Category Archives: Daily Market Update

Daily Market Update – August 24,  2015  (Close)

Last night when looking at the thinly traded US futures, things were looking pretty bleak as the overseas futures were again pointing much lower.

However, the last time I looked before going to bed the tone had changed considerably as the US futures were down only 95 points.

Based on the way Friday had closed, with a loss of more than 500 points on the DJIA and accelerating at that, a mere 95 points would have felt like a rally.

This morning that picture was again totally different. The picture facing us this morning reflected the fact that the Shanghai market essentially had an entire correction in a single trading session, having gone down just shy of 10%, although not to the same degree.

Japan followed and the European markets aren’t being left too far behind.

Our own futures, now with trading less thin in the morning session was rapidly deteriorating and within 10 minutes of the opening bell the DJIA was down just over 1000 points.

None of what we are seeing on our shores reflects anything on our shores, but that doesn’t matter for now.

Yesterday;’s decision by China to allow the nation’s pension funds invest in stocks may have had one intent, but it sent an entirely different message.

That message was one of desperation and exasperation and when the Chinese government gets to the point that it feels as if it is being backed up against a wall, everyone needs to be very cautious.

A cash strapped China can have very powerful impact on us if they decide they need to get out of their immense Treasury holdings, which are now trading at below 2% for the 10 Year. That represents a 25% decline in rates at a time when everyone was banking on rising rates, although at the same time widespread selling by China could send those rates much higher again.

Then, add Saudi Arabia into that picture as oil falls even more this morning and is now below $40/barrel. Even Saudi Arabia may begin to have a need for cash soon.

This morning the futures were trading nearly 700 points lower and the S&P 500 was on track to join the DJIA in official correction territory if the futures trading losses would have persisted into the trading session.

They did. Then they didn’t and then they did again to finish the day.

Some of these individual stock price drops that have been seen and were being seen in the morning’s futures trading were really stunning. They are the kind that we really haven’t seen in 7 years, as it’s hard to imagine companies such as Apple and others being down 25% in such a short time frame.

There’s very little to do in the face of that kind of selling.

The one thing to look for is any opportunity to take advantage of should be increasing option premiums and the use of out of the money strikes. That was actually a good combination in 2008 and early 2009, as it was again in the latter half of 2011.

Volatility, while so very significantly higher over the past 2 weeks is still afar cry from 2008, 2009 or even 2011, but the search for those premium opportunities can at least begin to take place.

There are no positions set to expire this week and that was partially by design as last weeks rollovers specifically sought to buy some time as the market was already deteriorating. Seeing this morning’s sharp decline the first thought is that more time should have been bought.

While I didn’t plan on being one of those brave ones to try and figure out where the market’s bottom will be, I surprised myself with 2 new positions added this morning. I thought tha today’s focus would be on where income generation can be found to try and offset the broadly distributed declines.

At least there was one of those, as well.

The one positive note this morning was that, if on heavy volume, it may have represented a “blow off” kind of selling that is very often followed by a bounce higher.

That bounce higher came and did so very emphatically, but had no staying power, as there may have been lots of mutual fund and ETF redemptions that still needed to be dealt with.

The late in the day sell off will undoubtedly leave a hangover for tomorrow as there were very likely an additional wave of sell orders hitting mutual funds as the market came to its close.

If that’s the case, the question will again fall to China to see what its next step will be and then back to the FOMC to see whether it begins to look at the loss of wealth experienced over this summer in deciding what to do regarding interest rates.

For now, the only hope may be that whoever has cash overseas may begin to look to the United States as their safety haven and flee with whatever cash they have to our shores to at least inject some buying.

While people are divided over the issue of immigration, right now most everyone would welcome foreign cash on our shores, even if caked in white powder.

Daily Market Update – August 24,  2015  (9:00 AM)

Last night when looking at the thinly traded US Futures, things were looking pretty bleak as the overseas futures were again pointing much lower.

However, the last time I looked before going to bed the tone had changed considerably as the US futures were down only 95 points.

Based on the way Friday had closed, with a loss of more than 500 points on the DJIA and accelerating at that, a mere 95 points would have felt like a rally.

This morning that picture is again totally different. The picture facing us this morning reflects the fact that the Shanghai market essentially had an entire correction in a single trading session, having gone down just shy of 10%, although not to the same degree.

Japan followed and the European markets aren’t being left too far behind.

Our own futures, now with trading less thin in the morning session is rapidly deteriorating.

None of what we are seeing on our shores reflects anything on our shores, but that doesn’t matter for now.

Yesterday;’s decsion by China to allow the nation’s pension funds invest in stocks may have had one intent, but it sent an entirely different message.

That message was one of desperation and exasperation and when the Chinese government gets to the point that it feels as if it is being backed up against a wall, everyone needs to be very cautious.

