Category Archives: Daily Market Update

Daily Market Update – June 16, 2015  (9:00 AM)

Yesterday was another in a series of days to feel negatively about the market.

Although the focus has very recently been on Greece and the back and forth it has been having with both the ECB and the IMF, that focus will shift pretty fast as the FOMC Statement is released tomorrow.

Yesterday was a pretty bad day, even as it closed nearly 50% below the day’s lows. At least this morning there’s no evidence of any further crumbling ahead of the opening bell.

That alone could be seen as a victory of sorts, as there’s been very little reason for optimism lately. Those occasional triple digit gains, such as last week, when it looked as if there might be some kind of agreement on the Greek issue, are just blips that have no meaning.

If they do have meaning it would only be if we are still in a bull market. That’s because the types of really large moves higher that we have been seeing the past few months after some large losses, usually only happen after bear markets.

With the market now only 3% off from its all time highs the feeling is far more negative than a mere 3% should warrant. Over the past few years we have had these kinds of declines on a very regular basis and simply moved higher from there.

While this may not be any different and while most of the previous declines likely had some of the feeling that the big one was coming, it’s difficult to see where the next bit of optimism is going to come from.

Where it may arise is from the feeling that a burden has finally been lifted once interest rates are finally raised.

There may be some hint of that to come tomorrow and that could result in a relief rally, but the amount of data coming in to support the interest rate increase hasn’t been very overwhelming. We may be seeing the beginning of a trend, but it does seem to be very early in the process to make the jump and pull that trigger.

Still, it would be a good thing for that decision to be finally made.

With yesterday’s weakness in the market and an unwillingness to put additional money on the line, I had a few rollover trades placed, but noe could get executed. Hopefully the very mild decline being seen this morning would be too much of a barrier to getting something done this week. Making some rollover trades ahead of the FOMC Statement release may be a good thing if the response by the market isn’t going to be welcoming, but those opportunities are becoming sparse as the market has been so tentative lately.

With some more possibility of an agreement ahead among Greece, the ECB and the IMF, there’s always that chance that markets will be lifted, as I don’t think there’s any further near term downside risk. Most probably expect no resolution and may even be already discounting a Greek exit from the EU.

With no good news having been digested by the markets in a while, any remotely good news may become exaggerated.

If so, I hope that comes before the week’s end and best of all would be additive to any good news we might react to from the FOMC.

I’d like to get out of the June 2015 option cycle and into the July cycle as unscathed as possible and with cash to show for it, but that may be a hard fought battle at the moment.

Daily Market Update – June 15, 2015  (Close)

If the morning’s pre-opening futures were going to be any indication, this week wasn’t going to be getting off to a good start.

With the DJIA down nearly 100 points some 90 minutes before the market’s open, there have been a couple of instances in the past month that such negative pre-openings reversed themselves very quickly as trading opened on the regular session, but that’s not usually the case.

Today wasn’t going to be one of those days.

This morning the pretext for the drop was some more disappointment concerning a Greek default.

Last week the large moves up and down were attributed to polar opposite news on the situation of an agreement between Greece and the ECB and IMF.

This morning the news wasn’t good, just as the last of the news last week wasn’t promising.

Ahead of this week’s FOMC Statement release, which also may weigh heavily on the market, even if only due to some change in wording, the market doesn’t appear to be well equipped to deal with any adversity.

While there’s always a chance that a rabbit will be pulled out of a hat and the Greek financial crisis can continue to be kicked down the road, there’s not too much prospect of good news coming from many quarters for now.

But with all of the negativity surrounding the market, the reality is that it was barely down even 2% from its highs as the morning was set to begin.

That’s still quite a distance from where a mini-correction would take us, which would be about another 2.5% lower after today’s final tally, which, maybe coincidentally, is where technicians would point out there is some support.

Most times I’m not overly anxious to see earnings season descend upon us, but right now that may be the only hope for a near term catalyst to move markets higher. Unfortunately, that’s still about 4 weeks away and until then we’ll have to continue to deal with interest rate hike fears and whatever dysfunction may come to us from Europe.

With so many positions set to expire this week and with very little time to recover from any FOMC induced sell off, I would like to look at any opportunity to better position anything that is due to expire this week. At the moment there is some chance for some assignments, but those opportunities may be fleeting if weakness persists or grows this week.

