Category Archives: Daily Market Update

Daily Market Update – April 6, 2015  (8:30 AM)

This morning looks as if it will do what it has to do to make up for lost time when it wasn’t able to react to Friday’s Employment Situation Report.

With the very disappointing numbers, that can still be subject to revision, as they always are, the bond markets and futures markets were open and did what you would probably have expected them to do in light of a very weak report.

Maybe a year ago or even just 6 months ago, the very same kind of weak job growth report would have been met enthusiastically because it would have meant a continuation of Quantitative Easing.

Now, a decline from what’s expected only means that growth is decelerating and that’s not a good thing when you realize how flat the trajectory has been over the past 6 years. It’s not as if there’s been explosive growth that could just as easily fall off of a cliff. The gains in employment and the economic growth have all been hard won, but have only been incremental victories. Even a small step backward may seem overly large or significant.

In the best of the worlds the market will come to the realization that the numbers released on Friday may either be an aberration, perhaps weather related, or be in line for their own revisions. Doing so would require some rational thought regarding the logic or reacting so strongly to data that is subject to revision. In fact Friday’s data included a downward revision to the previous month which had exceptionally strong numbers that started the recent decline seen all through the month of March.

But that’s not likely to happen. We will still go from number to number. Reacting first and rarely thinking over the logic of the action other than to have an equally illogical reaction.

This week brings another FOMC Statement release and there’s not too much reason to suspect that it will contain anything to move markets. There’s no expectation for a rate increase, nor for change in the language unless there is an acknowledgement that the economy is not growing as much as would have been expected.

The language used, especially if expressing any disappointment at the slower than expected pace of economic expansion, especially in the face of declining energy prices could be one of those things that sends the market higher, as there will be an expectation of  some more time with free and easy money courtesy of the Federal Reserve.

With only a single assignment last week it was at least good to get all expiring positions rolled over. That added to the positions now set to expire this week and next, which marks the end of the monthly cycle.

With volatility so low, despite what seems like a very volatile environment, there’s not much inducement to think about looking very far into the future when it comes to selecting expiration dates. The caveat to that is that earnings season starts this wek and for select positions there may be some enhancement of premium due to an upcoming earnings report.

With minimal in cash reserves I don’t expect very much action this week and find myself again preferring to generate whatever weekly income possible either through rollovers or the sale of calls on existing uncovered positions.

With the large decline expected this morning it’s not too likely that the latter of those preferences will be borne out today, but this kind of day, with the market needing to do some filling in for what was missed on Friday is also the kind of day that can see a turnaround once that filling in has come to its end.

Hopefully that turnaround will be quick in the making as after 3 days off I’m anxious to get something constructive done

Daily Market Update – April 2, 2015  (8:15 AM)

The Week in Review will be posted by 6 PM tonight and the Weekend Update will be posted by Sunday at 12 Noon.

The following trade outcomes are possible today:

Assignments:  none

Rollovers:   CSCO, UAL

Expirations:  ATVI, MET

The following were ex-dividend this week:  EMC (3/30 $0.12), CSCO (3/31 $0.21)

The following are ex-dividend next week: GPS (4/6 $0.23), WFM (4/8 $0.13)

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

Daily Market Update – April 1, 2015  (Close)

Yesterday was just another in a series of bad days that lately seem to come whenever there appears to have been some reason to be optimistic. For every really nice day there has been an equally bad day either before or after. That explains why we could have had about 15 days in which the market was 150 points higher or more in 2015 only to find a market that has been virtually unchanged during that period.

Yet despite what a rational person would describe as being a volatile environment, the actual volatility is virtually unchanged over the past 4 weeks. That’s because most days have seen very little variation in direction. They’ve either been good days from the start or bad days from the start. People patiently sitting and waiting for intra-day turnarounds, as is generally very common, have been pretty disappointed over the past month, with the exception of two days of trading.

With an acceleration of selling in the final hour, something that we’ve seen a number of times in the past 2 weeks, the DJIA finally did end up down 200 points and left the market in negative territory to end the quarter.

That hadn’t happened for about 2 years, but it’s time to move on. It’s a new month and it’s a new quarter.

You wouldn’t have known that, though, by the way today went.

Hopefully maybe starting tomorrow, April will follow the alternating pattern of the past 4 months, because that would mean a nicely higher move for the month, as lately they’ve been very neatly bundled packages of good or bad from the outset.

Looking at the futures this morning, which had deteriorated from having been perfectly flat, they were still far better from where they were late last night.