A cash strapped China can have very powerful impact on us if they decide they need to get out of their immense Treasury holdings, which are now trading at below 2% for the 10 Year. That represents a 25% decline in rates at a time when everyone was banking on rising rates, although at the same time widespread selling by China could send those rates much higher again.

Then, add Saudi Arabia into that picture as oil falls even more this morning and is now below $40/barrel. Even Saudi Arabia may begin to have a need for cash soon.

This morning the futures were trading nearly 700 points lower and the S&P 500 is on track to join the DJIA in official correction territory if the futures trading losses persist into the trading session.

Some of these individual stock price drops that have been seen and are being seen in the morning’s futures trading are really stunning. They are the kind that we really haven’t seen in 7 years, as it’s hard to imagine companies such as Apple and others being down 25% in such a short time frame.

There’s very little to do in the face of that kind of selling.

The one thing to look for is any opportunity to take advantage of should be increasing option premiums and the use of out of the money strikes. That wa actually agood combination in 2008 and early 2009, as it was again in thelatter half of 2011.

Volatility, while so very significantly higher over the past 2 weeks is still afar cry from 2008, 2009 or even 2011, but the search for those premium opportunities can at least begin to take place.

There are no positions set to expire this week and that was partially by design as last weeks rollovers specifically sought to buy some time as the market was already deteriorating. Seeing this morning’s sharp decline the first thought is that more time should have been bought.

While I don’t plan on being one of those brave ones to try and figure out where the market’s bottom will be the focus will be on where income generation can be found to try and offset the broadly distributed declines.

The one positive note this morning is that, if on heavy volume, may represent a “blow off” kind of selling that is very often followed by a bounce higher. If that’s the case, teh question will again fall to China to see what its next step will be and then back to the FOMC to see whether it begins to look at the loss of wealth experienced over this summer in deciding what to do regarding interest rates.

For now, the only hope may be that whoever has cash overseas may begin to look to the United States as their safety haven and flee with whatever cash they have to sour shorws to at least inject some buying.

While people are divided over the issue of immigration, right now most everyone would welcome foreign cash on our shores, even if caked in white poder.

Daily Market Update – August 21,  2015  (9:00 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:  none

Rollovers:  none

Expirations:  COH, CSCO, CVC, FAST, INTC, LVS

The following were ex-dividend this week: MRO (8/17 $0.21), CVC (8/19 $0.15), RIG (8/21 $0.15)

The following are ex-dividend next week: (MAT 8/27 $0.38)

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

Daily Market Update – August 20,  2015  (Close)

Yesterday was a rare kind of day.

For one thing there was a very premature release of the FOMC minutes from the previous month. That doesn’t happen too often, but every time there’s an early release, whether it’s on embargoed items or company earnings, the fingers start pointing very quickly.

The other thing that seems to characterize early releases is large moves and then reversals of those moves as traders try to out jockey one another and take whatever advantage they can of the unexpected.

This time they all pointed to Bloomberg News and instead of it being a leak done in high frequency trading time terms, this one was about 20 minutes early.

What there was no shortage of was surprise, nor was there any shortage of attempting to take advantage of the surprise and then either profiting from those quick actions or coming to regret those quick actions.

That’s because the real story was that there was another strong reversal to a triple digit drop, which had to offer some encouragement, particularly in light of earlier in the week, when such a reversal couldn’t find some staying power.

So ordinarily today would be a day of hope. That hope would be that the reversal could find some staying power, but unfortunately there was a reversal to that reversal.

That was the really big news for the day as traders were really confused over how to interpret the FOMC minutes. Now only were they divided over whether the tone was hawkish or dovish, but whether their interpretation should then be acted up in paradoxical ways or accordingly.

So this morning was destined to be one opening on continuing confusion, but added to it is some clarity.

That clarity comes from China, which was continuing its steep decline from earlier in the week.

I’ve lost track, but I think that this morning’s decline in China brings it to more than 10% on the week.

This morning’s triple digit decline in the futures seems reasonable given yesterday’s real disappointing lack of follow through and the morning’s overseas news.

I had thought about doing some early rollovers yesterday, but then felt briefly vindicated as the market recovered and gave some hope that there could still be some assignments. That hope didn’t deteriorate too much as the market then reversed its reversal, but this morning it was not looking terribly good.

In a week, however, that has really been characterized by reversals, it wouldn’t be unusual to expect that at some points those bargain hunters are going to come in, but it may first take some kind of capitulation in the oil sector to really get things going.

As it would turn out, if anything resembled panic or at least accelerated selling, it wasn’t really in oil. It was in everything else today.

It’s tempting to want to call a bottom in oil, but the fervor in selling hasn’t really occurred. With the prospects of Iranian oil hitting the market and the intransigence of the Saudis, the prospects of oil climbing higher in the face of a Chinese economic slowdown doesn’t seem too likely.