With just a little bit of cash added to the reserve from the single assignment last week and with a real desire to add to those reserves, I don’t expect to be looking for many, or any, new positions this week. After last week of not having added any new positions I would love to do something, but this may not be the right time to think about committing any new or existing funds, even if you have the money to spare.

Right now, even a new blue chip could be the same as a speculative position, being dragged down by market momentum.

This may be a good time to heed ages old advice and wait until seeing the whites of their eyes to get an idea of where market sentiment is going. For now it seems to be going lower and it may be up to the FOMC to finally set us free from our fears or let earnings speak for themselves and do what is supposed to happen in an economy that’s getting better and better.

Daily Market Update – June 15, 2015  (8:45 AM)

If the morning’s pre-opening futures are going to be any indication, this week isn’t going to be getting off to a good start.

With the DJIA down nearly 100 points some 90 minutes before the market’s open, there have been a couple of instances in the past month that such negative pre-openings reversed themselves very quickly as trading opened on the regular session, but that’s not usually the case.

This morning the pretext for the drop is some more disappointment concerning a Greek default.

Last week the large moves up and down were attributed to polar opposite news on the situation of an agreement between Greece and the ECB and IMF.

This morning the news isn’t good, just as the last of the news last week wasn’t promising.

Ahead of this week’s FOMC Statement release, which also may weigh heavily on the market, even if only due to some change in wording, the market doesn’t appear to be well equipped to deal with an adversity.

While there’s always a chance that a rabbit will be pulled out of a hat and the Greek financial crisis can continue to be kicked down the road, there’s not too much prospect of good news coming from many quarters for now.

But with all of the negativity surrounding the market, the reality is that it’s barely down even 2% from its highs.

That’s still quite a distance from where a mini-correction would take us, which would be about another 3% lower, which, maybe coincidentally, is where technicians would point out there is some support.

Most times I’m not overly anxious to see earnings season descend upon us, but right now that may be the only hope for a near term catalyst to move markets higher. Unfortunately, that’s still about 4 weeks away and until then we’ll have to continue to deal with interest rate hike fears and whatever dysfunction may come to us from Europe.

With so many positions set to expire this week and with very little time to recover from any FOMC induced sell off, I would like to look at any opportunity to better position anything that is due to expire this week. At the moment there is some chance for some assignments, but those opportunities may be fleeting if weakness persists or grows this week.

With just a little bit of cash added to the reserve from the single assignment last week and with a real desire to add to those reserves, I don’t expect to be looking for many, or any, new positions this week. After last week of not having added any new positions I would love to do something, but this may not be the right time to think about committing any new or existing funds, even if you have the money to spare.

Right now, even a new blue chip could be the same as a speculative position, being dragged down by market momentum.

This may be a good time to heed ages old advice and wait until seeing the whites of their eyes to get an idea of where market sentiment is going. For now it seems to be going lower and it may be up to the FOMC to finally set us free from our fears or let earnings speak for themselves and do what is supposed to happen in an economy that’s getting better and better.

Daily Market Update – June 12, 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: GM

Expirations:   AZN, GDX

The following were ex-dividend this week: GM (6/8 $0.36), KSS (6/8 $0.45), BBY (6/9 $0.23), NEM (6/9 $0.025), KO (6/11 $0.33)

The following are ex-dividend next week: LVS (6/18 $0.60)

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

Daily Market Update – June 11, 2015  (Close)

After yesterday’s 230+ point gain, you can be excused for wanting to see more, but it’s not very reasonable to do so.

Lately gains have been fairly sparse and they have been reversed the following day.

For a while there had been a regular alternating pattern of up and down days, but most recently that’s been superceded by a predominance of weakness.

This morning, however, the pre-opening futures were at least giving some hope that the gains of yesterday would at least be preserved.

Surprisingly, they were. But even more surprisingly there was the opportunity to get a trade made. One that I had been hoping to get made yesterday.

Given how poor of a job those pre-opening futures have done in even predicting the opening market action in the past few weeks, with even some very large early moves being reversed shortly after the opening bell, there’s no telling what was going to be in store today, but there’s always room for hope.

Sometimes hoping works, but most of the time it’s going against the prevailing currents.

