Category Archives: Daily Market Update

Daily Market Update – September 12, 2014 (8:30 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:  BP, WAG

Rollovers:  GM, TMUS

Expirations:  BX, EBAY

The week’s dividends were General Motors (9/8 $0.30) and NEM (9/9 $0.025).

Next week Las Vegas Sands is ex-dividend (9/18 $0.50)

Trades, if any, will be attempted to be made prior to 3:30 PM EDT.This morning the futures market showed the kind of conviction that has been missing for a while.

Daily Market Update – September 11, 2014 (Close)

This morning the futures market showed the kind of conviction that has been missing for a while.

Unfortunately it wasn’t the kind of conviction that I’d want to see, especially near the end of the week, when I want to see prices hovering around or near their strike prices.

The likely culprit this morning was the surprising increase in jobless claims which was consistent with the equally surprising drop in employment numbers that was reported last week and written off by many as being erroneous.

Not just an anomaly, but many were saying that those numbers were just wrong.

For some reason the market is putting some emphasis on today’s numbers. more so than they normally would be doing, perhaps validating the previous employment statistics, although if mistakes can happen once, why not again?

My hope, not surprisingly, was that the market would move onward from the initial shock of the disappointment, as perhaps someone will take it as an opportunity to again begin some buying.

As it would turn out, the shock didn’t last very long and there was at least some tentative, although not really widespread buying, but it did come in some of the right spots for me.

At this point we’ve become accustomed to the market recovering after drops of about 4 to 5%, but we were still quite a bit from even that level, as the morning began, even after the initial near triple digit drop. Even at the low point of the morning there was still more room to drop before even getting to that 5% level..

There’s wasn’t too much to be done while waiting for the market to find itself or to get on some kind of path. Although I had cash in reserve, it wasn’t as much as I might like in the event of any sustained weakness. However, as said on any number of occasions the developing benefit that may be seen is an increase in volatility and then a subsequent increase in those option premiums.

Still, I’d rather have the cash than the theory.

In an environment when prices are falling and premiums are rising those DOH trades become more plausible and can help to reduce the impact of any market decline and hopefully leave one, in relative terms, better off than they would otherwise have been when the damage is over.

Regardless, my preference would have been for some mild, but continuing market strength at this point in the week and fortunately, despite what would prove to be a loss for the day, it wasn’t very bad at all, especially since there was the opportunity to execute some rollover trades.

One of those, for Las Vegas Sands, was done specifically to have a chance at getting next week’s dividend. Despite shares having been above their strike price the rollover to two weeks away and at a strike level an additional $0.50 higher, opened the possibility of either getting the dividend or being assigned a week early, but having received two week’s worth of premium, in addition to the $0.50 higher strike price.

In shares that really were hit unduly hard because of adverse news from Macao, I may even want to add more of those shares next week, because there may also be capital gains to be made in the trade, in addition to premiums and dividends.

But as the week winds down timing can mean a lot, as expirations are a factor. Any kind of precipitous decline in shares can be looked at as fortuitous or unfortunate, depending on that timing.

A strong drop on a Monday may be very welcome, while the same thing on a Friday to end the monthly cycle can be unfortunate, if leading to the loss of assignments or can be fortuitous if bringing prices that were well above their strike prices much closer to either allow rollovers or even potential re-purchases the following week.

So we’ll now see how tomorrow will go, after receiving a little bit of a reprieve today. With now fewer positions set to expire this week and not being in the more dire position that looked to be developing in the morning, it’s easier to look forward to that final day of trading.

Daily Market Update – September 11, 2014 (9:15 AM)

This morning the futures market is showing the kind of conviction that has been missing for a while.

Unfortunately it’s not the kind of conviction that I’d want to see, especially near the end of the week, when I want to see prices hovering around or near their strike prices.

The likely culprit this morning is the surprising increase in jobless claims which is consistent with the equally surprising drop in employment numbers that was reported last week and written off by many as being erroneous.

Not just an anomaly, but many were saying that those numbers were just wrong.

For some reason the market is putting some emphasis on today’s numbers. more so than they normally would be doing, perhaps validating the previous employment statistics.

Hopefully the market will move onward from the initial shock of the disappointment and perhaps someone will take it as an opportunity to again begin some buying.

At this point we’ve become accustomed to that happening after drops of about 4 to 5%, but we’re still quite a bit from even that level, so there may still be more to come.

There’s not too much to be done while waiting for the market to find itself or to get on some kind of path. Although I have cash in reserve, it’s not as much as I might like in the event of any sustained weakness. However, as said on any number of occasions the developing benefit that may be seen is an increase in volatility and then a subsequent increase in those option premiums.

