Category Archives: Daily Market Update

Daily Market Update – Jul 8, 2014 (Close)

Yesterday was, what has seemed to be a rare day. The market not only traded lower, but the broad market was weaker than the major indices indicated.

For someone who may be in the market to buy stocks in a meaningful way, yesterday’s decline wasn’t enough. It also wasn’t enough to send any signals that perhaps there was more to come.

There’s still some talk of money on the sidelines from more than 5 years ago. It’s hard to believe that could possibly be the case, but it’s just as hard to believe that anyone who has been on the sidelines that long would pick this as the right time to re-enter the markets.

While I always like to keep some money on the sidelines for unexpected opportunities, in hindsight those opportunities have been nearly every day for the past two years. I don’t know how many people that are actively invested also have cash reserves that could come into play, but what would be the catalyst to get those who do to give up on their discipline and go all in?

Also with the competition between asset classes for investment dollars, such as between stocks, bonds and real estate, you have to wonder what money is left in bonds that could come over to stocks, as well as the fact that real estate isn’t facing an exodus of investment dollars.

So you do have to wonder where the new money will come from to push stocks even higher.

Overseas money? Possibly, but with the inter-connected nature of the world’s economies and markets and shift would likely cause market casualties at their source and ripple throughout the world.

Who needs that?

Again there’s lots of focus on the yield of the 10 year Treasury as it approaches 2.6%. The thinking is now that rather than 3%, which was what everyone was watching just a few months ago as that level that would begin to draw investment dollars out of stocks and into bonds, it is 2.6%.

That either represents lowered expectations for returns or just more of the same guessing games that seek to create significance out of that which may have no significance.

One thing that has lost its significance of late has been the release of the FOMC statement each month, as it has become very predictable and often the words spoken by the various Federal Reserve Governors or the Chairman have more sway on markets for that particular moment in time. With the FOMC statement release tomorrow there wasn’t great likelihood that today would have any kind of meaningful move higher and probably not much reason to think that it would move significantly lower, either.

Yet it moved with some commitment, nonetheless and followed yesterday’s lead, although there was still no real impetus for the drop today, either.

With pre-open indications of another mildly negative open I wasn’t expecting too much reason to abandon a little bit of purchasing caution and simply hoped to be able to continue looking for some rollover opportunities for some of the many positions that expire this Friday.

Fortunately, even with all of that negativity some of those opportunities did present in addition to what looked like a potential buying opportunity in an old friend, Chesapeake Energy.

While I do find it more exciting to enter into a new position and the initial ROI is generally greater with those, it is the rollover that really makes the returns accumulate. So I certainly wouldn’t mind seeing some more of those rollovers happen tomorrow while at the same time still being able to conserve cash in anticipation of a day when it could serve me much better, and perhaps with less risk, as well.

Today’s market decline, at least in the big picture is pretty meaningless and could easily have been an artifact of volume. Any continuation, however, after tomorrow’s FOMC release could be reason to wonder if there’s something to what is now just a mere blip in the chart, taking us back all the way to levels not seen since June 30th.

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

Yesterday was, what has seemed to be a rare day. The market not only traded lower, but the broad market was weaker than the major indices indicated.

For someone who may be in the market to buy stocks in a meaningful way, yesterday’s decline wasn’t enough. It also wasn’t enough to send any signals that perhaps there was more to come.

There’s still some talk of money on the sidelines from more than 5 years ago. It’s hard to believe that could possibly be the case, but it’s just as hard to believe that anyone who has been on the sidelines that long would pick this as the right time to re-enter the markets.

While I always like to keep some money on the sidelines for unexpected opportunities, in hindsight those opportunities have been nearly every day for the past two years. I don’t know how many people that are actively invested also have cash reserves that could come into play, but what would be the catalyst to get those who do to give up on their discipline and go all in?

Also with the competition between asset classes for investment dollars, such as between stocks, bonds and real estate, you have to wonder what money is left in bonds that could come over to stocks, as well as the fact that real estate isn’t facing an exodus of investment dollars.

So you do have to wonder where the new money will come from to push stocks even higher.

Overseas money? Possibly, but with the inter-connected nature of the world’s economies and markets and shift would likely cause market casualties at their source and ripple throughout the world.

Who needs that?

Again there’s lots of focus on the yield of the 10 year Treasury as it approaches 2.6%. The thinking is now that rather than 3%, which was what everyone was watching just a few months ago as that level that would begin to draw investment dollars out of stocks and into bonds, it is 2.6%.

That either represents lowered expectations for returns or just more of the same guessing games that seek to create significance out of that which may have no significance.

One thing that has lost its significance of late has been the release of the FOMC statement each month, as it has become very predictable and often the words spoken by the various Federal Reserve Governors or the Chairman have more sway on markets for that particular moment in time. With the FOMC statement release tomorrow there isn’t great likelihood that today will have any kind of meaningful move higher and probably not much reason to think that it would move significantly lower, either.