Now, with just 1 days left in the week and only 6 trading days left until the June 2015 option cycle comes to its end, this had been shaping up to be the second occurrence of a week with no trades.

With only 3 positions set to expire this week and seemingly out of competition for either rollovers or assignment and with all ex-dividend positions now having come and gone, there’s little likelihood of any other action this week, although I never do give up on the hope.

The reason the hopes were realized this morning was because the morning brought the Retail Sales Report and Jobless Claims.

The expectation was that both should add to the growing data that suggests the economy itself is growing and supporting the notion that the bond traders finally have gotten it right, as interest rates continue to climb.

That climb is ahead of now what is expected to be an earlier rise in rates from the FOMC.

The Retail Sales Report did, in fact, support that view, although the Jobless Claims didn’t have too much to say and the futures remained essentially unchanged.

That increase in Retail Sales, though, is probably the more important of the two pieces of data and does reflect some increasing consumer confidence. More importantly, confidence doesn’t really add to the economy, but sales do, so the morning’s data release is significant and should be reflected in earnings reports starting next month.

As with the earlier part of the week, I assume that I’ll simply be sitting and watching things unfold.

I did try to have a few trades made yesterday in attempts to sell calls on uncovered positions, but didn’t see those go through. A little bit of yesterday’s momentum continuing let one of those trades happen today in an effort to create even the barest trickles of income this week.

Fortunately, this was another week of multiple ex-dividend positions, but that’s really not sufficient to create the income flow that I like and need to see.

While this week may and likely will end up being a lost cause, next week, with a fair number of positions set to expire and with an FOMC Statement release scheduled, will hopefully offer all of the opportunities that this week hasn’t.

.

Daily Market Update – June 11, 2015  (8:45 AM)

After yesterday’s 230+ point gain, you can be excused for wanting to see more, but it’s not very reasonable to do so.

Lately gains have been fairly sparse and they have been reversed the following day.

For a while there had been a regular alternating pattern of up and down days, but most recently that’s been superceded by a predominance of weakness.

This morning, however, the pre-opening futures are at least giving some hope that the gains of yesterday will at least be preserved.

Given how poor of a job those pre-opening futures have done in even predicting the opening market action in the past few weeks, with even some very large early moves being reversed shortly after the opening bell, there’s no telling what may be in store today, but there’s always room for hope.

With just 2 days left in the week and only 7 trading days left until the June 2015 option cycle comes to its end, this is shaping up to be the second occurrence of a week with no trades.

With only 2 positions set to expire this week and seemingly out of competition for either rollovers or assignment and with all ex-dividend positions now having come and gone, there’s little likelihood of any action this week.

This morning brings the Retail Sales Report and Jobless Claims.

The expectation was that both should add to the growing data that suggests the economy itself is growing and supporting the notion that the bond traders finally have gotten it right, as interest rates continue to climb.

That climb is ahead of now what is expected to be an earlier rise in rates from the FOMC.

The Retail Sales Report did, in fact, support that view, although the Jobless Claims didn’t have too much to say and the futures remained essentially unchanged.

That increase in Retail Sales, though, is probably the more important of the two pieces of data and does reflect some increasing consumer confidence. More importantly, confidence doesn’t really add to the economy, but sales do, so the morning’s data release is significant and should be reflected in earnings reports starting next month.

As with the earlier part of the week, I assume that I’ll simply be sitting and watching things unfold.

I did try to have a few trades made yesterday in attempts to sell calls on uncovered positions, but didn’t see those go through. Hopefully, there will be some continuing momentum and let those trades happen today in an effort to create even the barest trickles of income this week.

Fortunately, this was another week of multiple ex-dividend positions, but that’s really not sufficient to create the income flow that I like and need to see.

While this week may and likely will end up being a lost cause, next week, with a fair number of positions set to expire and with an FOMC Statement release scheduled, will hopefully offer all of the opportunities that this week hasn’t.

.

Daily Market Update – June 10, 2015  (Close)

Lately there haven’t been too many mornings that you would be waking up to the futures indicating a stronger opening.

This morning, however, that was the case. Even though the gains weren’t very strong at that time, at least there was a chance to see some gains from the opening bell for a change.