In an environment when prices are falling and premiums are rising those DOH trades become more plausible and can help to reduce the impact of any market decline and hopefully leave one, in relative terms, better off than they would otherwise have been when the damage is over.

Regardless, my preference would have been for some mild, but continuing market strength at this point in the week.

Timing can mean a lot, as expirations are a factor. Any kind of precipitous decline in shares can be looked at as fortuitous or unfortunate, depending on that timing.

A strong drop on a Monday may be very welcome, while the same thing on a Friday to end the month can be unfortunate, if leading to the loss of assignments or can be fortuitous if bringing prices that were well above their strike prices much closer to either allow rollovers or even potential re-purchases the following week.

So we’ll see how today and tomorrow will go, with quite a few positions set to expire this week and now likely to be in a more difficult position. Fortunately there are still two full trading days to determine those fates.

Daily Market Update – September 10, 2014 (Close)

After what seemed to be a fairly predictable Apple event yesterday nothing had gotten a boost of any sort.

Apple itself fluctuated between a gain and a loss and the market accelerated losses, making it the second consecutive day of losses, putting more distance between September and this past August.

With the event now over there’s really nothing left for the rest of the week of any great importance.

Today became reasonably important, however, as after two days of losses and a small spike in volatility, a third day of the same would start getting everyone to begin their whispers about a correction.

Over the past two years there has been some sort of a mini-correction and spike in volatility every two months or so, the last of which was in July and ended in early August. During that time most everyone was pointing toward the 30% spike in volatility, having taken notice of the volatility late in the process of that most recent mini-correction. By the time volatility became noticed and became a topic it was already time for the correction to end, and it did in a very sudden manner.

This morning was giving indications of a higher open, but a very reluctant one, as futures are actually pointing lower, but are still above the fair value.

That means no one was terribly enthused as trading was getting ready to begin.

That described yesterday, as well. Despite some falling prices there really wasn’t anything that gave the message that some bargains were in the process of being created. It was difficult to get enthused about the price activity yesterday which deteriorated as the afternoon wore on, especially in the final two hours of trading.

That kind of deterioration going into the close is rarely a reason to get excited by the next morning’s opening and that’s precisely where I began the day.

It was also a Wednesday, which tends to be a slow day anyway, as the new weekly options for those without expanded weekly options aren’t yet available. That generally immediately cuts the available new position opportunities especially in a low volatility and low premium environment.

However, since next week is the end of the monthly cycle that also means that any position can be rolled over to next week even today.

So while I didn’t expect much action or trading today, any kind of strength that may develop throughout the rest of the week may be an opportunity to secure positions for rollover, if assignment doesn’t seem as likely. Given the weakness thus far this week, until the Apple inspired turnaround  in the afternoon, the hope of finding new call sale opportunities had been waning, so attention has to focus on the ability to create income through rollovers and hopefully replenish cash through some assignments.

Either of those goals would be compromised by further market weakness over the next 2 days, but I’m hopeful for some kind of stability. Whereas the weakness going into yesterday’s close wasn’t encouraging, the strength heading into today’s final two hours was encouraging, by contrast.  In that event I would rather commit to an early rollover, even if those shares move higher by the end of the week and could have been assigned, instead.

It’s generally better to have the cash in hand than to devote too much energy to hoping that favorable events will happen.

But I still hope they will.

Daily Market Update – September 10, 2014 (9:00 AM)

After what seemed to be a fairly predictable Apple event yesterday nothing had gotten a boost of any sort.

Apple itself fluctuated between a gain and a loss and the market accelerated losses, making it the second consecutive day of losses, putting more distance between September and this past August.

With the event now over there’s really nothing left for the rest of the week of any great importance.

Today becomes reasonably important, however, as after two days of losses and a small spike in volatility, a third day of the same would start getting everyone to begin their whispers about a correction.

Over the past two years there has been some sort of a mini-correction and spike in volatility every two months or so, the last of which was in July and ended in early August. During that time most everyone was pointing toward the 30% spike in volatility, having taken notice of the volatility late in the process of that most recent mini-correction. By the time volatility became noticed and became a topic it was already time for the correction to end, and it did in a very sudden manner.

This morning is giving indications of a higher open, but a very reluctant one, as futures are actually pointing lower, but are still above the fair value.

That means no one is terribly enthused as trading is getting ready to begin.

That describes yesterday, as well. Despite some falling prices there really wasn’t anything that gave the message that some bargains were in the process of being created. It was difficult to get enthused about the price activity yesterday which deteriorated as the afternoon wore on, especially in the final two hours of trading.