For some reason, not that there has to always be a reason, the futures plunged last night, after also trading flatly after the market close. When you see piling on in the futures after an accelerating negative close, that’s usually a sign of bad things to come.

This time it was a little unusual because there was a few hours of delay before the heavy selling started.

But somewhere along the line overnight whatever it was that upset traders seemed to have taken a break, or better yet, had just gone away.

If only.

This morning had an ADP Employment Report in advance of Friday’s Employment Situation Report.

The ADP Report doesn’t usually get too much of a reaction from markets unless it’s really far from what was expected. This week, however, could have been a little different because with markets closed on Friday there won’t be a chance to trade the Employment Situation Report, so ADP could end up being a proxy for that trade.

After yesterday’s sell off and that quick drop in the futures, it probably wouldn’t take too much to get back on that path. At this point too much of anything, either too many new jobs or too few new jobs could both be construed as bad news.

As it would turn out, despite some disappointing numbers that were lower than expected, the market really did nothing at that point. It was much later that everyone just seemed to give up.

With bond markets open on Friday there could still be some disruption of markets after the more meaningful Employment Situation Report is released, but for equity traders it’s either doing something today or having to waiting until Monday to respond to the data that could be inferred to have implications for the timing of any interest rate increases.

Otherwise, I didn’t think there would be much to do for the remaining 2 days of this week, other than hoping that the market recovers enough to give the few positions that are set to expire this week a chance to either be rolled over or be assigned.

After today’s sharp drop, those hopes are further removed from the realm of the probable.

But we’ll see what tomorrow can bring.

After that and after a 3 day break from markets it will be time to strap on and get ready for what could be an interesting earnings season as it could be anyone’s guess how the balance between currency issues and energy cost savings play out.

Daily Market Update – April 1, 2015  (8:00 AM)

Yesterday was just another in a series of bad days that lately seem to come whenever there appears to have been some reason to be optimistic. For every really nice day there has been an equally bad day either before or after. That explains why we could have had about 15 days in which the market was 150 points higher or more in 2015 only to find a market that has been virtually unchanged during that period.

Yet despite what a rational person would describe as being a volatile environment, the actual volatility is virtually unchanged over the past 4 weeks. That’s because most days have seen very little variation in direction. They’ve either been good dqays from the start or bad days from the start. People patiently sitting and waiting for intra-day turnarounds, as is generally very common, have been pretty disappointed over the past month, with the exception of two days of trading.

With an acceleration of selling in the final hour, something that we’ve seen a number of times in the past 2 weeks, the DJIA finally did end up down 200 points and left the market in negative territory to end the quarter.

That hadn‘t happened for about 2 years, but it’s time to move on. It’s a new month and it’s a new quarter.

Hopefully April will follow the alternating pattern of the past 4 months, because that would mean a nicely higher move for the month, as lately they’ve been very neatly bundled packages of good or bad from the outset.

Looking at the futures this morning, which have deteriorated from having been perfectly flat, they are still far better from where they were late last night.

For some reason, not that there has to always be a reason, the futures plunged last night, after also trading flatly after the market close. When you see piling on in the futures after an accelerating negative close, that’s usually a sign of bad things to come.

This time it was a little unusual because there was a few hours of delay before the heavy selling started.

But somewhere along the line overnight whatever it was that upset traders seems to have taken a break, or better yet, has just gone away.

This morning has an ADP Employment Report in advance of Friday’s Employment Situation Report.

The ADP Report doesn’t usually get too much of a reaction from markets unless it’s really far from what was expected. This week, however, may be a little different because with markets closed on Friday there won’t be a chance to trade the Employment Situation Report, so ADP could end up being a proxy for that trade.

After yesterday’s sell off and that quick drop in the futures, it probably wouldn’t take too much to get back on that path. At this point too much of anything, either too many new jobs or too few new jobs could both be construed as bad news.

With bond markets open on Friday there could still be some disruption of markets after the report is released, but for equity traders it’s either doing something today or having to wait until Monday to respond to the data that could be inferred to have implications for the timing of any interest rate increases.

Otherwise, I don’t think there will be much to do for the remaining 2 days of this week, other than hoping that the market recovers enough to give the few positions that are set to expire this week a chance to either be rolled over or be assigned.

After that and after a 3 day break from markets it will be time to strap on and get ready for what could be an interesting earnings season as it could be anyone’s guess how the balance between currency issues and energy cost savings play out

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Daily Market Update – March 31, 2015  (8:00 AM)

Yesterday was a nice day.