The recent direction of the market, however, would take a fairly significant gain to erase some of the weakness that has been the theme over those past few weeks as the S&P 500 is now about 3% lower.

And that’s exactly what the market did in reacting favorably to word that there might be an agreement regarding the mechanism by which Greece makes good on its debt obligations to the IMF and ECB.

We’ll see about that.

What may still concern some technicians is that after a 6 month period of seeing higher lows as the market has undulated from 1862 to 2036, we are now sitting at a relative low that is lower than the last low.

That’s pretty esoteric, but for some that’s very important and would indicate that the trend of 3 steps forward and 2 steps back is being broken.

Most people don’t really care about such esoteric things.

Of course, the other pattern that has already been broken is the one where we see a 5% mini-correction every few months.

Sitting at a 3% lower level to start this day may have simply been a mid-point for that expected decline, although over the past few years those declines have come fairly precipitously, while this most recent decline has come in very small doses, maybe the same way a frog doesn’t realize that it’s been swimming in a pot very slowly being brought to a boil.

It continues to be difficult, however, to understand what the next catalyst to propel markets higher, even to the point of simply approaching its previous high, would be. While the next earnings season could bring some better than expected earnings results as the currency exchange issues haven’t worsened, as had been expected, that’s still a month away.

While awaiting that next earnings season there is still the prospect of a continuing overhang coming from uncertainty over when the FOMC will finally raise interest rates. It may just be that the best catalyst to move higher would be to remove that overhang, but to remove it due to good economic news and not because the economy is shrinking.

That overhang can be eliminated if the market sees good news as being good news.

If this morning’s Mortgage Applications data is any indication, the concern that rates may be going higher could spur economic activity and most agree that housing is a great place to begin any real economic expansion.

While we could use some good news, between now and next Friday, which marks the end of the June 2015 option cycle, my hope is that there is just no bad news so that the relatively large number of positions set to expire next week can either be assigned or rolled over. Right now, the burden of the past few weeks has made that more difficult, so we could use a little bit of a respite from the erosion that has been going on since the June cycle began.

Hopefully today’s good start to taking another few steps forward will still have some staying power to take us through this week and next.

.

Daily Market Update – June 10, 2015  (8:45 AM)

Lately there haven’t been too many mornings that you would be waking up to the futures indicating a stronger opening.

This morning, however, that’s the case. Even though the gains aren’t very strong, at least there’s a chance to see some gains from the opening bell for a change.

The recent direction of the market, however, would take a fairly significant gain to erase some of the weakness that has been the theme over those past few weeks as the S&P 500 is now about 3% lower.

What may concern some technicians is that after a 6 month period of seeing higher lows as the market has undulated from 1862 to 2036, we are now sitting at a relative low that is lower than the last low.

That’s pretty esoteric, but for some that’s very important and would indicate that the trend of 3 steps forward and 2 steps back is being broken.

Most people don’t really care about such esoteric things.

Of course, the other pattern that has already been broken is the one where we see a 5% mini-correction every few months.

Sitting at a 3% lower level may simply be a mid-point for that expected decline, although over the past few years those declines have come fairly precipitously, while this most recent decline has come in very small doses, maybe the same way a frog doesn’t realize that it’s been swimming in a pot very slowly being brought to a boil.

It continues to be difficult, however, to understand what the next catalyst to propel markets higher, even to the point of simply approaching its previous high, would be. While the next earnings season could bring some better than expected earnings results as the currency exchange issues haven’t worsened, as had been expected, that’s still a month away.

While awaiting that next earnings season there is still the prospect of a continuing overhang coming from uncertainty over when the FOMC will finally raise interest rates. It may just be that the best catalyst to move higher would be to remove that overhang, but to remove it due to good economic news and not because the economy is shrinking.

That overhang can be eliminated if the market sees good news as being good news.

If this morning’s Mortgage Applications data is any indication, the concern that rates may be going higher could spur economic activity and most agree that housing is a great place to begin any real economic expansion.

While we could use some good news, between now and next Friday, which marks the end of the June 2015 option cycle, my hope is that there is just no bad news so that the relatively large number of positions set to expire next week can either be assigned or rolled over. Right now, the burden of the past few weeks has made that more difficult, so we could use a little bit of a respite from the erosion that has been going on since the June cycle began.

