Category Archives: Daily Market Update

Daily Market Update – August 12,  2015  (Close)

Yesterday was a major disappointment following Monday’s very nice and broad rally, but probably shouldn’t have come as too much of a surprise to anyone. That is except for the few that thought that maybe Monday was the start of something that would take us to new highs.

As it is, after yesterday’s 200+ point loss that made Monday seem as if it never existed, the S&P 500 is barely 2.5% below those all time highs.

This morning that figure was going to get larger as the futures were again down sharply again being whipsawed by China as its markets again fell and late in their trading day the government stepped in to support the currency.

Given that it devalued it just a couple of days earlier it was a little unusual that it was now stepping in to support it. History has long shown that governments attempting to support their currency against what the market is doing tends to be a waste of time.

If there was any doubt as to whether there would be any thing actually going on while the Federal Reserve was on its vacation, China has left no doubt that it was fully capable of filling whatever voids we might have.

So this morning our futures were again down triple digits as we awaited the first of the major national retailers getting ready to report their earnings. Most of those, other than Wal-Mart shouldn’t be terribly impacted by currency and may in fact find benefit to the devaluation of the Chinese Yuan. Although the news of the Chinese currency was just beginning to get digested, that could result in providing improved guidance, which could easily offset disappointing earnings, if that is going to be retail’s theme this quarter.

Of course, that could lead to some minor deflation on our end if the price of consumer goods, largely imported from China falls or even stays the same. That would make it a little more difficult to find the data justifying an interest rate increase.

While most everyone agrees that it’s likely that we will see that increase come in September, suddenly there is reason to re-think that target.

Meanwhile, Macys did get retail off to a start early this morning and it reported disappointing revenues and wasn’t giving positive guidance, either. It blamed a decrease in foreign tourist shopping, an indirect result of the US Dollar’s relative strength.

Everything is increasingly connected.

This morning the market’s were down before the opening bell, but the numbers had improved just a little, or at least they may have stabilized. However, if Macys was going to be reflective of what other retailers are going to report, there may not be much reason to expect the market doing anything to turn things around this week or maybe not even next week.

But if you thought that Tueday was a whipsaw day, you would have really been impressed with the way today ended, after the DJIA having been down by about 260 points, only to close the day barely unchanged, while the S&P 500 actually gained a bit.

Since Wednesdays are usually slow days, I didn’t expect to do much today, but being reluctant to see any of those positions that were expiring this week potentially slip away from being assigned and then further slip away from being rolled over, thought that I might do something.

Because of that, there might have been reason to consider some early rollovers just to capture some more income and forego the possibility of collecting some cash from assignments.

That was the view from this morning, but as is always the case,the view is subject to change and very likely to change.

I’m glad it did and I didn’t.

Daily Market Update – August 12,  2015  (8:30 AM)

Yesterday was a major disappointment following Monday’s very nice and broad rally, but probably shouldn’t have come as too much of a rurprise to anyone. That is except for the few that thought tha maybe Monday was the start of something that would take us to new highs.

As it is, after yesterday’s 200+ point loss that made Monday seem as if it never existed, the S&P 500 is barely 2.5% below those all time highs.

This morning that figure is going to get larger as the futures are again down sharply again being whipsawed by China.as its markets again fell and late in their trading day the government stepped in to support the currency.

Given that it devalued it just a couple of days earlier it was a little unusual that it was now stepping in to support it. History has long shown that governments attempting to support their currency against what the market is doing tends to be a waste of time.

If there was any doubt as to whether there would be any thing actually going on while the Federal Reserve was on its vqacation, China has left no doubt that it was fully capable of filling whatever voids we might have.

So this morning our futures are again down triple digits as we await the first of the major national retailers getting ready to report their earnings. Most of those, other than Wal-Mart shouldn’t be terribly impacted by currency and may in fact find benefit to the devaluation of the Chinese Yuan. Although the news of the CHinese currency is just beginning to get digested, that could result in providing improved guidance, which could easily offset disappointing earnings, if that is going to be retail’s theme this quarter.

Of course, that could lead to some minor deflation on our end if the price of consumer goods, largely imported from China falls or even stays the same. That would make it a little more difficult to find the data justifying an interest rate increase.

While most everyone agrees that it’s likely that we will see that increase come in September, suddenly there is reason to re-think that target.

Meanwhile, Macys did get retail off to a start early this morning and it reported disappointing revenues and wasn’t giving positive guidance, either. It blamed a decrease in foreign tourist shopping, an indirect result of the US Dollar’s relative strength.

