Category Archives: Daily Market Update

Daily Market Update – January 21, 2015 (Close)

Yesterday was not very different from much of the rest of this month.

It was actually a very volatile day, only the magnitude was missing.

This past week Jamie Dimon mentioned that JP Morgan traders  were victims of “bad volatility,” making the kind of distinction that isn’t really discussed very much, especially as the concept of volatility itself is so complex.

Yesterday, though, was an example of the good kind of volatility, as the market made intra-day moves in alternating directions. The more about faces in a single day and the less the net result of those moves, the better is the volatility, which is also sometimes considered to be a measure of uncertainty felt by traders.

The moves back and forth keep you on your toes and you never can really develop any confidence about direction. What can be more uncertain than that?

Yesterday finished virtually unchanged after positive indications in the pre-open futures trading that didn’t last very long. The ensuing decline after the open looked as if it might convincingly take the market toward another of the now familiar triple digit losses, but it reversed itself as inexplicably as the reverse from the futures occurred.

During the early part of yesterday’s decline I surprised myself by actually liking some positions during a time that I was thinking in terms of conserving cash.

I’m still surprised, but after last week’s incredibly slow trading and waiting for something to happen, I wasn’t particularly interested in repeating that, even though the outcome was acceptable.

But passivity has its limits and if the volatility seen thus far is any indication of what’s to come in 2015, passivity isn’t going to have the kind of success that it had in 2014.

This morning the market was pointing lower in the pre-open trading, very similar to the level at which it was pointing higher yesterday. In neither situation was there much reason for the moderate gain or loss, respectively and when there was no real reason to account for futures trading, those mild or moderate moves often have a way of disappearing once trading gets started for real.

So despite the indication of a loss to begin the day, I was still hopeful that there will be some new opportunities arising, especially when it comes to selling calls on uncovered positions. I think that the 3 new positions opened yesterday may end up being the sum total for the week, but even as cash shrinks away, it’s hard to think in terms of absolutes.

As it would turn out, today was pretty much the mirror opposite of yesterday, as the early losses in the futures turned out within the first 30 minutes of trading and the day ended with a decent gain, but again with a fairly wide trading range due to the early triple digit decline.

More good volatility.

With this being a shortened trading week and with a little bit of that volatility being built into premiums, if those opportunities do show up, there’s reason to look at establishing some contracts for next week, particularly since it would be nice to get diversified in time again and lock in some of the premiums that reflect some of that volatility.

Additionally, while there’s very little economic news coming from our shores this week to really move markets, there is a chance that the ECB may be able to move markets in one direction or another when it either makes an announcement regarding the implementation of quantitative easing or again simply defers action.

While most want to hear news of an European QE becoming reality and it would likely give a momentary boost to our markets, especially if there are those who still doubt its announcement tomorrow, I think that it would serve to detract from US equity liquidity by removing some money from our markets to European markets.

For those who believed that was the mechanism that fueled our own market’s rally from 2009, it would be difficult to ignore the same mechanism helping Europe to some degree and that money for new investment in European equities  has to come from somewhere.

So while European QE may be a good idea and while ECB President Draghi has certainly been dragging, I’m fine with him continuing to talk the talk and leaving it at that.

Daily Market Update – January 21, 2015 (8:00 AM)

Yesterday was not very different from much of the rest of this month.

It was actually a very volatile day, only the magnitude was missing.

This past week Jamie Dimon mentioned that JP Morgan traders  were victims of “bad volatility,” making the kind of distinction that isn’t really discussed very much, especially as the concept of volatility itself is so complex.

Yesterday, though, was an example of the good kind of volatility, as the market made intra-day moves in alternating directions. The more about faces in a single day and the less the net result of those moves, the better is the volatility, which is also sometimes considered to be a measure of uncertainty felt by traders.

The moves back and forth keep you on your toes and you never can really develop any confidence about direction. What can be more uncertain than that?

Yesterday finished virtually unchanged after positive indications in the pre-open futures trading that didn’t last very long. The ensuing decline after the open looked as if it might convincingly take the market toward another of the now familiar triple digit losses, but it reversed itself as inexplicably as the reverse from the futures occurred.

During the early part of yesterday’s decline I surprised myself by actually liking some positions during a time that I was thinking in terms of conserving cash.

I’m still surprised, but after last week’s incredibly slow trading and waiting for something to happen, I wasn’t particularly interested in repeating that, even though the outcome was acceptable.

But passivity has its limits and if the volatility seen thus far is any indication of what’s to come in 2015, passivity isn’t going to have the kind of success that it had in 2014.

