Category Archives: Daily Market Update

Daily Market Update – September 29,  2015  (Close)

If you are a fan of disappointment, your joy of yesterday wasn’t getting any less this morning.

Yesterday’s 300+ point loss didn’t have much of a basis for it, but it was amusing to hear so many talk about how the market was expressing a fear of an upcoming interest rate hike.

It really makes you wonder whether there is a collective deficit in short term memory or maybe those with airtime believe that the audience is either not listening or they are the ones suffering from short term memory issues.

This morning’s feeble attempt at a bounce back from yesterday’s large loss grew even more feeble as the pre-futures were edging closer to the opening bell and they weren’t offering too much encouragement. The day, as it would turn out, did nothing to make you believe that anything would get better tomorrow or the next day.

The decline yesterday took the S&P 500 well below the 10% correction level and once again people are looking at charts to give their predictions of where the market may go next if continuing to test support. Today’s gain did nothing to make things better, other than sneak 0.1% closer to not being in correction.

With the S&P 500 now sitting at 1881 to start the morning, it looks as if there is some support at about 1865 and then again not until 1820. From there, the next real stop is at about 1750.

That 1750 level would not quite represent the 20% decline level which is what is standardly seen in a bear correction.

Putting that in DJIA terms, which my mind still reverts to, those represent levels that are about 110, 480 and 1050 points lower.

WIth a couple of purchases yesterday, I thought that I’d be inclined to just sit and watch today and even if more “bargains” appeared to be popping up. Tomorrow may be no different and it may be a good idea to see just where the market can and will find support. Sometimes you just want to see some proof or some validation before you continue to stick your neck out even more.

Sticking the neck out, however, hasn’t been a very risky thing to do, but the moves have been so sudden on almost everything these days that victory is quickly snatched away. Fortunately, though, it is a little easier to find some rollover opportunities, maybe using longer term options, as long as the decline isn’t too swift and too drastic.

That, however, has definitely not been a given in any sense of the word as many stocks have exhibited some really large moves in the absence of any news.

Of course, as is usually the case, although we won’t see verification until earnings start pouring in, the level of corporate buyback activity has probably fallen as prices have.

That’ the typical perverse nature of things. 

While you and I are more apt to want to buy something when it looks value priced, corporate buyback programs are notorious for being indifferent to price and usually buying shares when they are moving strongly higher.

It doesn’t really matter when it’s other people’s money and your bonus is in part predicated on share performance. Why spend free cash to buy shares to prop up price and create support when it still leaves shares at a net loss and of no value to your bonus situation?

So even with all of that corporate cash still sitting around and set aside for buybacks, there’s much less left because so much was used at much higher levels and there’s no real incentive to use much of it now. Instead, those CEOs will likely wait for a market rebound and start buying again when it appears as if their activity may help to push shares above a certain threshold level that puts more bonus dollars in their own pockets.

What a system. You have to love it.

Daily Market Update – September 29,  2015  (8:30 AM)

If you are a fan of disappointment, your joy of yesterday isn’t getting any less this morning.

Yesterday’s 300+ point loss didn’t have much of a basis for it, but it was amusing to hear so many talk about how the market was expressing a fear of an upcoming interest rate hike.

It really makes you wonder whether there is a collective deficit in short term memory or maybe those with airtime believe that the audience is either not listening or they are the ones suffering from short term memory issues.

This morning’s feeble attempt at a bounce back from yesterday’s large loss grew even more feeble as the pre-futures were edging closer to the opening bell and they weren’t offering too much encouragement.

The decline yesterday took the S&P 500 well below the 10% correction level and once again people are looking at charts to give their predictions of where the market may go next if continuing to test support.

With the S&P 500 now sitting at 1881 to start the morning, it looks as if there is some support at about 1865 and then again not until 1820. From there, the next real stop is at about 1750.

That 1750 level would not quite represent the 20% decline level which is what is standardly seen in a bear correction.

Putting that in DJIA terms, which my mind still reverts to, those represent levels that are about 110, 480 and 1050 points lower.

WIth a couple of purchases yesterday, I think that I’m going to be more inclined to just sit and watch today and even if more “bargains” appear to be popping up, it may be a good idea to see just where the market can and will find support. Sometimes you just want to see some proof or some validation before you continue to stick your neck out even more.

Sticking the neck out, however, hasn’t been a very risky thing to do, but the moves have been so sudden on almost everything these days that victory is quickly snatched away. Fortunately, though, it is a little easier to find some rollover opportunities, maybe using longer term options, as long as the decline isn’t too swift and too drastic.

