Category Archives: Daily Market Update

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

It’s not 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 are even higher than they were yesterday and there’s not 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 tradoing 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.

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.

If this morning’s strength continues and is able to add to yesterday’s strength, that would reduce 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.

If so, that means 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.

Regardless of how today will end up, 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” back to life.

Daily Market Update – January 7, 2015 (Close)

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

Usually there has to be some kind of news for that kind of reaction prior to the markets open to account for the  strong commitment in either direction. While tepid futures moves don’t have much meaning for the market’s trading once the day begins, the strong kind of early mornings usually do have some staying power, although not necessarily for the entire session.

Today it stayed that way for the who session, even adding some on top of the already strong early advances.

What made it unusual this morning was that it came after a failed recovery attempt in the final hour of trading, which ended up adding another 130 points to the 330 point loss from the day before.

But even more unusual, while it dis come in the absence of any economic news, it also came hours before the FOMC Statement.release.

It can be a risky thing to commit too much in advance of the release as you never know how the slightest nuanced change in wording can set off programmed trading. For the past couple of months the FOMC Statement hasn’t really set off too much in the way of fireworks, even with last month’s wording change, but those days could easily return.

The double dip in markets seen over the last couple of weeks that had us returning toward than typical 2 month mini-correction level just a couple of weeks after the most recent one, is itself something that should be getting some attention, as that hasn’t happened in nearly 3 years and might make me reluctant to plow money into new positions, despite what appeared to be some bargain prices yesterday.

This morning, my primary thought was that if the early rally could  hold, I’d be more than happy to be able to sell calls on uncovered positions. However, the preceding drop of nearly 500 points in the two prior days meant that there’s lots of catching up to go making it challenging to get those sales done.

While I would have liked to see some of that recovery today put positions set to expire this week into better position to either be assigned or rolled over, I would especially like to see any advance over the next few days accomplish exactly that, but for the next week, which is the final week of the January 2015 option cycle.

Happily, today did offer some chance for early rollovers, both for this week and next.

With only 3 positions now set to expire this week, while it would be nice to see them contribute to the weekly income stream or to regenerate cash supplies, the 11 positions expiring next week could be more meaningful contributors, so it would be nice to see their prospects improved by some continuing market strength to offset the previous few days.

In the meantime, while awaiting this afternoon’s FOMC Statement, I was happy to see the market start to reclaim some of the substantial ground that it had lost over the past couple of days, especially as that resulted in something more than just paper gains for the day.

While I wasn’t expecting to make any new purchases yesterday, I would have been really stunned if I added more new positions today or for the rest of the week, for that matter. Fortunately, my heart didn’t have to be put to that test, as it was nice just having the chance to capitalize a little on the advance and be left in a better position to end the day than when the day started.

Other than taking advantage of any short term market climb I expect that the rest of the week will be fairly passive and filled with lots of observation, even though there’s still plenty of economic and market moving news to come in the final 1 1/2 days of trading for the week.

More of what today brought would be a good way to get things started for next week.

Daily Market Update – January 7, 2015 (9:00 AM)

It’s not too easy to understand why this morning’s futures are pointing so strongly higher.

Usually there has to be some kind of news for that kind of reaction prior to the markets open to account for the  strong commitment in either direction. While tepid futures moves don’t have much meaning for the market’s trading once the day begins, the strong kind of early mornings usually do have some staying power, although not necessarily for the entire session.

What makes it unusual this morning is that it comes after a failed recovery attempt in the final hour of trading, which ended up adding another 130 points to the 330 point loss from the day before.

But even more unusual, while it does come in the absence of any economic news, it also comes hours before the FOMC Statement.release.

It can be a risky thing to commit too much in advance of the release as you never know how the slightest nuanced change in wording can set off programmed trading. For the past couple of months the FOMC Statement hasn’t really set off too much in the way of fireworks, even with last month’s wording change, but those days could easily return.

The double dip in markets seen over the last couple of weeks that had us returning toward than typical 2 month mini-correction level just a couple of weeks after the most recent one, is itself something that should be getting some attention, as that hasn’t happened in nearly 3 years and might make me reluctant to plow money into new positions, despite what appeared to be some bargain prices yesterday.

This morning, if the early rally holds, I’d be more than happy to be able to sell calls on uncovered positions, but the preceding drop of nearly 500 points in the two prior days means that there’s lots of catching up to go.

While I’d like to see some of that recovery today put positions set to expire this week into better position top either be assigned or rolled over, I’d especially like to see any advance over the next few days accomplish exactly that, but for the next week, which is the final week of the January 2015 option cycle.