This morning the market is pointing lower in the pre-open trading, very similar to the level at which it was pointing higher yesterday. In neither situation was there much reason for the moderate gain or loss, respectively and when there is no real ereason to account for futures trading, those mild or moderate moves often have a way of disappearing once trading gets started for real.

So despite the indication of a loss to begin the day, I’m still hopeful that there will be some new opportunities arising, especially when it comes to selling calls on uncovered positions. I think that the 3 new positions opened yesterday may end up being the sum total for the week, but even as cash shrinks away, it’s hard to think in terms of absolutes.

With this being a shortened trading week and with a little bit of volatility being built into premiums, if those opportunities do show up, there’s reason to look at establishing some contracts for next week, particularly since it would be nice to get diversified in time again and lock in some of the premiums that reflect some of that volatility.

Additionally, while there’s very little economic news coming from our shores this week to really move markets, there is a chance that the ECB may be able to move markets in one direction or another when it either makes an announcement regarding the implementation of quantitative easing or again simply defers action.

While most want to hear news of an European QE becoming reality and it would likely give a momentary boost to our markets, especially if there are those who still doubt its announcement tomorrow, I think that it would serve to detract from US equity liquidity by removing some money from our markets to European markets.

For those who believed that was the mechanism that fueled our own market’s rally from 2009, it would be difficult to ignore the same mechanism helping Europe to some degree and that money for new investment in European equities  has to come from somewhere.

So while European QE may be a good idea and while ECB President Draghi has certainly been dragging, I’m fine with him continuing to talk the talk and leaving it at that.

.

Daily Market Update – January 20, 2015 (Close)

After a really tumultuous week last week that saw wild gyrations in metals, precious metals, currencies, fixed income, oil and stock markets, this week may be a little quieter. At least that’s the view you get when looking at the small number of scheduled economic report releases for this week.

The good news is that our own stock market had no reason to follow yesterday’s Shanghai market in its 7.7% plunge, as for the most part that plunge was seen as having resulted from good intentions. In that case there were significant changes made to the manner in which margin could be used to fuel speculation and that took a lot of wind out of distant sails, much in the same way as when futures markets here change their margin requirements periodically in response to large uni-directional price moves.

The big news story for the week is the same as the world has been awaiting for months and maybe longer.

There’s renewed speculation that this will finally be the week that the ECB President Mario Draghi finally announces some form of European Quantitative Easing.

It’s hard to know what the reaction will be, either way. We’ve become so accustomed to the disappointment of not getting that announcement that we may be completely numb to anymore of the same. By the same token, if it is finally to become a reality there may just be lots of shrugged shoulders and wonderment about what all of the fuss was about.

Ultimately, if it ever does become reality the ECB’s Quantitative Easing will probably not be helpful for our own markets, just as our QE helped US markets and not European ones.

While the US markets have, to some degree been the only game in town for the past few years, that may change as the ECB injects liquidity into the market.

We’ll see.

For now, it’s the second week of earnings and after the banks disappointing reports, which were continued this morning by Morgan Stanley, everyone is waiting to hear whether there’s really evidence of good things to come from steep energy price drops that will begin showing up in raised guidance.

That is the only likely candidate to actually give our markets good reason to move higher after having created an unusual triple bottom over the past month. The real impetus for that to happen will have to wait until the major retailers are on tap to present earnings, but that is still about 5 weeks away, although sometimes it’s hard to keep good news all bottled up inside and altered guidance could pop up between now and then.

Having had a few assignments last week I’m happy to have the cash reserves replenished a little, but would still like to see that level grow some more.

Despite having liked to have seen that, it was hard to resist making some purchases to start the week, that as it is, only has 4 days of premium to give.

As it was, with only 3 positions set to expire this week and serve as potential candidates there wasn’t too much too be in a position to replenish those cash reserves, even if all were to be assigned on Friday. While there is already a fair number of positions set to expire during the last week of the February 2015 monthly cycle, there is very little in-between.

Since I was already in a frame of mind to make those purchases, it was relatively easy to get back into the frame of mind that hasn’t been in place for a while, although I wasn’t expecting the market to so quickly give up its early gains, especially in the absence of news and well before what would turn out to be a sharp decline in oil prices.

AS expected, those new purchases used this Friday’s expiration and hopefully there will be enough good news this week to keep them in contention for assignment, or at least easy rollover.

With those purchases out of the way, though, I’d love to get back to the real priority of seeing existing uncovered positions finally begin to earn their keep.

Disappointingly, that wasn’t the case last week, as the first 4 days of trading took the market much lower. Even with Friday’s 200 point gain the market finished 1.2% lower, making it the third consecutive losing week.

At least this week, which initially looked as if would get off to a nice start, didn’t end up taking a big step backward and so at least for the remaining 3 days left this week there may still be some more opportunities than last week’s incredibly slow trading that left me lucky seeing any rollovers, much less assignments.