With pre-open indications of another mildly negative open I’m not expecting too much reason to abandon a little bit of purchasing caution and would continue looking for some rollover opportunities for some of the many positions that expire this Friday.

While I do find it more exciting to enter into a new position and the initial ROI is generally greater with those, it is the rollover that really makes the returns accumulate. So I certainly wouldn’t mind seeing those rollovers happen while at the same time still being able to conserve cash in anticipation of a day when it could serve me much better, and perhaps with less risk, as well.

Daily Market Update – Jul 7, 2014 (Close)

After a nice 3 1/2 days off from trading it looks as if there’s little memory of what got the markets to their new highs last week.

If you can recall back just a few weeks when the market got a nice boost from the FOMC and then Janet Yellen’s press conference remarks, that boost was very short lived, as well, never having any impact on the following week.

This past week’s boost, as opposed to the tiny steps that marked the large number of previous new highs en route to Dow 17000, was somewhat larger and more decisive. That alone should have created some momentum and optimism but in a world where short term memories are scant, maybe 3 1/2 days is just too long to sustain anything.

So it maybe it shouldn’t be a little surprising that the pre-open futures weren’t reflecting any of that optimism that ended last week’s trading, although with volume very likely to be light again this week, there’s no telling what kind of exaggerated moves may happen.

When the day finally settles the market had done as it did for the first half of last week and traded ina  narrow range, going lower, with the broad market weaker than the DJIA. There was really no news for today’s mild weakness and really no news for any kind of move.

Although there is an FOMC statement release this week, it’s an otherwise very quiet week on the news front.

On the events front it is the start of earnings season again, although it does get difficult to know where one season begins and the previous one ends.

With a large number of positions set to expire this week I do get a little concerned about potential fallout from the FOMC release even though there’s very little reason to suspect that it will contain anything surprising in nature.

Over the past two weeks the market has been spurred ahead by comments from Janet Yellen that should be reflected in the language used and the selection of words in the FOMC statement. With the belief that interest rates will be kept low until 2015 and news that the employment rate is dropping, equity markets shouldn’t find themselves spooked by anything that may be contained in Wednesday’s release.

However, given that next week is the end of the July cycle that means that every position with a contract expiring this week could potentially be rolled over on Wednesday, without having had to wait for the appearance of the weekly option on Thursday, as is normally the case.

At least that gives some greater flexibility in dealing with existing positions and any concerns for a surprise coming on Wednesday afternoon.

For the coming week with adequate cash there is certainly opportunity to add new positions, but the possibility of rolling over some of those existing positions may create ample cash streams to reduce the reliance on new positions to do so.

That would actually suit me just fine, as I wouldn’t mind a relatively quiet week for new positions. I would like to maintain cash near its current level so I don’t expect to be terribly aggressive with adding new positions.

However, the greatest likelihood is that with all of those positions set for this Friday’s expiration there’s reason to want to look at the July 19 contracts or beyond for any new positions in some attempt to diversify just a little.

As has been the case lately, there’s probably good reason to sit back and see how the market actually opens once the trading starts for the rest of us. This week, I would love to see some additional strength, if only to have the opportunity to rollover or see assignments on a wide scale. At the moment I find that more appealing than being able to pick up a broad selection of newly created bargains.

As the day took shape there wasn’t much reason to consider adding anything to the portfolio as there wasn’t really any movement in prices from the early established declines and there was absolutely no indication of any trend or direction other than the disappointment of not following through on last week’s good news.

For some, that’s reason enough to refrain, but at least there was some opportunity to do some of those early rollovers and even get coverage for one existing position to start the week.

Those may have been baby steps, too, but they may still get us to the hoped for destination if enough of them can be put together by Friday.

Daily Market Update – Jul 7, 2014 (9:30 AM)

After a nice 3 1/2 days off from trading it looks as if there’s little memory of what got the markets to their new highs last week.

If you can recall back just a few weeks when the market got a nice boost from the FOMC and then Janet Yellen’s press conference remarks, that boost was very short lived, as well, never having any impact on the following week.

This past week’s boost, as opposed to the tiny steps that marked the large number of previous new highs en route to Dow 17000, was somewhat larger and more decisive. That alone should have created some momentum and optimism but in a world where short term memories are scant, maybe 3 1/2 days is just too long to sustain anything.

So it maybe it shouldn’t be a little surprising that the pre-open futures weren’t reflecting any of that optimism that ended last week’s trading, although with volume very likely to be light again this week, there’s no telling what kind of exaggerated moves may happen.

Although there is an FOMC statement release this week, it’s an otherwise very quiet week on the news front.

On the events front it is the start of earnings season again, although it does get difficult to know where one season begins and the previous one ends.

With a large number of positions set to expire this week I do get a little concerned about potential fallout from the FOMC release even though there’s very little reason to suspect that it will contain anything surprising in nature.

