Category Archives: Daily Market Update

Daily Market Update – October 6, 2016 (7:30 AM)

Yesterday saw a nice rally that was led by oil, not that that really makes any more sense than it had made through much of 2016.

Nonetheless, it gave another opportunity to sell some calls on a non-performing position, but once again, the expiration date was measured in months and not in weeks.

While I do like trading and enjoy the activity, ultimately, it’s the bottom line and comparative performance that counts.

I suppose that if I can get to that bottom line objective it may not matter that I got there in a less enjoyable way, but it will matter to me.

Still, an opportunity is an opportunity and I don’t mind seeing the projected returns in the event of an assignment, even if it is still 3 or 4 months away.

For some reason, I still like looking at those nice percentage returns, especially when the stock hasn’t really moved very much.

For me, that never gets old, although waiting for assignments is both getting old and seeing me getting older and older.

That I could do without.

This morning, the day before the Employment Situation report is to be released, you would expect that markets would be cautious. What they’ve done the past couple of days is to once again take their cues from the oil market, despite the complete lack of sense in doing so.

Tomorrow may signal a return to an interest rate focus and I can’t imagine how anything would be greeted well, unless the employment numbers are weak.

At this point, it seems that anything that looks as if it could be justification for an interest rate increase is being scorned and then results in selling.

The expectations for tomorrow are fairly low.

Only 170,000 new jobs are expected when getting numbers in the 200,000 range have been pretty commonplace.

I hope to be able to get some more trades in, but only if they can put some laggards to work. I don’t want to spend down cash, especially having done so this week and having so poorly timed that purchase.

That may be the theme for a while

Daily Market Update – October 5, 2016 (7:30 AM)

There really is very little reason for the market to do much of anything until Friday, when the Employment Situation Report is released.

That seems to be the case this morning, as it had the two previous mornings this week, although there were some times as trading ensued after the opening bell that the market seemed to forget what it was waiting to hear.

One thing that did become clear is that there are interest rate jitters.

Another thing that has been abundantly clear is that whoever is calling the shots and creating market unease about interest rates, just simply isn’t a student of history.

Instead of panic over the thought of a 0.25% interest rate hike, there should be concern that the economy can’t support even more, now that we’re approaching our 7th year of recovery.

But if those selling off at the mere thought of an interest rate increase would only look back in time, they would see that the early stages of rate increases are a great time to be accumulating stock.

That makes sense and for once, or maybe on just this rare occasion, something that makes sense had actually been the thing that had happened in the past.

That is, in the past, the early stages of interest rate increases reflected an expanding economy that was then reflected in the top and bottom lines of companies.

That in turn expanded earnings, which we all know is tied to a stock’s price, or at least should be.

Those are the very basic fundamentals upon which investing has always been based.

Maybe not trading, but investing.

So, even as we sit near new all time highs, there’s reason to think that an old fashioned expansion of the economy will lead us  even higher. Last week saw 5 days with triple digit moves, yet the market itself only ended with a net 0.2% gain.

I tend not to think in terms of unbridled enthusiasm, but I would definitely like to add to my cash reserves to have an opportunity to pick up anything that may take a move lower, in anticipation of some sustained moves higher.

For now, I would just like to see some assignments of positions in October, stockpile some cash and then consider re-deployment as early as Election Day week, even as there could be a sell-off when the news of an interest rate increase does finally arrive.

Daily Market Update – October 4, 2016 (Close)

Last week saw 5 days with triple digit moves, yet the market itself only ended with a net 0.2% gain.

This week looked as if it was going to pick up right where it had left off, not only by being a triple digit day, but in a reversal of course.

At the sounding of yesterday’s closing bell the course was reversed, but the streak was broken.

This morning’s futures gave no indication of anything as the trading was muted, as we draw nearer and nearer Friday’s Employment Situation Report.

The expectations for Friday are on the low side, only about 170,000 new jobs created, so a number with a 2 handle, especially if accompanied with an upward revision or two, could easily provoke a large reaction.