And so I thought that today may be a day of trying to wait things out and hoping for the opportunity to roll anything over.

Surprisingly, some of those opportunities came, but in keeping with a theme of surprises, nothing surprised me more than digging into my other pocket and adding some shares of Bank of America, which along with everything else was hit very hard today. It could just as easily have been Blackstone or MetLife, but Bank of America is ex-dividend in a couple of weeks and I’m looking at bypassing next week for expirations to give the market some more time to get things out of its system.

While I thought today might be a day of leisure, I was happy to see that it wasn’t and am hopeful that tomorrow may offer some opportunity for shares of Cisco, Cablevision and Intel.

Meanwhile, I’m prepared to be in watching mode next week and would love to just sit back until this August comes to its end.

Daily Market Update – August 20,  2015  (7:30 AM)

Yesterday was a rare kind of day.

For one thing there was a very premature release of the FOMC minutes from the previous month. That doesn’t happen too often, but every time there’s an early release, whether it’s on embargoed items or company earnings, the fingers start pointing very quickly.

The other thing that seems to characterize early releases is large moves and then reversals of those moves as traders try to out jockey one another and take whatever advantage they can of the unexpected.

This time they all pointed to Bloomberg News and instead of it being a leak done in high frequency trading time terms, this one was about 20 minutes early.

What there was no shortage of was surprise, nor was there any shortage of attempting to take advantage of the surprise and then either profiting from those quick actions or coming to regret those quick actions.

That’s because the real story was that there was another strong reversal to a triple digit drop, which had to offer some encouragement, particularly in light of earlier in the week, when such a reversal couldn’t find some staying power.

So ordinarily today would be a day of hope. That hope would be that the reversal could find some staying power, but unfortunately there was a reversal to that reversal.

That was the really big news for the day as traders were really confused over how to interpret the FOMC minutes. Now only were they divided over whether the tone was hawkish or dovish, but whether their interpretation should then be acted up in paradoxical ways or accordingly.

So this morning was destined to be one opening on continuing confusion, but added to it is some clarity.

That clarity comes from China, which is continuing its steep decline from earlier in the week.

I’ve lost track, but I think that this morning’s decline in China brings it to more than 10% on the week.

This morning’s triple digit decline in the futures seems reasonable given yesterday’s real disappointing lack of follow through and the morning’s overseas news.

I had thought about doing some early rollovers yesterday, but then felt briefly vindicated as the market recovered and gave some hope that there could still be some assignments. That hope didn’t deteriorate too much as the market then reversed its reversal, but this morning is not looking terribly good.

In a week, however, that has really been characterized by reversals, it wouldn’t be unusual to expect that at some points those bargain hunters are going to come in, but it may first take some kind of capitulation in the oil sector to really get things going.

It’s tempting to want to call a bottom in oil, but the fervor in selling hasn’t really occurred. With the prospects of Iranian oil hitting the market and the intransigence of the Saudis, the prospects of oil climbing higher in the face of a Chinese economic slowdown doesn’t seem too likely.

So today may be a day of trying to wait things out and if the opportunity to roll anything over may arrive, then taking that opportunity.

Daily Market Update – August 19,  2015  (Close)

Yesterday was a pretty boring day as far as markets go, despite having two DJIA component companies report their earnings.

If those two had gone in the same direction it might have become more interesting, but they basically offset one another both in the price weighted DJIA and market capitalization weighted S&P 500, so the day was pretty much a draw every where you looked.

Although the market was boring, there was some opportunity to get some trading done. Some of it was of a preventive nature, trying to get some more premium out of a position that had a large fall yesterday, a week before reporting earnings. Abercrombie and Fitch’s announcement that they were bringing in 6 outside executives in a re-structuring was basically sending the message to the market that next week’s earnings are going to reflect a need to restructure and the market interpreted it just that way, forcing a big sell-off before next week’s stampede.

Another rollover, Holly Frontier, was to try and still get the dividend on a stock that’s very likely to get assigned early for its dividend, by rolling it over, collecting the premium, while still being in decent position to have shares get assigned early.

The final trade, was the one that I was hoping to make on Monday, in order to capture a nice premium in exchange for giving up the dividend. That was Cablevision, and I thought that selling the well in the money call would result in shares being assigned. But this morning those shares are still in the account, although, as usual, I’ll do the tally to see if that was the general experience.

With all of that happening on an otherwise boring day,  I would have been very happy to see the rest of the week just coast until the end, trying to keep a few positions in contention for either rollover or assignment.

But not today.

It definitely wasn’t boring today. Not only a reversal, but a reversal to the reversal.

Although there were some major retailers reporting earnings today, Lowes and Target, as well as a specialty retailer, L Brands, after the close, it should have been a relatively quiet day.

That wasn’t the case, as the market headed for a triple digit loss fairly quickly as the futures deteriorated heading into the open.