Over the past two weeks the market has been spurred ahead by comments from Janet Yellen that should be reflected in the language used and the selection of words in the FOMC statement. With the belief that interest rates will be kept low until 2015 and news that the employment rate is dropping, equity markets shouldn’t find themselves spooked by anything that may be contained in Wednesday’s release.

However, given that next week is the end of the July cycle that means that every position with a contract expiring this week could potentially be rolled over on Wednesday, without having had to wait for the appearance of the weekly option on Thursday, as is normally the case.

At least that gives some greater flexibility in dealing with existing positions and any concerns for a surprise coming on Wednesday afternoon.

For the coming week with adequate cash there is certainly opportunity to add new positions, but the possibility of rolling over some of those existing positions may create ample cash streams to reduce the reliance on new positions to do so.

That would actually suit me just fine, as I wouldn’t mind a relatively quiet week for new positions. I would like to maintain cash near its current level so I don’t expect to be terribly aggressive with adding new positions.

However, the greatest likelihood is that with all of those positions set for this Friday’s expiration there’s reason to want to look at the July 19 contracts for any new positions in some attempt to diversify just a little.

As has been the case lately, there’s probably good reason to sit back and see how the market actually opens once the trading starts for the rest of us. This week, I would love to see some additional strength, if only to have the opportunity to rollover or see assignments on a wide scale. At the moment I find that more appealing than being able to pick up a broad selection of newly created bargains.

Daily Market Update – Jul 3, 2014 (8:00 AM)

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

The possible outcomes today include:

Assignments: LVS

Rollovers: KSS

Expirations:  HFC

Trades, if any, will be attempted to be made prior to 12:30 PM EDT. The market closes early today to begin  the July 4th holiday.

Happy and safe celebration to all.

Daily Market Update – Jul 2, 2014 (Close)

Yesterday was a great example of how you can make something from nothing at all and that it’s so much easier when there’s little volume to fight back against the move.

Today was justa great example of how the market can be open all day long and no one would even have known about it, as it traded in an even more narrow range than on Monday.

Yesterday was something totally different, though. There wasn’t much reason for yesterday’s rise, but it was the kind that could easily perpetuate itself as the DJIA was approaching 17000. Those kind of round numbers tend to attract buying. As much as professional traders profess that such numbers have no meaning to them, it’s clear that market dynamics do seem to care, for whatever reason.

The market did close at another new high, but that 17000 wasn’t breached today. The tendency is that when those big round numbers are breached, they are done so in a pretty convincing fashion.

I certainly have no complaints because yesterday did offer an opportunity for a number of rollovers, leaving only a handful left for this shortened trading week. As for the rest of the portfolio, sometimes it really is better letting the market do the heavy lifting and simply enjoying the ride. Yesterday was one of those days, just occasionally punctuated with some unexpected rollover opportunities.

I don’t have any complaints about today, either, but it was nothing like yesterday, at least on an activity basis.

With markets closing in the early afternoon on Thursday, just a few trading hours after the release of the Employment Situation Report, that didn’t leave too much time to recover in the event of a drop and certainly didn’t leave too much time to trade, so yesterday’s activity was very welcome.

It was nice seeing the opportunity to execute the rollovers, Ideally, it’s always best to sell calls into strength, just as it is to sell puts into weakness.

You just never know what tomorrow brings and the shares of JP Morgan were a perfect example of that.

With shares having been due to expire this week at $58 and being within easy reach of that on Tuesday, who would have known of the unfortunate news to come after the close reporting that Jamie Dimon had been diagnosed with throat cancer? Given that other major banks went nicely higher today, you would have to believe that JP Morgan’s drop was related to the bad news regarding its Chairman.

Yesterday was a rare opportunity of strong price strength coming early in the week that happened to have an early expiration to boot. It was a Tuesday, but effectively was like a Thursday when it came to  option premiums and beginning to look for rollover opportunities.

With only a few new purchases for yet another week it always feels a little better being able to generate weekly income streams from existing positions. Yesterday’s activity didn’t leave much else to rollover this week, but there is still the chance that some more buying opportunities may appear this week using next week or the monthly cycle’s ending week option contracts. Somewhat unusually, there aren’t very many positions yet scheduled to expire at the cycle’s end, so if premiums allow, I may be more interested in those expirations rather than for next week.

Added into the equation is the beginning of earnings season prior to the end of the cycle. Just one more thing to keep eyes on. The past few quarters were very punishing for any company earnings disappointments and price recoveries tended to be much longer than during other times in this bull cycle. By and large, analysts have thought that earnings were in line, but ignored the impact of massive stock re-purchases and their contribution to raising EPS statistics. With much of the corporate cost cutting having already been done in previous years, the only real mechanism to increase earnings is through revenue and most everyone understands that revenues have not been stellar, as it tends to take a robust workforce and economy to drive revenues.

Yet, the march higher continued.