That kind of deterioration going into the close is rarely a reason to get excited by the next morning’s opening and that’s precisely where I begin the day.

Given that it’s also a Wednesday, which tends to be a slow day anyway, as the new weekly options for those without expanded weekly options aren’t yet available. That generally immediately cuts the available new position opportunities especially in a low volatility and low premium environment.

However, since next week is the end of the monthly cycle that also means that any position can be rolled over to next week even today.

So while I don’t expect much action or trading today, any kind of strength that may develop may be an opportunity to secure positions for rollover, if assignment doesn’t seem as likely. Given the weakness thus far this week the hope of finding new call sale opportunities is waning, so attention has to focus on the ability to create income through rollovers and hopefully replenish cash through some assignments.

EIther of those goals would be compromised by further market weakness over the next 3 days, so I’m hopeful for some kind of stability. In that event I would rather commit to an early rollover, even if those shares move higher by the end of the week and could have been assigned, instead.

It’s generally better to have the cash in hand than to devote too much energy to hoping that favorable events will happen.

But I still hope they will.

Daily Market Update – September 9, 2014 (Close)

In a week when there’s not much planned economic news and where it appears as if the geo-political news may be muted, today was destined to stand out.

Instead of anything really important, the driver of news was the Apple’s product releases presentation that begans early in the afternoon.

There was a time, just a few years ago that the market’s daily performance was essentially determined by Apple’s performance. You could have done away with the other 499 companies and just tracked Apple’s share performance day in and day out and you would have had a great idea of how the market performed that day, at least in direction.

Those days are gone, so it’s not too likely that anything coming out of today’s meeting will have much of an impact on the rest of the market. Too bad, because the market could have used some help today, especially as it deteriorated in the afternoon, while Apple was at least able to hold its ground, having alternated between disappointment and satisfaction.

After a mildly negative day yesterday, but without any real sign of  building sentiment, the pre-open trading looked like it would be another day beginning with some degree of indecision. There was really no reason to believe that it would crumble as the day wore on, but I never got a comfortable feeling at any point during the day to part with any money.

After a reasonably busy week of trading last week, I  think that yesterday’s activity in adding new positions may mark the week’s high point, at a time when my cash reserves have gone to a recent low point. In the face of any continuing indecision I would prefer to keep some funds back for the ability to be an opportunist and wouldn’t bemoan missing any unforeseen sudden spike higher in the broader market, as long as it also takes me along for the ride and also brings some of this week’s expiring positions in better shape to either get rolled over or be assigned, preferably the latter.Additionally, going along for that kind of a ride would also hopefully offer an opportunity to be opportunistic with other members of the portfolio that have been waiting for their chance to contribute to the generation of income.

However, today didn’t go that way. So while having already expected a slow day today, like many others I still kept an eye on potential opportunities that may have popped up, but fell into the trap of getting sucked in by the Apple event, even watching the watch the countdown clock that was featured on CNBC.

While not particularly interested in Apple at the moment and not too excited about the hype, there’s also the realization that there can be some kind of trickle down. The Apple event can then bring derivative events, as people smash open the products to determine what’s inside and try to figure out who the derivative winners and losers are, which can include hardware and software makers and this time around, possibly even a service provider, such as PayPal, eBay’s very profitable division.

While I’m not a very active consumer, I did hope that Apple introduced some kind of new product that gets people excited and digging into their pockets, although it’s not really clear that if they do it would be with anything other than money that may have otherwise been earmarked elsewhere, as opposed to introducing additional spending into the system.

After it was all said and done I’m really not sure what they introduced that’s new and innovative. As far as their much anticipated “apple Watch” goes, it won’t be hitting the stores until 2015, so any thoughts of a “must have” item in time for Christmas is off the books and won’t be offering too much of a boost this year.

Just as with the stock market and all of the talk about money on the sidelines that may drive shares higher, the retail market needs the same thing as a spur and that could be the sort of thing that would drive sideline investment back to work.

It’s now been a while since I’ve been fully invested and would love to be so, once again. Who knows, maybe tomorrow begins that day, now that today didn’t. But as far as seeing the retail sector expand as all of those people getting back to work start getting back on track for the discretionary spending that really drives everything and fuels this market even higher?

Thanks for nothing, Apple.

Daily Market Update – September 9, 2014 (8:15 AM)

In a week when there’s not much planned economic news and where it appears as if the geo-political news may be muted, today will stand out.

Instead of anything really important, the driver of news will be coming out of Apple’s product releases presentation that begins early in the afternoon.

There was a time, just a few years ago that the market’s daily performance was essentially determined by Apple’s performance. You could have done away with the other 499 companies and just tracked Apple’s share performance day in and day out and you would have had a great idea of how the market performed that day, at least in direction.