But the real excitement came after the premature release of the FOMC minutes from last month. That caused people to trip all over one another in trying to interpret what was going on in the minds of its members.

The initial reaction was to wipe out a 175 point decline, but then the next reaction was to bring most of that decline right back.

Although not an FOMC member and soon to be departing as a Federal Reserve Governor, Narayana Kocherlakota came out this morning saying that it would be a mistake to raise interest rates in September. That’s not too much of a surprise, since he has generally been dovish, although a few months ago he gave some indication that the time for a rate increase was nearing.

While we may have been on the path to see those rates get increased in September, it’s very possible that the FOMC members didn’t believe that anything so substantial would be happening in China while they were on their vacations, so they may have some second thoughts.

That might be good for the markets, although I’m still of the belief that a small increase would be welcome. Not only would it offer a chance for a relief gasp, but it could also make it easier to have a smooth series of small increases, rather than having to take quantum leaps, which could be more unsettling.

For today, the market appeared as if it was going to get off to a negative start, but gave no indication of just how negative it would be. Futures continue having a fairly poor record of predicting what the market will do during the course of the regular trading day, but today it was more a problem of predicting the magnitude and not the direction.

Maybe tomorrow the market can reach deep down to find something good to celebrate, even as Lowes and Target failed to excite today.

 Note:  I had a couple of people ask today why the rollover of Holly Frontier, which has September 18, 2015 $50 calls written on both outstanding lots. Since Holly Frontier is now about $3.25 above the strike and shares go ex-dividend on August 31st, for $0.33, I expect early assignment if shares stay at this level.

So in a pre-emptive move in an effort to get the equivalent of the dividend if assigned early, I decided to rollover an got a $0.35 premium. If shares are assigned early on August 30th, then you still have that extra premium which is a tiny bit more than the dividend itself. Better yet, you then get the proceeds from the assignment and the opportunity to re-invest or add to cash reserves, without having to wait an additional 3 weeks for assignment.

Daily Market Update – August 19,  2015  (8:15 AM)

Yesterday was a pretty boring day as far as markets go, despite having two DJIA component companies report their earnings.

If those two had gone in the same direction it might have become more interesting, but they basically offset one another both in the price weighted DJIA and market capitalization weighted S&P 500, sothe day was pretty much a draw every where you looked.

Although the market was boring, there was some opportunity to get some trading done. Some of it was of a preventive nature, trying to get some more premium out of a position that had a large fall yesterday, a week before reporting earnings. Abercrombia nd Fitch’s announcement that they were bringing in 6 outside executives in a re-structuring was basically sending the message to the market that next week’s earnings are going to reflect a need to restructure and the market interpretd it just that way, forcing a big sell-off before next week’s stampede.

Another rollover, Holly Frontier, was to try and still get the dividend on a stock that’s very likely to get assigned early for its dividend, by rolling it over, collecting the premium, while still being in decent position to have shares get assigned early.

The final trade, was the one that I was hoping to make on Monday, in order to capture a nice premium in exchange for giving up the dividend. That was Cablevision, and I thought that selling the well in the money call would result in shares being assigned. But this morning those shares are still in the account, although, as usual, I’ll do the tally to see if that was the general experience.

With all of that happening on an otherwise boring day, now I’d be happt to see the rest of the week just coast until the end, trying to keep a few positions in contention for either rollover or assignment.

ALthough there are some major retailers reporting earnings today, Lowes and Target, as well as a specialty retier, L Brands, it should be a relatively quiet day. The day also includes a release of last month’s FOMC minutes, which could give some insight into what is going on in the minds of its members.

Although not an FOMC member and soon to be departing as a Federal Reserve Governor, Narayana Kocherlakota came out this morning saying that it would be a mistake to raise interest rates in September. That’s not too much of a surprise, since he has generally been dovish, although a few months ago he gave some indication that the time for a rate increase was nearing.

While we may have been on the path to see those rates get increased in September, it’s very possible that the FOMC members didn’t believe that anyhting so substantial would be happening in China while they were on their vacations, so they may have some second thoughts.

That might be good for the markets, although I’m still of the belief that a small increase would be welcome. Not only would it offer a chance for a relief gasp, but it could also make it easier to have a smooth series of small increases, rather than having to take quantum leaps, which could be more unsettling.

For today, the market appears as if it’s going to get off to a negative start. Hopefully those futures will continue having a fairly poor record of predicting what the market will do during the course of the regular trading day and the market can reach deep down to find something good to celebrate, maybe coming from the aisles of Lowes and Target.

 Note:  I had a couple of people ask today why the rollover of Holly Frontier, which has September 18, 2015 $50 calls written on both outstanding lots. Since Holly Frontier is now about $3.25 above the strike and shares go ex-dividend on August 31st, for $0.33, I expect early assignment if shares stay at this level.