That, however, has definitely not been a given in any sense of the word as many stocks have exhibited some really large moves in the absence of any news.

Of course, as is usually the case, although we won’t see verification until earnings start pouring in, the level of corporate buyback activity has probably fallen as prices have.

That’ the typical perverse nature of things. 

While you and I are more apt to want to buy something when it looks value priced, corporate buyback programs are notorious for being indifferent to price and usually buying shares when they are moving strongly higher.

It doesn’t really matter when it’s other people’s money and your bonus is in part predicated on share performance. Why spend free cash to buy shares to prop up price and create support when it still leaves shares at a net loss and of no value to your bonus situation?

So even with all of that corporate cash still sitting around and set aside for buybacks, there’s much less left because so much was used at much higher levels and there’s no real incentive to use much of it now. Instead, those CEOs will likely wait for a market rebound and start buying again when it appears as if their activity may help to push shares above a certain threshold level that puts more bonus dollars in their own pockets.

What a system. You have to love it.

Daily Market Update – September 28,  2015  (Close)

Last week’s mid-week swoon, more like a nose dive after a tepid attempt at a recovery from the previous week’s FOMC induced nose dive, wasn’t giving much indication of being reversed as we got set to start the week.

Last Friday’s gains were actually only very mild, at best, once you factored out the performance of Nike and suddenly that triple digit gain on the DJIA was barely 35 points, while the S&P 500 finished lower, in a much better reflection of what was going on for most stocks and most people.

What this week does have, though, is some catalysts that could move markets higher and possibly move them away from the 10% correction line that’s been straddled for the past month.

In addition to the usual collection of FOMC Governors speaking their minds during scheduled speeches, the two that matter the most, Janet Yellen and Stanley Fischer will be holding court.

But you wouldn’t have known that based on how the day went, especially since there was never any kind of visible effort to bargain hunt as prices went lower and lower.

Last Friday’s early rally, which ultimately gave up ground heading into the close, may have been related to a more hawkish tone taken by Janet Yellen the previous day following the market’s close. Most everyone will be looking for more of the same and some reason to believe that the FOMC believes that the economy is on a good enough forward moving path to finally tighten up a little on the cost of borrowing.

However, the market may be indicating that it is getting weary of just words and wants words to coincide with actions. In this case, that means finally getting the initial interest rate increase done and moving on with things.

Bill Dudley’s comments today that he was expecting an increase by year’s end did nothing to give traders reason to change direction and start picking up bargains.

While today was terrible, the week ends with the Employment Situation report and a strong number could really send the market higher if Yellen and Fischer precede Friday’s report with an indication that they’re really ready to move in a somewhat pre-emptive fashion on any evidence of a pattern of good economic news.

Until then, though, the market seems to be in a “show me” state of mind and just more so after the first day of the weeks has now been entered into the books.

With a couple of assignments last week and a small number of potential expirations this week, coupled with a few ex-dividend positions, there was some room to add some new positions for the week. But with some income already guaranteed and with at least a couple of the week’s expiring positions being within reach of either assignment or rollover, the need to spend money to create income isn’t as strong this week.

Still, one of the characteristics of these kinds of markets is that you can often re-do the same trades, as the newly opened positions in Bank of America and General Electric today may demonstrate.

With the DJIA right at the 10% correction line and the S&P 500 just a it better, at only a 9% decline from its July 2015 highs, the pre-opening futures were doing nothing to help either index create a safety cushion on the right side of that line and the depth to climb out of that hole simply got larger, but it was hard to resist going back to the well a 5th time in the past month for General Electric and a 3rd time for Bank of America.

While I’m not entirely resistant to adding some additional new positions this week, especially if also including some dividends, I doubt that I’ll be as active in doing so as was the case last week.

For now, there’s very little reason to put too much faith into where the FOMC will be going, even though it feels as if they can only go in one direction. The real issue has been a question of “when” they’ll get going and they keep confounding everyone, particularly when you recall that most everyone was calling for that rate increase this past March and now many are thinking in terms of December.

While I would still like to add to cash reserves, if the market can continue straddling this 10% correction line and punctuate its moves with large moves higher and lower, I’d continue being happy to try and make some trades with a very short term time frame on them and would continue looking for opportunity to lock into some longer term contracts for their enhanced premiums, for as long as they might last.

We got one of those big moves today, hopefully there will be some sort of offset in the other direction.

So, as with most weeks, the week began with an open mind awaiting some indication of direction and sentiment and a hope that any opportunities are real and not illusory.