What will be interesting to see is whether the second quarter will show any kind of bounce back from the numbers of the previous quarter that were widely attributed to weather. The expectation would be for considerable improvement, so there is an immediate environment being established for disappointment to be the theme.

The rest of the week is framed by this morning’s ADP Report and followed by tomorrow’s Employment Situation Report. The ADP number was much larger than expected and had no revisions. Considering that their statistics are based on their payroll processing business you would have to wonder why there would ever be revisions.

The pre-open trading greeted that number with a yawn and gave up a small piece of the early gains upon the news.

It’s hard to imagine much that could or more appropriately, should, have an impact on markets, there’s some anxiety over a disappointing number, even as expectations are for another 200,000+ new jobs statistic. That nervousness is based on GDP revisions and the knowledge that it is most likely going to be a very lightly traded day, again introducing the low volume wild card.

With all of that, I’m glad it’s a short week and opportunity came along when it did.

Daily Market Update – Jul 2, 2014 (8:30 AM)

Yesterday was a great example of how you can make something from nothing at all and that it’s so much easier when there’s little volume to fight back against the move.

There wasn’t much reason for yesterday’s rise, but it was the kind that could easily perpetuate itself as the DJIA was approaching 17000. Those kind of round numbers tend to attract buying. As much as professional traders profess that such numbers have no meaning to them, it’s clear that market dynamics do seem to care, for whatever reason.

I certainly have no complaints because yesterday did offer an opportunity for a number of rollovers, leaving only a handful left for this shortened trading week. As for the rest of the portfolio, sometimes it really is better letting the market do the heavy lifting and simply enjoying the ride. Yesterday was one of those days, just occassionaly punctuated with some unexpected rollover opportunities.

With markets closing in the early afternoon on Thursday, just a few trading hours after the release of the Employment Situation Report, that didn’t leave too much time to recover in the event of a drop and certainly didn’t leave too much time to trade.

It was nice seeing the opportunity to execute the rollovers, Ideally, it’s always best to sell calls into strength, just as it is to sell puts into weakness.

Yesterday was a rare opportunity of strong price strength coming early in the week that happened to have an early expiration to boot. It was a Tuesday, but effectively was like a Thursday when it came to  option premiums and beginning to look for rollover opportunities.

With only a few new purchases for yet another week it always feels a little better being able to generate weekly income streams from existing positions. Yesterday’s activity didn’t leave much else to rollover this week, but there is still the chance that some more buying opportunities may appear this week using next week or the monthly cycle’s ending week option contracts. Somewhat unusually, there aren’t very many positions yet scheduled to expire at the cycle’s end, so if premiums allow, I may be more interested in those expirations rather than for next week.

Added into the equation is the beginning of earnings season prior to the end of the cycle. Just one more thing to keep eyes on. The past few quarters were very punishing for any company earnings disappointments and price recoveries tended to be much longer than during other times in this bull cycle. By and large, analysts have thought that earnings were in line, but ignored the impact of massive stock re-purchases and their contribution to raising EPS statistics. With much of the corporate cost cutting having already been done in previous years, the only real mechanism to increase earnings is through revenue and most everyone understands that revenues have not been stellar, as it tends to take a robust workforce and economy to drive revenues.

Yet, the march higher continued.

What will be interesting to see is whether the second quarter will show any kind of bounce back from the numbers of the previous quarter that were widely attributed to weather. The expectation would be for considerable improvement, so there is an immediate environment being established for disappointment to be the theme.

The rest of the week is framed by this morning’s ADP Report and followed by tomorrow’s Employment Situation Report. The ADP number was much larger than expected and had no revisions. Considering that their statistics are based on their payroll processing business you would have to wonder why there would ever be revisions.

The pre-open trading greeted that number with a yawn and gave up a small piece of the early gains upon the news.

It’s hard to imagine much that could or more appropriately, should, have an impact on markets, there’s some anxiety over a disappointing number, even as expectations are for another 200,000+ new jobs statistic. That nervousness is based on GDP revisions and the knowledge that it is most likely going to be a very lightly traded day, again introducing the low volume wild card.

With all of that, I’m glad it’s a short week and opportunity came along when it did.

Daily Market Update – Jul 1, 2014 (Close)

Yesterday was a little busier than I had expected, but it was certainly a quiet and uneventful day as the market stayed in a tight range all through the trading session.

This morning the pre-open futures are pointing toward a mildly positive opening.

I didn’t think that was going to result in much as far as opening new positions, but I had hoped and it turned out to be especially nice to see that opening spill over into the regular session and take on some life. That gave some opportunity to wring additional income out of existing positions, although lately you do have to wring harder to squeeze much premium out. To some degree that’s offset if dividends become part of the equation or become sought after, but there is a limit to those opportunities and they are far fewer than the universe of optionable stocks.

In the absence of any news or any obvious catalysts those kinds of large moves are possible when there’s not too much trading going on. If that’s the case, any moves are usually not very well sustained and return back to where they had started in fairly short order.