So in a pre-emptive move in an effort to get the equivalent of the dividend if assigned early, I decided to rollover an got a $0.35 premium. If shares are assigned early on August 30th, then you still have that extra premium which is a tiny bit more than the dividend itself. Better yet, you then get the proceeds from the assignment and the opportunity to re-invest or add to cash reserves, without having to wait an additional 3 weeks for asignment.

Daily Market Update – August 18,  2015  (Close)

Yesterday was another one of those impressive comebacks from a triple digit decline, just as we saw mid-week last week.

Those kind of reversals would end up being much more impressive if they could be the beginning of something with at least a little bit of staying power.

That definitely wasn’t the case last week and it may not be the case this week, either as the morning was already showing declines and the market ended the day having traded in a narrow range, finishing with losses.

Sometimes it’s just a case of bad timing, as we woke up this morning to news of a 6% drop in the Shanghai market and an early 3% drop in shares of Wal-Mart, after it announced its earnings.

Neither of those are the kind of things that give our market a reason to go higher, although we may be getting a little bit immune to stock news from China. What may now matter is not the news, but whether the government or others begin selling their Treasury Notes as there is an increasing cash drain going on in China and they certainly have lots of cash tied up in the paper that we hold.

For now, though, those US Treasuries may represent just about the only thing with intrinsic value sitting in lots of Chinese portfolios, so a raid on those holdings is likely to be the very last thing anyone will want to do, unless they specifically want to see some pain felt within US markets, as well.

China, however, is probably more of a rational player than some other nations, such as Saudi Arabia, who sees inflicting pain on others as more important that its own cash flow needs.

It would be much nicer, though, if all we really had to think about were the earnings reports still coming through. The downside to having an interconnected world is that it’s interconnected.

Now, everything is important and there are tangible and intangible impacts coming from direct and indirect exposures of all sorts, some of which may be made up as we go along.

This morning’s early earnings reports were mixed and come from two key DJIA components. Home Depot is faring well in the futures trading, while Wal-Mart was getting punished, although it did something that hasn’t been reported very often lately. Wal-Mart actually beat on revenues and fell short on earnings. For the most part, it has been just the other way around for so many companies who have seen EPS data improve even as revenues fell, likely the result of share buybacks.

As the day came to its end, Home Depot went even higher and Wal-Mart went even lower. Home Depot’s move more than offset Wal-Mart’s move in the DJIA, but it was a draw as far as their impacts on the S&P 500 were concerned.

With the market showing some mild losses prior to the opening bell, I was still hoping to have some opportunity to add a new position or two. Yesterday I was focused on an in the money position in Cablevision which goes ex-dividend tomorrow. However, it along with the rest of the market turned around and that in the money trade became a deep in the money trade. Along with that, the benefit of the trade was lost, as in the low volatility environment the deeper in the money you are the less the time value, so the trade becomes much less attractive.

Today, I still wanted to make that trade and it finally went, but it may be another very quiet week, other than for the potential for rollovers or assignments at week’s end.

For that Cablevision trade, I wouldn’t at all be disappointed to wake up tomorrow morning to find that it was assigned early, as it did finish about $0.31 over the breakeven on the strike, but with 3 days of time value remaining.

I certainly wouldn’t mind that or other assignments on the week, but banking on anything these days is itself risky business, so instead of thinking of it as an entitlement, I would be very grateful if it became a reality about 72 hours from now.

 Note:  I had a couple of people ask today why the rollover of Holly Frontier, which has September 18, 2015 $50 calls written on both outstanding lots. Since Holly Frontier is now about $3.25 above the strike and shares go ex-dividend on August 31st, for $0.33, I expect early assignment if shares stay at this level.

So in a pre-emptive move in an effort to get the equivalent of the dividend if assigned early, I decided to rollover an got a $0.35 premium. If shares are assigned early on August 30th, then you still have that extra premium which is a tiny bit more than the dividend itself. Better yet, you then get the proceeds from the assignment and the opportunity to re-invest or add to cash reserves, without having to wait an additional 3 weeks for asignment.

Daily Market Update – August 18,  2015  (8:00 AM)

Yesterday was another one of those impressive comebacks from a triple digit decline, just as we saw mid-week last week.

Those kind of reversals would end up being much more impressive if they could be the beginning of something with at least a little bit of staying power.

That definitely wasn’t the case last week and it may not be the case this week, either.

Sometimes it’s just a case of bad timing, as we wake up this morning to news of a 6% drop in the Shanghai market and an early 3% drop in shares of Wal-Mart, after it announced its earnings.

Neither of those are the kind of things that give our market a reason to go higher, although we may be getting a little bit immune to stock news from China. What may now matter is not the news, but whether the government or others begin selling their Treasury Notes as there is an increasing cash drain going on in China and they certainly have lots of cash tied up in the paper that we hold.