Those days are gone, so it’s not too likely that anything coming out of today’s meeting will have much of an impact on the rest of the market.

After a mildly negative day yesterday, but without any real sign of  building sentiment, the pre-open trading looks like it will be another day beginning with some degree of indecision.

After a reasonably busy week of trading last week, I  think that yesterday’s activity in adding new positions may mark the week’s high point, at a time when my cash reserves have gone to a recent low point. In the face of any continuing indecision I would prefer to keep some funds back for the ability to be an opportunist and wouldn’t bemoan missing any unforeseen sudden spike higher in the broader market, as long as it also takes me along for the ride and also brings some of this week’s expiring positions in better shape to either get rolled over or be assigned, preferably the latter.

Additionally, going along for that kind of a ride would also hopefully offer an opportunity to be opportunistic with other members of the portfolio that have been waiting for their chance to contribute to the generation of income.

So while expecting a slow day today, like many others I’ll still be keeping an eye on potential opportunities that may stay pop up, but will probably also fall into the trap of getting sucked in by the Apple event and will watch the countdown clock that is being featured on CNBC.

Of course that event then brings derivative events, as people smash open the products to determine what’s inside and try to figure out who the derivative winners and losers are, which can include hardware and software makers and this time around, possibly even a service provider, such as PayPal, eBay’s very profitable division.

While I’m not a very active consumer, I do hope that Apple introduces some kind of new product that gets people excited and digging into their pockets, although it’s not really clear that if they do it would be with anything other than money that may have otherwise been earmarked elsewhere, as opposed to introducing additional spending into the system.

Just as with the stock market and all of the talk about money on the sidelines that may drive shares higher, the retail market needs the same thing as a spur and that could be the sort of thing that would drive sideline investment back to work.

It’s now been a while since I’ve been fully invested and would love to be so, once again. Who knows, maybe today begins that day when the retail sector expands as all of those people getting back to work start getting back on track for the discretionary spending that really drives everything and can be just the fuel to get this market even higher.

If that’s the case, thank you Apple.

Daily Market Update – September 8, 2014 (Close)

After another week of setting records this week is one that doesn’t really have much in the way of scheduled news events.

In fact, if you didn’t realize it to be otherwise, you would have thought that this was the last week of summer, with no one staying around to do their jobs. In addition to a very, very light week of planned economic reports and releases, there’s only a single Federal Reserve Governor giving prepared remarks for the week, whereas most weeks it’ss about 5 or so.

Lately, however, the market has liked these vacuums and insulation from the world of real economics and data. It has just moved higher and higher, especially when there’s been nothing acting as resistance.

During these periods of quiet there hasn’t been a need to decide whether good news is bad or bad news is good. Instead, no news has been the best news. No thought is necessary when there are no inputs coming and even autopilot looks like a genius.

What it hasn’t liked has been external events, but lately it has turned a deaf ear to what has been going on around the world, not really letting much get in the way of its continued climb higher after a very brief and shallow downturn in July.

After a bit of a buying spree last week and the spending down of cash reserves that saw only 3 positions get assigned, I may be in a more cash preserving mode as this week begins. Unlike last week when the week started with only a single position set to expire that week, this week is much more broadly populated with expiring positions.

The same is true, and even more so, for next week’s monthly expiration.

With volatility continuing at such low levels that means that the likelihood is that for any new positions opened this week the focus will be on weekly expirations, as much as I would like to expand the holdings on the basis of expiration date, but we all know how those plans go, sometimes.

As has been the case for a while I would gladly trade off some new positions for the opportunity to find cover for existing positions and the ability to put those back to work. Not only could that preserve cash it could share in any potential market climb while not adding to the risk that might be associated with any market decline.

Unfortunately, that’s been more of a dream than a reality, but you can’t blame someone for continuing to dream. Today, though, wasn’t the kind of day that was meant to see dreams come true.

With no real direction noted in the pre-open, as has been the case for a while, I was very likely wait to see if there was any prevailing tone being established before committing much in the way of reserves, but some early weakness dictated otherwise and in hindsight, I wish I had not waited at all.

Although I’d especially like to add some technology, healthcare or finance in order to better re-establish some diversification, I wasn’t likely to just wait for one of those specific opportunities to come along, instead using the “best athlete” model and going for that opportunity, if it appears. So instead, it turned out to be more energy and more consumer sector positions added today.

Hopefully the week will be one of calmness inside and outside of markets, allowing some of the week’s positions to be assigned and replenishing cash, with an eye toward getting ready for the cycle’s end and beyond.