We’ll see about that tomorrow.

Daily Market Update – September 28,  2015  (8:00 AM)

Last week’s mid-week swoon, more like a nose dive after a tepid attempt at a recovery from the previous week’s FOMC induced nose dive, isn’t giving much indication of being reversed as we get set to start the week.

Last Friday’s gains were actually only very mild, at best, once you factored out the performance of Nike and suddenly that triple digit gain on the DJIA was barely 35 points, while the S&P 500 finished lower, in a much better reflection of what was going on for most stocks and most people.

What this week does have, though, is some catalysts that could move markets higher and possibly move them away from the 10% correction line that’s been straddled for the past month.

In addition to the usual collection of FOMC Governors speaking their minds during scheduled speeches, the two that matter the most, Janet Yellen and Stanley Fischer will be holding court.

Last Friday’s early rally, which ultimately gave up ground heading into the close, may have been related to a more hawkish tone taken by Janet Yellen the previous day following the market’s close. Most everyone will be looking for more of the same and some reason to believe that the FOMC believes that the economy is on a good enough forward moving path to finally tighten up a little on the cost of borrowing.

However, the market may be indicating that it is getting weary of just words and wants words to coincide with actions. In this case, that means finally getting the initial interest rate increase done and moving on with things.

The week ends with the Employment Situation report and a strong number could really send the market higher if Yellen and Fischer precede Friday’s report with an indication that they’re really ready to move in a somewhat pre-emptive fashion on any evidence of a pattern of good economic news.

Until then, though, the market seems to be in a “show me” state of mind.

With a couple of assignments last week and a small number of potential expirations this week, coupled with a few ex-dividend positions, there is some room to add some new positions for the week. But with some income already guaranteed and with at least a couple of the week’s expiring positions being within reach of either assignment or rollover, the need to spend money to create income isn’t as strong this week.

With the DJIA right at the 10% correction line and the S&P 500 just a it better, at only a 9% decline from its July 2015 highs, the pre-opening futures are doing nothing to help either index create a safety cushion on the right side of that line.

While I’m not entirely resistant to adding some new positions this week, especially if also including some dividends, I doubt that I’ll be as active in doing so as was the case last week.

For now, there’s very little reason to put too much faith into where the FOMC will be going, even though it feels as if they can only go in one direction. The real issue has been a question of “when” they’ll get going and they keep confounding everyone, particularly when you recall that most everyone was calling for that rate increase this past March and now many are thinking in terms of December.

While I would still like to add to cash reserves, if the market can continue straddling this 10% correction line and punctuate its moves with large moves higher and lower, I’d continue being happy to try and make some trades with a very short term time frame on them and would continue looking for opportunity to lock into some longer term contracts for their enhanced premiums, for as long as they might last.

So, as with most weeks, the week begins with an open mind awaiting some indication of direction and sentiment and a hope that any opportunities are real and not illusory.

Daily Market Update – September 25,  2015  (8:00 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:  ANF

Rollovers:  BAC, GE

Expirations:  none

The following were ex-dividend this week:

The following will be ex-dividend next week:   CY (9/22 $0.11)

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

Daily Market Update – September 24,  2015  (Close)

Other than Monday’s minor blip higher, there hasn’t been much of a reprieve from the disappointment that hit mid-way through Janet Yellen’s press conference last Thursday afternoon.

The implication was that the economy just wasn’t strong enough to warrant an increase in interest rates and investors, who had only very, very recently come to realize that an interest rate increase was a good thing just did what they so frequently do.

They over-reacted and continue to be in hysterical mode.

At least that’s what this morning’s pre-open futures were indicating.

Even as China closed their trading day with some strength and even as the FOMC indicated that they were now keeping an eye of global events, the outlook by investors remains pessimistic.

That could change tomorrow as the GDP is released.

A strong number could do wonders toward changing the mood on the trading floor, as even the slightest move lower this morning would take the S&P 500 back into correction territory, from which it had been emerging and then relapsing for nearly the past month.

Today’s move was less than just “slight,” but was much better than it had been during its depths.

Otherwise, there’s lots of economic data between today and the next FOMC Statement release which comes at the every end of October. Besides the basic economic news there will have been nearly 3 weeks of earnings reports as the next earnings season begins in just a few weeks, as well.

Conceivably there could be enough news supporting the idea that our economy could support that interest rate increase and there’s no doubt that the FOMC members took note of how the market expressed itself as finally being ready for that increase.

