Category Archives: Daily Market Update

Daily Market Update – November 19, 2014 (8:00 AM)

Yesterday broke that string of 5 consecutive days with the S&P 500 moving less than 0.1%

It took 35 years to repeat the last time that happened, but yesterday’s small gain, although bigger than 0.1%, has made that bit of trivia obsolete.

This morning appears to be shaping up to be a typical quiet morning in advance of the FOMC Statement release. Last month’s statement wasn’t met with any kind of over the top reaction, which itself was surprising, as the event usually has resulted in significant knee-jerk reactions, as well as large moves after the information has been digested and often large moves the following day, although frequently in the opposite direction.

More surprisingly, last month there was reason to believe that the FOMC had shifted somewhat toward the sentiments of the more hawkish members as none of those dissented, while a notable dove did do so.

That itself led to something even more surprising.

Based on that perceived shift, you would have expected a sell-off, even if it wasn’t really justified, but it never happened. Maybe that was a good sign, since everyone knows what direction we are headed toward and how that direction includes increased interest rates. There should be nothing to fear and amazingly the continued suggestion that those increases were coming didn’t produce fear or surprise.

Today’s FOMC shouldn’t hold much of a surprise for anyone, particularly as the economy gives no evidence of backsliding. If Janet Yellen’s suggestion that we focus more on the JOLT Summary is also something that the FOMC is doing, then we would expect that the timing of those interest rate increases will be getting nearer and nearer.

It’s very unlikely that I will make any new position trades today, at least before the FOMC Statement release.

While there are six speeches scheduled to be presented by Federal Reserve Governors before the week’s end, none of those is likely to really have any impact on the market. The only one that may be of interest will be one given by the newest appointee, Loretta Mester, who is still somewhat of a mystery, but is thought to have more hawkish sentiments than most of the other Governors.

So far, the single new position trade for the week, the Best Buy put sale will play out tomorrow morning and otherwise the only thing to look for is any opportunity to sell new calls or execute rollovers.

Despite yesterday’s small gain, there has been essentially no movement in stocks and little opportunity to make those kind of trades.

While there have been some recent FOMC Statement release days where the market has gone on a buying spree the previous day and even in the hours before the release, it doesn’t appear as if that will be the situation today, as the futures are trading about as flat as you can get.

So the likelihood is that the first half of the day will be one of watching and hoping for any outliers that happen to unexpectedly move in the right direction and then further hoping that any market moves after the FOMC Statement release will take us in a direction that will make rollovers and assignments more likely to occur.

Daily Market Update – November 18, 2014 (Close)

It has been a really long time since the S&P 500 has gone 4 days without a daily move of more than 0.1%.

That was back in 1979 and now it’s actually up to 5 consecutive days having remained virtually unchanged since that one day pop that came with the release of a previously obscure JOLT Summary.

The early indications weren’t for anything different today, although over the past few months the day before an FOMC Statement release has been a strongly higher moving kind of day. Today turned out to be a moderately higher day, but without any bells and whistles accompanying the move higher to leave the streak at 5 days, the first of such length since 1969.

Yesterday there was a comment about how much professional traders hate  those kind of days when nothing actually happens, much less when you string a few of them together. Traders make their living by the continuing moves up and down. They don’t particularly care about the direction, it’s change that they crave.

So if you were looking for change the stock market has been the wrong place to be for the past week, although it is still stunning to see how harshly some names are treated, with or without bad news and how punishing the market has become.

Yesterday was another of those one time unthinkable Mondays when I could find absolutely no trades that could be made, The nice thing about change is that in the event of a price drop you can consider a purchase of shares or the sale of puts or in the event of a price surge higher you can consider the sale of call options.

When there’s nothing happening there’s not much to be done. It’s otherwise not very different from flipping a coin. While you always hope for the best, it’s nice to feel that you have some kind of advantage when going in. Sometimes that feeling of advantage stems from following the trend and sometimes that advantage comes from going counter-trend.

But the past week has been absolutely trendless.

That could change as the FOMC Statement release draws closer, but despite the generally positive reaction to it over the past year, that too, still has a “flipping a coin” kind of characteristic to it. Since there are a number of components to the statement that are pored over and over-analyzed, any one of those could cause a significant movement. Trying to predict what will be contained in the statement, particularly if there are any substantive changes from the previous month and then trying to predict the market’s reaction is really a fool’s game.