Everything is increasingly connected.

This morning the market’s are down before the opening bell, but the numbers have improved just a little, or at least they may have stabilized. However, if Macys is going to be reflective of what other retailers are going to report, there may not be much reason to expect the market doing anything to turn things around this week or maybe not even next week.

Since Wednesdays are usually a slow day, I don’t expect to do much today, but would be reluctant to see any of those positions that were expiring this week potentially slip away from being assigned and then further slip away from being rolled over.

Becasue of that, there may be reason to consider some early rollovers just to capture some more income and forego the possibility of collecting some cash from assignments.

That’s the view from this morning, but as is always the case, subject to change and very likely to change.

Daily Market Update – August 11,  2015  (Close)

Yesterday’s big news, which people are still scratching their heads over, was the news that Google is going to become a subsidiary of a new holding company to be named “Alphabet.”

It was in the name of earnings transparency that sent Google shares soaring in the after hours. As far as investors are concerned the re-organization will split out Google earnings and then lump everything else together. Now, everything is lumped together so investors may not really have a good way of measuring how Google’s core business, the only one that really makes money, is doing.

The re-organization is a good example of why company founders might want to consider having dual class stocks. It makes it much easier to make decisions when your shareholders have no vote or say in matters.

The big story of the day before the Google news was that the market was up more than 200 points and never faltered on its way there.

It seems that the real impetus for the rise was the announcement that Greece was going to get access to capital by having agreed to a third bail out  That seemed to be much more important than the earlier overnight news that the Chinese stock markets had climbed 5%. The moment that news was announced the market really took off, seemingly oblivious to the history of this sort of thing, but that’s going to be a recurring problem for some other day.

This morning the early news was again related to China, but this time it’s not so good for us. The Chinese government announced an unexpected devaluation of their currency, which isn’t a very good thing for US companies doing significant business in China, as the strong USD is already problematic.

Making US goods even more expensive in local markets isn’t going to help sell more Teslas or even KFC drumsticks. You can already picture the amended guidance that is likely to come from many companies prior to the next quarter’s earnings reports.

The reaction of the futures this morning to that news was to take the market down by as many points as it had been higher yesterday morning prior to the Greek news.

That the market gaves up those nice gains from yesterday, shouldn’t be too surprising, even if there was no adverse news from China. It hasn’t exactly been easy stringing together two or more nicely positive market days, so why should today have been any different?

With no new purchases yesterday to begin the week and the closing of the Texas Instruments position, there was some opportunity to add a new position today in the face of broad weakness. I was happy yo have had the opportunity to get a rollover trade down so early in the week and for a position expiring next week, to boot. Additionally, it was nice getting the week started with the sale of some calls on an uncovered position, but there’s still much more needed in that regard.

I thought that the morning’s purchase of a stock going ex-dividend tomorrow was well timed and with as little as 3 hours to go until the market was to close I had concerns of those shares potentially being assigned away early as it was bucking the strong downward trend.

That changed, though.

It will be interesting to see whether the market can shake off today’s sell-off that, like yesterday, showed no signs of giving up steam.

The good news, however, may start coming from national retailers this week as they begin to report their earnings. Perhaps not so much related to their performance in the past quarter, but rather looking ahead to the next quarter when their cheaper imports from China may help to increase their profit margins and could conceivably lead to lower consumer prices, or at least a slow down in the rate of increase.

From the FOMC’s perspective that might not be a good thing if they’re hell bent on raising rates, but there’s plenty of time for hypotheticals to play themselves out before the September FOMC meeting.

It’s all about the give and take and the ups and downs.

You would be forgiven if beginning to feel a little bit sea sick, though.

Daily Market Update – August 11,  2015  (8:30 AM)

Yesterday’s big news, which people are still scratching their heads over, was the news that Google is going to become a subsidiary of a new holding company to be named “Alphabet.”

It was in the name of earnings transparency that sent Google shares soaring in the after hours. As far as investors are concerned the re-organization will split out Google earnings and then lump everything else together. Now, everything is lumped together so investors may not really have a good way of measuring how Google’s core business, the only one that really makes money, is doing.

The re-organization is a good example of why company founders might want to consider having dual class stocks. It makes it much easier to make decisions when your shareholders have no vote or say in matters.

The big story of the day before the Google news was that the market was up more than 200 points and never faltered on its way there.