Today you certainly would have been hard pressed to have identified a reason for the day long and sustained strong gain.

I suppose that with cash still in reserve and the willingness to spend some of that reserve down, I also wouldn’t necessarily mind a sharp, light volume kind of sell-off this week, especially after today’s gains. That would give enhanced buying opportunity and also lead to some increased option premiums.

It’s always strange to suggest that you wouldn’t mind some sort of a sell-off, even if highly qualifying what type would be acceptable, but there are definitely advantages, especially if there’s cash in reserve.

Unfortunately, like so many things in life, what you wish for and what you get can be very different, so even while thinking that a sell-off might be nice, that’s only if rational heads prevail.

When it comes to money rational thinking is often in short supply, whether its greed or fear that’s at fault.

This week the only known challenge will be Thursday’s Employment Situation Report. With three and a half days of markets being closed after the report any unforeseen news, such as might corroborate the revised GDP statistics, could lead to weakness, especially if other events, such as in Iraq, pile on to the nervousness.

We’ll get a little bit of a hint tomorrow as the ADP statistics are released and any deterioration in those numbers could serve as a precursor for Thursday.

It has been a while since the Employment Situation report really mattered, but this could be one of those times that it does, perhaps exacerbated by the nervousness of staying long through an exceptionally long week-end.

Recent history, meaning for the past two years, however, indicates that traders haven’t really cared too much about weekend exposure, even when there were clear threats, so  the likelihood still has to remain that the event will be another non-event.

I’m still content to watch and wait as the rest of the week unwinds. In the event of any weakness I would likely not be of the belief that there would be anything sustained, so would probably be in the market to add new positions.

As it is, it turned out to be a nice day to watch and to actually pull off some rollovers, on a Tuesday no less, as there’s no better time to sell new options than into the face of a rally. That’s especially true when dealing with such a short week as this one that sees much faster erosion of premiums for this week’s options than for next weeks.

Of course, that doesn’t leave too much left to do for the rest of the week, now with most positions already rolled over, but you still will never know what awaits around the corner and where there may be opportunity to wring those premiums.

Daily Market Update – Jul 1, 2014 (9:15 AM)

Yesterday was a little busier than I had expected, but it was certainly a quiet and uneventful day as the market stayed in a tight range all through the trading session.

This morning the pre-open futures are pointing toward a mildly positive opening.

I don’t think that’s going to result in much as far as opening new positions, but it would be especially nice to see that opening spill over into the regular session and take on some life. Maybe that would give some opportunity to wring some income out of existing positions, although lately you do have to wring harder to squeeze much premium out. To some degree that’s offset if dividends become part of the equation or become sought after, but there is a limit to those opportunities and they are far fewer than the universe of optionable stocks.

In the absence of any news or any obvious catalysts those kinds of large moves are possible when there’s not too much trading going on. If that’s the case, any moves are usually not very well sustained and return back to where they had started in fairly short order.

I suppose that with cash still in reserve and the willingness to spend some of that reserve down, I also wouldn’t necessarily mind a sharp, light volume kind of sell-off this week. That would give enhanced buying opportunity and also lead to some increased option premiums.

It’s always strange to suggest that you wouldn’t mind some sort of a sell-off, even if highly qualifying what type would be acceptable, but there are definitely advantages, especially if there’s cash in reserve.

Unfortunately, like so many things in life, what you wish for and what you get can be very different, so even while thinking that a sell-off might be nice, that’s only if rational heads prevail.

When it comes to money rational thinking is often in short supply, whether its greed or fear that’s at fault.

This week the only known challenge will be Thursday’s Employment Situation Report. With three and a half days of markets being closed after the report any unforeseen news, such as might corroborate the revised GDP statistics, could lead to weakness, especially if other events, such as in Iraq, pile on to the nervousness.

We’ll get a little bit of a hint tomorrow as the ADP statistics are released and any deterioration in those numbers could serve as a precursor for Thursday.

It has been a while since the Employment Situation report really mattered, but this could be one of those times that it does, perhaps exacerbated by the nervousness of staying long through an exceptionally long week-end.

Recent history, meaning for the past two years, however, indicates that traders haven’t really cared too much about weekend exposure, even when there were clear threats, so  the likelihood still has to remain that the event will be another non-event.

I’m still content to watch and wait as the rest of the week unwinds. In the event of any weakness I would likely not be of the belief that there would be anything sustained, so would probably be in the market to add new positions.

Daily Market Update – June 30, 2014 (Close)

A 3 1/2 day trading week that ends with the Employment Situation Report as many of the big boys head out to the Hamptons early to start the summer can make for a quiet trading week.

In volume, but not necessarily in outcome.

Other than some surprise that might be contained in the monthly numbers reported Thursday morning, there really isn’t much that should move markets, but you can never tell what kind of anomalous moves can be found during light volume trading.