With only 4 positions now set to expire this week, while it would be nice to see them contribute to the weekly income stream or to regenerate cash supplies, the 11 positions expiring next week could be more meaningful contributors.

In the meantime, while awaiting this afternoon’s FOMC Statement, I’d be happy to see the market start to reclaim some of the substantial ground that it has lost over the past couple of days, especially if that results in something more than just paper gains for the day.

While I wasn’t expecting to make any new purchases yesterday, I think that I’d really be stunned if I added more new positions today or for the rest of the week, for that matter.

Other than taking advantage of any short term market climb I expect that the rest of the week will be fairly passive and filled with lots of observation, even though there’s still plenty of economic and market moving news to come in the final 2 1/2 days of trading for the week.

Daily Market Update – January 6, 2015 (Close)

The initial reason given for yesterday’s market sell-off was rampant profit taking among people waiting to sell until after New Years, so that they could delay paying their capital gains taxes until 2016.

Yet somehow the same didn’t occur in January 2013, when there were far more gains from the previous year and if it happened in January 2014, it waited a couple of weeks for one of those standard mini-corrections to kick in.

The likelihood that yesterday’s 330+ sell-off was tax related was pretty small, as in the absence of any kind of panic or major news story, it’s not likely to see so many acting in concert for the same reason. Instead, it’s more likely that with oil getting below $50 the market again got dragged along, after having disengaged itself from that weakness with the realization that as long as demand exists, falling oil prices is an incredible gifts to most economies and to most companies.

While yesterday’s drop did begin to create some appealing price points for some stocks, there’s still a lot of uncertainty ahead this week and I wasn’t overly eager to commit to any new positions. There’s still the issue of falling oil, as the futures were pointing lower again this morning and the unknowns of the upcoming FOMC Statement release and the Employment Situation Report.

I don’t really expect either of the latter two to drag markets lower, as it’s unlikely that the FOMC would so quickly say anything to go counter to their declaration for “patience” before interest rate rises are considered. Their change to that wording was interpreting as meaning that they would have greater flexibility in responding to data, but the data is still scant.

The actual FOMC meeting started today and for the past few months markets have abandoned their caution in anticipation of the release and rallied in advance of the meeting. This morning’s stock futures indicated a mild rise, but after a 330 point decline, that rise barely even qualified as a bounce, much less an FOMC inspired rally.

Und=fortunately, the market didn’t take its lead from the futures. That’s often the case, especially when the futures aren’t very decisive, as they weren’t this morning.

By the same token, however, the market itself wasn’t very decisive, having dropped as much as another 230 points during the day, recovering to within about 30 points of a break even and then dropping another 100 points from that high point.

With no new positions opened yesterday there’s was still plenty of opportunity to do so, but I didn’t know if that opportunity would result in the probability of doing so.

At the moment, no one may be more surprised than me to have added two new positions today, but they both seemed to be far removed from the dangers of oil.

While oil continues to grab attention there has been almost no discussion of holiday retail sales and they have mostly gone under the radar, as the only thing we really know is that some declines in brick and mortar sales may have been offset by on-line activity. As earnings season begins next week and the major retailers begin to announce their earnings a couple of weeks into the season, we should begin seeing some of the data that the FOMC may begin to consider, as there’s likely to be some evidence of the consumer sector heating up.

Unfortunately, good economic news in the US, fueled by lower oil and continuing good news on the employment front, may be tempered a bit by some renewed nervousness over what’s going on in the European Union, as the  fragility and dysfunction of the Greek economy is being replayed and the integrity of the Euro and the entire European Union is again being questioned.

There’s some reason to believe that yesterday’s weakness across Europe as a result of the building concern may have spilled over to our side. If that’s the case, the uncertainty may still have a few weeks to go. What is a little concerning is that the regularity of our mini-corrections every two months for the past 2 years is being disrupted, as we had one right on schedule in mid-December, but are now seeing a very uncharacteristic second wave of selling after the recovery that began in the middle of December.

Not only is that second wave of selling unusual, given the past couple of years, but it also disrupted what is usually a very good December and wiped out the Santa Claus Rally.

Each of those is usually as much of a “done deal” as you can find, but not this year.

So for today, I had been hoping that the pre-FOMC enthusiasm would take hold and would have gladly sold calls into strength, but I wasn‘t counting, so it was easy to avoid disappointment. But I also wasn’t counting on picking up shares of both Bank of Amwerica and Campell Soup, today either.

Hopefully they won’t be sources of disappointment, either.

Otherwise, my expectations for the week are low and I’m not especially counting on the subsequent major economic events of the week to propel us forward in any meaningful way this week.