That’s what makes the past few months so confusing. Why traders would have bid prices much higher the day before the release really made no sense at all and seemed to be very risky. Of course, it turned out not to be risky and so it has to make you wonder what the signal was that made traders go from their traditional pre-FOMC caution to one of bullishness.

If you’re cynical, there can only be one answer.

Today there didn’t appear to be any reason to be cynical, as it appeared that some caution is back at play. While the market did move higher and set even more new closing records, it was still a pretty quiet day, all in all.

Ultimately, this may end up being a week that doesn’t really begin until 2 PM on Wednesday as some of the uncertainty may then be lifted and traders can get back to trading and attempting to make some money.

Daily Market Update – November 18, 2014 (8:00 AM)

It has been a really long time since the S&P 500 has gone  4 days without a daily move of more than 0.1%.

That was back in 1979 and now it’s actually up to 5 consecutive days having remained virtually unchanged since that one day pop that came with the release of a previously obscure JOLT Summary.

The early indications aren’t for anything different today, although over the past few months the day before an FOMC Statement release has been a strongly higher moving kind of day.

Yesterday there was a comment about how much professional traders hate  those kind of days when nothing actually happens, much less when you string a few of them together. Traders make their living by the continuing moves up and down. They don’t particularly care about the direction, it’s change that they crave.

So if you were looking for change the stock market has been the wrong place to be for the past week, although it is still stunning to see how harshly some names are treated, with or without bad news and how punishing the market has become.

Yesterday was another of those one time unthinkable Mondays when I could find absolutely no trades that could be made, The nice thing about change is that in the event of a price drop you can consider a purchase of shares or the sale of puts or in the event of a price surge higher you can consider the sale of call options.

When there’s nothing happening there’s not much to be done. It’s otherwise not very different from flipping a coin. While you always hope for the best, it’s nice to feel that you have some kind of advantage when going in. Sometimes that feeling of advantage stems from following the trend and sometimes that advantage comes from going counter-trend.

But the past week has been absolutely trendless.

That could change as the FOMC Statement release draws closer, but despite the generally positive reaction to it over the past year, that too, still has a “flipping a coin” kind of characteristic to it. Since there are a number of components to the statement that are pored over and over-analyzed, any one of those could cause a significant movement. Trying to predict what will be contained in the statement, particularly if tehre are any substantive changes from the previous month and then trying to predict the market’s reaction is really a fool’s game.

That’s what makes the past few months so confusing. Why traders would have bid prices much higher the day before the release really made no sense at all and seemed to be very risky. Of course, it turned out not to be risky and so it has to make you wonder what the signal was that made traders go from their traditional pre-FOMC caution to one of bullishness.

If you’re cynical, there can only be one answer.

Today there doesn’t appear to be any reason to be cynical, as it appears that some caution is back at play, so it will likely be another quiet day. This may end up being a week that doesn’t really begin until 2 PM on Wednesday as some of the uncertainty may then be lifted and traders can get back to trading and attempting to make some money.

Daily Market Update – November 17, 2014 (Close)

Lately the FOMC Statement Release has been the market’s friend. That’s been the case even before the Federal Reserve announced its intention to begin tapering of the most recent Quantitative Easing, about this time last year. It definitely hasn’t changed since Janet Yellen assumed leadership.

There aren’t too many things that are predictable, but lately the market’s move higher to close the week of an FOMC statement has been a pretty good bet, although the ferocity of the moves have been getting less and less.

Because of that pattern the occurrence of the end of a monthly option cycle, which tends to be more active than when weekly cycles end, a couple of days after the FOMC Statement haven’t been very unnerving.

That wasn’t always the case, though.

In the past few years I can recall a number of occasions when the smug belief that positions would be assigned or easily rolled over quickly evaporated as the response to the FOMC was decidedly negative and stayed that way to end the week.

Because of those few times I’m always aware of what could happen and frequently think about trying to execute rollovers, where possible, before the Wednesday afternoon meeting, but rarely ever actually get those trades done.

This week will probably be no different.

However, with 11 lots set to expire this week and relatively few in future weeks due to the low premiums, I never like seeing an over-dependence on a single week. That’s just too much risk and too much at stake on the basis of a report that will take about 10 seconds to summarize and immediately evokes responses before thinking can take place.

Other than the FOMC and some relatively inconsequential earnings reports, but from companies that usually make the process interesting, this week has relatively little to cause much movement in either direction.