Hopefully today will be a start to taking another few steps forward

.

Daily Market Update – June 9, 2015  (Close)

We are about a month away from the next earnings season and between now and then, other than the usual major economic reports or events, such as the Employment Situation Report or an FOMC Statement release, there isn’t too much to get anyone overly excited.

There’s still some drama in Europe, but mostly we’re in a holding pattern, although the market may simply become susceptible to technical factors. The latter is only likely to do one thing if it takes hold and that’s to pull markets lower.

With the weakness theme having taken hold over the last few weeks we are still only less than 3% below market highs as attrition has been gnawing at the market. It’s that slow attrition that could bring the technical traders back to life, as the S&P 500 approaches the 2041 level, which would require about another 2.5% decline and from there has only 2000 as a support level.

But even with all of those events taking place, that would only account for less than a 7% decline.

With this morning’s pre-opening futures trading looking as if it will be just another of the same days as we’ve been seeing over the past 3 weeks, there wasn’t too much telling how the day would proceed. Yesterday was one of slow erosion and attrition as buyers are just finding little reason to get excited about anything.

Today turned out to be a day of biding time as both sides of the unchanged level were tested and no one wanted to be on either side for very long.

Meanwhile, as interest rates are climbing, as they are now for the third time over the past few months, there’s renewed competition for investor’s dollars. What remains to be seen is whether these interest rate increases being seen in the market will persist. Previous attempts to predict the Federal Reserve’s actions proved to be too early and those interest rates fell back down giving some momentum back to stocks.

This time around the bond market may finally be getting it right. This week’s Retail Sales Report may give some further ammunition to the idea that the economy isn’t as weak as the GDP has been indicating.

That leads to next week and the FOMC Statement Release.

It’s probably not too likely that any policy change will occur by then, but all it takes is a change in the wording of the statement that might indicate a change in policy is coming soon. The initial impact of that will probably be to drive even more activity over to bonds and put further pressure on stocks.

Hopefully, though, that kind of pressure will be short lived, as it usually is and will be followed by an earnings season that ends up with better revenues and increased bottom lines, as the expected continuing dollar strength hasn’t materialized.

Right now, that’s still in the distant future.

In the immediate future, such as this week and next it’s all going to be about the FOMC and getting prepared to deal with that as the monthly option cycle will end just 2 days after the FOMC release.

While awaiting the news I have neither the available cash and am generally unwilling to use margin, nor the inclination to put much more at risk at a time when the bias is definitely on the side of sellers.

As with most cycles, whether up or down, it’s just a question of how long it will go on and whether the next leg of the cycle will atone for what preceded it.

For the remainder of this week I expect that I’ll be a spectator more than anything else while letting others figure out what the next step will be and let the stock and bond guys fight it out over who gets the marginal dollars that may be on the fence.

Right now, they won’t be my dollars.

.

Daily Market Update – June 9, 2015  (8:30 AM)

We are about a month away from the next earnings season and between now and then, other than the usual major economic reports or events, such as the Employment Situation Report or an FOMC Statement release, there isn’t too much to get anyone overly excited.

There’s still some drama in Europe, but mostly we’re in a holding pattern, although the market may simply become susceptible to technical factors. The latter is only likely to do one thing if it takes hold and that’s to pull markets lower.

With the weakness theme having taken hold over the last few weeks we are still only less than 3% below market highs as attrition has been gnawing at the market. It’s that slow attrition that could bring the technical traders back to life, as the S&P 500 approaches the 2041 level, which would require about another 2.5% decline and from there has only 2000 as a support level.

But even with all of those events taking place, that would only account for less than a 7% decline.

With this morning’s pre-opening futures trading looking as if it will be just another of the same days as we’ve been seeing over the past 3 weeks, there’s not too much telling how the day will proceed. Yesterday was one of slow erosion and attrition as buyers are just finding little reason to get excited about anything.

Meanwhile, as interest rates are climbing, as they are now for the third time over the past few months, there’s renewed competition for investor’s dollars. What remains to be seen is whether these interest rate increases being seen in the market will persist. Previous attempts to predict the Federal Reserve’s actions proved to be too early and those interest rates fell back down giving some momentum back to stocks.