It seems that the real impetus for the rise was the announcement that Greece was going to get access to capital by having agreed to a third bail out  That seemed to be much more important than the earlier overnight news that the Chinese stock markets had climbed 5%. The moment that news was announced the market really took off, seemingly oblivious to the history of this sort of thing, but that’s going to be a recurring problem for some other day.

This morning the early news is again related to China, but this time it’s not so good for us. The Chinese government announced an unexpected devaluation of their currency, which isn’t a very good thing for US companies doing significant business in China, as the strong USD is already problematic.

Making US goods even more expensive in local markets isn’t going to help sell more Teslas or even KFC drumsticks. You can already picture the amended guidance that is likely to come from many companies prior to the next quarter’s earnings reports.

The reaction of the futures this morning to that news is to take the market down by as many points as it had been higher yesterday morning prior to the Greek news.

If the market gives up some of those nice gains from tomorrow, it shouldn’t be too surprising, even if there was no adverse news from China. It hasn’t exactly been easy stringing together two or more nicely positive market days, so why should today have been any different?

With no new purchases yesterday to begin the week and the closing of the Texas Instruments position, there may be some opportunity to add a new position today in the event that there is some broad weakness or even just in a particular sector. I was happy yo have had the opportunity to get a rollover trade down so early in the week and for a position expiring next week, to boot. Additionally, it was nice getting the week started with the sale of some calls on an uncovered position, but there’s still much more needed in that regard.

It will be interesting to see whether the market can shake off this early morning sell-off in the futures that has been growing as more people are apparently waking up to the news and doing something about it.

The good news, however, may start coming from national retailers this week as they begin to report their earnings. Perhaps not so much related to their performance in the past quarter, but rather looking ahead to the next quarter when their cheaper imports from China may help to increase their profit margins and could conceivably lead to lower consumer prices, or at least a slow down in the rate of increase.

From the FOMC’s perspective that might not be a good thing if they’re hell bent on raising rates, but there’s plenty of time for hypotheticals to play themselves out before the September FOMC meeting.

It’s all about the give and take.

Daily Market Update – August 10,  2015  (Close)

On the economic news front this is a relatively quiet week, although Wednesday’s JOLTS report could be a sleeper.

It is a report that Janet Yellen herself mentioned about 6 months ago that it was one of the key reports that she looks at. The key pieces of information that can be gotten out of the JOLTS report is whether there’s optimism in the job market and whether there is upward pressure on wages.

The latter is especially important as despite generally strong Employment Situation Reports, the growth in jobs has been, to a degree, discounted, because those new jobs weren’t being accompanied by wages growth.

Other than when she first brought our attention to that report when the market took its information and drove prices higher, it has done nothing to spur any one’s

It is a quiet month for Federal Reserve Governors’ speeches, but we do have 2 of those this week and there may be some more hints regarding what the FOMC may have in mind for their September meeting. Even though there’s still not too much data that would seem to support an interest rate increase at that time, it increasingly appears that despite averring to be data driven, the FOMC is ready, anxious and itching to finally pull the trigger. 

Otherwise there is a Retail Sales Report, but what really counts is when the retailers themselves start reporting their quarterly earnings and that begins this week with JW Nordstrom and then gets really busy the following week.

Overnight, China got the week started on a good note as its markets rose about 5%.

Although our own futures trading this morning wasn’t reflecting that kind of optimism, it’s far better than waking up on a Monday morning and discovering that the Chinese markets fell 5% overnight. We’ve been there and we’ve done that recently.

How long China can continue keeping its markets behaved is anyone’s guess, as it has thus far been successful in preventing a meltdown, but there have been a series of very sharp moves up and down and that should always be a cause for concern.

Today’s 5% gain came even with bad economic news, so you have to wonder if they are taking on some of the perverse interpretations of the news as we occasionally do.

Instead of taking our cue this morning from China, at about 8:15 AM this morning the futures took a jump higher on what was perceived as good news coming from Greece and their access to capital.

We’ll take whatever good news there is and wherever it may come from at this point.

What really came as a surprise is that the rally not only had legs and never wavered through the day, but it actually doubled the gains from the futures by the time the closing bell came around.

This week, with my cash reserves at their lowest levels in at least 5 years, I would be more than happy to see the existing positions set to expire this week get assigned. Without wanting to jinx that from occurring, there is a decent chance of that being the case, but I would also welcome the opportunity to roll them over, otherwise.

Another surprise came today as there was an opportunity to roll over those Twitter puts all the ay to January 2016. That should give time for something to happen that would stem the tide of bad news and corporate mis-steps.