However, the FOMC is enough news for one week.

As with most weeks when there is an FOMC Statement release, especially not accompanied by a press conference, which tends to further buoy markets, I’m not very excited about adding new positions in advance of the announcement.

If doing so I’d like to look at the possibility of using some forward week expirations, rather than adding to the exposure this week. Of course that introduces the problem of not getting very much additional premium for the additional time, as the volatility is just so low.

With some additional cash available for investment this week it’s always hard to resist the temptation to pick something up. The morning’s futures trading looks as if it may be continuing some of last week’s listless trading, which nonetheless offered some opportunities for purchases, new call sales and rollovers, so I wouldn’t necessarily mind a repeat of that scenario.

Still, despite the low volatility and the prospect of it moving even lower if the market goes higher, I would prefer some incremental move in that direction this week, if only to be able to secure some additional assignments and add to the cash pile.

For now, as has become the case for a few months, I expected to just sit back and watch how the market is set to begin the week and would have been especially happy to put some stragglers to work even if not adding any new positions.

What I didn’t expect was that the S&P 500 would add to its 35 year old record of the number of consecutive days with less than a 0.1% daily change and that the day would end without a single trade of any kind.

There’s always tomorrow, I suppose and if the past 3 months will serve as an indication, then tomorrow will inexplicably head nicely higher in anticipation of the following day’s FOMC.

That’s a pattern I could learn to like.

Daily Market Update – November 17, 2014 (8:45 AM)

Lately the FOMC Statement Release has been the market’s friend. That’s been the case even before the Federal Reserve announced its intention to begin tapering of the most recent Quantitative Easing, about this time last year. It definitely hasn’t changed since Janet Yellen assumed leadership.

There aren’t too many things that are predictable, but lately the market’s move higher to close the week of an FOMC statement has been a pretty good bet, although the ferocity of the moves have been getting less and less.

Because of that pattern the occurrence of the end of a monthly option cycle, which tends to be more active than when weekly cycles end, a couple of days after the FOMC Statement haven’t been very unnerving.

That wasn’t always the case, though.

In the past few years I can recall a number of occasions when the smug belief that positions would be assigned or easily rolled over quickly evaporated as the response to the FOMC was decidedly negative and stayed that way to end the week.

Because of those few times I’m always aware of what could happen and frequently think about trying to execute rollovers, where possible, before the Wednesday afternoon meeting, but rarely ever actually get those trades done.

This week will probably be no different.

However, with 11 lots set to expire this week and relatively few in future weeks due to the low premiums, I never like seeing an over-dependence on a single week. That’s just too much risk and too much at stake on the basis of a report that will take about 10 seconds to summarize and immediately evokes responses before thinking can take place.

Other than the FOMC and some relatively inconsequential earnings reports, but from companies that usually make the process interesting, this week has relatively little to cause much movement in either direction.

However, the FOMC is enough news for one week.

As with most weeks when there is an FOMC Statement release, especially not accompanied by a press conference, which tends to further buoy markets, I’m not very excited about adding new positions in advance of the announcement.

If doing so I’d like to look at the possibility of using some forward week expirations, rather than adding to the exposure this week. Of course that introduces the problem of not getting very much additional premium for the additional time, as the volatility is just so low.

With some additional cash available for investment this week it’s always hard to resist the temptation to pick something up. The morning’s futures trading looks as if it may be continuing some of last week’s listless trading, which nonetheless offered some opportunities for purchases, new call sales and rollovers, so I wouldn’t necessarily mind a repeat of that scenario.

Still, despite the low volatility and the prospect of it moving even lower if the market goes higher, I would prefer some incremental move in that direction this week, if only to be able to secure some additional assignments and add to the cash pile.

For now, as has become the case for a few months, I will sit back and watch how the market is set to begin the week and would be especially happy to put some stragglers to work even if not adding any new positions.

Daily Market Update – November 14, 2014 (8:30 AM)

The Week in Review will be posted by 9 PM and the Weekend Update will be posted by 6 PM on Sunday.

The following trading outcomes are possible today:

Assignments:  EMC, INTC

Rollovers:  none

Expirations: GDX, JOY, TMUS

The following stocks were ex-dividend this week: CLF (11/12 $0.15), RIG (11/13 $0.75)

The following will be ex-dividend next week:  TGT (11/17 $0.51)

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

Daily Market Update – November 13, 2014 (Close)

The news coming in from retail is mixed, as far as investors are concerned.

