Category Archives: Daily Market Update

Daily Market Update – July 31,  2015  (8:45 AM)

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

The possible trade outcomes today are:

Assignments:   none

Rollovers:   BBY

Expirations:   DOW

The following were ex-dividend this week: KMI (7/29 $0.49), TXN (7/29 $0.34)

The following will be ex-dividend next week: INTC (8/5 $0.24)

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

Daily Market Update – July 30,  2015  (Close)

With no news coming from the FOMC yesterday, the market correctly anticipated that to be the case and tacked on another nice gain to the one seen on Tuesday.

Suddenly, the move to re-test the support level at the 2045 level of the S&P 500 was halted and the market is now within about 1.5% of its all time highs and in a position to re-test resistance.

Technicians like to think that as the lows get higher and the highs get lower, that kind of convergence of lines indicates that there will be some sort of break out, but they can’t say in which direction that breakout will be.

The catalyst to the upside could be earnings, but we’re now about at the mid-way point and many of the significant companies have now already reported. However, what may hold some potential for more moves could be retail earnings, which have yet to be released.

Other than that, the relative quiet on the world front, especially some calm now coming from the Chinese stock markets, after a rough start to the week, could remove a barrier from moving higher.

This morning was another GDP release, including revisions to previous data. In 2015 some of those revisions have been fairly significant and have caused an entire shift in sentiment about where we were and where we were going.

Today’s GDP data, even though showing growth of 2.3% was disappointing, but the market was basically a yawner all day, other than for the first 30 minutes when the DJIA was down triple digits.

A stronger than expected GDP and any upward revisions would have gotten tongues wagging again about a September rate hike, but that has been expected for so long at this point, that you would have to believe it has already been discounted and wouldn’t be considered as bad news. We might actually be at a point that good economic news would be seen as good economic news for a change.

Instead, the GDP was on the low side and was seen as bad news, the way you would expect normal people to react.

But eventually came the thought that if the FOMC is still swearing that it is going to be data driven and if growth isn’t heating up enough, then where’s the reason to raise rates, even in September?

This morning the futures were flat and after the past two days you couldn’t blame the market for taking a little break. But as we’ve been seeing lately, there’s very little predictive value in the futures. We’ve even seen some reversals on those days when the futures were making large moves, so it was really anyone’s guess how today would go. 

At this point, having already rolled over half of the positions set to expire this week, there’s not too much more to do other than to hope that the march higher continues.

With no expirations scheduled for next week and with cash at very low levels, I’d like to see some assignments, but that appears unlikely, although there’s still some glimmer of hope for Best Buy with two days of trading left in the week.

It, along with so many others, though, has had a rough time putting consecutive winning sessions together, just as the market has had a tough time doing so.

While it would have been nice if today could have added another day onto that modest market winning streak, there’s always the chance to start anew tomorrow and maybe see gains trickle down to members of the indexes in a more broad way than the market’s advance has been to date.

While most investors aren’t socialists at heart, they might agree that this one be an acceptable instance of sharing the wealth.

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

With no news coming from the FOMC yesterday, the market correctly anticipated that to be the case and tacked on another nice gain to the one seen on Tuesday.

Suddenly, the move to re-test the support level at the 2045 level of the S&P 500 was halted and the market is now within about 1.5% of its all time highs and in a position to re-test resistance.

Technicians like to think that as the lows get higher and the highs get lower, that kind of convergence of lines indicates that there will be some sort of break out, but they can’t say in which direction that breakout will be.

The catalyst to the upside could be earnings, but we’re now about at the mid-way point and many of the significant companies have now already reported. However, what may hold some potential for more moves could be retail earnings, which have yet to be released.

Other than that, the relative quiet on the world front, especially some calm now coming from the Chinese stock markets, after a rough start to the week, could remove a barrier from moving higher.

This morning will be another GDP release, including revisions to previous data. In 2015 some of those revisions have been fairly significant and have caused an entire shift in sentiment about where we were and where we were going.