The wild card may end up being what will be happening in the global picture, particularly in China. Lots can happen in the month until the next FOMC meeting and that’s now part of the equation, or so it seems.

This morning looked as if it would be one to sit and watch and just hope that the new positions opened and expiring this week don’t get dragged down along with the rest of the market and get taken too far along. It would be great to see those new positions get assigned tomorrow, but the environment has become very challenging and there’s really not to much reason for it.

The US economy and the US stock market remain the best in the world and this should be where money flows as the rest of the world demonstrates itself to be a less reliable place to park money.

While I had been waiting, as had so many, for a correction for a long time, it feels as if the next phase can and should only be higher despite what may be occurring in the rest of the world.

This week I put my money where my mouth is and hope that it wasn’t a mistake to have spoken up.

As has been the only hope that has worked out lately, there’s always tomorrow.

Daily Market Update – September 24,  2015  (8:00 AM)

Other than Monday’s minor blip higher, there hasn’t been much of a reprieve from the disappointment that hit mid-way through Janet Yellen’s press conference last Thursday afternoon.

The implication was that the economy just wasn’t strong enough to warrant an increase in interest rates and investors, who had only very, very recently come to realize that an interest rate increase was a good thing just did what they so frequently do.

They over-reacted and continue to be in hysterical mode.

At least that’s what this morning’s pre-open futures are indicating.

Even as China closed their trading day with some strength and even as the FOMC indicated that they were now keeping an eye of global events, the outlook by investors remains pessimistic.

That could change tomorrow as the GDP is released.

A strong number could do wonders toward changing the mood on the trading floor , as even the slightest move lower this morning would take the S&P 500 back into correction territory, from which it had been emerging and then relapsing for nearly the past month.

Otherwise, there’s lots of economic data between today and the next FOMC Statement release which comes at the every end of October. Besides the basic economic news there will have been nearly 3 weeks of earnings reports as the next earnings season begins in just a few weeks, as well.

Conceivably there could be enough news supporting the idea that our economy could support that interest rate increase and there’s no doubt that the FOMC members took note of how the market expressed itself as finally being ready for that increase.

The wild card may end up being what will be happening in the global picture, particularly in China. Lots can happen in the month until the next FOMC meeting and that’s now part of the equation, or so it seems.

This morning looks as if it will be one to sit and watch and just hope that the new positions opened and expiring this week don’t get dragged down along with the rest of the market and get taken too far along. It would be great to see those new positions get assigned tomorrow, but the environment has become very challenging and there’s really not to much reason for it.

The US economy and the US stock market remain the best in the world and this should be where money flows as the rest of the world demonstrates itself to be a less reliable place to park money.

While I had been waiting, as had so many, for a correction for a long time, it feels as if the next phase can and should only be higher despite what may be occurring in the rest of the world.

This week I put my money where my mouth is and hope that it wasn’t a mistake to have spoken up.

Daily Market Update – September 23,  2015  (Close)

Yesterday, despite the market coming well off of its lows, was still enough of a down day to make Monday’s bounce higher no more than merely a blip.

Following Thursday afternoon’s steep reversal and then Friday’s additional loss after the disappointment of no interest rate increase, analysts were looking everywhere they could to try and explain yesterday’s market action.

I think it was pretty simple and much like the lingering disappointment that may exist when something you wanted very badly failed to materialize.

In a very non-diagnostic kind of way, that feeling is called “the blues” and it’s hard to get into gear.

I think that’s all that the market is suffering from and it isn’t really responding to anything  other than being held hostage by that disappointment that things aren’t as good as they needed to be.

Just imagine being told that you weren’t good enough, whether personally or professionally. That’s what the market faced as it was told by the FOMC that the economy wasn’t good enough to warrant that rate increase, even if you had deluded yourself into believing that it was.

That has to make the market wonder, just as people might wonder, whether everything they had believed was a lie.

Did the market deserve to be at such high levels if the economy wasn’t as good as we thought?

So it’s all understandable.

This morning’s futures were flat and again showed no sign of following Shanghai, which was down sharply, even as its President Xi is trying to convince business leaders in the US that there’s no reason for concern about anything in China nor in the way China does business internally nor with its international partners.

Those business leaders are likely to have left last night’s meeting somewhat circumspect as they wondered whether the US-China relationship might undergo some sort of a re-set.

At this point separating from China’s markets and from its economy may be a very good thing as they are forced to speed up their evolutionary process and figure out how to re-balance personal freedoms with personal wealth as the latter may be dwindling.