They always look at the top line and the bottom line.

The top line represents revenues and the bottom line represents profits. Then they add into the mix forward guidance, which is far from an exact science, just as imaginative accounting removes the simple arithmetic behind profit and loss sheets from the realm of being an exact science.

The mixed news is that the trend is that the bottom lines are increased, but the top lines aren’t always so, although Wal-Mart reported this morning higher on both.

The consequence to that is that the bottom line represents sales and expenses, while the top line represents sales. One can be reflective of a company’s efficiencies, while the other can be much more reflective of what is going on in the economy, in addition to the particular popularity of a company at a moment in time.

So while seeing a general trend of increasing profits investors may be happy, especially if also guiding higher, but that may overlook the bigger picture.

On the other hand, if the revenue trend is flat or lower among a group of retailers, there has to be some concern that the consumer isn’t really participating, especially as employment statistics are suggesting that more and more people are at work and increasingly capable of spending their money.

Nothing propels an economy and creates confidence like consumer spending.

While we all love the very low interest rate environment that we have been in for so long, the one thing that we don’t think about too much is that the low interest rates are very much a by-product of the inability to consume. The pressure to drive prices higher by everyone seeking to satisfy personal demand for goods just isn’t there.

Somewhere is q happy medium that allows for some reasonable increase in interest rates as discretionary spending and business expansion is growing.

For the past few years and in particular the past year, there has been lots of concern about the Federal Reserve raising rates and the very idea of them going higher has placed a ceiling on the market’s climb higher, despite all of the advances that have been made.

Barely a year ago, the market was concerned at 10 year rates were approaching 3%. Then it got concerned at rates were beginning to climb to 2.5%. Just a few weeks ago the rate fell to 1.9% and had then taken a very strong bounce higher to its current  2.35%, having reached its bottom and begun its rise concurrent with the stock market in mid-October.

However, unless increasing employment will lead to increasing consumer demand for things big and small and not just European trips to take advantage of the strong dollar, there isn’t going to be anything to really drive those top lines and there is only so much that can be done by companies to increase their profits without those top line increases.

But those are all issues for another day, or at least until Target reports its earnings next week.

For now, it’s all about how to end up the week with some assignments, rollovers and call sales in preparation for the final week of the November cycle.

This morning looked like it will begin as yet another quiet day in a week that was expected to be that way. The day tutned out to have a little more character than the preceding 3 days, but was still fairly listless.

Who knows, maybe something will create a further spark, hopefully higher, but for now there’s nothing really in sight as the clock ticks to tomorrow’s close.

Daily Market Update – November 13, 2014 (8:30 AM)

The news coming in from retail is mixed, as far as investors are concerned.

They always look at the top line and the bottom line.

The top line represents revenues and the bottom line represents profits. Then they add into the mix forward guidance, which is far from an exact science, just as imaginative accounting removes the simple arithmetic behind profit and loss sheets from the realm of being an exact science.

The mixed news is that the trend is that the bottom lines are increased, but the top lines aren’t always so, although Wal-Mart reported this morning higher on both.

The consequence to that is that the bottom line represents sales and expenses, while the top line represents sales. One can be reflective of a company’s efficiencies, while the other can be much more reflective of what is going on int he economy, in addition to the particular popularity of a company at a moment in time.

So while seeing a general trend of increasing profits investors may be happy, especially if also guiding higher, but that may overlook the bigger picture.

On the other hand, if the revenue trend is flat or lower among a group of retailers, there has to be some concern that the consumer isn’t really participating, especially as employment statistics are suggesting that more and more people are at work and increasingly capable of spending their money.

Nothing propels an economy and creates confidence like consumer spending.

While we all love the very low interest rate environment that we have been in for so long, the one thing that we don’t think about too much is that the low interest rates are very much a by-product of the inability to consume. The pressure to drive prices higher by everyone seeking to satisfy personal demand for goods just isn’t there.

Somewhere is q happy medium that allows for some reasonable increase in interest rates as discretionary spending and business expansion is growing.

For the past few years and in particular the past year, there has been lots of concern about the Federal Reserve raising rates and the very idea of them going higher has placed a ceiling on the market’s climb higher, despite all of the advances that have been made.