Daily Market Update – January 20, 2015 (8:30 AM)

After a really tumultuous week last week that saw wild gyrations in metals, precious metals, currencies, fixed income, oil and stock markets, this week may be a little quieter. At least that’s the view you get when looking at the small number of scheduled economic report releases for this week.

The good news is that our own stock market had no reason to follow yesterday’s Shanghai market in its 7.7% plunge, as for the most part that plunge was seen as having resulted from good intentions. In that case there were significant changes made to the manner in which margin could be used to fuel speculation and that took a lot of wind out of distant sails, much in the same way as when futures markets here change their margin requirements periodically in response to large uni-directional price moves.

The big news story for the week is the same as the world has been awaiting for months and maybe longer.

There’s renewed speculation that this will finally be the week that the ECB President Mario Draghi finally announces some form of European Quantitative Easing.

It’s hard to know what the reaction will be, either way. We’ve become so accustomed to the disappointment of not getting that announcement that we may be completely numb to anymore of the same. By the same token, if it is finally to become a reality there may just be lots of shrugged shoulders and wonderment about what all of the fuss was about.

Ultimately, if it ever does become reality the ECB’s Quantitative Easing will probably not be helpful for our own markets, just as our QE helped US markets and not European ones.

While the US markets have, to some degree been the only game in town for the past few years, that may change as the ECB injects liquidity into the market.

We’ll see.

For now, it’s the second week of earnings and after the banks disappointing reports, which were continued this morning by Morgan Stanley, everyone is waiting to hear whether there’s really evidence of good things to come from steep energy price drops that will begin showing up in raised guidance.

That is the only likely candidate to actually give our markets good reason to move higher after having created an unusual triple bottom over the past month. The real impetus for that to happen will have to wait until the major retailers are on tap to present earnings, but that is still about 5 weeks away, although sometimes it’s hard to keep good news all bottled up inside and altered guidance could pop up between now and then.

Having had a few assignments last week I’m happy to have the cash reserves replenished a little, but would still like to see that level grow some more.

However, that;s not going to happen this week as there are only 3 positions set to expire this week and serve as potential candidates. While there is already a fair number of positions set to expire during the last week of the February 2015 monthly cycle, there is very little in-between.

I would like to make some new purchases this week and am most likely to consider using weekly expirations, but just as in past weeks, would be most happy seeing existing uncovered positions finally begin to earn their keep.

Disappointingly, that wasn’t the case last week, as the first 4 days of trading took the market much lower. Even with Friday’s 200 point gain the market finished 1.2% lower, making it the third consecutive losing week.

At least this week looks as if it may get off to a better start and may offer some more opportunities than last week’s incredibly slow trading that left me lucky seeing any rollovers, much less assignments.

Daily Market Update – January 16, 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:  DNKN, LULU

Rollovers:  none

Expirations:  AZN, DOW, MAT, SBGI

The following positions were ex-dividend this week:  CHK (1/13 $0.19), FCX (1/13 $0.31), WFM (1/14 $0.14)

Currently, no positions are scheduled to be ex-dividend next week.

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

Daily Market Update – January 15, 2015 (Close)

This morning brought more bad news, at least in the financial sector, as Citigroup and Bank of America added to yesterday’s disappointments from JP Morgan and Wells Fargo.

That’s a very tough way to get an earnings season underway. If the financial sector, specifically the major banks aren’t healthy, that casts a shadow on everything else, even if the lower revenues may be related to lower and lower interest rates, which may in turn be good for consumers and businesses.

But even as that significant bad news hit the wires this morning, the futures were still trading higher and it appeared as if this morning would be different from the rest of this week’s openings.

The difference may simply be that oil was trading higher this morning after suddenly have turned higher late in yesterday’s session as energy options were expiring.

The question that was posed yesterday was whether that late climb would be lasting or whether it was due solely to those option expirations.

Funny thing about that, though.

The same thing happened today, except in the other direction, with the oil reversal to a lower level being one of the largest intra-day moves traders could seem to remember.

And the markets followed today, just as they followed the reversal yesterday.

Those energy prices in the morning were just a little bit higher and that may have been enough to prop the market up a little, as it has had three very bad days, despite yesterday’s oil related recovery late in the afternoon.

With the adverse reversal and the move of the broader market lower, and unable to avoid another triple digit loss, all that leaves for this week is to now try and dispose of whatever positions are set to expire this week, as getting prepared for the February 2015 option cycle.

In hindsight, it has helped.that of the 12 originally set to expire this week, 5 have already been rolled over and one assigned. That leaves this Friday as somewhat less important or critical if subject to the kind of declines as we’ve seen in the past three days, that would have put more positions out of contention for expiration or assignment.

