some undeserved optimism being reflected in official data.

This morning the market looks as if it may be taking a little rest and looking for some kind of cue in order to decide where to go next.

While the FOMC will probably be paying some attention to earnings and to matters in China, it’s not too likely that there will be enough coming from any sources, reliable data or otherwise, to give a really good reason to push forward with an interest rate increase.

Now, sitting at the end of October, it’s actually hard to believe that we may not get that rate hike until 2016, as that kind of delay had been widely urged by most of the world. Not that long ago that smart money had been on an increase in March 2015, then June, then July and even October.

While traders aren’t looking at that delay as being bad news, it really is bad news, as our own economy can’t seem to get the kind of traction to create any meaningful heat. It’s now been a while since Quantitative Easing has ended and there has been lots of time for something to take hold, but growth has been elusive, even as expectations for it have been widespread.

Basically, the smart money doesn’t know much more about things than anyone else.

With a decent amount of cash freed up by assignments last week and with only a small number of positions set to expire this week, I’m inclined to want to spend some of that cash or at the very least look for some rollovers from among the upcoming week’s expirations in order to generate some income.

AS has been a successful strategy over the past few weeks, not because there’s been anything new about the strategy, but more because that’s just how things have worked out, I’d love to see a down Monday to start the week so that new positions could be added on weakness.

It’s generally a good idea to buy low, but lately Mondays have offered that opportunity more than they had in the past year.

This morning the market is just a little bit weaker as we await the opening bell, but I wouldn’t mind some sellers piling on and at least erasing last Friday’s late session gains.

Daily Market Update – October 16,  2015  (8:30 AM)

The Weekend Update will be posted by 6 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments:  ABBV, SBGI

Rollovers: ANF

Expirations:  EMC, MRO

The following were ex-dividend this week:  FCX (10/12 $0.05), AAB (10/13 $0.51)

The following will be ex-dividend next week: FAST (10/23 $0.28)

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

Daily Market Update – October 15,  2015  (Close)

Yesterday’s sell off was really unexpected, but if you filtered out the really large drops in Wal-Mart and Boeing, both DJIA components, all of a sudden it wasn’t quite that large.

Those two accounted for more than half of yesterday’s loss in that index, which was down 0.8%, while the S&P 500 was only down by 0.5%.

That’s still a sizeable drop, but it was really greased by the rapid plunge in Wal-Mart, which took a nearly 10% plunge in a heart beat, about 64 minutes into trading.

This morning it looked as if we’re back to the pattern that was in effect prior to the run higher over the previous 10 days.

That pattern had large declines one day being very often offset in part the following day by some kind of tepid recovery.

The net result of that pattern was to take the market lower and lower.

While I’d like to see the market strengthen, the way it had moved higher over these two previous weeks isn’t really the historical way that the markets have built strength.

But right at noon, something just clicked and the market went on another tear higher. Maybe it was a very minor support level at the 1994 level on the S&P 500, but that’s as good of an explanation as anything else that you can conjure up.

For the rest of this week and for next week, which is the start of the November 2015 option cycle, there continues to be relatively little news, yet today showed you don’t need news.

While we await the FOMC meeting the following week most of our attention will be focused on earnings which really started in force earlier this week and continued this morning with some big names reporting.

With some mixed results coming from the major financials there hasn’t been too much reason for the market to make a strong statement in one direction or another as the financial sector results so far seem to be very much company specific and without any over-riding themes.

What was pretty fascinating today was how some of those disappointing earnings reported this morning before the opening bell were really turned around as the day ended. Goldman Sachs, for example did a nearly $10 turnaround, or about 6%

For the rest of the week I don’t think that I’ll surprise myself again and open another new position as was the case yesterday. Increasingly, as this market goes back and forward, I find myself doing what has often been the easiest and most profitable of all things, which is simply to go back to the well for the same stocks over and over again. As long as those stocks go back and forth around some kind of arbitrary price point it is almost like shooting fish in a barrel.

That accounts for the fact that two of this week’s purchases weren’t on the prospective weekly list and that’s been the case over the past few weeks, as well.

There’s no doubt that doing things that way is more boring, but it’s the kind of boring that I can easily live with and would much rather deal with than the excitement of new discovery.

Hopefully this week will again end with a good combination of rollovers and assignments and leave us in good shape to begin populating the November weekly cycle with positions.

Daily Market Update – October 15,  2015  (8:15 AM)

Yesterday’s sell off was really unexpected, but if you filtered out the really large drops in Wal-Mart and Boeing, both DJIA components, all of a sudden it wasn’t quite that large.

Those two accounted for more than half of yesterday’s loss in that index, which was down 0.8%, while the S&P 500 was only down by 0.5%.

That’s still a sizeable drop, but it was really greased by the rapid plunge in Wal-Mart, which took a nearly 10% plunge in a heart beat, about 64 minutes into trading.