This time around the bond market may finally be getting it right. This week’s Retail Sales Report may give some further ammunition to the idea that the economy isn’t as weak as the GDP has been indicating.

That leads to next week and the FOMC Statement Release.

It’s probably not too likely that any policy change will occur by then, but all it takes is a change in the wording of the statement that might indicate a change in policy is coming soon. The initial impact of that will probably be to drive even more activity over to bonds and put further pressure on stocks.

Hopefully, though, that kind of pressure will be short lived, as it usually is and will be followed by an earnings season that ends up with better revenues and increased bottom lines, as the expected continuing dollar strength hasn’t materialized.

Right now, that’s still in the distant future.

In the immediate future, such as this week and next it’s all going to be about the FOMC and getting prepared to deal with that as the monthly option cycle will end just 2 days after the FOMC release.

While awaiting the news I have neither the available cash and am generally unwilling to use margin, nor the inclination to put much more at risk at a time when the bias is definitely on the side of sellers.

As with most cycles, whether up or down, it’s just a question of how long it will go on and whether the next leg of the cycle will atone for what preceded it.

For the remainder of this week I expect that I’ll be a spectator more than anything else while letting others figure out what the next step will be and let the stock and bond guys fight it out over who gets the marginal dollars that may be on the fence.

Right now, they won’t be my dollars.

.

Daily Market Update – June 8, 2015  (Close)

There isn’t too much economic news scheduled for this week and that should mean that teh markets will be relatively calm.

That would be a comforting thought, if it also wasn’t so unlikely to be the case. 

The past few weeks haven’t had too much news other than for the final day of the trading week, but the propensity to move lower has been pretty clear.

Even though if you squinted really hard you may have been able to see some positive signs coming from some of those trading days of the past two weeks, the reality has become that the market really can’t find much reason to try and go past those recent highs.

What has really been striking is the resurgence of the bond market as it has decided that rates are going higher sooner than anyone had come to recently expect. It is making its third recent assault on the ceiling on interest rates in the past few months and this time it may have it right.

The past week’s strong Employment Situation Report coupled with the idea that what we thought was a weaker than expected economy based on faulty data has suddenly created the idea that interest rate increases could even come as early as in 2 weeks.

This week’s Retail Sales Report could open some eyes if it gives reason to believe that consumers are finally coming alive.

When you look back just a week earlier and remember that people had started suggesting that a data driven Federal Reserve could possibly wait until 2016 to begin their rate increases, the idea of it now happening in two weeks can be pretty unsettling.

And that’s exactly what the markets have become.

They’re unsettled because their notions of where we the economy is standing may not be very valid and that could lead to sudden shifts in monetary policy.

No one likes that sort of thing.

The pre-opening futures to begin this week were pointing to a very quiet open. Whether that was going to stay the case as the day, much less the week unfolded was going to be anyone’s guess, but with my cash reserves much lower than I would like, I wasn‘t expecting to be opening many new positions for the week. The general uncertainty also added to the reluctance to make much in the way of a commitment.

Like last week, this one will have a nice number of existing positions going ex-dividend and that offers some solace. However, with only a small number of positions scheduled to expire this week, there may not be very much trading activity or opportunity to generate new income, unless an unexpectedly strong move higher creates the chance to sell calls on uncovered positions.

Of greater concern, however, are the large number of positions set to expire next week, just 2 days after the FOMC Statement release.

The concern, although still based on a small likelihood, is that if the FOMC does announce an interest rate increase, that will send markets sharply lower in the short term.

With just 2 days of recovery time until expiration that would put those positions set to expire at risk, so there may have to be some additional thought put to rolling those positions over this week, where possible or feasible.

For now, it’s just a question of sitting back and seeing where the momentum may take the market. At the moment, what looked to be a quiet opening simply deteriorated as the day went on, keeping in line with the theme of the past 2 weeks. as there has been nothing to give reason to bid prices higher.

Hopefully the bond market will take a little break this week and offer less competition to the stock market as we await any news that could create optimism and count down until the start of the next earnings season next month, which could offer those reasons.

Daily Market Update – June 8, 2015  (9:00 AM)

There isn’t too much economic news scheduled for this week and that should mean that teh markets will be relatively calm.

That would be a comforting thought, if it also wasn’t so unlikely to be the case. 