It had been more than a month since the market was able to put two advancing days together and the 263 point advance in the DJIA pretty much assured that the quarter, which ends today, wouldn’t end up being the first losing quarter in quite a while.

This morning, however, the early indication was that the market has changed its mind and wanted to take back a significant portion of what was gained yesterday.

It would take a lot, though, to move the quarter into negative territory, although another day like last Wednesday could do it easily enough.

As today was winding down in its final hour of trading that additional selling push came in turning a moderately negative day into a strongly negative day as the drop doubled in size in the final hour.

By the time it was all done the DJIA ended up with a quarterly loss.

As with yesterday’s gain, it’s not that easy to pinpoint a reason for the triple digit move in the pre-opening futures, nor was there really an obvious reason for the slide later in the session.. Lately reasons haven’t been necessary and have been few and far between. How else could you have the kind of regular alternating up and down pattern that we’ve been seeing?

Yesterday’s gain was just another in a string of very large gains that we’ve seen in 2015 and that get me nervous. We’ve had about 15 gains in the 150 and higher point range and yet the DJIA is up only 153 points for the year.

Actually, that may be good, because historically, when you see really large gains they tend to be associated with bear markets. If that’s the case this time around, at least the bear market hasn’t hit yet and is only sending an early warning signal.

The challenge is what to do about what may be an early warning signal.

Human nature makes it so that when we see a large gain we think that it’s going to be the first of many to come. That’s because sometimes they are. but so often they’re just there to suck people in.

The lesson, though, may simply be that 150 points just isn’t that large of a move anymore, at least in relative terms. It may be that what we really need to see to justify being nervous are more and more of the 250+ kind of higher moves.

In that case, I’m still nervous, because those have definitely been spotted over the past few months, as well.

Ever since reaching its then peak in early December 2014 the market has seen lots of these triple digit moves, with most just working to offset one another. In the nearly 4 months that have passed since that time the DJIA has gone about 76 points higher and I’ve decided not to even try and count the number of triple digit moves, but if you’ve been watching you know that they’ve become fairly commonplace since then.

With a couple of trades yesterday I would have loved to have seen a continuation of yesterday’s gains to be able to sell some more calls on uncovered positions or at least to be in better shape to have some chance for rollovers on Thursday or even, dare I say it, some assignments.

Today made all of those more challenging although as with last week’s early morning futures sell off that eventually reversed itself as the market opened, this morning’s sell-off was getting a little less pronounced, so for what it’s worth, my fingers were crossed.

But obviously it wasn’t worth much.

Last week’s turn-around on that morning was surprising, as it was welcome. I don’t expect the same to happen again this morning, but it would have been even more welcome this week, as there are fewer days to recover from any large decline, as markets are closed on Friday.

Today’s trading helped nothing.

At the very least we can be certain that March is coming to its close today and it will be as good to see it go as it was to see January go. What we don’t know is whether April will be as welcome a breath of fresh air as was February.

Unfortunately, April will have the added challenge of currency challenged earnings that will start in about a week. While you would think that we’re all prepared to deal with the adjustments that may need to be made in earnings expectations and that perhaps lower prices already reflect that reality, there’s bound to be shock and dismay coming.

Daily Market Update – March 31, 2015  (8:00 AM)

Yesterday was a nice day.

It had been more than a month since the market was able to put two advancing days together and the 263 point advance in the DJIA pretty much assured that the quarter, which ends today, wouldn’t end up being the first losing quarter in quite a while.

This morning, however, the early indication is that the market has changed its mind and wants to take back a significant portion of what was gained yesterday.

It would take a lot, though, to move the quarter into negative territory, although another day like last Wednesday could do it easily enough.

As with yesterday’s gain, it’s not that easy to pinpoint a reason for the triple digit move in the pre-opening futures. Lately reasons haven’t been necessary and have been few and far between. How else could you have the kind of regular alternating up and down pattern that we’ve been seeing?

Yesterday’s gain was just another in a string of very large gains that we’ve seen in 2015 and that get me nervous. We’ve had about 15 gains in the 150 and higher point range and yet the DJIA is up only 153 points for the year.

Actually, that may be good, because historically, when you see really large gains they tend to be associated with bear markets. If that’s the case this time around, at least the bear market hasn’t hit yet and is only sending an early warning signal.

Human nature makes it so that when we see a large gain we think that it’s going to be the first of many to come. That’s because sometimes they are. but so often they’re just there to suck people in.

The lesson, though, may simply be that 150 points just isn’t that large of a move anymore, at least in relative terms. It may be that what we really need to see to justify being nervous are more and more of the 250+ kind of higher moves.