For now, though, those US Treasuries may represent just about the only thing with intrinsic value sitting in lots of Chinese portfolios, so a raid on those holdings is likely to be the very last thing anyone will want to do, unless they specifically want to see some pain felt within US markets, as well.

China, however, is probably more of a rational player than some other nations, such as Saudi Arabia, who sees inflicting pain on others as more important that its own cash flow needs.

It would be much nicer, though, if all we really had to think about were the earnings reports still coming through. The downside to having an interconnected world is that it’s interconnected.

Now, everything is important and there are tangible and intangible impacts coming from direct and indirect exposures of all sorts, some of which may be made up as we go along.

This morning’s early earnings reports are mixed and come from two key DJIA components. Home Depot is faring well in the futures trading, while Wal-Mart is getting punished, although it did something that hasn’t been reported very often lately. Wal-Mart actually beat on revenues and fell short on earnings. For the most part, it has been just the other way around for so many companies who have seen EPS data improve even as revenues fell, likely the result of share buybacks.

With the market showing some mild losses prior to the opening bell, I would still like to have some opportunity to add a new position or two. Yesterday I was focused on an in the money position in Cablevision which goes ex-dividend tomorrow. However, it along with the rest of the market turned around and that in the money trade became a deep in the money trade. Along with that, the benefit of the trade was lost, as in the low volatility environment the deeper in the money you are the less the time value, so the trade becomes much less attractive.

Today, I’ll still keep an eye on that trade, but it may be another very quiet week, other than for the potential for rollovers or assignments at week’s end.

I certainly wouldn’t mind the assignments, but banking on anything these days is itself risky business, so instead of thinking of it as an entitlement, I would be very grateful if it became a reality about 80 hours from now.

Daily Market Update – August 17,  2015  (Close)

After a less than compelling week for either side last week, the market was getting ready to start with a little more ambivalence to begin this week.

Unlike last Monday which zoomed higher on what was perceived as good news from both the EU and the lack of bad news from China, this Monday looked as if it was going to begin with no real news of any kind.

What there wasn’t is more bad news from China, but that may still remain a day to day thing for a while.

There will be more retail earnings reports this week that could give the FOMC more reason to consider an interest rate hike in the coming month, although the data pointing toward an inflationary environment has been less than convincing.

That became even more evident as the usually relatively inconsequential New York State Manufacturing Index was fairly week and sent the market tumbling prior to the open. That carried through to past the opening bell, but was reversed by the equally relatively inconsequential Housing Market Index and so a mere 30 minutes into the session it all turned around.

It doesn’t seem too likely that this week’s remaining retail sales earnings reports will do much to paint a picture of growing consumer discretionary spending, so it doesn’t seem as if that’s going to be the missing key for any market advance this week.

We’ll just probably have to look elsewhere, as even the continuing fall in energy prices isn’t turning out to be that key.

With a minimum of cash to start the week, there’s not too much likelihood of spending any to open new positions, although I am willing to dip into personal; funds to create a margin account that I would owe to myself. I had actually tried to get a dividend trade in on Cablevision and then it followed along with the rest of the market and went higher, so that went unrequited.

As I mentioned the previous week that willingness to add additional funds is definitely not an endorsement of taking out a margin loan to buy or add stocks at this time. If anything, my preference would really be to build up cash reserves, but I haven’t been able to do that very well.

With a fair number of positions set to expire this week as the August monthly cycle comes to its end, a few of those are not going to be assigned unless some amazing things happen. Those represented positions that in the throes of a sharp climb higher had longer term options written on them and the time has come for those contracts to expire, but the promise of those higher and sustained moves never came.

If those opportunities were to arise again, I wouldn’t mind doing the same thing all over again. The extra few cents makes the waiting a little bit easier, but the waiting is getting longer and longer, as those cycles are getting stretched more and more on so many stocks, which is another reflection of how skewed the market has become as the indexes are reflecting the robust health of a small number of stocks while so many others are flailing.

Otherwise, it is, as have been so many recent weeks, one of hoping to see some assignments and if that fails, at least some rollovers.

That was exactly the situation last week, but last week the stocks that looked as if they had a good chance for assignment ended up being fortunate to get rolled over. Hopefully this week those positions will be the source of new cash to begin the September 2015 cycle, which itself is already fairly well populated with expiring positions during its final week.

The week will be getting off to a start that won’t probably amount to much more than watching as most prices and price moves are fairly tentative. If anything, however, the past 2 months have shown that kind of tentative behavior can easily be altered as the market remains undecided as to whether to breach support or breach resistance.

Now sitting at only about 2% below the all time highs and about 2% above an important support level, you can easily understand why things could easily go either way as very few investors are wedded to their beliefs in the direction the market will take and would be likely to abandon their beliefs in an instant.