Barely a year ago, the market was concerned at 10 year rates were approaching 3%. Then it got concerned at rates were beginning to climb to 2.5%. Just a few weeks ago the rate fell to 1.9% and had then taken a very strong bounce higher to its current  2.35%, having reached its bottom and begun its rise concurrent with the stock market in mid-October.

However, unless increasing employment will lead to increasing consumer demand for things big and small and not just European trips to take advantage of the strong dollar, there isn’t going to be anything to really drive those top lines and there is only so much that can be done by companies to increase their profits without those top line increases.

But those are all issues for another day, or at least until Target reports its earnings next week.

For now, it’s all about how to end up the week with some assignments, rollovers and call sales in preparation for the final week of the November cycle.

This morning looks like it will begin as yet another quiet day in a week that was expected to be that way.

Who know, maybe something will create a spark, hopefully higher, but for now there’s nothing really in sight as the clock ticks to tomorrow’s clsoe.

Daily Market Update – November 12, 2014 (Close)

Today was Wednesday, generally the quietest day of the week, right in the middle of what was expected to be a quiet week.

With Singles Day and Veterans Day now over, the most interesting thing this week may turn out to be today’s planned space landing on a moving comet which went from “planned” to “successful landing.”

How that figures into anything is debatable, but at least it’s interesting and really the stuff of science fiction.

While that’s going on the market seemed as if it was prepared to open weaker than the past two days, but still not with very much conviction.

While there are still some earnings reports to go, for the most part that has now been removed as an overall market catalyst, although individual stocks can obviously still have their significant ups and downs, although the prevalent significant movement, when it occurs, has been lower.

Those whose every breath is fully invested in the market know very well that November and December tend to be good months, regardless of how the holiday retailing season stacks up. While patterns tend to break down as they become more widely recognized, especially when everyone talks about it, such as with the “January Effect,” the November – December effect isn’t one that’s too widely discussed and there’s still plenty of reason to believe that there’s hedge fund fuel to keep that pattern alive for another year.

One thing that could definitely help the overall market to move higher would be some good numbers coming from the retailers that are just now gearing up to report their earnings. More importantly, their forward guidance can really be the catalyst that seems to be missing right now.

Those good numbers and good forward prospects have to come from more than the higher end retailers, though. That segment of society has noticeably increased discretionary spending, but in the really big picture they represent a very small portion of what really matters. Even Macys isn’t entirely reflective of an improving retail picture if it reports good earnings. The improved results really have to be seen from the bottom up, including dollar stores, Wal-Mart, specialty retailers and big box stores throughout the spectrum.

I hope that turns out to be the case, as it also will get the albatross around our necks to be released. That is the fear of when interest rate increases will finally happen. A heating up economy, especially in those phases that necessitate an increase in interest rates tends to be good for everyone and would finally get us over the fear of those hikes, just as the eventual announcement of a taper finally got us over the anticipation of that announcement.

Macys, which did report its earnings before the market’s open fared very well, despite offering lowered guidance and lower revenues, but despite it rising about 5% it did nothing to nudge the market higher

For the next few days I doubt that I’ll be adding any new positions. With a couple of DOH Trades set to expire this week,  I would like to see them either expire or will have a need to roll them over, hopefully into a marketplace that has more willing sellers than has recently been the case.

That lack of a willing market of sellers may continue to add to the difficulty of executing rollover trades at fair prices, but I expect that when hedge funds get back into the practice of hedging that will no longer be the case.

Today that reluctance to participate was still obvious as attempted rollovers in International Paper, Lorillard and T-Mobile went nowhere.

A convoluted trade to roll International Paper from a $50 strike to a $53 in the hope of seeing it assigned early in order to have the dividend taken tomorrow, was just too much risk even for the nice dividend.

The lesson, I think, is that if market participants are acting in an irrational fashion, it’s probably best not to try to meet them, even half way.

Daily Market Update – November 12, 2014 (8:00 AM)

It’s now Wednesday, generally the quietest day of the week, right in the middle of what was expected to be a quiet week.

With Singles Day and Veterans Day now over, the most interesting thing this week may turn out to be today’s planned space landing on a moving comet.

How that figures into anything is debatable, but at least it’s interesting and really the stuff of science fiction.

While that’s going on the market seems as if it prepared to open weaker than the past two days, but still not with very much conviction.

While there are still some earnings reports to go, for the most part that has now been removed as an overall market catalyst, although individual stocks can obviously still have their significant ups and downs, although the prevalent significant movement, when it occurs, has been lower.