In that case, I’m still nervous, because those have definitely been spotted over the past few months, as well.

Ever since reaching its then peak in early December 2014 the market has seen lots of these triple digit moves, with most just working to offset one another. In the nearly 4 months that have passed since that time the DJIA has gone about 76 points higher and I’ve decided not to even try and count the number of triple digit moves, but if you’ve been watching you know that they’ve become fairly commonplace since then.

With a couple of trades yesterday I would have loved to have seen a continuation of yesterday’s gains to be able to sell some more calls on uncovered positions or at least to be in better shape to have some chance for rollovers on Thursday or even, dare I say it, some assignments.

Today will likely make all of those more challenging although as with last week’s early morning futures sell off that eventually reversed itself as the market opened, this morning’s sell-off is getting a little less pronounced, so for what it’s worth, my fingers are crossed.

Last week’s turn-around on that morning was surprising, as it was welcome. I don’t expect the same to happen again this morning, but it might be even more welcome this week, as there are fewer days to recover from any large decline, as markets are closed on Friday.

At the very least we can be certain that March is coming to its close today and it will be as good to see it go as it was to see January go. What we don’t know is whether April will be as welcome a breath of fresh air as was February.

Unfortunately, April will have the added challenge of currency challenged earnings that will start in about a week. While you would think that we’re all prepared to deal with the adjustments that may need to be made in earnings expectations and that perhaps lower prices already reflect that reality, there’s bound to be shock and dismay coming.

Daily Market Update – March 30, 2015  (Close)

This is a holiday shortened trading week, but there’s plenty to push or pull markets.

Lately it doesn’t take very much, at least nothing that can be identified, to make markets move in a meaningful manner.

For starters this week there’s no shortage of Federal Reserve Governors giving speeches, including Stanley Fischer and Janet Yellen.

Interestingly, neither of them moved markets last week in any of the 3 speeches they gave. Yellen’s came during the final 15 minutes of trading last week which could have ended up being very interesting for its timing, but she said little in response to some tepid questioning from her home town crowd in San Francisco.

What may be most interesting is that this week the stock market will be closed when the Employment Situation Report is released on Friday. Lately that report has shown that it still can move markets, but this time the only market that it could possibly move will be the bond market which will be open on Friday.

Stock markets may have some catching up to do if the bond markets decide that the data is interesting enough to warrant a large move, as has been the case lately. Those 10 Year Treasury rates are still below 2%, but they were significantly higher just a few weeks ago and could make that move easily enough with another unexpectedly strong Employment Situation Report

Otherwise, there’s not too much expected this week as much of the country is on spring break or getting prepared to begin their break after a long winter.

With only one assignment last week and another week with just a handful of positions set to expire, the likelihood is that any new positions this week would look at using a weekly option, although their premiums are expected to be proportionately lower as there’s less time value this week.

Still, with cash reserves low, I don’t expect too much activity and would have liked to have seen this morning’s pre-open futures rally continue.

It was a nice change of pace to get something that I had been hoping for.

While the triple digit kind of pre-opening moves tend to replicate themselves once the opening bell rings, I was reminded that last week was an example of one such pre-opening triple digit move that had no legs. Fortunately that was a dive of over 100 points, but it’s always a little disconcerting when patterns are broken.

Today was more true to form, so the hope that the morning’s optimism continued wasn’t in vain.

But just as with last week’s large drop, it wasn’t not too easy to identify a reason for the day’s move although most were looking at some overnight news from China that could be leading toward their own form of Quantitative Easing.

That always makes the move a little more suspect, but if it turns out to be the real thing I would be more than happy to see it put this week’s expiring positions into contention for either rollovers or assignments and would be perfectly happy if there was a repeat of two weeks ago and plenty of opportunity to sell calls on uncovered positions.

Last week was such a low activity week, despite being able to out-perform the market. That’s rarely something to be happy about when out-performing still represents a decline, even though it is critical to stay ahead, especially during down markets.

For this week it would be nice if we could finally put an end to the March pattern of trading, which was virtually identical to the January trading.

Hopefully April will bring a return to February an some opportunity to both trade and make some money while seeing assets appreciate at the same time.

That would be nice for a change. Today was a good start to usher that change in.

Daily Market Update – March 30, 2015  (9:00 AM)

This is a holiday shortened trading week, but there’s plenty to push or pull markets.

Lately it doesn’t take very much, at least nothing that can be identified, to make markets move in a meaningful manner.

For starters this week there’s no shortage of Federal Reserve Governors giving speeches, including Stanley Fischer and Janet Yellen.