If they did, however, I’d be grateful for anything that could put next week’s expiring positions into a better state. For now, that better state would be a slew of assignments, but the past few days have made that a bit harder of a reality down the road.

For now, all we can do is wait for tomorrow’s FOMC and see what kind of a rabbit we can pull out of the hat as the words are interpreted and then re-interpreted to fit whatever thesis prevails to explain the market’s reactions.

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

The initial reason given for yesterday’s market sell-off was rampant profit taking among people waiting to sell until after New Years, so that they could delay paying their capital gains taxes until 2016.

Yet somehow the same didn’t occur in January 2013, when there were far more gains from the previous year and if it happened in January 2014, it waited a couple of weeks for one of those standard mini-corrections to kick in.

The likelihood that yesterday’s 330+ sell-off was tax related was pretty small, as in the absence of any kind of panic or major news story, it’s not likely to see so many acting in concertt for the same reason. Instead, it’s more likely that with oil getting below $50 the market again got dragged along, after having disengaged itself from that weakness with the realization that as long as demand exists, falling oil prices is an incredible gifts to most economies and to most companies.

While yesterday’s drop did begin to create some appealing price points for some stocks, there’s still a lot of uncertainty ahead this week and I wasn’t overly eager to commit to any new positions. There’s still the issue of falling oil, as the futures are pointing lower again this morning and the unknowns of the upcoming FOMC Statement release and the Employment Situation Report.

I don’t really expect either of the latter two to drag markets lower, as it’s unlikely that the FOMC would so quickly say anything to go counter to their declaration for “patience” before interest rate rises are considered. Their change to that wording was interpreting as meaning that they would have greater flexibility in responding to data, but the data is still scant.

The actual FOMC meeting starts today and for the past few months markets have abandoned their caution in anticipation of the release and rallied in advance of the meeting. This morning’s stock futures indicates a mild rise, but after a 330 point decline, that rise barely even qualifies as a bounce, much less an FOMC inspired rally.

With no new positions opened yesterday there’s still plenty of opportunity to do so, but I don’t know if that opportunity will result in the probability of doing so.

While oil continues to grab attention there has been almost no discussion of holiday retail sales and they have mostly gone under the radar, as the only thing we really know is that some declines in brick and mortar sales may have been offset by on-line activity. As earnings season begins next week and the major retailers begin to announce their earnings a couple of weeks into the season, we should begin seeing some of the data that the FOMC may begin to consider, as there’s likely to be some evidence of the consumer sector heating up.

Unfortunately, good economic news in the US, fueled by lower oil and continuing good news on the employment front, may be tempered a bit by some renewed nervousness over what’s going on in the European Union, as the  fragility and dysfunction of the Greek economy is being replayed and the integrity of the Euro and the entire European Union is again being questioned.

There’s some reason to believe that yesterday’s weakness across Europe as a result of the building concern may have spilled over to our side. If that’s the case, the uncertainty may still have a few weeks to go. What is a little concerning is that the regularity of our mini-corrections every two months for the past 2 years is being disrupted, as we had one right on schedule in mid-December, but are now seeing a very uncharacteristic second wave of selling after the recovery that began in the middle of December.

Not only is that second wave of selling unusual, given the past couple of years, but it also disrupted what is usually a very good December and wiped out the Santa Claus Rally.

Each of those is usually as much of a “done deal” as you can find, but not this year.

So for today, I’m hoping that the pre-FOMC enthusiasm does take hold and would gladly sell calls into strength, but I’m not counting on it and not especially counting on the subsequent major economic events of the week to propel us forward in any meaningful way this week.

Daily Market Update – January 5, 2015 (Close)

The first week of 2015 may be a busy one with economic news.

After today’s horrible day, we could use some economic news of any kind to give us something to think about, because today there was really nothing to think about and that didn’t work out terribly well.

On the schedule for some thought is this week’s FOMC Statement release. Although it always seems as if we just had one of those, this month there will actually be two of them to ponder.

The one this week is followed by an Employment Situation Report on Friday and either one can move markets, although at this point it’s hard to imagine how either could really move markets forward very much, as the pattern now seems to be pretty clear for each.

The FOMC is now just teasing us as far as when interest rates will increase and the Employment Situation Report gives us good news about growing employment, making us wonder when wage inflation will finally become a reality,

The FOMC will be especially interesting as since the last one there has been some indication that the GDP will be growing at a much faster than expected rate due to the drastically lowered energy prices. That may be the kind of data that causes the FOMC to start thinking more seriously about interest rate increases as the previous FOMC statement finally changed the wording from “considerable time” to “patience,” with regard to when those rate increases may begin.