A stronger than expected GDP and any upward revisions will get tongues wagging again about a September rate hike, but that has been expected for so long at this point, that you would have to believe it has already been discounted and wouldn’t be considered as bad news. We might actually be at a point that good economic news would be seen as good economic news for a change.

This morning the futures are flat and after the past two days you couldn’t blame the market for taking a little break. But as we’ve been seeing lately, there’s very little predictive value in the futures. We’ve even seen some reversals on those days when the futures were making large moves, so it’s really anyone’s guess.

At this point, having already rolled over half of the positions set to expire this week, there’s not too much more to do other than to hope that the march higher continues.

With no expirations scheduled for next week and with cash at very low levels, I’d like to see some assignments, but that appears unlikely, although there’s still some glimmer of hope for Best Buy with two days of trading left in the week.

It, along with so many others, though, has had a rough time putting consecutive winning sessions together, just as the market has had a tough time doing so.

We’ll see whether today can add another day onto that modest market winning streak and whether or not that streak trickles down to members of the indexes in a more broad way than the market’s advance has been to date.

While most investors aren’t socialists at heart, they might agree that this one be an acceptable instance of sharing the wealth.

Daily Market Update – July 29,  2015  (Close)

Yesterday was a nice break from a series of days that could make one only pessimistic about what was to come next.

Possibly, the catalyst was that the Chinese market wasn’t down as much as it had been the previous day and may have looked as if it was beginning to moderate on this next wave of weakness, as the government again sought to control its behavior.

What would be really nice, unless all you care about is volatility, would be to see more than just a single day of gains,

Lately it has been very difficult to see stocks that aren’t in the news actually string together 2 or more days higher. It has also been a period in which stocks are taking longer and longer to recover from their declines. That is one of the things that makes the current levels of the DJIA and S&P 500 so deceiving.

It’s still on the backs of a few that the market looks to be healthy on the surface.

This morning the futures were pointing just a little bit higher, and that had to be taken as a cautious positive sign, but it turned out that no caution was required.

Overnight, the Chinese stock market reversed course and actually finished higher for the session and so that at least wasn’t going to be something to weigh on today’s market, although the situation in China isn’t going to be going away anytime soon.

Today was also to be the final FOMC Statement release until summer comes to its end in 2 months, but the market didn’t wait to start its party.

It’s wasn’t too likely that there would be anything contained in the release this afternoon that should either excite or spook markets, but it wouldn’t have been too surprising if some of the wording today in the statement gives people something to mull over for the next two months, as economic data will still be forthcoming between now and September.

With yesterday’s gain I wanted to see more of the same, even at the expense of volatility and premiums. Like some others, I’d especially like to see some moderation of the recent bear market in energy and materials. Although both sectors may represent oversold conditions, what they really need is not some sympathy from investors who are driven by technical factors, but rather some demand driven by economic activity.

With only a single new purchase so far this week and cash reserves down about as low as it can go, I’m not too likely to add any new positions this week. Having already rolled over 2 of the week’s expiring positions and the remaining 2 not looking as if they may be rollover candidates, this may be a very quiet few days ahead.

With regard to those rollovers, I decided that I wanted to try and keep the Texas Instruments dividend after seeing its price unexpectedly surge along with everything else yesterday.

The thinking was that there was still a possibility of early assignment with a rollover to the August 14th expiration, but at least that would have delivered the equivalent of about 85% of the dividend and then recycled the cash for further investment. Otherwise, there was a very high probability of assignment of the July 31st expiration contracts.

The other side of the coin is that in so doing it eliminated any possibility of being able to recycle the cash.

Twitter, on the other hand, was a rollover of puts in the face of significant strength heading into earnings. In that case the worst outcome of the rollover would be to delay being able to exit the position, while the advantage was being able to wring extra premium while awaiting some price recovery in the event that shares dropped.