While the futures were flat this morning that disappointment in the FOMC’s decision isn’t likely over, but Friday’s upcoming GDP data release could become the springing off point for another jump higher.

Unlike previous months when a disappointing GDP was met with a happy stock market, because it signaled the continuation of low interest rates, this time around every one wants to see better than expected GDP numbers. The hope is that there will be enough data coming in to prompt the FOMC to increase rates.

With earnings season ready to start in less than 3 weeks the real catalyst would be some evidence of earnings growth, especially if there’s also evidence of revenue growth.

That has been an elusive combination for a while and would really be embraced if the case could be made as those earnings start coming in that sales are increasing and profits are rising.

Until then, we should probably be prepared for more bouncing back and forth between being in correction territory and having escaped correction as markets create a foundation that will either end up serving as resistance or support.

It’s anyone’s guess and today the market didn’t even try to think about things, as it was about a listless day as you could find and with almost noting to hang your hopes upon nor to fear.

Daily Market Update – September 23,  2015  (9:00 AM)

Yesterday, despite the market coming well off of its lows, was still enough of a down day to make Monday’s bounce higher no more than merely a blip.

Following Thursday afternoon’s steep reversal and then Friday’s additional loss after the disappointment of no interest rate increase, analysts were looking everywhere they could to try and explain yesterday’s market action.

I think it was pretty simple and much like the lingering disappointment that may exist when something you wanted very badly failed to materialize.

In a very non-diagnostic kind of way, that feeling is called “the blues” and it’s hard to get into gear.

I think that’s all that the market is suffering from and it isn’t really responding to anything  other than being held hostage by that disappointment that things aren’t as good as they needed to be.

Just imagine being told that you weren’t good enough, whether personally or professionally. That’s what the market faced as it was told by the FOMC that the economy wasn’t good enough to warrant that rate increase, even if you had deluded yourself into believing that it was.

That has to make the market wonder, just as people might wonder, whether everything they had believed was a lie.

Did the market deserve to be at such high levels if the economy wasn’t as good as we thought?

So it’s all understandable.

This morning’s futures are flat and again show no sign of following Shanghai, which was down sharply, even as its Premier Xi is trying to convince business leaders in the US that there’s no reason for concern about anything in China nor in the way China does busness internally nor with its international partners.

Those business leaders are likely to have left last night’s meeting somewhat circumspect as they wondered whether the US-China relationship might undergo some sort of a re-set.

At this point separating from China’s markets and from its economy may be a very good thing as they are forced to speed up their evolutionary process and figure out how to re-balance personal freedoms with personal wealth as the latter may be dwindling.

While the futures are flat this morning that disappointment in the FOMC’s decision isn’t likely over, but Friday’s upcoming GDP data release could become the springing off point for another jump higher.

Unlike previous months when a disappointing GDP was met with a happy stock market, because it signaled the continuation of low interest rates, this time around every one wants to see better than expected GDP numbers. The hope is that there will be enough data coming in to prompt the FOMC to increase rates.

With earnings season ready to start in less than 3 weeks the real catalyst would be some evidence of earnings growth, especially if there’s also evidence of revenue growth.

That has been an elusive combination for a while and would really be embraced if the case could be made as those earnings start coming in that sales are increasing and profits are rising.

Until then, we should probably be prepared for more bouncing back and forth between being in correction territory and having escaped correction as markets create a foundation that will either end up serving as resistance or support.

It’s anyone’s guess.

Daily Market Update – September 22,  2015  (Close)

This morning’s sharp decline in the futures was probably an invalidation of yesterday’s decent gain coming after a sharp reversal in fortunes last week.

Yesterday seemed like a day that traders were getting back to their previous behavior that welcomed the delay of any interest rate increase because it extended their handout, which was good for equity trading. They were more than happy to continue receiving that handout rather than seeing the economy show the kind of tangible and sustained improvement that would slow down the flow of those handouts.

That initial reversal of fortune was directly tied to the realization that no one of importance over at the FOMC could sway enough other voting members to vote to finally increase interest rates. That inability was a reflection of the belief that not enough of those people believed that the economy was showing enough building strength to warrant even the tiniest of taps on the brakes

More importantly, as the FOMC has indicated that it wants to finally push through a rate increase and that it has indicated that it would do so ahead of the curve, that seems to send a message that the kind of improvement in the economy to warrant a rate increase isn’t necessarily right around the corner.

Too bad that had to happen just at the same time that the market came to the realization that a rate increase wouldn’t mark the end of the world and instead had set its hopes up for that rate increase after years of pinning everything on the continuation of the Zero Interest Rate Policy.