Certainly, as was the case last week, I’d also welcome any chance to sell some new calls on uncovered positions, but again that may take a phenomenon that we haven’t seen much of lately, which is stringing together a couple of positive days. After 7 straight losing sessions you might think that we were due for something good.

At least there was one opportunity to get those calls sold, so that’s a start.

Then there was the chance to close out that Texas Instruments position and maybe use the money to do something else, so maybe there’s some hope yet for this week.

Who would have guessed that it might be Greece, but we have a full day of trading ahead to see what kind of staying power that news may have.

Daily Market Update – August 10,  2015  (8:30 AM)

On the economic news front this is a relatively quiet week, although Wednesday’s JOLTS report could be a sleeper.

It is a report that Janet Yellen herself mentioned about 6 months ago that it was one of the key reports that she looks at. The key pieces of information that can be gotten out of the JOLTS report is whether there’s optimism in the job market and whether there is upward pressure on wages.

The latter is especially important as despite generally strong Employment Situation Reports, the growth in jobs has been, to a degree, discounted, because those new jobs weren’t being accompanied by wages growth.

Other than when she first brought our attention to that report when the market took its information and drove prices higher, it has done nothing to spur any one’s

It is a quiet month for Federal Reserve Governors’ speeches, but we do have 2 of those this week and there may be some more hints regarding what the FOMC may have in mind for their September meeting. Even though there’s still not too much data that would seem to support an interest rate increase at that time, it increasingly appears that despite averring to be data driven, the FOMC is ready, anxious and itching to finally pull the trigger. 

Otherwise there is a Retail Sales Report, but what really counts is when the retailers themselves start reporting their quarterly earnings and that begins this week with JW Nordstrom and then gets really busy the following week.

Overnight, China got the week started on a good note as its markets rose about 5%.

Although our own futures trading this morning wasn’t reflecting that kind of optimism, it’s far better than waking up on a Monday morning and discovering that the Chinese markets fell 5% overnight. We’ve been there and we’ve done that recently.

How long China can continue keeping its markets behaved is anyone’s guess, as it has thus far been successful in preventing a meltdown, but there have been a series of very sharp moves up and down and that should always be a cause for concern.

Today’s 5% gain came even with bad economic news, so you have to wonder if they are taking on some of the perverse interpretations of the news as we occasionally do.

Instead of taking our cue this morning from China, at about 8:15 AM this morning the futures took a jump higher on what was perceived as good news coming from Greece and their access to capital.

We’ll take whatever good news there is and wherever it may come from at this point.

This week, with my cash reserves at their lowest levels in at least 5 years, I would be more than happy to see the existing positions set to expire this week get assigned. Without wanting to jinx that from occurring, there is a decent chance of that being the case, but I would also welcome the opportunity to roll them over, otherwise.

Certainly, as was the case last week, I’d also welcome any chance to sell some new calls on uncovered positions, but again that may take a phenomenon that we haven’t seen much of lately, which is stringing together a couple of positive days. After 7 straight losing sessions you might think that we were due for something good.

Who would have guessed that it might be Greece, but we have a full day of trading ahead to see what kind of staying power that news may have.

Daily Market Update – August 7,  2015  (8:30 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:  ANF, INTC

Expirations:  none

The following were ex-dividend this week: INTC (8/5 $0.24)

The following will be ex-dividend next week: AZN (8/12 $0.45)

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

Daily Market Update – August 6,  2015  (Close)

After attending last night’s Gordon Lightfoot concert I felt like a young man, again.

Not that the music was invigorating, but because the average age in the crowd must have been in the 70s and instead of smartphone charging stations, there were hearing aid and oxygen tank refill stations spread throughout the venue.

It was all a question of comparables.

By comparison I felt pretty young.

The concert, as expected, was about as invigorating as this market has been, which is to say, not all all.

It was disappointing to see yesterday’s early gains evaporate so quickly as it followed oil and energy prices down the drain.

It’s hard to understand why this market is taking a different path from other markets that have been the beneficiaries of lower energy prices. But, by the same token, it’s hard to understand why this economy hasn’t gotten a kick start from those same lower energy prices, so maybe the market is only reflecting what it sees and what it foresees.

Tomorrow brings the Employment SItuation Report and following yesterday’s early reaction to the ADP Report, which delivered some minor disappointment, as the loss of jobs in the energy sector lowered numbers, it’s probable that a similar disappointment tomorrow may also bring market gains.