Still, it would have been nice to have seen some recovery today and to have taken a break from the really terrible trading of the past three days.

If considering only the past 3 years, these past few days have brought about yet another sharp decline, in just the past month. Instead of what we have become used to, that is seeing a 5% decline every 2 months, we’ve now seen 3 of these declines in the past month, with the market now about 4% off from its high just 3 weeks ago.

In the meantime while the US economy seems to be improving, this week’s data suggesting that the improvement wasn’t resulting in more retail sales, added to falling energy and commodity prices points to a world economy that isn’t necessarily doing that well.

As long as this now remains an international effort, US companies and their stocks rely on more than the US economy to thrive, so while no one necessarily wants to pay more for oil or copper, it may be the key to the next catalyst to drive share prices higher if consumer spending doesn’t kick in soon.

Daily Market Update – January 15, 2015 (8:30 AM)

This morning brought more bad news, at least in the financial sector, as Citigroup and Bank of America added to yesterday’s disappointments from JP Morgan and Wells Fargo.

That’s a very tough way to get an earnings season underway. If the financial sector, specifically the major banks aren’t healthy, that casts a shadow on everything else, even if the lower revenues may be related to lower and lower interest rates, which may in turn be good for consumers and businesses.

But even as that significant bad news hits the wires this morning, the futures are still trading higher and it appears as if this morning will be different from the rest of this week’s openings.

The difference may simply be that oil is trading higher this morning after suddenly have turned higher late in yesterday’s session as energy options were expiring.

The question that was posed yesterday was whether that late climb would be lasting or whether it was due solely to those option expirations.

So far this morning those energy prices are again a little bit higher and that may be enough to prop the market up a little, as it has had three very bad days, despite yesterday’s oil related recovery late in the afternoon.

All that’s left for this week is to now try and dispose of whatever positions are set to expire this  week as getting prepared for the February 2015 option cycle.

In hindsight, it has helped.that of the 12 originally set to expire this week, 5 have already been rolled over and one assigned. That leaves this Friday as somewhat less important or critical if subject to the kind of declines as we’ve seen in the past three days, that would have put more positions out of contention for expiration or assignment.

Hopefully today will bring a break to the really terrible trading of the past three days that, if considering only the past 3 years, has brought about yet another sharp decline, in just the past month. Instead of what we have become used to, that is seeing a 5% decline every 2 months, we’ve now seen 3 of these declines in the past month, with the market now about 4% off from its high just 3 weeks ago.

In the meantime while the US economy seems to be improving, this week’s data suggesting that the improvement wasn’t resulting in more retail sales, added to falling energy and commodity prices points to a world economy that isn’t necessarily doing that well.

As long as this now remains an international effort, US companies and their stocks rely on more than the US economy to thrive, so while no one necessarily wants to pay more for oil or copper, it may be the key to the next catalyst to drive share prices higher if consumer spending doesn’t kick in soon.

Daily Market Update – January 14, 2015 (Close)

This morning was already getting off to a bad start as last night’s futures trading had the DJIA down nearly 100 points. Given the kind of reversal that we saw yesterday, the continuing weakness in the after hours futures market wasn’t very good.

This morning, when we could have expected a little bit of help from the earnings reports of both JP Morgan and Wells Fargo, that help didn’t come.and the market sold off even more.

Then came news of the Retail Sales Report, which isn’t usually that big of a deal, but this time it was.

That’s because people were expecting to see some evidence of increased consumer spending as people were supposed to be feeling richer from the drop in oil prices and then converting that feeling into spending.

I know that I was.

But according to those retail sales figures that wasn’t the case. That’s even though yesterday’s JOLT Survey showed that the majority of the new jobs created in 2014 were at wages that were above the average of all wages in the US, meaning that it was higher paying jobs that were being created and not just more burger flipper jobs.

But this morning the interpretation of all of that news was decidedly negative, as oil fell a bit more, as well, to start the trading day.

With today’s expected downturn, it was reasonable to believe that this may have ended up being the lightest trading week in a long while, as the added downturn, after the first two weak days already encountered, made the ability to rollover positions more out of reach and also made it less likely that new call positions will be sold on existing uncovered positions.

It’s not lost on me that it has been the Gold Miners ETF (GDX) options that have seen a lot of trading activity lately. That’s generally not a very healthy sign when you see that proxy for precious metals bouncing back and forth. Certainly that kind of bouncing has also been seen in the broader market, but when you see it in that very speculative sector it demonstrates lots of uncertainty among those that generally thrive in uncertainty and chaos.

I actually tried to get yet another rollover in those shares done today, trying to match last week’s two rollovers of that position.