Funny how those sort of things seem to happen.

For people who are supposed to understand the economy and investor psychology they certainly don’t do a very good job of it.

It continues to amaze me that there would ever be such sharp moves, especially on an alternating basis, as even the most clueless person would know that the basic health of the market and the economy could never change on a dime and then do so again in a back and forth manner. But it also still amazes me that there can be such large moves seen in so many individual stocks, given how many analysts follow so many of those companies and have as much of an informed position as almost anyone else in the world.

Yet, they get it wrong all the time.

So what did this morning’s marked weakness mean?

As I was pondering that question in the morning it meant nothing more than a buying opportunity, as we again were approaching a correction on the S&P 500 if the decline were to hold.

It was and it did.

What may be important this week, maybe more so than usual, will be Friday’s GDP release.

With some discussion that a rate hike may still be on the table in October, perhaps even before the next FOMC meeting, another strong GDP statistic could send an “all’s clear” to investors who now want to see a rate hike and would welcome that strong GDP number.

History shows that September is generally a very weak month and October not much better.

As we approach the end of September it would be nice to see an October that if not moving the market higher, at least continues this volatile kind of back and forth. The trick will be to attempt to capitalize on any strong move higher by finding any opportunity to sell some calls and also finding some of the braveness necessary to buy something on the way down.

I had some of that braveness today and hope that it’s not really more stupidity. If those best and brightest on Wall Street can’t readily tell the difference I’m not going to worry too much about being able to know so myself until all the cards are played.

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

This morning’s sharp decline in the futures is probably an invalidation of yesterday’s decent gain coming after a sharp reversal in fortunes last week.

Yesterday seemed like a day that traders were getting back to their previous behavior that welcomed the delay of any interest rate increase because it extended their handout, which was good for equity trading. They were more than happy to continue receiving that handout rather than seeing the economy show the kind of tangible and sustained improvement that would slow down the flow of those handouts.

That initial reversal of fortune was directly tied to the realization that no one of importance over at the FOMC could sway enough other voting members to vote to finally increase interest rates. That inability was a reflection of the belief that not enough of those people believed that the economy was showing enough building strength to warrant even the tiniest of taps on the brakes

More importantly, as the FOMC has indicated that it wants to finally push through a rate increase and that it has indicated that it would do so ahead of the curve, that seems to send a message that the kind of improvement in the economy to warrant a rate increase isn’t necessarily right around the corner.

Too bad that had to happen just at the same time that the market came to the realization that a rate increase wouldn’t mark the end of the world and instead had set its hopes up for that rate increase after years of pinning everything on the continuation of the Zero Interest Rate Poiicy.

Funny how those sort of things seem to happen.

For people who are supposed to understand the economy and investor psychology they certainly don’t do a very good job of it.

It continues to amaze me that there would ever be such sharp moves, especially on an alternating basis, as even the most clueless person would know that the basic health of the market and the economy could never change on a dime and then do so again in a back and forth manner. But it also still amazes me that there can be such large moves seen in so many individual stocks, given how many analysts follow so many of those companies and have as much of an informed position as almost anyone else in the world.

Yet, they get it wrong all the time.

So what does this morning’s marked weakness mean?

I’m looking at it, for the moment, as nothing more than a potential buying opportunity, as we again approach a correction on the S&P 500 if the decline holds up.

What may be important this week, maybe more so than usual, will be Friday’s GDP release.

With some discussion that a rate hike may still be on the table in October, perhaps even before the next FOMC meeting, another strong GDP statistic could send an “all’s clear” to investors who now want to see a rate hike and would welcome that strong GDP number.

History shows that September is generally a very weak month and October not much better.

As we approach the end of September it would be nice to see an October that if not moving the market higher, at least continues this volatile kind of back and forth. The trick will be to attempt to capitalize on any strong move higher by finding any opportunity to sell some calls and also finding some of the braveness necessary to buy something on the way down.

Daily Market Update – September 21,  2015  (Close)

Last week the market finally started doing the right thing and followed the logical direction with regard to their expectations for the FOMC’s action.

It’s just that the FOMC didn’t do what everyone had only very recently come to expect. Even more recent than that expectation was the decision to act accordingly.

Acting accordingly meant sending the market higher in advance of the expected announcement of that initial interest rate increase and then sending stocks lower when that expectation was dashed.

This morning’s futures were indicating a recovery of at least the further loss that occurred on Friday, although that still leaves us in the hole for the very large reversal that took place during the course of Janet Yellen’s press conference.