Today was nothing more than a step to get us one day closer to this Friday and the next and with nothing else very memorable or consequential. However, I’m not certain that I will be very inclined to add too much more in the way of new positions unless feeling significant certainty that a fair portion of this week’s expiring positions are likely to be assigned or rolled over.

Unfortunately, today’s market didn’t do much to encourage that feeling of confidence.

Daily Market Update – September 8, 2014 (9:00 AM)

After another week of setting records this week is one that doesn’t really have much in the way of scheduled news events.

In fact, if you didn’t realize it to be otherwise, you would have thought that this was the last week of summer, with no one staying around to do their jobs. In addition to a very, very light week of planned economic reports and releases, there’s only a single Federal Reserve Governor giving prepared remarks for the week, whereas most weeks is about 5 or so.

Lately, however, the market has liked these vacuums and insulation from the world of real economics and data. It has just moved higher and higher, especially when there’s been nothing acting as resistance.

During these periods of quiet there hasn’t been a need to decide whether good news is bad or bad news is good. Instead, no news has been the best news. No thought is necessary when there are no inputs coming and even autopilot looks like a genius.

What it hasn’t liked has been external events, but lately it has turned a deaf ear to what has been going on around the world, not really letting much get in the way of its continued climb higher after a very brief and shallow downturn in July.

After a bit of a buying spree last week and the spending down of cash reserves that saw only 3 positions get assigned, I may be in a more cash preserving mode as this week begins. Unlike last week when the week started with only a single position set to expire that week, this week is much more broadly populated with expiring positions.

The same is true, and even more so, for next week’s monthly expiration.

With volatility continuing at such low levels that means that the likelihood is that if any new positions are opened this week the focus will be on weekly expirations, as much as I would like to expand the holdings on the basis of expiration date.

As has been the case for a while I would gladly trade off some new positions for the opportunity to find cover for existing positions and the ability to put those back to work. Not only could that preserve cash it could share in any potential market climb while not adding to the risk that might be associated with any market decline.

Unfortunately, that’s been more of a dream than a reality, but you can’t blame someone for continuing to dream.

With no real direction noted in the pre-open, as has been the case for a while, I will very likely wait to see if there is any prevailing tone being established before committing much in the way of reserves. Although I’d especially like to add some technology, healthcare or finance in order to better re-establish some diversification, I probably won’t just wait for one of those specific opportunities to come along, instead using the “best athlete” model and going for that opportunity, if it appears.

Hopefully the week will be one of calmness inside and outside of markets, allowing some of the week’s positions to be assigned and replenishing cash, with an eye toward getting ready for the cycle’s end and beyond.

Daily Market Update – September 5, 2014 (8:00 AM)

The Week in Review will be posted by 6:00 PM and the Weekend Update will be posted by 12:00 noon on Sunday.

Today’s possible outcomes include:

Assignments: INTC

Rollovers:  BP, LVS, WFM

Expirations: none

The following positions were ex-dividend this week: COH (9/5 $0.34), MOS (9/2 $0.25)

The following positions are ex-dividend next week: GM (9/8 $0.30), NEM (9/9 $0.025)

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

Daily Market Update – September 4, 2014 (Close)

Comparatively speaking, today was a big news day with both the ADP Jobs reports and an announcement from the ECB regarding its forward policies, in addition to comments from its head, Mario Draghi.

As it would turn out, neither would really be very important nor really change anyone’s minds about anything.

Early this morning came the unusual leak of information confirming the initiation of ECB’s version of quantitative easing and placed it at 500 billion Euros, which would be about 7 months worth of Federal Reserve easing, so while sounding like a lot, may be only a down-payment on what may be required to jump start the European economies that are lagging.

The pre-opening market seemed to like the unconfirmed information contained in that leak, but as I mentioned yesterday, that kind of  embracing the ECB decision by US markets may be short lived if it ends up firming up European markets, whose offerings can be in direction competition to our own.

If that’s going to be a problem it will likely be one that gets set into place in relatively slow motion, at least in its early phases. Other than the day when someone finally opines that is going to be the case and the market takes a quick hit, there should be plenty of time to position a portfolio to not get blind-sided.

With Thursday now here, my attention shifted to positioning for next week. That’s far enough into the future to be planning, for now.

With only five positions set to expire this week there’s wasn’t too much to work with, although as Thursday’s trading got ready to begin they were all in striking range of either being rollover candidates or getting assigned. Either of those is acceptable, although, as with most weeks it’s always nice to have a combination.