For Twitter it was a real rollercoaster ride as shares went about $5 higher after earnings were announced. But then the dourness in the conference call ended up seeing shares drop $4, or a net change of about $9 from peak to trough, literally in the space of minutes in the after hours session.

Both of those early rollovers seemed warranted, but as always, time will tell, as I still had my Texas Instrument shares this morning and now another month to see whether Twitter can overcome itself.

Also, for a change, tomorrow we get to see whether we can string yet another day on to these gains and make the illusion of a healthy market become a reality.

.

Daily Market Update – July 29,  2015  (9:00 AM)

Yesterday was a nice break from a series of days that could make one only pessimistic about what was to come next.

Possibly, the catalyst was that the Chinese market wasn’t down as much as it had been the previous day and may have looked as if it was beginning to moderate on this next wave of weakness, as the government again sought to control its behavior.

What would be really nice, unless all you care about is volatility, would be to see more than just a single day of gains,

Lately it has been very difficult to see stocks that aren’t in the news actually string together 2 or more days higher. It has also been a period in which stocks are taking longer and longer to recover from their declines. That is one of the things that makes the current levels of the DJIA and S&P 500 so deceiving.

It’s still on the backs of a few that the market looks to be healthy on the surface.

This morning the futures are pointing just a little bit higher, but for now that has to be taken as a positive.

Overnight, the Chinese stock market reversed course and actually finished higher for the session and so that at least wasn’t going to be something to weigh on today’s market, although the situation in China isn’t going to be going away anytime soon.

Today will be the final FOMC Statement release until summer comes to its end in 2 months.

It’s not too likely that there will be anything contained in the release this afternoon that should either excite or spook markets, but it wouldn’t be too surprising if some of the wording today in the statement gives people something to mull over for the next two months, as economic data will still be forthcoming between now and September.

With yesterday’s gain I’d like to see more of the same, even at the expense of volatility and premiums. Like some others, I’d especially like to see some moderation of the recent bear market in energy and materials. Although both sectors may represent oversold conditions, what they really need is not some sympathy from investors who are driven by technical factors, but rather some demand driven by economic activity.

With only a single new purchase so far this week and cash reserves down about as low as it can go, I’m not too likely to add any new positions this week. Having already rolled over 2 of the week’s expiring positions and the remaining 2 not looking as if they may be rollover candidates, this may be a very quiet few days ahead.

With regard to those rollovers, I decided that I wanted to try and keep the Texas Instruments dividend after seeing its price unexpectedly surge along with everything else yesterday.

The thinking was that there was still a possibility of early assignment with a rollover to the August 14th expiration, but at least that would have delivered the equivalent of about 85% of the dividend and then recycled the cash for further investment. Otherwise, there was a very high probability of assignment of the July 31st expiration contracts.

The other side of the coin is that in so doing it eliminated any possibility of being able to recycle the cash.

Twitter, on the other hand, was a rollover of puts in the face of significant strength heading into earnings. In that case the worst outcome of the rollover would be to delay being able to exit the position, while the advantage was being able to wring extra premium while awaiting some price recovery in the event that shares dropped.

For Twitter it was a real rollercoaster ride as shares went about $5 higher after earnings were announced. But then the dourness in the conference call ended up seeing shares drop $4, or a net change of about $9 from peak to trough, literally in the space of minutes in the after hours session.

Both of those early rollovers seemed warranted, but as always, time will tell, as I still have my Texas Instrument shares this morning and now another month to see whether Twitter can overcome itself.

.

Daily Market Update – July 28,  2015  (Close)

Yesterday was another in a series of down days and deteriorating internal metrics. 

That latter part refers to the mix of up and down stocks and the relative number of new lows to new highs, as well as other indicators that are all pointing to a loss of optimism.

But you definitiely wouldn’t have known any of that by today’s action, although it was hard to understand what lit the fire and especially what can keep it going.

If earnings can’t help the market seek newer heights, there really isn’t much that will push the market higher at the moment other than these unforeseen daily oddities.