Interestingly, neither of them moved markets last week in any of the 3 speeches they gave. Yellen’s came during the fiinal 15 minutes of trading last week which could have ended up being very interesting for its timing, but she said little in response to some tepid questioning from her home town crowd in San Francisco.

What may be most interesting is that this week the stock market will be closed when the Employment SItuation Report is released on Friday. Lately that report has shown that it still can move markets, but this time the only market that it could possibly move will be the bond market which will be open on Friday.

Stock markets may have some catching up to do if the bond markets decide that the data is interesting enough to warrant a large move, as has been the case lately. Those 10 Year Treasury rates are still below 2%, but they were significantly higher just a few weeks ago and could make that move easily enough with another unexpectedly strong Employment Situation Report

Otherwise, there’s not too much expected this week as much of the country is on spring break or getting prepared to begin their break after a long winter.

With only one assignment last week and another week with just a handful of positions set to expire, the likelihood is that any new positions this week would look at using a weekly option, although their premiums are expected to be proportionately lower as there’s less time value this week.

Still, with cash reserves low, I don’t expect too much activity and would like to see this morning’s pre-open futures rally continue,

While the triple digit kind of pre-opening moves tend to replicate themselves once the opening bell rings, I’m reminded that last week was an example of one such pre-opening triple digit move that had no legs. Fortunately that was a dive of over 100 points, but it’s always a little disconcerting when patterns are broken.

I hope that the morning’s optimism continues, but just as with last week’s large drop, it’s not too easy to identify a reason for the move.

That always makes the move a little more suspect, but if it turns out to be the real thing I would be more than happy to see it put this week’s expiring positions into contention for either rollovers or assignments and would be perfectly happy if there was a repeat of two weeks ago and plenty of opportunity to sell calls on uncovered positions.

Last week was such a low activity week, despite being able to out-perform the market. That’s rarely something to be happy about when out-performing still represents a decline, even though it is critical to stay ahead, especially during down markets.

For this week it would be nice if we could finally put an end to the March pattern of trading, which was virtually identical to the January trading.

Hopefully April will bring a return to February an some opportunity to both trade and make some money while seeing assets appreciate at the same time.

That would be nice for a change.

Daily Market Update – March 27, 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:  DOW

Rollovers:   MET

Expirations:  ABBV, BAC

The following were ex-dividend this week:  ATVI (3/26 $0.23), DOW (3/27 $0.42)

The following will be ex-dividend next week: EMC (3/30 $0.12)

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

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Daily Market Update – March 26, 2015  (Close)

Yesterday’s near 300 point sell-off was for no discernible reason and that can never leave you with a good feeling.

It was another example of the disconnect seen over the past month between the pre-open futures trading and the manner in which the day’s trading later on would unfold. Almost without exception the early morning indicators have indicated nothing. Jumping in at the market open hasn’t been a good strategy of late.

This morning may be a counter to that disconnect as the early pre-open futures trading is decidedly negative, approaching a triple digit loss to begin the day, although the gap has been slowly improving.

These days that’s just a moderately negative opening, but the more pronounced the futures trading, whether higher or lower, the more likely you’re going to see it replicated when the regular session opens.

If that’s the case this morning the trend began with Tuesday’s closing as a decent gain heading into the closing hour was all lost and that selling has just continued for now.

As always, just like when you’re a kid, it’s much easier to learn your lesson when there’s a clear explanation available.

But whatever it is that has accounted for the selling pressure the past few days hasn’t been clearly presented.

Based on what little economic data has been released this week it’s hard to make either a bullish or bearish case and it’s hard to adopt a good news is good news or good news is bad news kind of mentality.

Tomorrow still holds the GDP release, but it’s hard to imagine what it would hold that hasn’t already shown up in some other form in such things as Retail Sales Reports, Durable Goods, Home Sales and other measures of the economy.

With the losses of the past few days the prospects of assignments this Friday become more distant so the hope is for rollovers, but even those become increasingly unlikely as the market continues lower.

The one shining light, just as it previously was a beacon of darkness, has been the energy sector this week. If you hold shares in those companies, then your performance this week is better than the averaged are indicating, but those still have a long way to go to start earning some respectability again.

For today, there wasn’t likely to be too much to do as looking at the early numbers.

Despite a very impressive turnaround of about 160 points at the extremes, it still ended up a day of not much to do.

It’s rarely a good idea to get too much ahead of momentum when there’s an entire market behind that move. While I often like to get ahead of momentum on an individual stock those are often easier to halt than when the whole market is on the move.