Surprisingly, there was some opportunity to add another new position as British Petroleum had a horrible day after receiving news of the court’s decision regarding the fine for its role in the Gulf of Mexico spill some 4 years ago. Shockingly, the claim was that British Petroleum put cost savings ahead of safety and for that they have another $17 billion in fines and penalties facing them.

Does anyone remember Anadarko?

In addition to that purchase came some reason to rollover some positions early. One of those, Coach, goes ex-dividend tomorrow and it saw its price run up sharply at about 2 PM, as there were two separate large trades that sent shares sharply higher very quickly. More intriguing were the two very large options trades made a few minutes later after the jump from $37.10 to $37.37.

There was a very aggressive trade for the $37.50 contracts expiring tomorrow, about 800 contracts worth and then an equally sized, but more cautious trade for the $37 September 20th contracts.

I hope that whoever made those trades is right, but I did want to keep my dividend, hence the rollover, which as it turned out in the final 10 minutes of trading, may not have been necessary, as shares closed inside of the $37.34 threshold.

Despite some unexpected activity today, what’s still missing this week is the ability to reduce the number of uncovered positions as the market has been fairly milquetoastish during the first couple of days of trading. Ideally, what helps to get a position to leave its uncovered status is a price spurt and there haven’t been too many of those of late.

What I think has been telling of late of the health of the market is that individual stocks seem to be taking longer to recover from any moves lower. Those moves seem to be sharper and more sustained. In a period of low volatility it is then difficult to find an option premium that can justify the trade off of potential future gains.

One can argue that is the case simply because there may be alternative investments and so money flees from a weakened position to others. That’s precisely the same kind of dynamic that could be the undoing of our current market run higher.

While so much has been said of the US equity markets offering the best opportunities, not only in terms of geography, but also in terms of products, such as in comparison to bonds, any perception in that advantage waning will shift investor allegiances.

The micro-economic issues are important, witness this mornings further erosion in YUM Brands, but the various macro-economic issues are all of concern, as well.

For now, it’s just time to take it all in, as the only consistency is inconsistency. Following the ECB statement and comments from Draghi, we may be entering an altered landscape, but one that could be a much more easy one in which to trade if it slows down the rush of US stock markets higher.

Daily Market Update – September 4, 2014 (8:00 AM)

Comparatively speaking, today is a big news day with both the ADP Jobs reports and an announcement from the ECB regarding its forward policies, in addition to comments from its head, Mario Draghi.

Early this morning came the unusual leak of information confirming the initiation of ECB’s version of quantitative easing and placed it at 500 billion Euros, which would be about 7 months worth of Federal Reserve easing, so while sounding like a lot, may be only a down-payment on what may be required to jump start the European economies that are lagging.

The pre-opening market seems to like the unconfirmed information contained in that leak, but as I mentioned yesterday, that kind of  embracing the ECB decision by US markets may be short lived if it ends up firming up European markets, whose offerings can be in direction competition to our own.

If that’s going to be a problem it will likely be one that gets set into place in relatively slow motion, at least in its early phases. Other than the day when someone finally opines that is going to be the case and the market takes a quick hit, there should be plenty of time to position a portfolio to not get blind-sided.

With Thursday now here, attention shifts to positioning for next week. That’s far enough into the future to be planning, for now.

With only five positions set to expire this week there’s not too much to work with, although as Thursday’s trading gets ready to begin they are all in striking range of either being rollover candidates or getting assigned. Either of those is acceptable, although, as with most weeks it’s always nice to have a combination.

What’s still missing this week is the ability to reduce the number of uncovered positions as the market has been fairly milquetoastish during the first couple of days of trading. Ideally, what helps to get a position to leave its uncovered status is a price spurt and there haven’t been too many of those of late.

What I think has been telling of late of the health of the market is that individual stocks seem to be taking longer to recover from any moves lower. Those moves seem to be sharper and more sustained. In a period of low volatility it is then difficult to find an option premium that can justify the trade off of potential future gains.

One can argue that is the case simply because there may be alternative investments and so money flees from a weakened position to others. That’s precisely the same kind of dynamic that could be the undoing of our current market run higher.

While so much has been said of the US equity markets offering the best opportunities, not only in terms of geography, but also in terms of products, such as in comparison to bonds, any perception in that advantage waning will shift investor allegiances.

The micro-economic issues are important, witness this mornings further erosion in YUM Brands, but the various macro-economic issues are all of concern, as well.

For now, it’s just time to take it all in, as the only consistency is inconsistency. Following the ECB statement and comments from Draghi, we may be entering an altered landscape, but one that could be a much more easy one in which to trade if it slows down the rush of US stock markets higher.

Daily Market Update – September 23 2014 (Close)

If the stakes weren’t so serious this morning’s news from Ukraine would be pretty laughable.