This morning it looks as if we’re back to the pattern that was in effect prior to the run higher over the previous 10 days.

That pattern had large declines one day being very often offset in part the following day by some kind of tepid recovery.

The net result of that pattern was to take the market lower and lower.

While I’d like to see the market strengthen, the way it had moved higher over these two previous weeks isn’t really the historical way that the markets have built strength.

For the rest of this week and for next week, which is the start of the November 2015 option cycle, there continues to be relatively little news.

While we await the FOMC meeting the following week most of our attention will be focused on earnings which really started in force earlier this week and continued this morning with some big names reporting.

With some mixed results coming from the major financials there hasn’t been too much reason for the market to make a strong statement in one direction or another as the financial sector results so far seem to be very much company specific and without any over-riding themes.

For the rest of the week I don’t think that I’ll surprise myself again and open another new position as was the case yesterday. Increasingly, as this market goes back and forward, I find myself doing what has often been the easiest and most profitable of all things, which is simply to go back to the well for the same stocks over and over again. As long as those stocks go back and forth around some kind of arbitrary price point it is almost like shooting fish in a barrel.

That accounts for the fact that two of this week’s purchases weren’t on the prospective weekly list and that’s been the case over the past few weeks, as well.

There’s no doubt that doing things that way is more boring, but it’s the kind of boring that I can easily live with and would much rather deal with than the excitement of new discovery.

Hopefully this week will again end with a good combination of rollovers and assignments and leave us in good shape to begin populating the November weekly cycle with positions.

Daily Market Update – October 14,  2015  (Close)

Yesterday was another pretty boring day made even more so by having had my internet and cable connections restored.

The day started with some disappointing earnings by Johnson and Johnson that couldn’t be ignored even after the announcement of a big stock buyback and ended with a less than enthusiastic reception from investors after the market closed when both JP Morgan and Intel reported earnings.

The early response to the Intel earnings may paint a picture of what this new earnings season may be like, as the initial response was actually a very positive one, as the earnings were better than expected. Not too long afterward the selling started and reasonably good news was treated as if it was disappointing.

Of course, just when you think you have it all figured out, Intel turned around beautifully even as the overall market just crumbled away.

Early indications this morning, however, from Bank of America and Wells Fargo were showing their early earning gains as holding up, but their conference calls still awaited and Wells Fargo wilted, while Bank of America at least kept its head above water..

So this morning’s futures were again flat, as that had been the theme for this week, so far, but the market paid no attention to that and went its own not so merry way that just got less and less merry as the day wore on.

With a couple of new purchases for the week and now entering the mid-point, I thought that I was likely done spending money for the week and would instead have loved to have simply had the opportunity to do anything to generate some more income for the week.

Instead, there was more parting of the ways with cash and some more opportunity to generate cash, thanks to some strength in precious metals.

After a few weeks of large moves, this week, was looking as if it was  shaping up as one for everyone to just sit back and take a deep collective breath.

So much for appearances.

From a technician’s point of view a breather would have been a very good thing following a very quick 6% move higher, just as developing a period of stability after a large drop would be considered to be a good thing.

Having these periods of collection is usually a sign that those who are prone to rash trading have been flushed out and more rational minds can prevail, even if their time period for dominance can be measured only in minutes sometimes.

I don’t know where those rational minds went today, because despite Wal-Mart’s glum news, there really wasn’t much reason for the market to follow along.

For now, things do still seem rational, but there really hasn’t been much in the way of news that can elicit a market response. While we will be getting a torrent of earnings coming in over the next two weeks, the real news may just end up being the more macroeconomic stories that can be interpreted as having an influence over the FOMC as they prepare to have their October meeting.

Until then, though, it will be a focus on individual names and at some point there may be an over-riding theme, as there has been for the past couple of quarters. 

That theme has been missing on the top line and beating on the bottom line.

While everyone loves to see profits it doesn’t necessarily paint a very positive picture when comparative revenues are down or less than expected, even as profits may increase, especially when those profits are being reported on a per share basis and the denominator of shares is shrinking.

Or when the profits come as a result of cost savings, such as was the case for Bank of America this morning, which reported a quarter with significantly lower legal costs and was actually suffering from some of the bigger picture issues that JP Morgan reported.

That over-riding theme hasn’t been the most conducive for the market to continue its move higher, even though for the longest time the market did ignore the illusion of profits.

Daily Market Update – October 14,  2015  (8:15 AM)

Yesterday was another pretty boring day made even more so by having had my internet and cable connections restored.

The day started with some disappointing earnings by Johnson and Johnson that couldn’t be ignored even after the announcement f a big stock buyback and ended with a less than enthusiastic reception from investors after the market closed when both JP Morgan and Intel reported earnings.