The past few weeks haven’t had too much news other than for the final day of the trading week, but the propensity to move lower has been pretty clear.

Even though if you squinted really hard you may have been able to see some positive signs coming from some of those trading days of the past two weeks, the reality has become that the market really can’t find much reason to try and go past those recent highs.

What has really been striking is the resurgence of the bond market as it has decided that rates are going higher sooner than anyone had come to recently expect. It is making its third recent assault on the ceiling on interest rates in the past few months and this time it may have it right.

The past week’s strong Employment Situation Report coupled with the idea that what we thought was a weaker than expected economy based on faulty data has suddenly created the idea that interest rate increases could even come as early as in 2 weeks.

This week’s Retail Sales Report could open some eyes if it gives reason to believe that consumers are finally coming alive.

When you look back just a week earlier and remember that people had started suggesting that a data driven Federal Reserve could possibly wait until 2016 to begin their rate increases, the idea of it now happening in two weeks can be pretty unsettling.

And that’s exactly what the markets have become.

They’re unsettled because their notions of where we the economy is standing may not be very valid and that could lead to sudden shifts in monetary policy.

No one likes that sort of thing.

The pre-opening futures to begin this week are pointing to a very quiet open. Whether that’s going to stay the case as the day, much less the week unfolds is going to be anyones guess, but with my cash reserves much lower than I would like, I’m not expecting to be opening many new positions for the week. The general uncertainty also adds to the reluctance to make much in the way of a commitment.

Like last week, this one will have a nice number of existing positions going ex-dividend and that offers some solace. However, with only a small number of positions scheduled to expire this week, there may not be very much trading activity or opportunity to generate new income, unless an unexpectedly strong move higher creates the chance to sell calls on uncovered positions.

Of greater concern, however, are the large number of positions set to expire next week, just 2 days after the FOMC Statement release.

The concern, although still based on a small likelihood, is that if the FOMC does announce an interest rate increase, that will send markets sharply lower in the short term.

With just 2 days of recovery time until expiration that would put those positions set to expire at risk, so there may have to be some additional thought put to rolling those positions over this week, where possible or feasible.

For now, it’s just a question of sitting back and seeing where the momentum may take the market. At the moment, despite the quiet that looks as if it’s heading our way, for the most part that’s how markets have looked every morning in the past few weeks, only to deteriorate as there has been nothing to give reason to bid prices higher.

Hopefully the bond market will take a little break this week and offer less competition to the stock market as we await any news that could create optimism and count down until the start of the next earnings season next month, which could offer those reasons.

Daily Market Update – June 5, 2015  (8:00 AM)

The Week in Review will be posted by 10 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments:  none

Rollovers:  none

Expirations:   MOS, MRO, WY

The following were ex-dividend this week:  HAL (6/1 $0.18), JOY (6/2 $0.20), MOS (6/2 $0.27), BAC (6/3 $0.05), COH (6/3 $0.34), HFC (6/3 $0.33), WY (6/3 $0.29)

The following will be ex-dividend next week. GM (6/8 $0.36), KSS (6/8 $0.45), BBY (6/9 $0.23), NEM (6/9 $0.025), KO (6/11 $0.33)

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

Daily Market Update – June 4, 2015  (Close)

With the Employment Situation Report coming tomorrow, the pre-open futures was continuing its recent pattern of indecisiveness, as the morning was going counter to yesterday’s trading.

The futures were improving as the morning had proceeded, with the early triple digit losses reflecting some bad overseas sessions over Greek concerns getting more manageable

However, given that there has been a 0.5% move higher in the S&P 500 over the course of the first 3 trading days of the week and the uncertainty contained in tomorrow’s Employment Situation Report, it’s completely understandable why the market might be reluctant to add to those gains.

What there wasn’t was any reason to lose nearly 200 points on the day.

While there were reasons to be optimistic following the first 2 days of trading this week, it was less easy to be so yesterday, despite the market gains.

Those gains were much better in the DJIA than they were in the S&P 500, although as the DJIA gains eroded heading into the close, the gap between the two indexes did get smaller. Still, the gains weren’t as broad as they may have appeared.

Today was disappointing, not only for the size of the loss, but because the market had actually erased the pre-futures losses after tumbling about 100 points at the open and was looking as if it might really sky rocket.