Normally, when Janet Yellen has spoken at the post-FOMC press conferences, her words have either supported the initial rise higher in stocks after the announcement or sent them even higher, so this past week’s reversal of fortune was a real surprise.

What seems to have occurred is that traders felt disappointed, but for the right reason.

Over the past 18 months as expectations for an eventual rate increase began, the disappointments that were expressed all had to do with fearing the end of the Federal Reserve’s handout through their Zero Interest Rate Policy. Now the concern seems to have become that the economy may not be as strong as we had hoped and was unable to withstand an increase in interest rates.

This morning’s futures bounce didn’t really provide much in the way of sentiment. It could easily be nothing more than some bargain hunting on small volume.

The way the day traded you could interpret it any way you pleased. Most of all it was some kind of ambivalence and maybe some kind of fear of missing out.

The market kept its triple digit gain for much of the session, having been up nearly 200 points at one point and then gave it all back, only to end the day right where the futures said it was going to be.

That doesn’t happen too often, but it definitely wasn’t a very direct route.

The story, as it almost always does, began for real at the opening bell and while I was hopeful that the next series of sustained moves would be higher and move us further away from the line between correction and no correction, it’s just not that clear that will be the case, despite the gain on the day.

At least China wasn’t a factor as this week has now begun, as Shanghai moved higher to open their week, but lately our own markets have discounted their wild swings.

Instead, we seem much more likely to start focusing on economic news and fundamentals.

This week brings a GDP report, but not much else.

Earnings start again in about 3 weeks, but otherwise it may just be a period of time for investors to either tread water or speculate over the meaning of every bit of economic news.

With some more cash in hand after a couple of assignments last week and with only one position set to expire this week and only a single ex-dividend position, I wouldn’t mind adding some new positions in an effort to create some income for the week.

Ordinarily, I’d like to do that with weekly expirations in mind, but a number of the potential trades this week may require the use of expanded weekly options due to the dividend dates involved in those stocks and while providing income may make it more difficult to be prepared to open even more new positions the following week if  those positions aren’t assigned early to capture dividends.

I expect this to be another relatively quiet week with regard to personal portfolio trading, but would be very anxious to capitalize on any opportunity to sell some calls on unhedged positions, especially after some rebound in volatility to close the week.

That would likely also look to see whether it makes sense to use some longer term contracts, as was the case with the new position opened in Cypress Semiconductor today, in an effort to lock in some higher premiums while awaiting some long overdue price rebounds as 2015 is now heading into the final stretch.

Let’s see if tomorrow brings any more clarity, but at least there wasn’t reason to continue the pessimism of the latter part of last week.

Who knows, maybe what little is left in the month of September can do something to dispel the reality that September tends not to be a very good month to count on market gains.

Daily Market Update – September 21,  2015  (8:30 AM)

Last week the market finally started doing the right thing and followed the logical direction with regard to their expectations for the FOMC’s action.

It’s just that the FOMC didn’t do what everyone had only very recently come to expect. Even more recent than that expectation was the decision to act accordingly.

Acting accordingly meant sending the market higher in advance of the expected announcement of that initial interest rate increase and then sending stocks lower when that expectation was dashed.

This morning’s futures are indicating a recovery of at least the further loss that occurred on Friday, although that still leaves us in the hole for the very large reversal that took place during the course of Janet Yellen’s press conference.

Normally, when Janet Yellen has spoken at the post-FOMC press conferences, her words have either supported the initial rise higher in stocks after the announcement or sent them even higher, so this past week’s reversal of fortune was a real surprise.

What seems to have occurred is that traders felt disappointed, but for the right reason.

Over the past 18 months as expectations for an eventual rate increase began, the disappointments that were expressed all had to do with fearing the end of the Federal Reserve’s handout through their Zero Interest Rate Policy. Now the concern seems to have become that the economy may not be as strong as we had hoped and was unable to withstand an increase in interest rates.

This morning’s futures bounce doesn’t really provide much in the way of sentiment. It could easily be nothing more than some bargain hunting on small volume.

The story, as it almost always does, begins for real at the opening bell and while I’m hopeful that the next series of sustained moves will be higher and move us further away from the line between correction and no correction, it’s just not that clear.

At least China wasn’t a factor as this week is set to begin, as Shanghai moved higher to open their week, but lately our own markets have discounted their wild swings.

Instead, we seem much more likely to start focusing on economic news and fundamentals.

This week brings a GDP report, but not much else.