Any other day and I might want to take a look at a stock like SanDisk, which is again taking a dive due to changing guidance, just as it did prior to its earnings report. But with a weakening market in the background, despite the turnaround and what may be over-done reactions it may be only the beginning, so we sit and watch and may find ourselves ending up asking “what if?”

Hopefully tomorrow’s GDP and maybe some encouraging words from Stanley Fischer, who’s on center stage again, may at least give investors some reason to believe that a better economy awaits and will be the kind that can sustain moderate growth for a while to come.

Daily Market Update – March 26, 2015  (8:00 AM)

Yesterday’s near 300 point sell-off was for no discernible reason and that can never leave you with a good feeling.

It was another example of the disconnect seen over the past month between the pre-open futures trading and the manner in which the day’s trading later on would unfold. Almost without exception the early morning indicators have indicated nothing. Jumping in at the market open hasn’t been a good strategy of late.

This morning may be a counter to that disconnect as the early pre-open futures trading is decidedly negative, approaching a triple digit loss to begin the day, although the gap has been slowly improving.

These days that’s just a moderately negative opening, but the more pronounced the futures trading, whether higher or lower, the more likely you’re going to see it replicated when the regular session opens.

If that’s the case this morning the trend began with Tuesday’s closing as a decent gain heading into the closing hour was all lost and that selling has just continued for now.

As always, just like when you’re a kid, it’s much easier to learn your lesson when there’s a clear explanation available.

But whatever it is that has accounted for the selling pressure the past few days hasn‘t been clearly presented.

Based on what little economic data has been released this week it’s hard to make either a bullish or bearish case and it’s hard to adopt a good news is good news or good news is bad news kind of mentality.

Tomorrow still holds the GDP release, but it’s hard to imagine what it would hold that hasn’t already shown up in some other form in such things as Retail Sales Reports, Durable Goods, Home Sales and other measures of the economy.

With the losses of the past few days the prospects of assignments this Friday become more distant so the hope is for rollovers, but even those become increasingly unlikely as the market continues lower.

The one shining light, just as it previously was a beacon of darkness, has been the energy sector this week. If you hold shares in those companies, then your performance this week is better than the averaged are indicating, but those still have a long way to go to start earning some respectability again.

For today, there’s not likely to be too much to do as it’s rarely a good idea to get too much ahead of momentum when there’s an entire market behind that move. While I often like to get ahead of momentum on an individual stock those are often easier to halt than when the whole market is on the move.

Any other day and I might want to take a look at a stock like SanDisk, which is again taking a dive due to changing guidance, just as it did prior to its earnings report. But with a weakening market in the background, even what look like over-done reactions may be only the beginning, so we sit and watch and may find ourselves ending up asking “what if?”

Hopefully tomorrow’s GDP and maybe some encouraging words from Stanley Fischer, who’s on center stage again, may at least give investors some reason to believe that a better economy awaits and will be the kind that can sustain moderate growth for a while to come.

Daily Market Update – March 25, 2015  (Close)

Yesterday reverted back to recent form after having spent a couple of hours of the trading day looking as if it would simply be as flat as was the pre-open futures.

Instead it was another triple point move. This one was to the downside and was a continuation of the sell-off that happened on Monday afternoon that saw the DJIA give up its gains in the final 15 minutes of trading.

Today did not revert back to form, because if it had, it would have been an up day. Instead, it was an abysmal day that only got worse as it progressed, with the DJIA off almost 300 points.

This morning looked like it will be another flat open as the futures were doing almost nothing despite some excitement from the impending Kraft Foods deal. The fact that interest rates are still so low would make you think that more deals might be on the horizon, although it may be hard to justify the stock prices at these levels. Even for those companies that are sinking below 200 day moving averages are still pretty expensive for those looking for bargains.

That goes even for someone just looking to pick up 100 shares, although most things did get a little less expensive today.

Still, some increased activity would be welcome and they don’t all have to be blockbuster kind of deals, such as with Kraft Foods. Just look at yesterday’s announcement of a relatively tiny $1 Billion deal that Lexmark was undertaking in buying a company that I’d never heard of, but coincidentally also starts with the letter “K.”

Both of those companies appear to be getting pats on the back this morning, so there may be more, especially as Lexmark hasn’t exactly been the kind of company on the acquisitive prowl over the past few years, but opportunity is opportunity.

The real focus for the rest of the week will still be on Friday’s GDP release, although this morning’s Durable Goods could have potentially given the markets either a reason to celebrate or to fear that the news was a harbinger for impending interest rate hikes.