Even the upcoming FOMC Announcement has little that it can offer to make the markets feel optimistic, especially as the situation in China is weighing so heavily on our own markets. It’s not so much that there’s really contagion that’s the risk, but rather, in the event of a cash crisis in China or a significant need for capital, there’s always the chance the the government will sell their US Treasury holdings.

That wouldn’t be very good.

But for now, even though this morning’s decline in Shanghai was 2%, that’s a moderation from what happened over the weekend and may show that at least in the short term, China is beginning to control some of those forces that would take their markets even lower.

One question to be asked is just how long the government can continue to stop or slow down the natural direction of the market, but anopther important question is always “How low will it go?” and that applies just as well to energy and commodity prices here in the US, as it does to stocks in those sectors.

Of course, to some degree those are both also related to Chinese prosperity and increasing economic activity.

Regardless, today looked as if it was the day that traders began to ask that “How low can you go?” question.

This morning the futures were moving higher, although moderating a little as the opening bell neared. After 5 consecutive days of losses, it would be nice to have some kind of an end to that string occur, but as we had seen with previous turnarounds to the upside, the best turnaround is one that seems insidious. The ones that are done 200 points at a time to the upside seem to have very little lasting power.

But at least we’ll have a chance to see if that’s true tomorrow, as the market finished the day nearly 200 points higher, more than erasing yesterday’s loss.

Just as “death by a thousand cuts,” the more sure way to work back from technical support and overwhelm technical resistance is to do so by small pieces, especially as nearing that resistance level, but I wouldn’t mind some quantum kind of leaps forward.

So for now, I’d still be happy to see some small gains and wouldn’t mind if those triple digit moves, usually coming after triple digit losses, just went on a break for a while.

Daily Market Update – July 28,  2015  (9:15 AM)

Yesterday was another in a series of down days and deteriorating internal metrics.

That latter part refers to the mix of up and down stocks and the relative number of new lows to new highs, as well as other indicators that are all pointing to a loss of optimism.

If earnings can’t help the market seek newer heights, there really isn’t much that will push the market higher at the moment.

Even the upcoming FOMC Announcement has little that it can offer to make the markets feel optimistic, especially as the situation in China is weighing so heavily on our own markets. It’s not so much that there’s really contagion that’s the risk, but rather, in the event of a cash crisis in China or a significant need for capital, there’s always the chance the the government will sell their US Treasury holdings.

That wouldn’t be very good.

But for now, even though this morning’s decline in Shanghai was 2%, that’s a moderation from what happened over the weekend and may show that at least in the short term, China is beginning to control some of those forces that would take their markets even lower.

One question to be asked is just how long the government can continue to stop or slow down the natural direction of the market, but anopther important question is always “How low will it go?” and that applies just as well to energy and commodity prices here in the US, as it does to stocks in those sectors.

Of course, to some degree those are both also related to Chinese prosperity and increasing economic activity.

This morning the futures are moving higher, although moderating a little as the opening bell nears. After 5 consecutive days of losses, it would be nice to have some kind of an end to that string occur, but as we had seen with previous turnarounds to the upside, the best turnaround is one that seems insidious. The ones that are done 200 points at a time to the upside seem to have very little lasting power.

Just as “death by a thousand cuts,” the more sure way to work back from technical support and overwhelm technical resistance is to do so by small pieces, especially as nearing that resistance level.

So for now, I’d be happy to see some small gains and wouldn’t mind if those triple digit moves, usually coming after triple digit losses, just went on a break for a while.

Daily Market Update – July 27,  2015  (Close)

Last week was one of revelation.

There came the realization that despite the markets having hovering near new highs the indexes were portraying a picture of market health that was largely illusory.

All it took to realize that was to see the consistent deviations that the major indexes had from one another and then to dissect out some of the biggest winners whose equally big market capitalizations moved their respective indexes while leaving so many other index members behind.