While last week seems as if the market was already on vacation this week it definitely becomes reality and my expectation isn’t to be doing too much trading.

For most of today it seemed as if most everyone had gone away as well, even as the market drifted lower in the final hour after having spent the day in a pretty tight trading range.

This was one of those days that I could have done something else or maybe tried multi-tasking, even though there were a few, not terribly exciting trades to be made.

Coming off a forgettable week I would have loved to see a return to the ability to sell calls on existing positions rather than aggressively adding new positions. With only a handful of positions expiring this week and with premiums reflecting a much shorter week it’s a little more challenging to find any opportunities that will expire this week. That may result in adding on to the list of positions set to expire next week, as that same challenge was present last week when looking for rollovers.

With sufficient cash to start the week I didn’t mind bringing the level down to about 20%. That would have meant 5 to 6 trades, but I just don’t believe that will end up being the case. I’m actually stunned that even three opening trades were made, but even those may have simply been done to try and fight off boredom.

One thing that I would like to see, but have now been waiting a while, is any kind of market commitment toward direction. That could be a higher or a lower direction, but at least a short term path. Maybe tomorrow, because today didn’t quite live up to that expectation.

This morning’s pre-open futures didn’t help to give much of an indication of any commitment, as moderation continued to be the theme. As so often has been the case lately, the early indication is for a slightly negative opening and most often that has gotten into the habit of leading to a meandering day.

And that’s exactly what today was.

With weeks as short as this one just about the only way to capture a reasonable premium on a weekly trade is to be able to make it fairly early in the week’s opening session, as the remaining time until expiration ticks away very quickly.

With some nice dividends this week it may simply be a good time to add to some of those positions, such as in JP Morgan and Bristol Myers, particularly as they trade off from their recent highs and their sectors may be in line for the next rotation, as that has continually been the market’s character as it reaches new highs but its component pieces aren’t always following along as you would normally expect.

That might make it a very easy kind of week.

But as usual, it’s not terribly often that a plan really goes as envisioned.

While clarity is always a nice thing to have I don’t think that vision will in any way be advanced this week.

Hopefully, there will at least be opportunity to generate some income, with or without much in the way of new purchases.

Daily Market Update – June 30, 2014 (9:00 AM)

A 3 1/2 day trading week that ends with the Employment Situation Report as many of the big boys head out to the Hamptons early to start the summer can make for a quiet trading week.

In volume, but not necessarily in outcome.

Other than some surprise that might be contained in the monthly numbers reported Thursday morning, there really isn’t much that should move markets, but you can never tell what kind of anomalous moves can be found during light volume trading.

While last week seems as if the market was already on vacation this week it definitely becomes reality and my expectation isn’t to be doing too much trading.

Coming off a forgettable week I would love to see a return to the ability to sell calls on existing positions rather than aggressively adding new positions. With only a handful of positions expiring this week and with premiums reflecting a much shorter week it may be challenging to find any opportunities that will expire this week. That may result in adding on to the list of positions set to expire next week, as that same challenge was present last week when looking for rollovers.

With sufficient cash to start the week I don’t mind bringing the level down to about 20%. That would mean 5 to 6 trades, but I just don’t believe that will end up being the case.

One thing that I would like to see, but have now been waiting a while, is any kind of market commitment toward direction. That could be a higher or a lower direction, but at least a short term path.

This morning’s pre-open futures aren’t helping to give much of an indication as moderation continues to be the theme. As so often has been the case lately, the early indication is for a slightly negative opening and most often that has gotten into the habit of leading to a meandering day.

With weeks as short as this one just about the only way to capture a reasonable premium on a weekly trade is to be able to make it fairly early in the week’s opening session, as the remaining time until expiration ticks away very quickly.

With some nice dividends this week it may simply be a good time to add to some of those positions, such as in JP Morgan and Bristol Myers, particularly as they tradeoff from their recent highs and their sectors may be in line for the next rotation, as that has continually been the market’s character as it reaches new highs but its component pieces aren’t always following along as you would normally expect.

That might make it a very easy kind of week.

But as usual, it’s not terribly often that a plan really goes as envisioned.

While clarity is always a nice thing to have I don’t think that vision will in any way be advanced this week.

Hopefully, there will at least be opportunity to generate some income, with or without much in the way of new purchases.

Daily Market Update – June 27, 2014 (8:30 AM)

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

Today’s possible outcomes include:

Assignment:  LVS

Rollover:  BBBY (puts),  DOW, MA

Expiration:   C, EBAY, HFC, PFE

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

Daily Market Update – June 26, 2014 (Close)

Yesterday was really a day that had government imprints on just about everything from before the opening bell until after the closing bell.

It started with a government decision regarding oil exports that significantly hurt the refiners across the board.

Then came the Supreme Court decision that may have killed off Aereo and its technology while boosting the networks and local broadcasters.