And then it didn’t.

This morning there had to be concern about the upcoming Employment Situation Report, not just for what the data happens to be, but also because there’s no telling how the market will react if the data is outside of the expected range.

On top of that, with talk of more adjustments to previously released GDP data comes lots of uncertainty about the validity of economic data to date.

With so many people now taking a position that interest rate hikes may be held at bay until 2016, there could be a very significant surprise in store if revised data shows that the economy has been much stronger than we’ve been lead to believe.

While most understand that interest rate increases would be a good thing for the economy, even while likely causing some near term and short lived selling pressure, that scenario might be less likely if interest rate increases occurred as a result of the sudden realization that previous data had been invalid.

It’s much easier to deal with what may be perceived as bad news if you can prepare yourself for it or if it’s expected. Despite anecdotes of an economy much better than what economic data has reflected, the market has been taking its lead from the expectation that a stagnant economy would delay hold interest rate increases.

With the next FOMC meeting occurring just 2 days before the end of the June 2015 option cycle, any indication that the economy is stronger than previous data has indicated would be a good reason to want to rollover those positions well in advance of their expiration.

Just in case.

With only 3 positions now set to expire tomorrow, there’s not that much at stake as we get closer to the big reveal tomorrow morning.

However, just as was the case earlier this week, even though I generally like to wait until Friday to try my rollover trades, I would have liked to take any opportunity as it may have arisen. It’s just that today wasn’t going to be that day..

While I’d like to see some assignments in order to replenish the cash reserve that was spent down this week in the pursuit of dividends and premiums, I think I would rather get the chance to rollover positions and pocket the premiums with certainty, than to await the uncertainty of their assignment.

Maybe tomorrow will be that day.

Daily Market Update – June 4, 2015  (8:00)

With the Employment Situation Report coming tomorrow, the pre-open futures is continuing its recent pattern of indecisiveness, as the morning is going counter to yesterday’s trading.

The futures were improving as the morning has preceded, with the early triple digit losses reflecting some bad overseas sessions over Greek concerns getting more manageable

However, given that there has been a 0.5% move higher in the S&P 500 over the course of the first 3 trading days of the week and the uncertainty contained in tomorrow’s Employment Situation Report, it’s completely understandable why the market might be reluctant to add to those gains.

While there were reasons to be optimistic following the first 2 days of trading this week, it was less easy to be so yesterday, despite the market gains.

Those gains were much better in the DJIA than they were in the S&P 500, although as the DJIA gains eroded heading into the close, the gap between the two indexes did get smaller. Still, the gains weren’t as broad as they may have appeared.

This morning there has to be concern about the upcoming Employment Situation Report, not just for what the data happens to be, but also because there’s no telling how the market will react if the data is outside of the expected range.

On top of that, with talk of more adjustments to previously released GDP data comes lots of uncertainty about the validity of economic data to date.

With so many people now taking a position that interest rate hikes may be held at bay until 2016, there could be a very significant surprise in store if revised data shows that the economy has been much stronger than we’ve been lead to believe.

While most understand that interest rate increases would be a good thing for the economy, even while likely causing some near term and short lived selling pressure, that scenario might be less likely if interest rate increases occurred as a result of the sudden realization that previous data had been invalid.

It’s much easier to deal with what may be perceived as bad news if you can prepare yourself for it or if it’s expected. Despite anecdotes of an economy much better than what economic data has reflected, the market has been taking its lead from the expectation that a stagnant economy would delay hold interest rate increases.

With the next FOMC meeting occurring just 2 days before the end of the June 2015 option cycle, any indication that the economy is stronger than previous data has indicated would be a good reason to want to rollover those positions well in advance of their expiration.

Just in case.

With only 3 positions now set to expire tomorrow, there’s not that much at stake as we get closer to the big reveal tomorrow morning.

However, just as was the case earlier this week, even though I generally like to wait until Friday to try my rollover trades, at the moment I would take any opportunity as it may arise.

While I’d like to see some assignments in order to replenish the cash reserve that was spent down this week in the pursuit of dividends and premiums, I think I would rather get the chance to rollover positions and pocket the premiums with certainty, than to await the uncertainty of their assignment.