Otherwise, it continues to be a typical summer where there is less news than is usually the case, especially once August rolls around and most of Europe closes down. While the data will continue coming in, there will either have to be a significant shift in the direction of the economy demonstrating some real growth, or the FOMC has to abandon its claim to being data dependent.

They may just have to say we know what’s best for the economy and we’re not going to wait for things to happen.

That might just be the best thing.

There’s not necessarily anything wrong with a beneficent dictator and at least a rise in interest rates would get us temporarily to stop playing mind games and instead focus on metrics that matter.

With now just one day of trading left to go and today’s sell-off, there’s still some reason to be hopeful that the week may see either assignment or rollover of what few positions are set to expire. Who knows, maybe even another call sale on an uncovered position, as well. But I don’t want to get too greedy, now having been able to get 2 of those uncovered positions back into making some money while sitting and waiting.

Seeing those hopes all come true would be nice, but certainly not something worth predicting, because the market has been beyond predictable of late, other than it hasn’t been very forgiving.

Add today into the growing amount of confusing data making you wonder just what kind of a market could be so close to its highs yet feel so bad.

Daily Market Update – August 6,  2015  (9:15 AM)

After attending last night’s Gordon Lightfoot concert I feel like a young man, again.

Not that the music was invigorating, but because the average age in the crowd must have been in the 70s and instead of smartphone charging stations, there were hearing aid and oxygen tank refill stations spread throughout the venue.

It was all a question of comparables.

By comparison I felt pretty young.

The concert, as expected, was about as invigorating as this market has been, which is to say, not all all.

It was disappointing to see yesterday’s early gains evaporate so quickly as it followed oil and energy prices down the drain.

It’s hard to understand why this market is taking a different path from other markets that have been the beneficiaries of lower energy prices. But, by the same token, it’s hard to understand why this economy hasn’t gotten a kick start from those same lower energy prices, so maybe the market is only reflecting what it sees and what it foresees.

Tomorrow brings the Employment SItuation Report and following yesterday’s early reaction to the ADP Report, which delivered some minor disappointment, as the loss of jobs in the energy sector lowered numbers, it’s probable that a similar disappointment tomorrow may also bring market gains.

Otherwise, it continues to be a typical summer where there is less news than is usually the case, especially once August rolls around and most of Europe closes down. While the data will continue coming in, there will either have to be a significant shift in the direction of the economy demonstrating some real growth, or the FOMC has to abandon its claim to being data dependent.

They may just have to say we know what’s best for the economy and we’re not going to wait for things to happen.

That might just be the best thing.

There’s not necessarily anything wrong with a beneficent dictator and at least a rise in interest rates would get us temporarily to stop playing mind games and instead focus on metrics that matter.

With two days of trading left to go there’s still some reason to be hopeful that the week may see either assignment or rollover of what few positions are set to expire. Who knows, maybe even another call sale on an uncovered position, as well.

That would be nice, but certainly not something worth predicting, because the market has been beyond predictable of late, other than it hasn’t been very forgiving.

Daily Market Update – August 5,  2015  (Close)

It was nice to wake up this morning and to see the futures heading nicely higher. They were nearly 100 points higher on the DJIA and those kinds of moves tend to have some staying power.

The word “tend” has some leeway built into it and today all of that leeway was necessary, as that triple digit advance disappeared at 10:30 AM, immediately after the Oil and Gas reports were released.

This morning it was the ADP Employment Report that added to the already impressive gains seen in the futures trading. It did so by putting forward disappointing numbers reflecting job decreases in the energy sector.

So what did the futures market do? It simply added about 50% to those earlier gains.

With that somewhat bad news the market reverted back to its “bad news is good news” mentality, as the initial thought must now be that those kinds of employment statistics would likely mean a further delay in an interest rate increase, even when Federal Reserve Governors are increasingly saying that it’s time for that increase.

It’s too bad that is still the way of interpreting news. At some point the market has to get to the more healthy way of accepting news for its real meaning and simply discounting the first order of events 6 months down the road.

Instead, the market is discounting second order events 6 months into the future. That’s a good way to discover disappointment and to realize that crystal balls get cloudy when you expect too much of them.

It is predicting that the bad news will delay an interest rate increase and then it is further predicting that such a delay in interest rates will be good for the stock market that’s just a bit too much of a stretch.

That’s just too much to try and predict.

It also forgets that there’s lots of data that is still going to be released between now and the September FOMC meeting and those scales can easily be tipped, especially if those FOMC members are getting anxious to finally do something after 9 years of not having had a rate increase.