The retraction of a claim that Ukraine had reached a ceasefire agreement with Russia because Russia claims it was never a party to the conflict and because rebel leaders said they were never consulted could never happen in real life, but could be the sort of fork in the road that could take the next step in any direction.

So while awaiting some clarification on what that conflict will mean for us, there is the matter of tomorrow morning’s delayed ADP Report, which comes before Friday’s Employment Situation Report.

Most everyone is expecting another month of 200,000+ job gains and there’s little reason to expect a surprise from either measure of the US economy. The bad news is that because we’re so accustomed to good news on employment bad news would now likely be received very negatively, as no one can reasonably expect the Federal Reserve to back off from its planned end to quantitative easing. Further, really good news would likely also be interpreted as being bad as it could mean an accelerated time table for interest rate increases.

So there’s not much benefit to be gained from the reports and there really hasn’t been much in the way of market reaction through all of 2014, although the Employment Situation Report continues to be strongly associated with both a market advance for the week as well as for the day before the release.

Instead, the real interest will be on tomorrow’s ECB statement and the speculation as to whether they will finally follow the path set by our Federal Reserve and take actions that could add some reason for investment in their own stock markets. However, even in this new inter-connected world, where our greatest companies are now multi-nationals, the shift to a European version of quantitative easing could divert money from our own markets to the new hot markets in Europe.

While any suggestion of quantitative easing in Europe may be made with some initial euphoria, it wouldn’t be too surprising to see a realization that moving in that direction might not be the best thing for our own markets, which have certainly benefited from the flow of money from others around the world.

But that’s an issue for some other day. The delay is also in homage to the deftness with which Mario Draghi, head of the ECB, has done very well speaking a good game, consistently saying that the ECB would do everything in its power, yet has really not done anything other than the obligatory need to lower rates as the world has set the pace in that regard.

Today the market is prepared for a positive open in advance of a quiet day on the news front and after yesterday’s comeback. With a busier day than I initially expected yesterday, I wasn’t expecting to do very much in the pursuit of more new positions and was just hoping that the market is able to maintain at these levels, if not higher, to end out the week.

As usual, just as with the Federal Reserve, I have a dual mandate.

I want assignments and I want rollovers. At least yesterday’s surprisingly busy activity opens up the possibility for both this week and with only 4 days in which to act there’s already the need to start thinking about setting up the stage for next week, which is also in need of having it populated with positions set to expire next Friday.

For today, while I didn’t anticipate spending too much  more and definitely don’t want to chase anything down, there was still some hope of finding an isolated opportunity, ideally one that was also dividend related. Those are fairly sparse this week, but among the opportunities appeared to be some going ex-dividend on Monday, which can be an easy way to pick up an additional week’s worth of premium for a very short holding period if all goes as hoped.

Well see.

Daily Market Update – September 23 2014 (8:15 AM)

If the stakes weren’t so serious this morning’s news from Ukraine would be pretty laughable.

The retraction of a claim that Ukraine had reached a ceasefire agreement with Russia because Russia claims it was never a party to the conflict and because rebel leaders said they were never consulted could never happen in real life, but could be the sort of fork in the road that could take the next step in any direction.

So while awaiting some clarification on what that conflict will mean for us, there is the matter of tomorrow morning’s delayed ADP Report, which comes before Friday’s Employment Situation Report.

Most everyone is expecting another month of 200,000+ job gains and there’s little reason to expect a surprise from either measure of the US economy. The bad news is that because we’re so accustomed to good news on employment bad news would now likely be received very negatively, as no one can reasonably expect the Federal Reserve to back off from its planned end to quantitative easing. Further, really good news would likely also be interpreted as being bad as it could mean an accelerated time table for interest rate increases.

So there’s not much benefit to be gained from the reports and there really hasn’t been much in the way of market reaction through all of 2014, although the Employment Situation Report continues to be strongly associated with both a market advance for the week as well as for the day before the release.

Instead, the real interest will be on tomorrow’s ECB statement and the speculation as to whether they will finally follow the path set by our Federal Reserve and take actions that could add some reason for investment in their own stock markets. However, even in this new inter-connected world, where our greatest companies are now multi-nationals, the shift to a European version of quantitative easing could divert money from our own markets to the new hot markets in Europe.

While any suggestion of quantitative easing in Europe may be made with some initial euphoria, it wouldn’t be too surprising to see a realization that moving in that direction might not be the best thing for our own markets, which have certainly benefited from the flow of money from others around the world.

But that’s an issue for some other day.