As last week came to its end, with the entire week having taken a strong turn downward as the second full week of earnings started uncovering some disappointments among the few gems, the expectation was that this week would be guided by more earnings reports and the FOMC Statement release.

While some good earnings could help to bring the market higher, it’s not too likely that the FOMC will have anything to say that would be interpreted in a positive way by the markets in the immediate day or two of its release.

For the most part, there wasn’t too much reason to believe that this week would be very active, but that was the case last week, too, as there was very little in the way of scheduled economic news, other than earnings and the rest of the world seemed to be quiet.

It was a little different than expected this morning, however. There’s not very much scheduled economic news this week, but the week looked as if it would be getting off to a negative start as the unexpected comes into play.

While China’s overnight sharp sell-off took about 8% off the Shanghai market, it probably shouldn’t have been too unexpected.

What may have been more unexpected is that their attempt to manipulate the market and keep natural forces from doing what they need to do, had worked for the 2 weeks that it did. That’s a very long time to be able to hold markets back from what they find as their natural course.

As the futures were trading this morning in the aftermath of the sharp sell-off in China, they were relatively muted in response, although we had seen that last week as well, with the market taking mild to moderate negative trading in the futures market and then exploding it in a bad way once trading started.

That’s what ended up happening today, but not in anything resembling an explosive way.

WIth a small number of positions set to expire this week and with cash reserves still at much lower levels than I would like to see, despite the possibility of another lower opening this morning, my expectation was to keep my personal activity low, but it was still hard to resist, although I didn’t go after one of last week’s really big losers – and there plenty of those.

Last week there was a prevailing belief that bargains were being formed, but with each day they became better and better bargains. While there may seem to be compelling reason to step in and buy something, at this point it really takes a fair amount of faith to do so.

The bounce higher from the lows of a few weeks ago that erased the 5% decline so quickly was a good sign, but the rapidity in which that gain has eroded is definitely not a good sign. As the week sets to begin in continuation of last week’s decline that erased all of the previous week’s really nice advance, there’s not too much reason to want to “buy on the dip,” at least not yet.

With the market having tested its support at about the 2045 level on the S&P 500, but failing to surpass its resistance level at about 2037, it looks as if the market wants to re-test its support and I will likely be testing the support of my La-Z-Boy as the week progresses, while watching to see how the market reacts to an overnight return of natural forces and wondering how those forces may take control and then what actions the Chinese government takes next, particularly with its own portfolio of bond holdings.

Daily Market Update – July 27,  2015  (8:30 AM)

Last week was one of revelation.

There came the realization that despite the markets having hovering near new highs the indexes were portraying a picture of market health that was largely illusory.

All it took to realize that was to see the consistent deviations that the major indexes had from one another and then to dissect out some of the biggest winners whose equally big market capitalizations moved their respective indexes while leaving so many other index members behind.

As last week came to its end, with the entire week having taken a strong turn downward as the second full week of earnings started uncovering some disappointments among the few gems, the expectation was that this week would be guided by more earnings reports and the FOMC Statement release.

While some good earnings could help to bring the market higher, it’s not too likely that the FOMC will have anything to say that would be interpreted in a positive way by the markets in the immediate day or two of its release.

For the most part, there wasn’t too much reason to believe that this week would be very active, but that was the case last week, too, as there was very little in the way of scheduled economic news, other than earnings and the rest of the world seemed to be quiet.

It’s a little different than expected this morning, however. There’s not very much scheduled economic news this week, but the week looks as if it will be getting off to a negative start as the unexpected comes into play.

While China’s overnight sharp sell-off took about 8% off the Shanghai market, it probably shouldn’t have been too unexpected.

What may have been more unexpected is that their attempt to manipulate the market and keep natural forces from doing what they need to do, had worked for the 2 weeks that it did. That’s a very long time to be able to hold markets back from what they find as their natural course.

As the futures are trading this morning in the aftermath of the sharp sell-off in China, they are relatively muted in response, although we had seen that last week as well, with the market taking mild to moderate negative trading in the futures market and then exploding it in a bad way once trading started.