Another strong Employment Situation report, though, could very conceivably set the stage for the second of the month’s FOMC Statements to  put forward a more hawkish kind of  position on the prospects of higher rates, which would be reasonably expected to cast a short term pall on the market’s climb.

This week we’re also left to wonder what ever happened to December and where the Santa Claus Rally went? The 300+ point drop to begin the new year didn’t do much to convince me that the Santa Claus Rally was just a little late in getting started. In fact, the way in which the tepid buying in the final 10 minutes faded was enough reason to believe that The Grinch was in control of things.

While wondering about such things there can also be all kinds of speculation as to what may motivate investors to begin 2015. As this morning’s sell off was getting started the conventional theory was that sellers were unloading money makers and waited until after the new year began so that they could wait another year to pay taxes.

That’s plausible, but it’s just not too likely that you would see so many people and so much volume in concert, reflecting people independently deciding to act the same way in their perceived best interests.

Just as plausible is that we followed the lead set in Europe and the tumbling Euro.

Maybe oil and the stock market are moving in tandem again, after oil broke the $50 level today amid reports of OPEC member nations now pumping even more oil, because they really need the money.

Forget the basic economic law of supply and demand. In this case it’s as simple as “pump more. make more.”

Or maybe we just don’t know what really went on today, but whatever it was, it wasn’t a good way to get things off, although the first trading week of 2014 wasn’t really very good, either.

It seems as if it has been a couple of years since “The January Effect” has actually occurred and some of those dogs in the DJIA have been dogs for more than just the one year that they were supposed to be in the doghouse.

With no assignments last week and no new cash added to reserves, I’m not overly enthused about committing new money this week. I would much rather see some assignments to begin the first week of the year and have a chance to see what, if any, theme gets us started.

Despite some of the really large price drops today, including in some positions that were on the potential buy list for this week, it’s not easy to be the first one to step in and test the waters as there wasn’t much evidence of people picking up bargains today.

For now there doesn’t look as if there is any new theme, as low oil prices continue to be the major story, as those prices may now once again be in control of where stocks are going from one day to the next.

The morning futures didn’t do too much to give me hope for being able to simply sell calls on existing uncovered positions, as that would still have been my preference this week as it has been now for quite a while. At least the gold miners were higher today, but you know that on days when your portfolio protection kind of stocks are higher it may not be a terribly good day to be a stock, otherwise.

With four positions set to expire this week it did at least offer some more income generation opportunities than the previous week, which may have been the slowest such week in the past 5 years. The good news is that now there are only 3 positions set to expire this Friday. Other than that it’s not too easy to find anything resembling good news.

Looking a week ahead, with a fair number of positions set to expire as the monthly cycle comes to its end, any new purchases this week are more likely to consider the use of weekly options, where available, rather than the extended ones, especially as the volatility continues to make the extended weekly premiums less appealing.

In the event, however, that the FOMC does introduce some kind of rally, as has been the case for the day before the FOMC Statement release the past few months, there may be reason to try and lock in some premiums on that kind of good news through the use of the expanded weeklies or even heading into the February cycle, as earnings season will also be at hand very soon.

After today, I’ll only believe that after i see it, though.

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Daily Market Update – January 5, 2015 (8:45 AM)

The first week of 2015 may be a busy one with economic news.

Although it always seems as if we just had an FOMC Statement release this month there will actually be two of them to ponder.

The one this week is followed by an Employment Situation Report on Friday and either one can move markets, although at this point it’s hard to imagine how either could really move markets forward very much, as the pattern now seems to be pretty clear for each.

The FOMC is now just teasing us as far as when interest rates will increase and the Employment Situation Report gives us good news about growing employment, making us wonder when wage inflation will finally become a reality,

The FOMC will be especially interesting as since the last one there has been some indication that the GDP will be growing at a much faster than expected rate due to the drastically lowered energy prices. That may be the kind of data that causes the FOMC to start thinking more seriously about interest rate increases as the previous FOMC statement finally changed the wording from “considerable time” to “patience,” with regard to when those rate increases may begin.

Another strong Employment Situation report, though, could very conceivably set the stage for the second of the month’s FOMC Statements to  put forward a more hawkish kind of  position on the prospects of higher rates, which would be reasonably expected to cast a short term pall on the market’s climb.

This week we’re also left to wonder what ever happened to December and where the Santa Claus Rally went?

While doing that there can also be all kinds of speculation as to what may motivate investors to begin 2015.

It seems as if it has been a couple of years since “The January Effect” has actually occurred and some of those dogs in the DJIA have been dogs for more than just the one year that they were supposed to be in the doghouse.