Finally, there came an IRS ruling in favor of Iron Mountains quest to be considered a REIT. That battle and open question had been going on for at least three years and the sudden spike in its option premiums suggested that some kind of decision was forthcoming.

It would otherwise likely have been a very quiet day if not for those stories that continue this morning with allegations by the New York State Attorney General against Barclays and its “dark pools,” Most people would believe that whether a violation of the law or not, Barclays wouldn’t be the only one involved.

Like they say, there’s usually more than one cockroach, so that may explain some weakness to all of the others that wouldn’t be likely to let a good scheme go unused. They certainly wouldn’t let Barclays be the only one to prosper from doing something of questionable ethics or legality.

The latter two of yesterday’s decisions were known to be coming, it just wasn’t exactly clear when they would be announced, nor what the decisions would be. The oil exporting rules came as a complete surprise, not just in timing, but in content, as well.

Ultimately, whether you’re on the right side of the wrong side of a government decision it’s an unsettling way to go about things. You really can’t get any closer to pure gambling as you’re fully dependent on a decision that is going to move markets in one direction or another, with very little chance of leaving the stock unchanged.

Even worse, there are no leaks or well placed rumors to give any ideas of what is to come. Watching SBGI in the days before the decision was released was pretty laughable as the shares alternated between going higher and going lower on multiple occasions on an intraday basis. People were simply guessing and rushing to place their bets.

While that may have been the case for IRM and SBGI, it wasn’t really part of the equation for those with positions in the oil refiners. Doing a quick glance at four of the major refiners there was a market capitalization decline of more than $10 billion on yesterday’s unanticipated news and then its unexpected content.

Today doesn’t seem as if yesterday’s theme will have legs, as it’s a new day and one beginning to appear as if it will have no catalysts nor any new big stories, save what may further develop from the Attorney General’s office.

Unfortunately, lately bad news and the over the top reactions are much slower in rebounding than I can remember during any upward moving market.

While government intervention is certainly needed it can raise havoc with markets whether through direct intervention or indirect. It’s much easier to navigate the markets when the intervention is below the radar and more geared toward creating a liquid and credible environment for trading.

Yesterday was a bit heavy handed. In the case of Aereo, it’s not even very clear that the Justices understand technology nor considered the history of the development of television, its transmission and reception. Their decision, as reflected in Justice Breyer’s eyes, was as much about definitions and drawing parallels to existing models as through an interpretation of the law.

For those old enough to remember “rabbit ears.” the Aereo is essentially a  new iteration of rabbit ears that allows transmission through public airwaves to be delivered through an internet connection. They charge a monthly fee for that service. The broadcasters claim that they are pirating protected content and charging for that content.

Go back 60 years as television was being introduced and those broadcasts over the public airwaves were worthless without antennae. The only difference between Aereo and those antennae makers of days past is that the latter didn’t lease out their products. They sold them. Had they chosen to follow a leasing model today Aereo would be nothing more than a mobile version of an old product and sales model. You paid for the product that captured protected content back then and Aereo was just evolving the relationship to a new device, unforeseen 60 years ago.

But because the past was as it was the future will likely be deprived of a new technology and some businesses suffer and others prosper, as a result.

And investors, too.

Today, though, turned out to be one of those days that wasn’t any where near as bad as it could have been, as the market showed a nice recovery from early losses. Maybe that will have some legs and take us out for the week on a positive note.

At least today there was some opportunity to rollover some positions and get into decent position to maybe get some more accomplished tomorrow if there’s any residual strength left over to end the week.

Daily Market Update – June 26, 2014 (9:00 AM)

Yesterday was really a day that had government imprints on just about everything from before the opening bell until after the closing bell.

It started with a government decision regarding oil exports that significantly hurt the refiners across the board.

Then came the Supreme Court decision that may have killed off Aereo and its technology while boosting the networks and local broadcasters.

Finally, there came an IRS ruling in favor of Iron Mountains quest to be considered a REIT. That battle and open question had been going on for at least three years and the sudden spike in its option premiums suggested that some kind of decision was forthcoming.

It would otherwise likely have been a very quiet day if not for those stories that continue this morning with allegations by the New York State Attorney General against Barclays and its “dark pools,” Most people would believe that whether a violation of the law or not, Barclays wouldn’t be the only one involved.

The latter two of yesterday’s decisions were known to be coming, it just wasn’t exactly clear when they would be announced, nor what the decisions would be. The oil exporting rules came as a complete surprise, not just in timing, but in content, as well.

Ultimately, whether you’re on the right side of the wrong side of a government decision it’s an unsettling way to go about things. You really can’t get any closer to pure gambling as you’re fully dependent on a decision that is going to move markets in one direction or another, with very little chance of leaving the stock unchanged.

Even worse, there are no leaks or well placed rumors to give any ideas of what is to come. Watching SBGI in the days before the decision was released was pretty laughable as the shares alternated between going higher and going lower on multiple occasions on an intraday basis. People were simply guessing and rushing to place their bets.