Today the market is preparing for a positive open in advance of a quiet day on the news front and after yesterday’s comeback. With a busier day than I initially expected yesterday, I’m not expecting to do very much in the pursuit of more new positions and will just be hoping that the market is able to maintain at these levels, if not higher, to end out the week.

As usual, just as with the Federal Reserve, I have a dual mandate.

I want assignments and I want rollovers. At least yesterday’s surprisingly busy activity opens up the possibility for both this week and with only 4 days in which to act there’s already the need to start thinking about setting up the stage for next week, which is also in need of having it populated with positions set to expire next Friday.

For today, while I don’t anticipate spending too much  more and definitely don’t want to chase anything down, there’s still some chance of finding an isolated opportunity, ideally one that is also dividend related. Those are fairly sparse this week, but may have some  opportunities next week, including some going ex-dividend on Monday, which can be an easy way to pick up an additional week’s worth of premium for a very short holding period if all goes as hoped.

Well see.

Daily Market Update – September 2, 2014 (Close)

The big story this morning was that the traders are back now that Labor Day has come and gone.

It’s really not as if anyone went away for the summer, it’s just that they had other things to do besides trading all day long. Market volume was abysmally low during the climb higher and the only really elevation in trading activity came during the very brief decline earlier in the summer.

But this week people start coming back and volume should also be increasing, as if they had absolutely no ability to conduct business from the Hamptons.

For a little while today it seemed as if they were coming back with a chip on their shoulders, as the market took a brief turn downward in the absence of any real catalyst.

Fortunately there was nothing on a geo-political front occurring during this past long holiday weekend to really shake things up, because that could have been a messy way to get a shortened week off to a start. As a result the market looked as if it would get off to a really benign start and with very little scheduled news during the week to create expectations for market reactions in either direction. Why the market took a brief turn downward is anyone’s guess, but despite the comeback it was a fairly dour kind of day.

Although there is the monthly Employment Situation Report on Friday and a number of Federal Reserve Governors will be speaking during the week, including the one most recent dissenting voter, there’s not likely to be much in the way of surprise coming from these scheduled events, although there may be some news coming later in the week from the ECB, particularly regarding their version of qualitative easing and how firmly they may be ready to adopt such policies.

Until that point that, again, puts the spotlight on geo-political events and that could also take markets in either direction, although with the NATO meeting this week it’s hard to see how anything could move the markets higher as a result of those events, unless an acquiescent Putin is the end result. However, if the market has any ability to draw upon its recent past, it will realize that the appearance of any kind of acquiescence or agreeability is just a precursor to another bit of disagreeable action.

But what are you going to do? Wait until something happens? That’s actually not a bad idea, except to predicate everything on waiting is probably not a good way to go, but keeping something back for any kind of surprise isn’t necessarily a bad strategy.

Recycling money from assignments is an intermediate approach to dealing with uncertainty. It’s not really committing new money and it doesn’t have to include all of the recently freed up cash, although it easily could and even more.

As usual, when I have funds from assignments looking to be recycled I like to see the market get off to a weak start for the week, but lately that hasn’t been the case, as August had a four week winning streak, with each week getting off to a good start, so I’m not likely to recycle all of it this week.

However, with only a single position set to expire this week that meant that there is little to be rolled over into next week, which itself has a mere three positions set to expire. That further meant I needed to populate this week’s list of income producing stocks and either create the possibility of freeing up cash for next week or at least creating additional income streams from the rollover of any new positions. As a result I found myself looking for new positions with expirations coming this week rather than thinking about the use of expanded options or the monthly. While I would have liked to focus on dividend paying positions, there aren’t too many worthy ones this week that could be of any use.

With the market appearing to get off to a very flat start there wasn’t much reason to aggressively get into the hunt. Instead, as has been the recent pattern, I expected to wait to see if there was any kind of direction to be established. The downside to that waiting, however, was that premiums were already extremely low thanks to the non-existent volatility and are further driven to their depths by having lost one day of time value with the holiday passed.

As far as a constellation of factors goes, those forming this week aren’t very propitious.

The market is at all time highs,  premiums are at all time lows and we are being held hostage by events external to the market in far off lands.

Not my favorite way to get a week off to a start, but somehow it usually works out anyway.

Admittedly, I was surprised by having opened as many new positions as I did. They may represent the totality of this week’s new position activity, but at least it gives some framework for the rest of the week and perhaps next week as well.

After getting off to a reasonable start for the week I would be very happy to see it gain some strength moving toward the week’s end and the Employment Situation Report. Any opportunity to put some cover on existing positions would be a nice way to mix things up a bit while awaiting some clarity regarding what kind of liabilities await us on the various risk fronts, both inside and outside of the market.