The market opened really weakly this morning as the preliminary earnings from JP Morgan and Wells Fargo were disappointing. You generally need strong performance from the financial sector to have a strong market. Those two banks represent very different markets and so together they send a powerful message when reporting in tandem. That message can be one speaking of a strong economy or one of a weak one.

Today it was on the weak side.

But later this week we also hear from Goldman Sachs and they could offer some saving grace.

It will still be a few weeks before we start to hear from the major retailers, but today’s Retail Sales Report makes it less likely that they will be able to report earnings that reflect any significant increase in consumer spending. However, they will have had the advantage of seeing a few weeks of data after the close of the quarter that may indicate whether any trend in increased spending is developing.

If it is and ends up being part of a more optimistic pattern of forward guidance, the market may respond very positively.

In the meantime, if those sales aren’t there and there is no upward pressure on prices, the likelihood of an interest rate coming from the FOMC is reduced, and that can be a positive for the markets.

For the rest of the week, though, it may be a case of strapping in and hanging on to see whether fear or opportunism takes hold.

For a brief while, as oiul unexpectedly started climbing higher in the final 90 minutes, at least there was some market recovery, well off its nearly 400 point decline.

Somehow, even amid all of the negative tone there was at least some opportunity to rollover a couple of positions today and even the nerve to open a new position in Fastenal, a favorite, that I hope doesn’t let me down tomorrow, as it reports earnings.

It often disappoints on earnings, but it usually does so a few weeks after lowering guidance. This time around it didn‘t offer lower guidance, so I’m hopeful that it may be a good acquisition at a time when there’s lots of uncertainty.

At least today wasn’t as bad as it looked as if it was going to be and we still have two days left to resurrect something from this week.

Daily Market Update – January 14, 2015 (9:00 AM)

This morning was already getting off to a bad start as last night’s futures trading had the DJIA down nearly 100 points. Given the kind of reversal that we saw yesterday, the continuing weakness in the after hours futures market wasn’t very good.

This morning, when we could have expected a little bit of help from the earnings reports of both JP Morgan and Wells Fargo, that help didn’t come.and the market sold off even more.

Then came news of the Retail Sales Report, which isn’t usually that big of a deal, but this time it was.

That’s because people were expecting to see some evidence of increased consumer spending as people were supposed to be feeling richer from the drop in oil prices and then converting that feeling into spending.

But according to those retail sales figures that wasn’t the case. That’s even though yesterday’s JOLT Survey showed that the majority of the new jobs created in 2014 were at wages that were above the average of all wages in the US, meaning that it was higher paying jobs that were being created and not just more burger flipper jobs.

But this morning the interpretation of all of that news is decidedly negative, as oil falls a bit more, as well, to start the trading day.

With today’s likely downturn, this may end up being the lightest trading week in a long while, as the added downturn, after the first two weak days already encountered, makes teh ability to rollover positions more out of reach and also makes it less likely that new call positions will be sold on existing uncovered positions.

It’s not lost on me that it has been the Gold Miners ETF (GDX) options that have seen a lot of trading activity lately. That’s generally not a very healthy sign when you see that proxy for precious metals bouncing back and forth. Certainly that kind of bouncing has also been seen in the broader market, but when you see it in that very speculative sector it demonstrates lots of uncertainty among those that generally thrive in uncertainty and chaos.

The preliminary earnings from JP Morgan and Wells Fargo are disappointing, as you generally need strong performance from the financial sector to have a strong market. Those two banks represent very different markets and so together they send a powerful message when reporting in tandem.

Later this week we also hear from Goldman Sachs and they could offer some saving grace.

It will still be a few weeks before we start to hear from the major retailers, but today’s Retail Sales Report makes it less likely that they will be able to report earnings that reflect any significant increase in consumer spending. However, they will have had the advantage of seeing a few weeks of data after the close of the quarter that may indicate whether any trend in increased spending is developing.

If it is and ends up being part of a more optimistic pattern of forward guidance, the market may respond very positively.

In the meantime, if those sales aren’t there and there is no upward pressure on prices, the likelihood of an interest rate coming from the FOMC is reduced, and that can be a positive for the markets.

For the rest of the week, though, it may be a case of strapping in and hanging on to see whether fear or opportunism takes hold.

Daily Market Update – January 13, 2015 (Close)

This morning was getting off to the same kind of start that yesterday did.

That’s not necessarily a good thing.

Yesterday the pre-open futures got off to a triple digit gain and then saw some slight erosion of those advances before the opening bell.

It then only took a few minutes to see those gains all lost and we ended up the day with a triple digit loss.

This morning, the early triple digit gain in the futures had also eroded just a bit, but hopefully the similarity would end there, was my thought as sipping coffee.