Those whose every breath is fully invested in the market know very well that November and December tend to be good months, regardless of how the holiday retailing season stacks up. While patterns tend to break down as they become more widely recognized, especially when everyone talks about it, such as with the “January Effect,” the November – December effect isn’t one that’s too widely discussed and there’s still plenty of reason to believe that there’s hedge fund fuel to keep that pattern alive for another year.

One thing that could definitely help the overall market to move higher would be some good numbers coming from the retailers that are just now gearing up to report their earnings. More importantly, their forward guidance can really be the catalyst that seems to be missing right now.

Those good numbers and good forward prospects have to come from more than the higher end retailers, though. That segment of society has noticeably increased discretionary spending, but in the really big picture they represent a very small portion of what really matters. Even Macys isn’t entirely reflective of an improving retail picture if it reports good earnings. The improved results really have to be seen from the bottom up, including dollar stores, Wal-Mart, specialty retailers and big box stores throughout the spectrum.

I hope that turns out to be the case, as it also will get the albatross around our necks to be released. That is the fear of when interest rate increases will finally happen. A heating up economy, especially in those phases that necessitate an increase in interest rates tends to be good for everyone and would finally get us over the fear of those hikes, just as the eventual announcement of a taper finally got us over the anticipation of that announcement.

For the next few days I doubt that I’ll be adding any new positions. With a couple of DOH Trades set to expire this week,  I would like to see them either expire or will have a need to roll them over, hopefully into a marketplace that has more willing sellers than has recently been the case.

That lack of a willing market of sellers may continue to add to the difficulty of executing rollover trades at fair prices, but I expect that when hedge funds get back into the practice of hedging that will no longer be the case.

Daily Market Update – November 11, 2014 (Close)

Yesterday, in what is otherwise a slow week, so much attention was placed on the Alibaba manufactured holiday called “Singles Day.”

It’s a day that single people are supposed to take the time and present a gift to themselves. Of course there are those who might believe that being single is gift enough, but nonetheless, it is a perfectly materialistic occasion that would have the leaders of the 1948 Revolution apoplectic.Having actually celebrated a 30th wedding anniversary yesterday, coinciding with Singles Day, somehow I didn’t receive anything for my troubles, so maybe I should have just following the crowd and gifted myself.

Today, in the United States, it is Veterans Day, where we honor those who gave the gift of freedom rather than honoring themselves with a gift.

I’m not quite certain why stock markets are open, as the bond markets and banks are closed.

But they are and on those few days a year that the credit markets are closed and stocks do trade, those are usually fairly slow trading days.

And so it was today.

The morning’s futures seemed to be on course to follow the same path as yesterday, as that day’s listless opening was the pattern throughout the day and served as today’s templet, as well.

The only thing of note yesterday was the marked reversal in energy prices in the late morning which eliminated the sizeable gains in the sector with moderate losses. Insofar as energy is a significant portion of the S&P 500 it again limited those gains. Since the slide in energy started sometime in July 2014, the DJIA and S&P 500 have performed identically, gaining 3.1%, with the S&P 500 being held back due to its heavier energy representation.

In the meantime, any benefit to be gained from lower energy prices won’t really become apparent until the next quarter’s earnings are reported.

For now, ever since Goldman Sachs’ call for $75 crude, the markets have been relatively stable and I think may have bottomed, although there are further calls going as low as $50.

As an unusually early start to winter begins to sweep across parts of the nation the excess supply over demand may shift a little bit, but at these prices there is also bound to be those seeking bargain pricing and speculating on an eventual rebound.

Ordinarily, the thinking would be that low energy prices would spur other businesses to ramp up their activity, seeing it as a perfect time to be able to increase their margins.

That would usually lead to increased employment, increased spending and increased earnings.

But that doesn’t appear to be happening yet.

Maybe businesses are skeptical of low energy prices remaining low and continue to be cautious, but the reality is that the markets and the economy tend to do better when oil prices are increasing, as long as that increase is demand driven.

Maybe they just don’t see consumer demand increasing for discretionary items.

Now, we’re in the unusual position of having too much energy and not enough demand. Hopefully, whatever is saved in gas prices and heating prices will become part of an increase in discretionary spending.