WIth a small number of positions set to expire this week and with cash reserves still at much lower levels than I would like to see, despite the possibility of another lower opening this morning, my expectation is to keep my personal activity low.

Last week there was a prevailing belief that bargains were being formed, but with each day they became better and better bargains. While there may seem to be compelling reason to step in and buy something, at this point it really takes a fair amount of faith to do so.

The bounce higher from the lows of a few weeks ago that erased the 5% decline so quickly was a good sign, but the rapidity in which that gain has eroded is definitely not a good sign. As the week sets to begin in continuation of last week’s decline that erased all of the previous week’s really nice advance, there’s not too much reason to want to “buy on the dip,” at least not yet.

With the market having tested its support at about the 2045 level on the S&P 500, but failing to surpass its resistance level at about 2037, it looks as if the market wants to re-test its support and I will likely be testing the support of my La-Z-Boy, while watching to see how the market reacts to an overnight return of natural forces and wondering how those forces may take control and then what actions the Chinese government takes next, particularly with its own portfolio of bond holdings.

MONDAY:   More negativity seems on the way as the week is ready to begin. Lots of earnings ahead and an FOMC Statement release to maybe help out, but hard to imagine any news from the latter moving markets higher in its immediate aftermath

TUESDAY:   More earnings, more China. More disappointment? At least this morning the futures are pointing higher as the FOMC meeting begins and perhaps CHina begins to stabilize a little.

WEDNESDAY:  Could today be a rarity that sees 2 consecutive days of gains? That would be especially nice given that yesterday was a nearly 200 point advance. Today has more earnings reports, but more importantly, there’s an FOMC Statement release this afternoon. Probably a non-event, but you never know.

THURSDAY:  Another day of big gains is being followed by flat futures, so it’s anyone’s guess where today may go, but suddenly the market is just 1.5% away from its all time highs as it has reversed course from re-testing its support level to maybe trying to take on resistance levels again.

FRIDAY:. It looks like a flat start to follow up on the flat close to yesterday’s trading and maybe a quiet end to a week that halted the re-testing of support levels







Daily Market Update – July 24,  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:   BBY

Expirations:  none

The following were ex-dividend this week: FAST (7/24 $0.28)

The following will be ex-dividend next week:  KMI (7/29 $0.49)

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

Daily Market Update – July 23,  2015  (Close)

After a couple of days of disappointing earnings from some big names, especially among those that had recently taken a run higher and carrying the NASDAQ on its shoulders, there was some better news coming yesterday evening and again this morning, although there were still some disappointments in the mix, as well.

If some of those price reductions hold as we bring the week to its end, there may be some good opportunities next week, but there’s a little too much uncertainty right now, as the market itself is having a hard time getting past its resistance level, to want to commit what limited cash I have.

For example, there was no real reason that today should have gone negative and especially no good reason for it to have done so with a triple digit loss. It did exactly that as the market simply deteriorated all throughout the trading session, not really knowing what to do with itself.

In the past week we’ve completely gotten away from any discussion of international events and have really focused entirely on fundamental issues and have put forward guidance on the back burner.

Over the past few years it has been forward guidance that has sent many stocks higher or lower as earnings were released. If the market is truly a forward discounting mechanism, then that’s probably the way it should be.

However, it seems that this quarter, with continuing uncertainty over the strength of the US Dollar and energy prices, there hasn’t been too much emphasis placed on the future. Additionally, there’s also no telling what an interest rate hike, albeit, at the earliest coming near the end of the current quarter, might do to those numbers.

So, for the most part, the past week or so has been one of purity, one that has been backward looking. But the reactions to old news, on a net basis have been fairly subdued.

On an individual basis, however, if you were an owner of shares of some of those NASDAQ high fliers reporting earnings, you were brought back to earth. While the net market move hasn’t been really great, there have certainly been no shortage of very large moves coming after earnings have been released.