With no assignments last week and no new cash added to reserves, I’m not overly enthused about committing new money this week. I would much rather see some assignments to begin the first week of the year and have a chance to see what, if any, theme gets us started.

For now there doesn’t look as if there is any new theme, as low oil prices continue to be the major story, even though they are no longer the primary forces in moving the market from one day to the next.

The morning futures aren’t doing to much to give me hope for being able to simply sell calls on existing uncovered positions, as that would still be my preference this week as it has been now for quite a while.

With four positions set to expire this week it does at least offer some more income generation opportunities than the previous week, which may have been the slowest such week in the past 5 years.

Looking a week ahead, with a fair number of positions set to expire as the monthly cycle comes to its end, any new purchases this week are more likely to consider the use of weekly options, where available, rather than the extended ones, especially as the volatility continues to make the extended weekly premiums less appealing.

In the event, however, that the FOMC does introduce some kind of rally, as has been the case for the day before the FOMC Statement release the past few months, there may be reason to try and lock in some premiums on that kind of good news through the use of the expanded weeklies or even heading into the February cycle, as earnings season will also be at hand very soon.

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Daily Market Update – January 2, 2015 (8:30 AM)

The Week in Review will be posted by 6:00 PM and the Weekend Update will be posted by Noon on Sunday.

Today’s possible trade outcomes are:

Assignments:  none

Rollovers:  none

Expirations:  DOW 

This week’s ex-dividend position was DOW (12/29 $0.42)

Next week’s ex-divdend position is GPS (1/5 $0.22)

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

Daily Market Update – December 31, 2014 (Close)

So far the first two days of this week have been disappointing if you’ve been looking for that fabled Santa Claus Rally, as I have.

You may have had a better chance of spotting the real Santa Claus on Christmas Eve than experiencing that rally, although there’s still Friday, strictly speaking, as that is the fifth day after Christmas.

This morning’s futures looked as if today will be just like the previous two days of this week and that trading would be in a narrow range.

The good news is that the range wasn’t anywhere near as narrow, but the bad news was that it was in the wrong direction, especially in the last hour.

This morning it looked as if that trading may get off to a positive start, even as energy prices were again moderately lower and getting further away from that $54 level.

I didn’t expect that there would be be much personal action today, but I didn’t expect much yesterday, either, and at least two trades came out of the boredom and even more today. 

Fortunately, those opportunities came before the market decided to not cooperate with those in a party mood.

While there was some economic news today, such as the Jobless Claims, nothing was really of the stature to typically move markets. Friday reveals an ISM number and sometimes that has an impact on things, but the beginning of a new tax year can bring its own dynamic, regardless of economic report activity.

Today, instead, was a day to think about last minute tax strategies, as looking through closets that are screaming for items to be donated and maybe losing positions longing to be sold.

The basic rule for the former may be related to how your waist size has changed over the year. Meanwhile, the basic rule for the latter is based on your tax rate.

That rate, together with the time frame of your holding determines what kind of tax benefit you can get from taking a loss on the position.

That value can be expressed on a per share basis.

The question becomes can you reasonably expect the stock to appreciate by that much in the next 30 days, at which point you can buy shares back without triggering the “Wash Sales Rule.”

If the answer is that you don’t expect the stock to gain that much in that time frame, then there may be a tax advantage from selling, if in a taxable account.

A spreadsheet to do the calculations is located at http://j.mp/1BhNGMI and offers a quick and simple analysis of whether or not it may make sense to take a loss.

That’s always a touchy subject and I hate taking losses other than for tax reasons, but I especially hate the idea of taking a loss in what should be a sound company, but may be subject to basic economic laws or business cycles

That definitely is the case in the energy sector, but I also think that is the case in all commodities, including metals. In the latter case that cycle has been much more prolonged than I ever would have imagined, but at some point an ascent will occur, as it always has in the past. Just as I hate taking losses, I especially hate to watch that ascent occur after I’ve taken the losses.

For today I wasn’t too worried about such things, but surprisingly did get an answer to my hopes for any errant opportunities to sell some calls on uncovered positions. I was prepared to hold my breath for those opportunities, even at the risk of turning blue, but it didn’t have to be that way.

I’d rather be a nice shade of pink, anyway, but maybe even more appropriately, a really nice shade of green to start the new year. A few of those unexpected sales at least may end up paying for tonight’s libations, just as the last hour’s sell off put me in a less festive mood, but at least the bubbles may cure that.

Happy New Year and wishes for health, happiness and prosperity to all.