Maybe the morning’s energy report brought the market back to a more normal way of thinking, although historically anything that drives down the price of oil and gas has been good for the stock market. It’s only been during this recent slide over the past 9 months that the market has reacted in such a strange sort of way.

That still leaves Friday’s Employment Situation Report and an expectation that if the numbers are light that the market may again exhibit some inappropriate rejoicing.

While the flurry of futures buying didn’t continue into the actual trading session today, it came within the context of DJIA component Disney down nearly 5%, which alone took away about 60 points from the DJIA. It also came with a continuing weak Apple, which is now officially in correction mode, despite having recovered from its additional 1% loss in the futures trading.

I’d would have l;ked to have seen those gains continue and hopefully leave expiring positions this week in better shape for either assignment or rollover, so I still can’t complain about the disappointment of losing the day’s gains. There was also an all too rare opportunity to sell some calls on an uncovered position, but it’s going to take some sustained gains to see more of those happen and the staying power of advances hasn’t been very good of late.

We’ll see if bad news can end up being the new good news and take us to the new highs that we’ve started believing is our destiny, even if the masses are left behind.

Daily Market Update – August 5,  2015  (9:00 AM)

It was nice to wake up this morning and to see the futures heading nicely higher. They were nearly 100 points higher on the DJIA and those kinds of moves tend to have some staying power.

Then came the ADP Employment Report and it was a disappointing release as it reflected job decreases in the energy sector.

So what did the futures market do? It simply added about 50% to those earlier gains.

With that somewhat bad news the market reverted back to its “bad news is good news” mentality, as the initial thought must now be that those kinds of employment statistics would likely mean a further delay in an interest rate increase, even when Federal Reserve Governors are increasingly saying that it’s time for that increase.

It’s too bad that is still the way of interpreting news. At some point the market has to get to the more healthy way of accepting news for its real meaning and simply discounting the first order of events 6 months down the road.

Instead, the market is discounting second order events 6 months into the future. That’s a good way to discover disappointment and to realize that crystal balls get cloudy when you expect too much of them.

It is predicting that the bad news will delay an interest rate increase and then it is further predicting that such a delay in interest rates will be good for the stock market that’s just a bit too much of a stretch.

That’s just too much to try and predict.

It also forgets that there’s lots of data that is still going to be released between now and the September FOMC meeting and those scales can easily be tipped, especially if those FOMC members are getting anxious to finally do something after 9 years of not having had a rate increase.

That still leaves Friday’s Employment Situation Report and an expectation that if the numbers are light that the market may again exhibit some inappropriate rejoicing.

We’ll see if the futures buying will continue into the actual trading session today, but it comes within the context of DJIA component Disney down nearly 5%, which alone is taking away about 60 points from the DJIA. It also comes with a continuing weak Apple, which is now officially in correction mode, although it is only down about an additional 1% in the futures trading.

I’d like to see these gains continue and hopefully leave expiring positions this week in better shape for either assignment or rollover. In a perfect world it would also allow for the sale of some call options on uncovered positions. That would be nice, but it might take some sustained gains to see those happen and the staying power of advances hasn’t been very good of late.

We’ll see if bad news can end up being the new good news and take us to the new highs that we’ve started believing is our destiny, even if the masses are left behind.

Daily Market Update – August 4,  2015  (Close)

No matter what the appearances were yesterday as the pre-opening futures were trading, there was no indication that the day would deteriorate so quickly and decisively.

There wasn’t too much reason seen during the course of the day to account for the very broad negative tone, although some pointed to Chinese economic news.

That seemed plausible, except that Chinese economic news is released well before our own markets begin trading and typically, if they are going to have any impact at all, begin to have that impact on our futures market the evening before.

That definitely wasn’t the case on Sunday evening, nor was it the case at 9:29 AM on Monday.

Sometimes, we just have to realize that there aren’t necessarily easy answers to explain reality.

There weren’t any obvious technical triggers, although individual hedge funds, banks or other institutions may have their own internal sell and buy signals, but there was no real sudden drop on a relatively large volume spike. Instead, it was a slow grind lower over the course of 90 minutes. If there was anything representing a spike in volume it came on an uptick at the close that pulled the DJIA almost 30 points higher in the final 5 minutes.

This morning’s futures are again relatively quiet, although there is a negative bias. Earnings are continuing to come in, although other than Retail, which begins with JW Nordstrom next week and then goes into high gear the following week, most of the important companies have now reported their earnings.