We’ll find out later this week whether retailers have received any benefit at all from the increasing employment statistics over the past 3 months, but despite good numbers for the past year, there has continued to be a reluctance to spend.

Something is just qualitatively different about this recovery and the typical patterns just aren’t materializing or are just taking much longer to become evident.

Hopefully retail will bring some good news this week and energy pricing will moderate as consumer demand leads to greater overall economic activity.

With Macys and JC Penney reporting after today’s close maybe we’ll get something to bring some life into the market this week. With next week being the last week of the cycle it’s never too late to sell any options if the market can find a reason to move suddenly higher.

Daily Market Update – November 11, 2014 (9:00 AM)

Yesterday, in what is otherwise a slow week, so much attention was placed on the Alibaba manufactured holiday called “Singles Day.”

It’s a day that single people are supposed to take the time and present a gift to themselves. Of course there are those who might believe that being single is gift enough, but nonetheless, it is a perfectly materialistic occasion that would have the leaders of the 1948 Revolution apoplectic.Having actually celebrated a 30th wedding anniversary yesterday, coinciding with Singles Day, somehow I didn’t receive anything for my troubles, so maybe I should have just following the crowd and gifted myself.

Today, in the United States, it is Veterans Day, where we honor those who gave the gift of freedom rather than honoring ourselves with a gift.

I’m not quite certain why stock markets are open, as the bond markets and banks are closed.

But they are and on those few days a year that the credit markets are closed and stocks do trade, those are usually fairly slow trading days.

The morning’s futures seem to be following the same path as yesterday’s, as that listless opening was the pattern throughout the day.

The only thing of note yesterday was the marked reversal in energy prices in the late morning which eliminated the sizeable gains in the sector with moderate losses. Insofar as energy is a significant portion of the S&P 500 it again limited those gains. Since the slide in energy started sometime in July 2014, the DJIA and S&P 500 have performed identically, gaining 3.1%, with the S&P 500 being held back due to its heavier energy representation.

In the meantime, any benefit to be gained from lower energy prices won’t really become apparent until the next quarter’s earnings are reported.

For now, ever since Goldman Sachs’ call for $75 crude, the markets have been relatively stable and I think may have bottomed, although there are further calls going as low as $50.

As an unusually early start to winter begins to sweep across parts of the nation the excess supply over demand may shift a little bit, but at these prices there is also bound to be those seeking bargain pricing and speculating on an eventual rebound.

Ordinarily, the thinking would be that low energy prices would spur other businesses to ramp up their activity, seeing it as a perfect time to be able to increase their margins.

That would usually lead to increased employment, increased spending and increased earnings.

But that doesn’t appear to be happening yet.

Maybe businesses are skeptical of low energy prices remaining low and continue to be cautious, but the reality is that the markets and the economy tend to do better when oil prices are increasing, as long as that increase is demand driven.

Maybe they just don’t see consumer demand increasing for discretionary items.

Now, we’re in the unusual position of having too much energy and not enough demand. Hopefully, whatever is saved in gas prices and heating prices will become part of an increase in discretionary spending.

We’ll find out later this week whether retailers have received any benefit at all from the increasing employment statistics over the past 3 months, but despite good numbers for the past year, there has continued to be a reluctance to spend.

Something is just qualitatively different about this recovery and the typical patterns just aren’t materializing or are just taking much longer to become evident.

Hopefully retail will bring some good news this week and energy pricing will moderate as consumer demand leads to greater overall economic activity.

Daily Market Update – November 10, 2014 (Close)

Last week there was plenty of reason to believe that the market would do something to make either bulls or bears happy.

There were potentially 3 big stories for the week, each of which could have moved the market in a big way. As it would turn out the market didn’t care very much and did little of anything, other than acted a little surprised by the election results that were very widely expected.

This week there’s very little on the economic calendar that could potentially move markets and as unpredictable as the world has always been, there doesn’t appear to be any particular flash point this week, as some signals being sent on Friday regarding a Russian incursion into Ukraine haven’t been validated.

So, logic might suggest that this morning’s listless futures trading would characterize the week ahead, but that kind of logic didn’t fare too well last week and there’s not much reason to ever expect that quiet futures trading has any great predictive power.

For now, that doesn’t really matter too much.

Ultimately, what forms action is the availability of cash, the need to raise cash or the need to preserve cash.