While I often find playing earnings a potentially appealing activity, those option premiums, whether calls or puts, just haven’t made the effort worth the risk and the options market has been consistently under-estimating the implied move, as a result.

At the moment that is the seeming paradox in markets and derivatives pricing.

The derivatives are priced as if there’s minimal risk, but the market feels as if there is lots of risk.

That usually works its way out, but it has really been taking a very long time for that to happen. Unfortunately, the way that sort of thing usually works out is for some kind of explosive move and typically that means an explosive move to the downside.

With the week now coming to its end and with only a single position set to expire, there’s not much action in the cards.

The morning’s futures trading was subdued, but for the most part this week the futures haven’t really given much indication of what the day’s trading will hold.

Today was just another example of that and ultimately gave no reason to jump in and pick up seeming bargains. Maybe tomorrow will be different, but I think that I can wait until Monday.

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

After a couple of days of disappointing earnings from some big names, especially among those that had recently taken a run higher and carrying the NASDAQ on its shoulders, there was some better news coming yesterday evening and again this morning, although there were still some disappointments in the mix, as well.

If some of those price reductions hold as we bring the week to its end, there may be some good opportunities next week, but there’s a little too much uncertainty right now, as the market itself is having a hard time getting past its resistance level, to want to commit what limited cash I have.

In the past week we’ve completely gotten away from any discussion of international events and have really focused entirely on fundamental issues and have put forward guidance on the back burner.

Over the past few years it has been forward guidance that has sent many stocks higher or lower as earnings were released. If the market is truly a forward discounting mechanism, then that’s probably the way it should be.

However, it seems that this quarter, with continuing uncertainty over the strength of the US Dollar and energy prices, there hasn’t been too much emphasis placed on the future. Additionally, there’s also no telling what an interest rate hike, albeit, at the earliest coming near the end of the current quarter, might do to those numbers.

So, for the most part, the past week or so has been one of purity, one that has been backward looking. But the reactions to old news, on a net basis have been fairly subdued.

On an individual basis, however, if you were an owner of shares of some of those NASDAQ high fliers reporting earnings, you were brought back to earth. While the net market move hasn’t been really great, there have certainly been no shortage of very large moves coming after earnings have been released.

While I often find playing earnings a potentially appealing activity, those option premiums, whether calls or puts, just haven’t made the effort worth the risk and the options market has been consistently under-estimating the implied move, as a result.

At the moment that is the seeming paradox in markets and derivatives pricing.

The derivatives are priced as if there’s minimal risk, but the market feels as if there is lots of risk.

That usually works its way out, but it has really been taking a very long time for that to happen. Unfortunately, the way that sort of thing usually works out is for some kind of explosive move and typically that means an explosive move to the downside.

With the week now coming to its end and with only a single position set to expire, there’s not much action in the cards.

The morning’s futures trading is subdued, but for the most part this week the futures haven’t really given much indication of what the day’s trading will hold.

Daily Market Update – July 22,  2015  (Close)

More earnings came after yesterday’s closing bell and they continued the shift of the path of the first full week of earnings. That shift began before yesterday’s open.

While yesterday was another in a series of days in which the DJIA was lagging behind the S&P 500 and the NASDAQ 100, due in part to some large moves in DJIA components and a streak of forward moves by a very small handful of NASDAQ components, this morning, as we got ready to begin, the shoe was clearly on the other foot.

This time, the dual disappointments from Microsoft and Apple added a double dose of earnings disappointment to the NASDAQ, which is based on market capitalization, as opposed to the DJIA, which is based on share price.

That share price is one of the reasons, maybe the only real reason that Apple had to split 7 to 1. Had it not done so, this morning’s $9.50 decline in the futures trading would have detracted about 420 points from the DJIA, instead of the paltry 60 points.

Microsoft, on the other hand, despite being only half as much as Apple on a percentage basis, was costing the DJIA only about 10 points during the pre-opening trading.