Instead of suggesting that the manufacturing portion of the economy was humming along those Durable Good numbers threw some cold water on the idea of any real economic expansion brewing.

But despite the absence of good news or the presence of bad news, depending on how you interpret the Durable Goods Report, it had no real impact on today’s trading.

At this point we don’t really know whether the market is going to view good news as good news or whether it’s going to take that paradoxical approach that it often does.

As the Durable Goods figures were released the futures did virtually nothing, befitting a market that may still find itself confused over what it wants to hear.

For the rest of the week I don’t see very much in activity, although it ended up being hard to resist a position in Activision which was going ex-dividend tomorrow. Since it has an annual dividend if it can be assigned quickly that will end up being much better than the 1% yield it offers on a yearly basis.

While I wouldn’t completely exclude the possibility of any other purchases of new positions for the rest of the week, it’s probably not too likely and there are only a handful of contracts that are possible rollover candidates this week that require much attention.

While I was wishing that today would be a very passive and watchful day, just like it was yesterday, that obviously wasn’t meant to be.

Hopefully tomorrow will bring something different as time is running out on this week and the chance to roll anything over.

Daily Market Update – March 25, 2015  (8:30 AM)

Yesterday reverted back to recent form after having spent a couple of hours of the trading day looking as if it would simply be as flat as was the pre-open futures.

Instead it was another triple point move. This one was to the downside and was a continuation of the sell-off that happened on Monday afternoon that saw the DJIA give up its gains in the final 15 minutes of trading.

This morning looks like it will be another flat open as the futures are doing almost nothing despite some excitement from the impending Kraft Foods deal. The fact that interest rates are still so low would make you think that more deals might be on the horizon, although it may be hard to justify the stock prices at these levels. Even for those companies that are sinking below 200 day moving averages are still pretty expensive for those looking for bargains.

That goes even for someone just looking to pick up 100 shares.

Still, some increased activity would be welcome and they don’t all have to be blockbuster kind of deals, such as with Kraft Foods. Just look at yesterday’s announcement of a relatively tiny $1 Billion deal that Lexmark was undertaking in buying a company that I’d never heard of, but coincidentally also starts with the letter “K.”

Both of those companies appear to be getting pats on the back this morning, so there may be more, especially as Lexmark hasn’t exactly been the kind of company on the acquisitive prowl over the past few years, but opportunity is opportunity.

The real focus for the rest of the week will still be on Friday’s GDP release, although this morning’s Durable Goods could have potentially given the markets either a reason to celebrate or to fear that the news was a harbinger for impending interest rate hikes.

Instead of suggesting that the manufacturing portion of the economy was humming along those Durable Good numbers threw some cold water on the idea of any real economic expansion brewing.

At this point we don’t really know whether the market is going to view good news as good news or whether it’s going to take that paradoxical approach that it often does.

As the Durable Goods figures were released the futures did virtually nothing, befitting a market that may still find itself confused over what it wants to hear.

For the rest of the week I don’t see very much in activity. While I wouldn’t completely exclude the possibility of any other purchases of new positions for the week, it’s probably not too likely and there are only a handful of contracts that are possible rollover candidates this week that require much attention.

As the day gets ready to begin it doesn’t appear as if there will be too many chances to sell calls on uncovered positions, so it may be a very passive and watchful day today, just like it was yesterday.

Daily Market Update – March 24, 2015  (Close)

Well, at least yesterday came close to being able to put together two consecutive days of gains for the first time in a month.

Up until the last 10 minutes or so it looked as if it would happen.

There was actually some reason to feel optimistic yesterday as the Existing Home Sales were higher and Federal Reserve Vice-Chair Stanley Fischer gave the first of his two talks this week and didn’t shy away from plainly stating that rates were going up.

Perhaps had those events happened a week earlier the market may have taken it as a set of signs that it would be appropriate to take a plunge.

Instead, there was both something refreshing about Fischer actually joking about impending rate increases and the market reacting rationally to news that would have sent it into a panic just days ago.

That may be reason enough to have some optimism as the market continues to be able to find higher ground even as so many stocks are being challenged on a 50 day basis, which many consider to be a bearish signal.

While there’s nothing much else scheduled between today and the end of the week, there’s always Friday and Stanley Fischer has another chance to get people nervous now that he’s softened them up with economic humor.

It will be interesting to hear his comments in light of the GDP statistics that will be released that morning, as most everyone will be  focusing on whether the GDP finally begins to show the consumer led expansion that we’ve now been expecting for about 4 months of lower energy prices.