Yesterday, the culprit was said to be oil prices, which continued their decline.

This morning that decline goes even further as OPEC has reiterated its decision to not curtail production.

The difference between yesterday and today’s early trading may be the good earnings news that Alcoa provided after the closing bell.

There’s going to be lots more news coming this week, predominated by bank earnings.

While the economy needs good earnings from its banks, they don’t necessarily tell the story of how the other sectors will perform. There have been a number of quarters over the past few years where the banks have done very well, while everyone else fell behind. Had it not been for the impact of unprecedented buy backs over these past few years and the continuing reliance on the “EPS” metric, some of those quarters would have been abysmal.

Another factor that can potential propel today’s market is the morning’s JOLT Survey.

A few months ago we were all told by Janet Yellen to pay more attention to this report, which indicates the willingness of people to give up the security of their jobs in the expectation that they can find something even better.

That’s an optimistic thing if that’s what’s indicated by the report, but ever since Janet Yellen told us to pay attention to it, we’ve only done so right after she told us, having ignored its data for the past two months.

Regardless of what would be in this month’s report, even if spectacular, its impact will disappear by the time the next economic report is delivered.

Instead, the earnings reports may offer something every day for the next couple of weeks to move us forward.

Still, I didn’t think that there will be much opportunity to do trading today, but would have gladly accepted any if it came my way. While I always want to open new weekly positions and was disappointed that I couldn’t get some of those trades done yesterday, there’s usually something more satisfying about being able to generate the income with what you already have in hand.

My hope was that satisfaction wouldn’t be in short supply, but it was.

What wasn’t expected was that a 250+ point gain would degenerate into about a 140 point loss at its lowest point, representing one of the largest reversals we’ve seen in a while, although lately those reversals have been more frequent.

Yesterday’s decline moved some of those opportunities to get rollovers done and new call sales executed further away, but that was exactly the situation last week, as well and that turned out nicely.

After today’s really negative action, even though the net result is now just like last week, the reversal is in the wrong direction if you’re a bull.

Last week the first two days of the week were really, really bad, but then a reversal came and the middle of the week was a completely different story.

Nothing would be more welcome right now than a repeat of the middle part of last week and seeing a couple of strong days in succession and providing the opportunity to get those rollovers and call sales done, even if no new positions are open.

With volatility a little bit higher, there may be reason to look at some expanded option opportunities, but now earnings also have to be kept in mind.

It’s just too bad that today wasn’t the start of those successive days moving higher, but we still have the possibility of stringing three of those together to end the week and it’s no less bleak than it was this time last week.

Daily Market Update – January 13, 2015 (8:45 AM)

This morning is getting off to the same kind of start that yesterday did.

That’s not necessarily a good thing.

Yesterday the pre-open futures got off to a triple digit gain and then saw some slight erosion of those advances before the opening bell.

It then only took a few minutes to see those gains all lost and we ended up the day with a triple digit loss.

This morning, the early triple digit gain in the futures has also eroded just a bit, but hopefully the similarity ends there.

Yesterday, the culprit was said to be oil prices, which continued their decline.

This morning that decline goes even further as OPEC has reiterated its decision to not curtail production.

The difference between yesterday and today may be the good earnings news that Alcoa provided after the closing bell.

There’s going to be lots more news coming this week, predominated by bank earnings.

While the economy needs good earnings from its banks, they don’t necessarily tell the story of how the other sectors will perform. There have been a number of quarters over the past few years where the banks have done very well, while everyone else fell behind. Had it not been for the impact of unprecedented buy backs over these past few years and the continuing reliance on the “EPS” metric, some of those quarters would have been abysmal.

Another factor that can potential propel today’s market is the morning’s JOLT Survey.

A few months ago we were all told by Janet Yellen to pay more attention to this report, which indicates the willingness of people to give up the security of their jobs in the expectation that they can find something even better.

That’s an optimistic thing if that’s what’s indicated by the report, but ever since Janet Yellen told us to pay attention to it, we’ve only done so right after she told us, having ignored its data for the past two months.

Regardless of what will be in this month’s report, even if spectacular, its impact will disappear by the time the next economic report is delivered.

Instead, the earnings reports may offer something every day for the next couple of weeks to move us forward.

Still, I don’t think that there will be much opportunity to do trading today, but would gladly accept any if it comes my way. While I always want to open new weekly positions and was disappointed that I couldn’t get some of those trades done yesterday, there’s usually something more satisfying about being able to generate the income with what you already have in hand.

Hopefully that satisfaction won’t be in short supply.

Yesterday’s decline moved some of those opportunities to get rollovers done and new call sales executed further away, but that was exactly the situation last week, as well and that turned out nicely.