On the other hand, the combined market capitalization of Apple and Microsoft was over $1.1 Trillion before this morning’s prices settle.

At that moment, before the opening bell was to rings, as a result of that one – two punch, the DJIA was down about 0.2%, the S&P 500 was down about 0.4% and the NASDAQ 100 was down 1.1%.

When it was all over Apple contributed about 35 points of the DJIA’s 68 point loss, while Microsoft accounted for about 11 points of that loss.

That’s a complete reversal of the picture as the market had been moving higher, but sooner or later that’s the way most things go. Whatever goes up goes down and whatever lags, tends to catch up in relative terms.

While the earnings reports after yesterday’s close were disappointing, it really remained to be seen what kind of an impact the most recent reports would have on today’s market. Yesterday’s early disappointments took their real toll on the DJIA, but there was enough pain to spread around as the broader market got progressively weaker as the morning went on.

What was also noticeable yesterday was the large hits taken by some lesser known stocks when reporting earnings disappointments. Even announcing the plans to cut jobs, normally something that offsets some of the price declines associated with disappointing earnings, did little, if anything to stem the decline in Lexmark, for example.

With a little bit of cash still in hand, I don’t think that I’ll be likely to spend any more for the remainder of the week unless there’s some significant weakness to capitalize on, such as in Lexmark, maybe.

With still lots more earnings yet to be reported, there’s a need to erase the disappointments from yesterday and a need to paint a picture that’s consistent with an expanding economy.

Of course, that would re-introduce fears of an interest rate increase, but most are beginning to accept the likelihood that a rate increase will become reality by September.

Daily Market Update – July 22,  2015  (9:15 AM)

More earnings came after yesterday’s closing bell and they continued the shift of the path of the first full week of earnings. That shiftt began before yesterday’s open.

While yesterday was another in a series of days in which the DJIA was lagging behind the S&P 500 and the NASDAQ 100, due in part to some large moves in DJIA comoponents and a streak of forward moves by a very small handful of NASDAQ components, this morning, as we get ready to begin, the shoe is on the other foot.

This time, the dual disappointments from Microsoft and Apple add a double dose of earnings disappointment to the NASDAQ, which is based on market capitalization, as opposed to the DJIA, which is based on share price.

That share price is one of the reasons, maybe the only real reason that Apple had to split 7 to 1. Had it not done so, this morning’s $9.50 decline in the futures trading would have detracted about 420 points from the DJIA, instead of the paltry 60 points.

Microsft, on the other hand, despite being only half as much as Apple on a percentage basis, is costing the DJIA only about 10 points.

On the other hand, the combined market capitalization of Apple and Microsoft was over $1.1 Trillion before this morning’s prices settle.

At the moment, before the opening bell rings, as a result the DJIA is down about 0.2%, the S&P 500 is down about 0.4% and the NASDAQ 100 is down 1.1%.

That’s a complete reversal odf the picture as the market had been moving higher, but sooner or later that’s the way most things go. Whatever goes up goes down and whatever lags, tends to catch up in relative terms.

While the earnings reports after yesterday’s close were disappointing, it really remains to be seen what kind of an impact the most recent reports will have on today’s market. Yesterday’s early disappointments took their real toll on the DJIA, but there was enough pain to spread around as the broader market got progressively weaker as the morning went on.

What was also noticeable yesterday was the large hits taken by some lesser known stocks when reporting earnings disappointments. Even announcing the plans to cut jobs, normally something that offsets some of the price declines associated with disappointing earnings, did little, if anything to stem the decline in Lexmark, for example.

With a little bit of cash still in hand, I don’t think that I’ll be likely to spend any more for the remainder of the week unless there’s some significant weakness to capitalize on, such as in Lexmark, maybe.

With still lots more earnings yet to be reported, there’s a need to erase the disappointments from yesterday and a need to paint a picture that’s consistent with an expanding economy.

Of course, that would re-introduce fears of an interest rate increase, but most are beginning to accept the likelihood that a rate increase will become reality by September.