Daily Market Update – December 31, 2014 (9:00 AM)

So far the first two days of this week have been disappointing if you’ve been looking for that fabled Santa Claus Rally, as I have.

You may have had a better chance of spotting the real Santa Claus on Christmas Eve than experiencing that rally, although there’s still Friday, strictly speaking, as that is the fifth day after Christmas.

This morning’s futures look as if today will be just like the previous two days of this week and that trading will be in a narrow range.

This morning it looks as if that trading may get off to a positive start, even as energy prices are again moderately lower and getting further away from that $54 level.

I don’t expect that there will be much action today, but I didn’t expect much yesterday, either, and at least two trades came out of the boredom.

While there’s some economic news today, such as Jobless Claims, nothing is really of the stature to typically move markets. Friday reveals an ISM number and sometimes that has an impact on things, but the beginning of a new tax year can bring its own dynamic, regardless of economic report activity.

Today, instead, may just be a day to think about last minute tax strategies, as I look through closets that are screaming for items to be donated and maybe losing positions longing to be sold.

The basic rule for the former may be related to how your waist size has changed over the year. Meanwhile, the basic rule for the latter is based on your tax rate.

That rate, together with the time frame of your holding determines what kind of tax benefit you can get from taking a loss on the position.

That value can be expressed on a per share basis.

The question becomes can you reasonably expect the stock to appreciate by that much in the next 30 days, at which point you can buy shares back without triggering the “Wash Sales Rule.”

If the answer is that you don’t expect the stock to gain that much in that time frame, then there may be a tax advantage from selling, if in a taxable account.

A spreadsheet to do the calculations is located at http://j.mp/1BhNGMI and offers a quick and simple analysis of whether or not it may make sense to take a loss.

That’s always a touchy subject and I hate taking losses other than for tax reasons, but I especially hate the idea of taking a loss in what should be a sound company, but may be subject to basic economic laws or business cycles

That definitely is the case in the energy sector, but I also think that is the case in all commodities, including metals. In the latter case that cycle has been much more prolonged than I ever would have imagined, but at some point an ascent will occur, as it always has in the past. Just as I hate taking losses, I especially hate to watch that ascent occur after I’ve taken the losses.

For today I won’t worry about such things and instead will hope for any errant opportunities to sell some calls on uncovered positions, but I won’t be holding my breath until I turn blue.

I’d rather be a nice shade of pink, but maybe even more appropriately, a really nice shade of green to start the new year.

Happy New Year and wishes for health, happiness and prosperity to all.

Daily Market Update – December 30, 2014 (Close)

If you wanted another example of how oil and the energy sector have stopped taking control of the broader market, yesterday was a good example for you.

The pre-open futures yesterday and the trading right up until noon had oil prices going modestly.

In the meantime the market was just treading water and not traveling very far up or down up until that point.

At noon the factor that was believed to have sent oil higher, some potential for reduced oil output by Libya was realized to not have been new news. How the people who follow this sort of thing 24/7 didn’t realize that there was no new news to digest is a question in itself, but the realization that it wasn’t made for a reversal in oil and brought it below that $54 level.

In the meantime the stock market didn’t even notice, although energy stocks did, but not by that much. Most shares just kept treading water and the S&P 500 traded in only an 8 point range, finishing less than 0.1% higher, while the DJIA finished less than 0.1% lower.

With that test now done and out of the way  and with more evidence that US stocks may be able to separate themselves from falling energy prices, is the realization that most global economies that count, will benefit from falling crude oil prices. There really isn’t too much in the near term that should act to get in the way of the market being able to maintain or surpass current levels, although Greece is trying to get back onto the front page again as it may be making noises about leaving the European Union and that can drag European and US markets lower.

But, it is the final 2 trading days of December, after all, and that means that Greece can’t possibly matter yet, but now we’re left with even less time for the traditional rally to take place.

Yesterday, low volume and all, just wasn’t able to get that anticipated rally started, but maybe today could have been a little different?

Not really.

With such little movement yesterday there wasn’t too much opportunity to do anything, other than a longer term position that oil will be headed higher in a 3 month time frame. Otherwise, the range was so narrow and the volatility returning to such low levels, that there is very little that can entice, especially as this is a shortened trading week and has already chopped about 20% off from already low premiums.

Today the range was wider, but still not to much opportunity to do anything, although energy is beginning to look as if there may be some room for entry, but cautiously. The same may be true for those that dabble in metals; precious and otherwise.

This morning’s pre-open futures looked just like they did at this time yesterday morning except that oil is slightly weaker to start off the morning. The changes through the day of trading were really very minor, with no one really committing one way or the other, as many may have already headed for, or are still on their ski or beach vacations.