The response to the Intel earnings may paint a picture of what this new earnings season may be like, as the initial response was actually a very positive one, as the earnings were better than expected. Not too long afterward the selling started and reasonably good news was treated as if it was disappointing.

Early indications this morning, however, from Bank of America and Wells Fargo are showing their early earning gains as holding up, but their conference calls still await.

So this morning’s futures are again flat, as that’s been the theme for this week, so far.

With a couple of new purchases for the week and now entering the mid-point, I’m likely done spending money for the week and would love to have the opportunity to do anything to generate some more income for the week.

After a few weeks of large moves, this week, however, is shaping up as one for everyone to just sit back and take a deep collective breath.

From a technician’s point of view that would be a very good thing following a very quick 6% move higher, just as developing a period of stability after a large drop would be considered to be a good thing.

Having these periods of collection is usually a sign that those who are prone to rash trading have been flushed out and more rational minds can prevail, even if their time period for dominance can be measured only in minutes sometimes.

For now, things do seem rational, but there really hasn’t been much in the way of news that can elicit a market response. While we will be getting a torrent of earnings coming in over the next two weeks, the real news may just end up being the more macroeconomic stories that can be interpreted as having an influence over the FOMC as they prepare to have their October meeting.

Until then, though, it will be a focus on individual names and at some point there may be an over-riding theme, as there has been for the past couple of quarters. 

That theme has been missing on the top line and beating on th bottom line.

While everyone loves to see profits it doesn’t necessarily paint a very positive picture when comparative revenues are down or less than expected, even as profits may increase, especially when those profits are being reported on a per share basis and the denominator of shares is shrinking.

Or when the profits come as a result of cost savings, such as was the case for Bank of America this morning, which reported a quarter with significantly lower legal costs and was actually suffering from some of the bigger picture issues that JP Morgan reported.

That over-riding theme hasn’t been the most conducive for the market to continue its move higher, even though for the longest time the market did ignore the illusion of profits.

Daily Market Update – October 13,  2015  (Close)

Yesterday was a pretty boring day, or at least so I think it may have been.

That’s because I had an internet and cable outage from about 11 AM to 6 PM and spent the day trying to get the usual amount of information through the tiny form factor of a cell phone.

That’s not a very satisfying way of trying to get anything done, especially if you weren’t anticipating that to be the case.

As far as I could tell markets weren’t moving much, but for me the flow of news that usually serves as a background for what’s going on, was absent. Toggling back and forth between tiny screens and not having a grasp on whatever intuitive design there may have been to the brokerage app made it a long day.

I suppose I could have done something constructive around the house or otherwise with my time but the expectation was that the outage was only going to be momentary.

The good news was that the work crews beat their 3 AM estimate by about 9 hours.

I did have one other trade sitting hoping to get made, but tweaking the prices and checking the quotes on that little hand held is a lot harder than on a big screen and a full program, rather than a streamlined app.

Today the market looked as if it would be getting off to a slightly negative start. Despite having had a couple of tiny losses in the S&P 500 over the past week and half, the DJIA has been on a streak that may be challenged today.

Today would also turn out to be a boring day and it would also break the DJIA consecutive streak, but not in any meaningful way.

With some money sitting in reserve, I had no qualms about putting some more of it to work this week, although volatility has come down despite there still being considerable uncertainty about what’s coming next.

What is next are the beginning of the big names reporting earnings. Financials start this afternoon after the final bell and will continue through to next week.

Good numbers from the financial sector don’t necessarily say anything about how the rest of the market will react when they start reporting numbers, but good numbers from the financials wouldn’t hurt.

With a handful of positions expiring this week and some chance for either assignment or rollover and a couple of ex-dividend positions this week, I still wouldn’t mind trying to find some new opportunities to generate some more income and after today’s new purchase. The likelihood is that I would like to stick with a weekly option, but as the week draws on there’s more reason to look at expanded weekly time frames, especially if a dividend is involved, although there isn’t much on the dividend radar screen for next week.

Tomorrow does bring a Retail Sales Report that could also serve to move markets. With credit card companies now suggesting that consumer discretionary spending is finally starting to move higher, perhaps representing the energy dividend that we’ve been waiting to receive for nearly a year, there may finally be reason to think that the data will become more compelling for the FOMC to take some action.

The next FOMC meeting is later this month, although it seems that there would have to be a lot of good news and in a very short period of time to result in an interest rate increase, especially after the last Employment SItuation Report.

So for now, we may simply be guided by fundamentals for the next few weeks, barring any international crises in the Middle East or financial meltdowns in China.

A world guided by fundamentals and not distracted by explosive events and fears would be a good thing, even if only until the end of the year.

Daily Market Update – October 13,  2015  (9:00 AM)

Yesterday was a pretty boring day, or at least so I think it may have been.

That’s because I had an internet and cable outage from about 11 AM to 6 PM and spent the day trying to get the usual amount of information through the tiny form factor of a cell phone.