This morning the Consumer Price Index was up 0.2%, which did nothing to excite the pre-opening futures, which like yesterday were trading fairly flat. That was, however, the first increase seen since October 2014, but it actually reflected higher gas prices seen over the past month. The increase was, though, perhaps an indication that the annual inflation rate may reach the Federal Reserve target of 2% or even beyond, which could give some justification for the first interest rate increase.

In its very early response, though, the bond market was taking rates down ever so slightly. As the day wore on those rates went even lower.

So far there hasn’t been any validation of the thesis that consumer spending was going to increase in a meaningful way as energy prices decreased in a meaningful way. Even retailers that had initially started painting a rosy picture stepped back a little when providing earnings guidance over the past month.

Yesterday, though, most of the day was simply one of trading without any reason to go up nor down, although over the previous week the market hasn’t really needed a reason to make a large move, although each of those moves was in some way erased or mostly erased the following day.

Today, after that flat start in the futures the market hugged the flat line until about noon and then just gave up for the day until finally ending with another triple digit loss, with the selling picking up for real in the final 30 minutes again.

With a couple of new positions opened yesterday there still may be some more for the rest of the week, but there’s no real compelling reason to put more at risk when the market continues to be so directionless. Today was a good day to just sit and aimlessly watch and wonder.

If that direction does turn higher at any point this week, it would still be nice to see some very strong moves in that direction, even if they don’t have much in the way of staying power. Those are the kind of moves that can make sale of calls on uncovered positions begin to look appealing. Additionally, those large moves, especially if occurring with lots of intra-day price fluctuation sends premiums higher. Lately we’ve had the large moves, but without the intra-day fluctuation, so the volatility has actually been falling and taking premiums along with it.

As with yesterday and again today, there’s not too much reason to rush into any trades and plenty of reason to simply watch and see where the market may head again tomorrow.

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

Well, at least yesterday came close to being able to put together two consecutive days of gains for the first time in a month.

Up until the last 10 minutes or so it looked as if it would happen.

There was actually some reason to feel optimistic yesterday as the Existing Home Sales were higher and Federal Reserve Vice-Chair Stanley Fischer gave the first of his two talks this week and didn’t shy away from plainly stating that rates were going up.

Perhaps had those events happened a week earlier the market may have taken it as a set of signs that it would be appropriate to take a plunge.

Instead, there was both something refreshing about Fischer actually joking about impending rate increases and the market reacting rationally to news that would have sent it into a panic just days ago.

That may be reason enough to have some optimism as the market continues to be able to find higher ground even as so many stocks are being challenged on a 50 day basis, which many consider to be a bearish signal.

While there’s nothing much else scheduled between today and the end of the week, there’s always Friday and Stanley Fischer has another chance to get people nervous now that he’s softened them up with economic humor.

It will be interesting to hear his comments in light of the GDP statistics that will be released that morning, as most everyone will be  focusing on whether the GDP finally begins to show the consumer led expansion that we’ve now been expecting for about 4 months of lower energy prices.

This morning the Consumer Price Index was up 0.2%, which did nothing to excite the pre-opening futures, which like yesterday were trading fairly flat. That was, however, the first increase seen since October 2014, but it actually reflected higher gas prices seen over the past month. The increase was, though, perhaps an indication that the annual inflation rate may reach the Federal Reserve target of 2% or even beyond, which could give some justification for the first interest rate increase.

In its very early response, though, the bond market was taking rates down ever so slightly.

So far there hasn’t been any validation of the thesis that consumer spending was going to increase in a meaningful way as energy prices decreased in a meaningful way. Even retailers that had initially started painting a rosy picture stepped back a little when providing earnings guidance over the past month.

Yesterday, though, most of the day was simply one of trading without any reason to go up nor down, although over the previous week the market hasn’t really needed a reason to make a large move, although each of those moves was in some way erased or mostly erased the following day.

With a couple of new positions opened yesterday there still may be some more for the rest of the week, but there’s no real compelling reason to put more at risk when the market continues to be so directionless.

If that direction does turn higher, it would still be nice to see some very strong moves in that direction, even if they don’t have much in the way of staying power. Those are the kind of moves that can make sale of calls on uncovered positions begin to look appealing. Additionally, those large moves, especially if occurring with lots of intra-day price fluctuation sends premiums higher. Lately we’ve had the large moves, but without the intra-day fluctuation, so the volatility has actually been falling and taking premiums along with it.

As with yesterday there’s not too much reason to rush into any trades and plenty of reason to simply watch and see where the market may head for the day.