WIth those lower highs and higher lows mounting, it does appear that something significant is in the making, but only time will tell if that’s the case and then more importantly in what direction.

I’m strapped in and awaiting that outcome.

MONDAY:   A moderately negative start to begin the week appears to be in the cards, as more retail earnings hit this week and so far, China remains quiet

TUESDAY:   Some big earnings numbers before this market day begins from Wal-Mart and Home Depot, but they come amid another huge loss in China. While the US futures are just mildly negative, the opening bell will tell whether traders get spooked by news from far away

WEDNESDAY: It’s a relatively quiet day in earnings reports today, although a couple of major retailers do report. Otherwise, with the FOMC on vacation, the minutes from the last meeting are released, which could give some insight into what may await in September, as the futures are basically asleep this morning.

THURSDAY: Another sell-off in China overnight  leads to another weak day in Europe and that seems to be oozing over to our shores this morning after yesterday’s reversal to the earlier reversal left us even deeper in the hole. Strap on.

FRIDAY:. Another huge drop in China overnight on top of yesterday’s largest loss of the year in the US isn’t the way to end the week and the monthly option cycle on a happy note







Daily Market Update – August 17,  2015  (9:15 AM)

After a less than compelling week for either side last week, the market is getting ready to start with a little more ambivalence to begin this week.

Unlike last Monday which zoomed higher on what was perceived as good news from both the EU and the lack of bad news from China, this Monday begins with no real news of any kind.

What there isn’t is more bad news from China, but that may remain a day to day thing for a while.

There will be more retail earnings reports this week that could give the FOMC more reason to consider an interest rate hike in the coming month, although the data pointing toward an inflationary environment has been less than convincing.

It doesn’t seem too likely that this week’s remaining retail sales earnings reports will do much to paint a picture of growing consumer discretionary spending, so it doesn’t seem as if that’s going to be the missing key for any market advance this week.

We’ll just probably have to look elsewhere, as even the continuing fall in energy prices isn’t turning out to be that key.

Witha minimum of cash to start the week, there’s not too much likelihood of spending any to open new positions, although I am willing to dip into personal; funds to create a margin account that I would owe to myself.

As I mentioned the previous week that’s definitely not an endorsement of taking out a margin loan to buy or add stocks at this time. If anything, my preference would really be to build up cash reserves, but I haven’t been able to do that very well.

With a fair number of positions set to expire this week as the August mointhly cycle comes to its end, a few of those are not going to be assigned unless some amazing things happen. Those represented positions that in the throes of a sharp climb higher had longer term options written on them and the time has come for those contracts to expire, but the promise of those higher and sustained moves never came.

If those opportunities were to arise again, I wouldn’t mind doing the same thing all over again. The extra few cents makes the waiting a little biut easier, but the waiting is getting longer and longer, as those cycles are getting stretched more and more on so many stocks, which is another reflection of how skewed the market has become as the indexes are reflecting the robust health of a small number of stocks while so many others are flailing.

Otherwise, it is, as have been so many recent weeks, one of hoping to see some assignments and if that fails, at least some rollovers.

That was exactly the situation last week, but last week the stocks that looked as if they had a good chance for assignment ended up being fortunate to get rolled over. Hopefully this week those positions will be the source of new cash to begin the September 2015 cycle, which itself is already fairly well populated with expiring positions during its final week.

The week will be getting off to a start that won’t probably amount to much more than watching as most prices and price moves are fairly tentative. If anything, however, the past 2 months have shown that that kind of tentative behavior can easily be altered as the market remains undecided as to whether to breach support or breach resistance.

Now sitting at only about 2% below the all time highs and about 2%^ above an important support level, you can easily understand why things could easily go either way as very few investors are wedded to their beliefs in the direction the market will take and would be likely to abandon their beliefs in an instant.

WIth those lower highs and higher lows mounting, it does apper that something significant is in the making, but only time will tell if that’s the case and then more importantly in what direction.

I’m strapped in and awaiting that outcome.

Daily Market Update – August 14,  2015  (7:30 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:  none

Rollovers:  Intel, International Paper

Expirations:   Abercrombie and Fitch, Weyerhauser

The following were ex-dividend this week:  AZN (8/12 $0.45), IP (8/12 $0.40)

The following will be ex-dividend next week:  MRO (8/17 $0.21)

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

Daily Market Update – August 13,  2015  (Close)

Waking up in the morning and learning that the world’s second largest economy had devalued its currency for the third consecutive day should have added some credance to those believing that the People’s Bank of China was planning an overall 10% reduction in the Yuan’s value.

I don’t really follow, nor do I understand currencies, but that’s pretty huge.

As it is, the 3 days of central bank action, which also included moving in to support the currency on the same day that it was devalued, has already led to a large move and disrupted markets all around. Worldwide stocks, bonds and currencies have felt the impact of the move.