What we’ve seen thus far has already been designated with the acronym “BEMR.”

Beat earnings, missed revenues.

So if you were wondering what the impact of all of those share buybacks have been, it has been to create an illusion of earnings and to make management look good.

They have done so by spending lots and lots of shareholder money and they very often do so when shares are not priced very attractively.

I’m not a huge fan of dividends, but if a company has a need to spend its cash, I’d much rather see either an increase in the regular dividend or a special dividend. The former, though, is far better at supporting or encouraging an increase in share price than is the latter.

The problem is that increasing the dividend does nothing for the metrics that analysts like to follow, such as EPS growth, but share buybacks do make it look as if all is well and improving.

With a couple of new positions opened yesterday, I’m hopeful that they will have a chance of being assigned at the end of the week in order to generate a little cash for the following week. Next week, although only having 2 expiring positions at least has 2 more than starting this week and gives some hope for either generating some additional revenue or raising cash. That’s more than can be said for the way this week started.

The nice bounce I had been hoping for yesterday, in order to have a chance of selling some calls on existing positions never did come, so today the holes were a little deeper and they ended the day today, still a little bit more deep. My minimal hope for today was that the market can at least maintain itself and create some sort of a base as we head into Friday’s Employment Situation Report.

At least that happened.

I’m hopeful that Friday’s report will show strong job growth and that the market will respond in an appropriate way, recognizing that to be good news.

At the moment, the only real impetus for a march higher is good economic news and maybe the same coming from China, for a change.

Daily Market Update – August 4,  2015  (8:45 AM)

No matter what the appearances were yesterday as the pre-opening futures were trading, there was no indication that the day would deteriorate so quickly and decisively.

There wasn’t too much reason seen during the course of the day to account for the very broad negative tone, although some pointed to Chinese economic news.

That seemed plausible, except that Chinese economic news is released well before our own markets begin trading and typically, if they are going to have any impact at all, begin to have that impact on our futures market the evening before.

That definitely wasn’t the case on Sunday evening, nor was it the case at 9:29 AM on Monday.

Sometimes, we just have to realize that there aren’t necessarily easy answers to explain reality.

There weren’t any obvious technical triggers, although individual hedge funds, banks or other institutions may have their own internal sell and buy signals, but there was no real sudden drop on a relatively large volume spike. Instead, it was a slow grind lower over the course of 90 minutes. If there was anything representing a spike in volume it came on an uptick at the close that pulled the DJIA almost 30 points higher in the final 5 minutes.

This morning’s futures are again relatively quiet, although there is a negative bias. Earnings are continuing to come in, although other than Retail, which begins with JW Nordstrom next week and then goes into high gear the following week, most of the important companies have now reported their earnings.

What we’ve seen thus far has already been designated with the acronym “BEMR.”

Beat earnings, missed revenues.

So if you were wondering what the impact of all of those share buybacks have been, it has been to create an illusion of earnings and to make management look good.

They have done so by spending lots and lots of shareholder money and they very often do so when shares are not priced very attractively.

I’m not a huge fan of dividends, but if a company has a need to spend its cash, I’d much rather see either an increase in the regular dividend or a special dividend. The former, though, is far better at supporting or encouraging an increase in share price than is the latter.

The problem is that increasing the dividend does nothing for the metrics that analysts like to follow, such as EPS growth, but share buybacks do make it look as if all is well and improving.

With a couple of new positions opened yesterday, I’m hopeful that they will have a chance of being assigned at the end of the week in order to generate a little cash for the following week. Next week, although only having 2 expiring positions at least has 2 more than starting this week and gives some hope for either generating some additional revenue or raising cash. That’s more than can be said for the way this week started.

The nice bounce I had been hoping for yesterday, in order to have a chance of selling some calls on existing positions never did come, so today the holes are a little deeper. Hopefully today the market can at least maintain itself and create some sort of a base as we head into Friday’s Employment Situation Report.

I’m hopeful that the report will show strong job growth and that the market will respond in an appropriate way, recognizing that to be good news.

At the moment, the only real impetus for a march higher is good economic news and maybe the same coming from China, for a change.

Daily Market Update – August 3,  2015  (Close)

With last week being another in a direction higher, the market has continued its back and forth character for a while, with occasional minimally sustained moves lower or higher.

Lately, we haven’t even been able to get a real mini-correction going, although we came close on an intra-day basis. Otherwise, it’s been 5 months since there has been a 5% drop on a closing basis. We used to talk in terms of a 10% drop, but for that you really have to go back in time.