As that early trend set the tone for today’s trading that now leaves it all to tomorrow to deliver on the promise and hope of a Santa Claus Rally, although the purists will tell you that it really encompasses the 5 trading days after Christmas, which would then also include the first trading day of 2015.

So there’s still some hope, but today was a good day to start cleaning out the garage and tomorrow may be more of the same.

Daily Market Update – December 30, 2014 (8:00 AM)

If you wanted another example of how oil and the energy sector have stopped taking control of the broader market, yesterday was a good example for you.

The pre-open futures yesterday and the trading right up until noon had oil prices going modestly.

In the meantime the market was just treading water and not traveling very far up or down up until that point.

At noon the factor that was believed to have sent oil higher, some potential for reduced oil output by Libya was realized to not have been new news. How the people who follow this sort of thing 24/7 didn’t realize that there was no new news to digest is a question in itself, but the realization that it wasn’t made for a reversal in oil and brought it below that $54 level.

In the meantime the stock market didn’t even notice, although energy stocks did, but not by that much. Most shares just kept treading water and the S&P 500 traded in only an 8 point range, finishing less than 0.1% higher, while the DJIA finished less than 0.1% lower.

With that test now done and out of the way  and with more evidence that US stocks may be able to separate themselves from falling energy prices, is the realization that most global economies that count, will benefit from falling crude oil prices. There really isn’t too much in the near term that should act to get in the way of the market being able to maintain or surpass current levels, although Greece is trying to get back onto the front page again as it may be making noises about leaving the European Union and that can drag European and US markets lower.

But, it is the final 2 trading days of December, after all, and that means that Greece can’t possibly matter yet, but now we’re left with even less time for the traditional rally to take place.

Yesterday, low volume and all, just wasn’t able to get that anticipated rally started, but maybe today will be a little different.

With such little movement yesterday there wasn’t too much opportunity to do anything, other than a longer term position that oil will be headed higher in a 3 month time frame. Otherwise, the range was so narrow and the volatility returning to such low levels, that there is very little that can entice, especially as this is a shortened trading week and has already chopped about 20% off from already low premiums.

This morning’s pre-open futures look just like they did at this time yesterday morning except that oil is slightly weaker to start off the morning.

If that early trend is what will set the tone for today’s trading that leaves it all to tomorrow to deliver on the promise and hope of a Santa Claus Rally, although the purists will tell you that it really encompasses the 5 trading days after Christmas, which would then also include the first trading day of 2015.

So there’s still some hope, but today may be a good day to start cleaning out the garage.

Daily Market Update – December 29, 2014 (Close)

With only a few trading days left for 2014 the Santa Claus Rally doesn’t have much time left, but then again, it never does.

After today’s uneventful trading it now has even less time.

While December is typically the best month of the year, or at least right up there with the very best, by comparison to past years, so far the 1% advance for the month is disappointing. It’s also a little deceiving, as essentially the entire net gain for the month came last week, after two very large moves in opposite directions the first two weeks of December.

Two back to back days accounted for the entire month’s worth of gains

So if you’re looking for trends or patterns to explain this December, you can keep looking for clues. What has been largely missing, as there have been some big international macro-economic stories, has been an almost complete absence of discussion about retail sales.

Maybe not today and maybe not tomorrow, but very soon lots of attention will be paid to those reports as they start to come out.

Usually at this time of the year, the last few days of December we find out that sales haven’t been as bad as we thought and that last minute price cutting by retailers helped to rescue the season.

So far, that’s not the way it has been playing out, as there hasn’t been the kind of widely held cries about how preliminary sales were lagging projections and last year’s statistics.

Given what’s going on in the economy, with increasing employment, better jobs and much lower energy costs, you would have to think that unless people are paying down debt or saving, they would have to be spending.

If that’s the case, it didn’t look as if the pre-opening futures knew about it. Based on the early trading it looked as if it was going to be a quiet start to a quiet week and it wasn’t looking as if anything was being done to push that rally forward.

There’s not too much scheduled news this week and the world is usually quiet during the final week of the year, as well.

It’s funny how that works out. Somehow the world is often able to put everything on the back burner and just watch the old year go out like a lamb.

As usual, whenever there’s going to be a week of relatively low volume, like this shortened 4 day trading week, there’s always the talk of artificially large moves created by the light volume.You certainly couldn’t prove that theory based on today’s light volume, though, as the market barely mopved around a 20 point range from being unchanged all through the day.