In that case, that was the situation for the first two days of the week and then the middle of the week was a completely different story.

Nothing would be more welcome right now than a repeat of last week and seeing a couple of strong days in succession and providing the opportunity to get those rollovers and call sales done, even if no new positions are open.

With volatility a little bit higher, there may be reason to look at some expanded option opportunities, but now earnings also have to be kept in mind.

Daily Market Update – January 12, 2015 (Close)

Last week was quite a week.

Even though there was lots of important economic news and there was certainly enough going on in the world, the market followed none of it. It didn’t listen to the FOMC, it didn’t listen to the EMployment Situation Report.

It also didn’t melt when events unfolded in France.

Anyone who follows charts or believes in technical indicators would also be at a loss to explain either the sharp decline or the strong rally back.

This week there isn’t quite as much news and the markets looked as if they were going to get off to a better start than they had last week.

Most of all, another earnings season begins this week and it may hold the key to finding something that may propel markets higher.

But not today.

The market quickly gave up its early futures gains without any real reason for doing so, although oil could again have been the culprit, as there was significant price deterioration in the oil futures markets.

But if the theory that reduced energy prices will be good for the consumer is true, there’s some chance that we’ll catch a glimpse of it soon enough, as the quarter being reported should reflect some of that data. That can start as early as when Alcoa reports its results, as it’s a big user of energy.

If it does, you can expect companies to give guidance that will be more cheery than we’ve heard in a long, long time and if investors have shown that they really like anything, it’s positive guidance. Just look at today’s happy announcement from LuLuLemon, nearly 2 months ahead of its earnings.

By the same token they don’t like  negative guidance, but that’s an issue for another time, unless you’re holding shares of either SanDisk or Tiffanys, both of which gave some early warnings today and took about 15% hits.

This week I wouldn’t have minded seeing a repeat of the last week to get us started.. Even though the broad market was lower there was lots of opportunity to rollover existing positions and sell calls on some uncovered positions. While there was one assignment for the week, the only real disappointment was that there weren’t more, as I’d like to be sitting on more cash than is currently in reserve.

What we got was a literal repeat of the start of last week, with the market ending sharply lower and having traded lower all day without any real evidence of an attempt to stem the losses.

This week with 8 positions set to expire as the monthly January 2015 option cycle comes to its end, another week that has some positive days, especially some strong days higher, may offer the opportunities to have a repeat of last week. Last week there were just three days to get it all accomplished after a terrible first two days of the trading week. This week we still have 4 days left.

While there may still be some potential new positions that look appealing this week, I don’t think I’ll be very aggressive in adding to the existing roster, although I thought that last week, as well, and was actually a little surprised to have added any. Today I tried to get a dividend related trade in AbbVie made, but just couldn’t get the right combination of prices.

This morning’s rise in the futures had an optimistic tone, but it was slowly being degraded by even further price drops in oil prices, so it would be especially nice to see some stability coming to that market. The stock market and the economy don’t necessarily need those prices to go any lower, as the decline in energy prices has already been a significant gift, well beyond what has been expected. It’s unlikely that companies, as they do guide forward, will be projecting even lower prices for their good fortunes, so this would be a good place to stop and build a base.

The removal of uncertainty in the direction, magnitude and suddenness of energy price moves would likely be good for most everyone, even if oil prices move higher. In the absence of a significant decrease in production, possibly due to some geo-political event, it’s not too likely that we’ll see the kind of price increase similar to the decline, so anything that removes the downward uncertainty may end up being a gift that keeps giving for quite a while.

I’m ready to accept whatever gifts may come my way and would like to start this week.

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

Last week was quite a week.

Even though there was lots of important economic news and there was certainly enough going on in the world, the market followed none of it. It didn’t listen to the FOMC, it didn’t listen to the EMployment Situation Report.

It also didn’t melt when events unfolded in France.

Anyone who follows charts or believes in technical indicators would also be at a loss to explain either the sharp decline or the strong rally back.

This week there isn’t quite as much news and the markets look as if they are going to get off to a better start than they had last week.

Most of all, another earnings season begins this week and it may hold the key to finding something that may propel markets higher.

If the theory that reduced energy prices will be good for the consumer is true, there’s some chance that we’ll catch a glimpse of it soon enough, as the quarter being reported should reflect some of that data.

If it does, you can expect companies to give guidance that will be more cheery than we’ve heard in a long, long time and if investors have shown that they really like anything, it’s positive guidance.

By the same token they don’t like  negative guidance, but that’s an issue for another time.

This week I wouldn’t mind seeing a repeat of last. Even though the broad market was lower there was lots of opportunity to rollover existing positions and sell calls on some uncovered positions. While there was one assignment for the week, the only real disappointment was that there weren’t more, as I’d like to be sitting on more cash than is currently in reserve.