While that may have been the case for IRM and SBGI, it wasn’t really part of the equation for those with positions in the oil refiners. Doing a quick glance at four of the major refiners there was a market capitalization decline of more than $10 billion on yesterday’s unanticipated news and then its unexpected content.

Today doesn’t seem as if yesterday’s theme will have legs, as it’s a new day and one beginning to appear as if it will have no catalysts nor any new big stories, save what may further develop from the Attorney General’s office.

While government intervention is certainly needed it can raise havoc with markets whether through direct intervention or indirect. It’s much easier to navigate the markets when the intervention is below the radar and more geared toward creating a liquid and credible environment for trading.

Yesterday was a bit heavy handed. In the case of Aereo, it’s not even very clear that the Justices understand technology nor considered the history of the development of television, its transmission and reception. Their decision, as reflected in Justice Breyer’s eyes, was as much about definitions and drawing parallels to existing models as through an interpretation of the law.

For those old enough to remember “rabbit ears.” the Aereo is essentially a  new iteration of rabbit ears that allows transmission through public airwaves to be delivered through an internet connection. They charge a monthly fee for that service. The broadcasters claim that they are pirating protected content and charging for that content.

Go back 60 years as television was being introduced and those broadcasts over the public airwaves were worthless without antennae. The only difference between Aereo and those antennae makers of days past is that the latter didn’t lease out their products. They sold them. Had they chosen to follow a leasing model today Aereo would be nothing more than a mobile version of an old product and sales model. You paid for the product that captured protected content back then and Aereo was just evolving the relationship to a new device, unforeseen 60 years ago.

But because the past was as it was the future will likely be deprived of a new technology and some businesses suffer and others prosper, as a result.

And investors, too.

Daily Market Update – June 25, 2014 (Close)

It’s often said that the market discounts the future and reflects the situation six months from now.

With another revision of the first quarter’s GDP now indicating a negative 2.9% GDP if you could go back in time by about 6 months, I would bet you that those investing would be pretty unhappy to discover that they were following a fantasy and plowing their money into that fantasy.

Except that there may now be much consequence for that kind of misrepresentation of the health of the economy. And if you didn’t believe that could possibly have been the case, just look at today’s market, which shook off early concerns about the revisions and closed with a decent gain, despite the lack of anything resembling good news.

With all of the reasons to believe that the economy had been growing, albeit slowly, the market chugged along in anticipation that it would keep going that way. Except it turns out that’s not really the way it had been going.

The real optimists would shrug this off and simply say that six months from now our economy will be even more robust than it is today and that alone makes it reasonable to invest in stocks, as it’s all about the future and not the past.

You do have to wonder whether such large revisions begin to put some seminal metrics into the same league as those provided, and regularly derided by us, by the Chinese government. Those numbers are routinely dismissed despite the fact that they will move the markets on the day of their release and then so frequently those moves are quickly reversed as investors remember that the data often has no basis in fact.

This morning as the revision came out the immediate response was negative, but that fairly quickly corrected itself. Coming off yesterday’s very surprising loss that accelerated into the close you might believe that any negative news would be magnified, but that’s not appearing to be the case.

Approaching mid-week, this is shaping up to be one of the slowest trading weeks that I can recall, especially when having so much to spend.

What I thought were relative bargains yesterday got caught up in the sell-off that characterized the afternoon and that has to be a concern for additional positions that may be considered for purchase. Given the current environment it would be nice to see something tangible to provide confidence that the market can sustain itself at these levels.

Today’s digestion of the bad news should have been one of those signs, but it just didn’t have a really positive feeling about it.

Despite assurances from the Federal Reserve that would favor stocks over bonds, the deluge of IPO offerings leaves a bad taste for many who remember that as being a clarion call for bad things to come. Certainly, for those who look at the need for confirmatory volume for any kind of move, there hasn’t been any of that sort of thing.

While there may be a basis for that belief the rise of the market has been fairly slow, regular and sustained and isn’t the kind that could be grouped together with past speculative bubbles, it’s hard to escape that feeling.

While the Employment Situation Report hasn’t been very important lately, I think that next week’s report may conceivably become a market mover if it doesn’t significantly advance the thought that there are many more people in a position to spend their money and support economic growth.

Although I think that retail is strengthening and that should reflect increasing consumer ability to make discretionary purchases, the numbers coming along haven’t done much to confirm that belief.

With what remains of this week, I hope that there is some opportunity to rollover positions or get some assignments, but my preference at this point would be to see rollovers as a means of generating income stream, rather than adding to the already ample cash reserve.

To its credit, given the horrible revision of this morning and sell-offs in Asia, the preliminary read on this morning’s market wasn’t terribly bad, so you can never really know what awaits. 

Turning away from the stock ticker may be done only at peril, but by the same token trying to apply a logical frame of mind in understanding what is going on may be equally perilous.