That low volume axiom doesn’t seem to be quite as true or frequent anymore, as those that really control market volume aren’t likely to just sit back and watch a large move in either direction occur without them, But still, there’s nothing lost by keeping fingers crossed and hoping for a nice rally to close the year and to get us off to a good start.

No matter what the last few days of the year will bring, the theories to explain any large moves are the same, year in and year out.

There will be those claiming traders taking tax losses. There will then be those claiming that those that already took tax losses are now jumping back in before a traditional January rally.

Of course, that traditional January Rally isn’t so traditional anymore, either.

With some cash replenished and only a single position set to expire this week, I’d be much more happy being able to use existing positions to create the week’s income stream. However, early indications aren’t showing the kind of broad advance that would make that likely.

The alternative is to add some new positions to begin the week and in all probability looking at the weekly option, although the shortened trading week again offers lower premiums, just as with last week.

The exception, just as with last week, is again found in the energy sector, which has lots of uncertainty built into option premiums, a oil is able to hold above $54 for now, which may be a good level at which to anchor energy related strategies, whether bullish or bearish on near term price.

However, because of the inherent near term risk, some thought, was given to using longer option contracts, especially when considering trades directly based on the price of oil, such as BNO.

Otherwise, it’s more of the same for now. Sitting back and watching to see how the market wants to begin the week once the bell rings for real.

I don’t think that tomorrow will be very different, although it couldn’t possibly be any slower.

Daily Market Update – December 29, 2014 (9:00 AM)

With only a few trading days left for 2014 the Santa Claus Rally doesn’t have much time left, but then again, it never does.

While December is typically the best month of the year, or at least right up there with the very best, by comparison to past years, so far the 1% advance is disappointing. It’s also a little deceiving, as essentially the entire net gain for the month came last week, after two very large moves in opposite directions the first two weeks of December.

So if you’re looking for trends or patterns to explain this December, you can keep looking for clues. What has been largely missing, as there have been some big international macro-economic stories, has been an almost complete absence of discussion about retail sales.

Maybe not today and maybe not tomorrow, but very soon lots of attention will be paid to those reports as they start to come out.

Usually at this time of the year, the last few days of December we find out that sales haven’t been as bad as we thought and that last minute price cutting by retailers helped to rescue the season.

So far, that’s not the way it hads been playing out, as there hasn’t been the kind of widely held cries about how preliminary sales were lagging projections and last year’s statistics.

Given what’s going on in the economy, with increasing employment, better jobs and much lower energy costs, you would have to think that unless people are paying down debt or saving, they would have to be spending.

If that’s the case, it doesn’t look as if the pre-opening futures knows about it. Based on the early trading it looks as if it’s going to be a quiet start to a quiet week and it isn’t looking as if anything is being done to push that rally forward.

There’s not too much scheduled news this week and the world is usually quiet during the final week of the year, as well.

It’s funny how that works out. Somehow the world is often able to put everything on the back burner and just watch the old year go out like a lamb.

As usual, whenever there’s going to be a week of relatively low volume, like this shortened 4 day trading week, there’s always the talk of artificially large moves created by the light volume.

That axiom doesn’t seem to be quite as true or frequent anymore, as those that really control market volume aren’t likely to just sit back and watch a large move in either direction occur without them, But still, there’s nothing lost by keeping fingers crossed and hoping for a nice rally to close the year and to get us off to a good start.

No matter what the last few days of the year will bring, the theories to explain any large moves are the same, year in and year out.

There will be those claiming traders taking tax losses. There will then be those claiming that those that already took tax losses are now jumping back in before a traditional January rally.

Of course, that traditional January Rally isn’t so traditional anymore, either.

With some cash replenished and only a single position set to expire this week, I’d be much more happy being able to use existing positions to create the week’s income stream. However, early indications aren’t showing the kind of broad advance that would make that likely.

The alternative is to add some new positions to begin the week and in all probability looking at the weekly option, although the shortened trading week again offers lower premiums, just as with last week.

The exception, just as with last week, is again found in the energy sector, which has lots of uncertainty built into option premiums, a oil is able to hold above $54 for now, which may be a good level at which to anchor energy related strategies, whether bullish or bearish on near term price.

However, because of the inherent near term risk, some thought, may be given to using longer option contracts, especially if considering trades directly based on the price of oil, such as BNO.

Otherwise, it’s more of the same for now. Sitting back and watching to see how the market wants to begin the week once the bell rings for real

Daily Market Update – December 26, 2014 (8:30 AM)

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

The following trade outcomnes are possible today:

Assignments:  DOW, MOS

Rollovers:  HAL

Expirations:  GDX, GM, JOY

There were no ex-dividend positions this week.

Next week’s ex-dividend position is DOW

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