For those following interest rates and pointing to them just a few weeks ago that the die was cast, well those rates are down about 12% in the past month.

That’s huge, too.

Today they were up almost 3% and you probably know how big that kind of a move is, too.

This morning the PBOC said that it is done, but it’s not entirely clear if that is something to really accept on face value. The government of China has taken some very strong steps in an effort to control their economy, stock market and currency. What has to be of some concern is that reports from a few years ago that questioned the reality of the Chinese economic expansion may really have all been true. What was alleged at that time was that the government was engaged in a huge move to grow cities and population centers and was essentially building ghost towns with the most modern of amenities.

Lots of activity and lots of economic growth fueled by government projects, but without any reasonable expectation that they would lead to any real kind of economic growth after the projects were completed.

So we’ll see whether the fears of a Chinese bubble, which were once laughed at, may be the real reality.

What is especially of concern is that the trustworthiness of the data released by the Chinese government may be as suspect as the data released by its publicly traded companies.

That’s fine when the news is all good and markets head higher, but it’s not so good on the way down.

This morning’s futures, though, wa taking its lead from the really nice come back in the market that was seen yesterday. After having been down about 270 points, the bounce started at about noon. It looked as if Apple was leading that charge higher, just like in the old days. It had been sharply lower, but turned things around before the general market and the market then seemed to follow.

Technicians will simply say that the 2045 level of support in the S&P 500 held and would disregard any individual stock as having played a role in moving a broad basket of stocks.

That gain lasted most of the day but finally withered out in the final 30 minutes as materials and energy stocks reversed their previous gains on the week.

WIth now just one day left in the week, there is still a chance for some assignments or rollovers, so the hope at this point is simply that tomorrow doesn’t take its cue from some of the week’s earlier responses to the situation in China, and instead focuses on our own economic fundamentals.

For now, with more retail sales earnings reports being released, those fundamentals may not be so great, even as the JOLTS Report showed more people leaving their jobs for new jobs, which typically means new jobs with higher salaries.

As today’s Retail Sales Report was released, there will be time over this week and next to digest what in line retail sales data may mean for the FOMC given a context of major retailers reporting very disappointing revenues in the early stages of their reporting.

We may as well also try to figure out what all of that means for the market, as it looks for any fuel to light up a rally.

Daily Market Update – August 13,  2015  (8:30 AM)

Waking up in the morning and learning that the world’s second largest economy had devalued its currency for the third consecutive day should have added some credance to those believing that the People’s Bank of China was planning an overall 10% reduction in the Yuan’s value.

I don’t really follow, nor do I understand currencies, but that’s pretty huge.

As it is, the 3 days of central bank action, which also included moving in to support the currency on the same day that it was devalued, has already led to a large move and disrupted markets all around. Worldwide stocks, bonds and currencies have felt the impact of the move.

For those following interest rates and pointing to them just a few weeks ago that the die was cast, well those rates are down about 12% in the past month.

That’s huge, too.

This morning the PBOC says that it is done, but it’s not entirely clear if that is something to really accept on face value. The government of China has taken some very strong steps in an effort to control their economy, stock market and currency. WHat has to be of some concern is that reports from a few years ago that questioned the reality of the CHinese economic expansion may really have all been true. What was alleged at that time was that the government was engaged in a huge move to grow cities and population centers and was essentially building ghost towns with the most modern of amenities.

Lots of activity and lots of economic growth fueled by government projects, but without any reasonable expectation that they would lead to any real kind of economic growth after the projects were completed.

So we’ll see whether the fears of a Chinese bubble, which were once laughed at, may be the real reality.

What is especially of concern is that the trustworthiness of the data released by the CHinese government may be as suspect as the data released by its publicly traded companies.

That’s fine when the news is all good and markets head higher, but it’s not so good on the way down.

This morning’s futures, though, is taking its lead from the really nice come back in the market that was seen yesterday. After having been down about 270 points, the bounce started at about noon. It looked as if Apple was leading that charge higher, just like in the old days. It had been sharply lower, but turned things around before the general market and the market then seemed to follow.

Technicians will simply say that the 2045 level of support in the S&P 500 held and would disregard any individual stock as having played a role in moving a broad basket of stocks.

WIth two days now left in the week, there is still a chance for some assignments or rollovers, so the hope at this point is simply that these last two days don’t take their cue from some of the week’s earlier responses to the situation in China, and instead focuses on our own economic fundamentals.

For now, with more retail sales earnings reports being released, those fundamentals may not be so great, even as the JOLTS Report showed more people leaving their jobs for new jobs, which typically means new jobs with higher salaries.

As today’s Retail Sales Report is released, there will be time over this week and next to digest what poorer than expected retail sales may mean for the FOMC and what that may mean for the market, as it looks for any fuel to light up a rally.