The reality is that the market is still at new highs and the momentum has clearly been in a single direction for the past 3 weeks, although it did slow down just a little bit last week. Historically, the last 2 months of the year outperform the preceding 10 months, especially in years that hedge funds are likely to be trailing the broad market, as they are again this year.

Today would end up just adding to those new highs. Not by much, but still, a little higher than ever before.

With little to lose, especially if investing other people’s money and not their own,  I expect that hedge funds may fuel that momentum, just as I think they have been already causing the options market to see less volume, as they take hedges off in an effort to go for the fences.

With some more cash in hand after some assignments last week I’m not  opposed to adding new positions in order to take advantage of any potential continuation of the upward momentum, but I would still like to be able to generate whatever income possible from additional call sales, despite the realization that it may continue being more difficult to rollover positions as sellers are fewer or asking relatively exorbitant premiums as trying to close out positions near the week’s end.

With a few positions scheduled to expire this and the same next, the low volatility makes it unlikely that I would be looking at expanded weekly options unless there is an earnings report or a dividend involved.

That was definitely the case with the purchase of Mattel today and the use of the December and may be reason to rollover the additional Sinclair Broadcasting option sold today on the new shares picked up.

I expect this week to be relatively light in personal trading, but fortunately there are some dividends this week as well. One of those, International Paper, may be at risk for early assignment, but is also a potential choice for addition of a new position this week. I may look at opportunities to roll that existing position over in order to keep the dividend, but like Intel the previous week the traders just weren’t there to make a deal. With International Paper there will still be two more days to try and get a trade done, but the participants are few and far between as are the spreads.

As long as it takes 2 parties to complete a trade that’s an obstacle that I hope won’t last very long.

Daily Market Update – November 10, 2014 (8:45 AM)

Last week there was plenty of reason to believe that the market would do something to make either bulls or bears happy.

There were potentially 3 big stories for the week, each of which could have moved the market in a big way. As it would turn out the market didn’t care very much and did little of anything, other than acted a little surprised by the election results that were very widely expected.

This week there’s very little on the economic calendar that could potentially move markets and as unpredictable as the world has always been, there doesn’t appear to be any particular flash point this week, as some signals being sent on Friday regarding a Russian incursion into Ukraine haven’t been validated.

So, logic might suggest that this morning’s listless futures trading would characterize the week ahead, but that kind of logic didn’t fare too well last week and there’s not much reason to ever expect that quiet futures trading has any great predictive power.

For now, that doesn’t really matter too much.

Ultimately, what forms action is the availability of cash, the need to raise cash or the need to preserve cash.

The reality is that the market is still at new highs and the momentum has clearly been in a single direction for the past 3 weeks, although it did slow down just a little bit last week. Historically, the last 2 months of the year outperform the preceding 10 months, especially in years that hedge funds are likely to be trailing the broad market, as they are again this year.

With little to lose, especially if investing other people’s money and not their own,  I expect that hedge funds may fuel that momentum, just as I think they have been already causing the options market to see less volume, as they take hedges off in an effort to go for the fences.

With some more cash in hand after some assignments last week I’m not  opposed to adding new positions in order to take advantage of any potential continuation of the upward momentum, but I would still like to be able to generate whatever income possible from additional call sales, despite the realization that it may continue being more difficult to rollover positions as sellers are fewer or asking relatively exorbitant premiums as trying to close out positions near the week’s end.

With a few positions scheduled to expire this and the same next, the low volatility makes it unlikely that I would be looking at expanded weekly options unless there is an earnings report or a dividend involved.

I expect this week to be relatively light in personal trading, but fortunately there are some dividends this week as well. One of those, International Paper, may be at risk for early assignment, but is also a potential choice for addition of a new position this week. I may look at opportunities to roll that existing position over in order to keep the dividend, but like Intel the previous week the traders just weren’t there to make a deal.

As long as it takes 2 parties to complete a trade that’s an obstacle that I hope won’t last very long.

Daily Market Update – November 7, 2014 (8:00 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 outcomes include:

Assignments:  Ford, Whole Foods

Rollovers:  British Petroleum, Lorillard

Expirations: Abercrombie and Fitch, Las Vegas Sands, Twitter (puts)

The following stocks were ex-dividend this week:  British Petroleum (11/5 $0.60), Walter Energy (11/6 $0.01)

The following stocks will be ex-dividend next week: Cliffs Natural Resources (11/12 $0.15), International Paper (11/13 $0.40), Transocean (11/12 $0.75)

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