This week with 8 positions set to expire as the monthly January 2015 option cycle comes to its end, another week that has some positive days, especially some strong days higher, may offer the opportunities to have a repeat of last week.

While there may still be some potential new positions that look appealing this week, I don’t think I’ll be very aggressive in adding to the existing roster, although I thought that last week, as well, and was actually a little surprised to have added any.

This morning’s rise in the futures has an optimistic tone, but it is slowly being degraded by even further price drops in oil prices, so it would be especially nice to see some stability coming to that market. The stock market and the economy don’t necessarily need those prices to go any lower, as the decline in energy prices has already been a significant gift, well beyond what has been expected. It’s unlikely that companies, as they do guide forward, will be projecting even lower prices for their good fortunes, so this would be a good place to stop and build a base.

The removal of uncertainty in the direction and magnitude of energy prices would likely be good for most everyone, even if oil prices move higher. In the absence of a significant decrease in production, possibly due to some geo-political event, it’s not too likely that we’ll see the kind of price increase similar to the decline, so anything that removes the downward uncertainty may end up being a gift that keeps giving for quite a while.

I’m ready to accept whatever gifts may come my way and would like to start this week.

Daily Market Update – January 9, 2015 (8:15 AM)

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

Today’s possible trade outcomes include:

Assignments:  BAC 

Rollovers:  GPS

Expirations:  EMC

This week’s ex-dividend positions were: GPS (1/5 $0.22)

Next week’s ex-dividend positions are: CHK (11/13 $0.09), FCX (11/13 $0.31), WFM (1/14 $0.13)

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

Daily Market Update – January 8, 2015 (Close)

It’s wasn’t too easy to understand why this morning’s futures were pointing so strongly higher.

Wait. That’s what I said yesterday.

This morning the futures were even higher than they were yesterday and there’ wasn’t much reason to account for it.

It would be easy to point to yesterday’s FOMC Statement release and say that was responsible, but the market was virtually unchanged in the aftermath of that release in the afternoon. The new confusion that was contained in the altered wording of the statement would have ordinarily caused gyrations in the market as it tried to figure out what the FOMC meant, was instead simply discussed and not the basis of any emotionally charged swings in trading.

That’s either adult-like or rational, neither of which are usually adjectives used when describing stock trading behavior among the masses.

What was really interesting was how last night’s futures, at a time when not much is happening, suddenly went nearly 100 points higher at about 8:30 PM. At that time of the night no major markets are open to lead the US futures in sentiment, so it was odd seeing that happen, but more odd seeing that high level sustained through the night.

Later during this morning’s trading there was some consensus that the rise was fueled by words from new voting FOMC Governor Charles Evans, but the timing wasn’t quite right if trying to connect his comments and the spike in futures.

With so much focus on yesterday’s tragic events in France you might have thought that the sudden surge reflected some kind of substantive development in the story. While initial rumors proved to be false, had those been the impetus for the sudden pop higher, they would also have been the reason for any bursting of that bubble, except that this morning the rally is even stronger.

As the morning’s strength continued and wass able to add to yesterday’s strength, that reduced the nearly 5%sudden decline in about half, in about as much time as it took to reach the bottom in that drop earlier this week.

That meant trying to do more of the same and keeping an eye on all of next week’s positions and taking advantage of any price strength by either rolling over into that strength or, even better, being fortunate enough to find the opportunities to sell new call positions on uncovered positions.

What I can tell you, based on the option premiums, is that next week’s premiums don’t reflect the same kind of optimism that is still being reflected for tomorrow’s market. That’s because I tried rolling over a good number of positions, including GDX (again), GME, AZN and EMC. In addition, I made lots of adjustments in order to get the LXK rollover executed, but those same adjustments did nothing for those others.

Regardless of how today ended up, and the addition of another 30 points was a nice way to end the day, there is still tomorrow’s Employment Situation Report.

There’s not too much reason to think that there will be anything in the report to spook or elate markets, although at some point there may be evidence of decreasing employment statistics related to the suddenly reduced energy prices and subsequent reduced drilling activities.

While the actual statistic may not have too much impact directly on how markets react, an overly strong number will get people playing the game of “what will the FOMC think?”

Too much good news could herald the kind of economic heating up that the FOMC will want to squash by increasing interest rates, although they too will have an eye on how those falling energy prices can increase GDP, while also adversely impacting employment statistics.

Hopefully, as earnings season starts next week some of the impact of lower oil prices will be seen in earnings, and maybe more importantly on future guidance.

Those could be the fuel for the next level higher and could bring “The January Effect” really back to life.