What has been missing for a while has been any kind of sustained move and as we sit getting ready to begin the eighth month of the year, the market is essentially unchanged, owing most of whatever gains it has for the year on the past week.

This late in the year it’s somewhat unusual to keep hearing the phrase “and with today’s loss, the market has given up all of its gains for the year.”

That’s been very commonly uttered the past few months, yet somehow the market has resisted staying down or getting up.

Looking at this morning’s futures, it seemed to be a perfect reflection of that kind of indecision, as the futures were perfectly flat for the morning. It would turn out to be anything but a flat kind of trading day, as the market was decidedly lower, but without any obvious reason for taking the sharp downturn.

If China stays calm for the week, there’s very little international news that should have an impact on markets this week, but today was an example of how news isn’t necessary.

For the rest of the week there are still earnings to come, but the next important wave of earnings begins sometime next week as Retail begins to report and will continue in the week following.

There is an Employment Situation Report this week, but with no Federal Reserve meeting for nearly 2 months, any incoming data today can be old and stale by the time the FOMC gets together to make an interest rate decision, which is increasingly not looking as if it will result in a September rate increase.

So it’s not too likely that Friday’s report would have any impact, but the guess is that if it is outside of the expected range, a bad number would move markets down, while a really good number might send the market higher. That’s the way economic news is supposed to work when people aren’t trying to over-analyze everything.

The one thing that should be noted by now is that for the past year, markets, pundits and analysts have all been wrong about when that first rate increase would come and fears of that increase have perennially depressed the market, as the fears simply got stretched out over time.

This may still end up being a quiet week for the market, despite today’s dour trading. While I was expecting it to be a very quiet week for me, I surprised myself with 2 new positions and have exhausted cash. With limited cash and no positions set to expire this week, the best bet for activity would now be if the market could somehow find a way to add some real gains and perhaps create an opportunity to sell some calls on uncovered positions. WIth having spent the day digging a hole, it’s going to take more to climb out.

I won’t hold my breath for that, but as we’ve been seeing over and over again, the morning’s futures trading doesn’t necessarily mean anything for the trading day to come.

I had hoped that would have been the case this morning. We’ll see what tomorrow will bring.

Daily Market Update – August 3,  2015  (8:30 AM)

With last week being another in a direction higher, the market has continued its back and forth character for a while, with occasional minimally sustained moves lower or higher.

Lately, we havent even been able to get a real mini-correction going, although we came close on an intra-day basis. Otherwise, it’s been 5 months since there has been a 5% drop on a closing basis. We used to talk in terms of a 10% drop, but for that you really have to go back in time.

What has been missing for a while has been any kind of sustained move and as we sit getting ready to begin the eighth month of the year, the market is essentially unchanged, owing most of whatever gains it has for the year on the past week.

This late in the year it’s somewhat unusual to keep hearing the phrase “and with today’s loss, the market has given up all of its gains for the year.”

That’s been very commonly uttered the past few months, yet somehow the market has resisted staying down or getting up.

Looking at this morning’s futures, it seems to be a perfect reflection of that kind of indecision, as the futures are perfectly flat for the morning.

If China stays calm for the week, there’s very little international news that should have an impact on markets this week. There are still earnings to come, but the next important wave of earnings begins sometime next week as Retail begins to report and will continue in the week following.

There is an Employment Situation Report this week, but with no Federal Reserve meeting for nearly 2 months, any incoming data today can be old and stale by the time the FOMC gets together to make an interest rate decision, which is increasingly not looking as if it will result in a September rate increase.

So it’s not too likely that Friday’s report would have any impact, but the guess is that if it is outside of the expected range, a bad number would move markets down, while a really good number might send the market higher. That’s the way economic news is supposed to work when people aren’t trying to over-analyze everything.

The one thing that should be noted by now is that for the past year, markets, pundits and analysts have all been wrong about when that first rate increase would come and fears of that increase have perenially depressed the market, as the fears simply got stretched out over time.

This may end up being a quiet week for the market and will definitely be a quiet week for me. With limited cash and no positions set to expirte this week, the best bet for activity would be if the market could somehow find a way to add some real gains and perhaps create an opportunity to sell some calls on uncovered positions.

I won’t hold my breath, but as we’ve been seeing over and over again, the morning’s futures trading doesn’t necesseraily mean anything for the trading day to come.

I hope that’s going to be the case this morning.