That’s not a very satisfying way of trying to get anything done, especially if you weren’t anticipating that to be the case.

As far as I could tell markets weren’t moving much, but for me the flow of news that usually serves as a background for what’s going on, was absent. Toggling back and forth between tiny screens and not having a grasp on whatever intuitive design there may have been to the brokerage app made it a long day.

I suppose I could have done something constructive around the house or otherwise with my time but the expectation was that the outage was only going to be momentary.

The good news was that the work crews beat their 3 AM estimate by about 9 hours.

I did have one other trade sitting hoping to get made, but tweaking the prices and checking the quotes on that little hand held is a lot harder than on a big screen and a full program, rather than a streamlined app.

Today the market looks as if it will be getting off to a slightly negative start. Despite having had a couple of tiny losses in the S&P 500 over the past week and half, the DJIA has been on a streak that may be challenged today.

With some money sitting in reserve, I have no qualms about putting some of it to work this week, although volatility has come down despite there still being considerable uncertainty about what’s coming next.

What is next are the beginning of the big names reporting earnings. Financials start this afternoon after the final bell and will continue through to next week.

Good numbers from the financial sector don’t necessarily say anything about how the rest of the market will react when they start reporting numbers, but good numbers from the financials wouldn’t hurt.

With a handful of positions expiring this week and some chance for either assignment or rollover and a couple of ex-dividend positions this week, I still wouldn’t mind trying to find some new opportunities to generate some more income. The likelihood is that I would like to stick with a weekly option, but as the week draws on there’s more reason to look at expanded weekly time frames, especially if a dividend is involved.

Tomorrow does bring a Retail Sales Report that could also serve to move markets. With credit card companies now suggesting that consumer discretionary spending is finally starting to move higher, perhaps representing the energy dividend that we’ve been waiting to receive for nearly a year, there may finally be reason to think that the data will become more compelling for the FOMC to take some action.

The next FOMC meeting is later this month, although it seems that there would have to be a lot of good news and in a very short period of time to result in an interest rate increase, especially after the last Employment SItuation Report.

So for now, we may simply be guided by fundamentals for the next few weeks, barring any international crises in the Middle East or financial meltdowns in China.

A world guided by fundamentals and not distracted by explosive events and fears would be a good thing, even if only until the end of the year.

Daily Market Update – October 12,  2015  (Close)

This is a week that has the Shanghai market in China back in action and starting the week off with a large gain and the People’s Republic of China  putting out comments saying that the correction is over.

History shows that it’s difficult to know with much certainty when an economy or when a stock market is really at an inflection point and braggarts have a way of getting humbled very easily if they own up to their own comments.

This morning begins the first substantive week of earnings with the financial sector getting things started. As long as using history as a barometer, it’s pretty clear that the financials don’t necessarily tell us too much about the rest of the economy.

Over the past few years as the market has been in recovery, we’ve had lots of quarters with earnings jumping out of the gate as the financials had roared back, but the retail and industrial portion of the S&P 500 didn’t necessarily follow along in reporting great revenues.

Increasingly lots of attention is being placed on both the top line and the bottom line, with the top line having recently become more important. That’s because every one now admits that the bottom lines have been artificially altered by all of the stock buy backs and it has been nearly impossible to compare one quarter to a next when the number of outstanding shares has really been a moving target.

When that point comes that the top lines of companies do start to grow, we are likely headed for another leg higher and are likely to finally give the FOMC some reason to act.

This week does have a Retail Sales Report and that may give some glimpse into what is being experienced within the economy, but the more telling information will come in a few weeks as the major retailers begin spinning their numbers.

With some money in hand from a fair number of assignments last week and with only a small number of potential assignments or rollovers this week, I am very open to adding new positions, but will likely be looking at weekly expirations.

This morning the pre-opening futures were very flat, having ended last week in the same way, after accruing some nice gains for the week. The market has essentially been on an upward climb since the mid-morning turnaround on the Friday of the last Employment SItuation Report. 

With the S&P 500 having hit a low point of being nearly 12% lower, it starts this week only about 6% lower, but when the day came to its end, it was one of those rare days when not much happened and the trading range was very narrow.

That climb higher had been great, but you do have to wonder about those straight shots higher. The market rarely goes on to gains in that manner. It usually puts together lots of incremental pieces that just create a cumulative effect.

As with large declines, the market usually tries to fill in the gaps and there is certainly a big gap right now. 

Part of the reason for that gap may be that markets have again gone to believing that the delay in an interest rate increase means that their party ways can now continue. In other words, bad economic news has created an environment that’s perceived to be good for the markets.

What that means is that we will likely once again be faced with a market that will then look at good economic news as being bad for markets, just as we had finally started interpreting news on its face value.

So there may be reason to buckle up again and maybe not spend all of that money that recently showed up after last week’s assignments.