Earnings start again in about 3 weeks, but otherwise it may just be a period of time for investors to either tread water or speculate over the meaning of every bit of economic news.

With some more cash in hand after a couple of assignments last week and with only one position set to expire this week and only a single ex-dividend position, I wouldn’t mind adding some new positions in an effort to create some income for the week.

Ordinarily, I’d like to do that with weekly expirations in mind, but a number of the potential trades this week may require the use of expanded weekly options due to the dividend dates involved in those stocks and while providing income may make it more difficult to be prepared to open even more new positions the following week if  those positions aren’t assigned early to capture dividends.

I expect this to be another relatively quiet week with regard to personal portfolio trading, but would be very anxious to capitalize on any opportunity to sell some calls on unhedged positions, especially after some rebound in volatility to close the week.

That would likely also look to see whether it makes sense to use some longer term contracts in an effort to lock in some higher premiums while awaiting some long overdue price rebounds as 2015 is now heading into the final stretch.

Daily Market Update – September 18,  2015  (7:45 AM)

The Week in Review 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:  CVC

Rollovers:  HPQ

Expirations:  CY, GDX, GPS, KO, KSS, MOS, NEM

The following were ex-dividend this week: GE (9/17 $0.23), LVS (9/18 $0.65)

The following will be ex-dividend next week: CY (9/22 $0.11)

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

Daily Market Update – September 17,  2015  (Close)

The last couple of days were pretty impressive, especially given that today’s FOMC Statement release coming at 2 PM and the ensuing Chairman’s press conference report still held some uncertainty.

What has been surprising is that it suddenly seemed as if investors no longer feared the idea of an interest rate increase and that they made that change of heart so quickly.

But it’s also surprising that they seemed so certain of what the FOMC would do this afternoon.

At best, the messages from the Federal Reserve Governors have been mixed and the data has been less than compelling, but there has really been a very palpable change in acceptance of what can only be validation that the economy is improving,

This morning, less than 90 minutes from the opening of trading, the futures were once again subdued, as they have been all week. This morning, as China again had another large market decline overnight, it looked like another day of not caring what is going on there and we continue to focus on our own fundamentals and prospects for the economy.

As the morning was ready to open for trading, the S&P 500 was still about 7% below its highs from exactly 2 months ago, but that’s far better than what has been happening overseas, where there’s still no indication of what will turn things around. At this point, the only thing that should provide any encouragement about the economy in China can come from the earnings reports of US companies doing significant business there, if they report stability or growth in their revenues coming from China.

At the very least that would indicate something about the economy that may have much more validity than anything that the government’s official numbers can provide. But still, that doesn’t mean that their stock markets will follow suit.

But so long as that remains the case and the Chinese markets lack the ability to provide investors confidence, that can only be good for our own markets, especially if the Chinese economy continues to support business activities of US companies.

To a large degree, it may be that seeing the meltdown in China has been the factor that finally caused US investors to come to the realization that a small interest rate increase by the Federal Reserve may not be such a bad thing, after all, given what may be going on in the rest of the world. At least that interest rate increase is a reflection of the fact that we’re heading in the right direction and have a lot more transparency about everything than can be readily found elsewhere.

For now, that may be next week’s story, as all that will matter this week and certainly for the last 2 trading days of this monthly option cycle was to have been that FOMC Statement.

About that.

So, no change in rates and the statement includes a comment about events in “overseas markets.”

China?

Who else could they be referring to? So now the mandate is being expanded overseas?

That’s news.

What ended up happening was that a 170 point gain after the announcement of no change ended up going into neagitive territory as Janet Yellen’s press conference came to its end.

From there, it actually got worse.

No one expected that, especially since markets have always climbed during a Yellen post-FOMC Statement release press conference, except for the very first one.

So we’ll see what the mood will be tomorrow, including what the reaction will be in those overseas markets greeting us when we awaken.

Even though the past few days have seen a large drop in volatility, I’ve been glad to see some recovery from the 10% decline that we had and would be happy to see things stabilize at this level for a while as we get ready to head into yet another earnings season, which is now barely 3 weeks away.

For the rest of the week it’s otherwise just more of the same.

In the event that the market decides to add more onto its gains for the week after digesting FOMC Statement,  I’ll look for any possible opportunity to roll something over, or better yet, sell some calls on new options, but for now I’d be happy seeing whatever can be assigned, actually getting assigned.

While anything is still possible, at the least it does look as if a couple of positions will be assigned this week, helping to add some cash to reserves as the new monthly cycle gets ready to begin in a few days.

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