My guess is that reaction would be a negative one, even though once cool heads prevailed it should be seen as being something very positive.

The recent GDP release shows that something good is brewing in the economy and that would make it only a matter of short time until its reflected in both earnings and in guidance.

Maybe not in that order, but with spending cuts going on any increase to the top line should result in better comparable statistics and that is what it’s all about.

I went speculative yesterday with the sale of puts on a precious metal and was fortunate to get an opportunity to sell some calls on a long dormant position, that if ever assigned will still result in a nice return, thanks to the dividends and the accumulated premiums, even if one of the lots sold goes for $5 less than the purchase price.

While I still have some cash to part with, my expectation, just as that expectation was breached yesterday, is to be cautious and await Friday’s news.

There’s little else to capture attention this week other than any rallies that could give some additional opportunities to sell calls on dormant positions.

That would make the week worthwhile.

Today, however, the market really did show how unwilling it is to go gently into a higher interest rate environment as a fairly steep increase in rates today, partially due to some finite timetable Brexit news, sent stocks lower and really punished precious metals.

Unless there is some sustained news on the interest rate front between today’s close and Friday’s Employment Situation Report release, I suspect that today was a blip in both markets, but predictability hasn’t been the hallmark for what this market is likely to do on any given day.

Daily Market Update – October 4, 2016 (7:30 AM)

Last week saw 5 days with triple digit moves, yet the market itself only ended with a net 0.2% gain.

This week looked as if it was going to pick up right where it had left off, not only by being a triple digit day, but in a reversal of course.

At the sounding of yesterday’s closing bell the course was reversed, but the streak was broken.

This morning’s futures give no indication of anything as the trading is muted, as we draw nearer and nearer Friday’s Employment Situation Report.

The expectations for Friday are on the low side, only about 170,000 new jobs created, so a number with a 2 handle, especially if accompanied with an upward revision or two, could easily provoke a large reaction.

My guess is that reaction would be a negative one, even though once cool heads prevailed it should be seen as being something very positive.

The recent GDP release shows that something good is brewing in the economy and that would make it only a matter of short time until its reflected in both earnings and in guidance.

Maybe not in that order, but with spending cuts going on any increase to the top line should result in better comparable statistics and that is what it’s all about.

I went speculative yesterday with the sale of puts on a precious metal and was fortunate to get an opportunity to sell some calls on a long dormant position, that if ever assigned will still result in a nice return, thanks to the dividends and the accumulated premiums, even if one of the lots sold goes for $5 less than the purchase price.

While I xstill have some cash to part with, my expectation, just as that expectation was breached yesterday, is to be cautious and await Friday’s news.

There’s little else to capture attention this week other than any rallies that could give some additional opportunities to sell calls on dormant positions.

That would make the week worthwhile.

Daily Market Update – October 3, 2016 (Close)

Last week saw 5 days with triple digit moves, yet the market itself only ended with a net 0.2% gain.

There was, clearly, no theme last and no pattern.

This week will come to an end with a release of the Employment SItuation Report and there may be significant reason for the market to feel that it must react in a big way.

There was some hint last week that the market, although it had previously indicated that it would accept the idea of a December rate hike, wasn’t all that interested in really doing so.

The first bit of data to support the idea of an improving consumer led economy, the GDP, wasn’t well accepted, as it showed some surging consumer participation.

So this week’s Employment SItuation Report, if indicating a strong number or having upward revisions to the past, could be a real test.

With some cash freed up last week, I had money to spend, but just like the market, which was pointing toward a flat open this morning to start the week, I was and am still pretty tentative, at best.

With only 2 ex-dividend positions for the week and no positions set to expire, I wouldn’t have minded finding a place to park some money, but was planning to remain cautious.

At least in words, if not deeds, as it turns out I was anything but cautious in deeds.

Maybe caution will return tomorrow, but i was pretty satisfies with today.

With the start of the new quarter, we begin earnings season next week and we may finally get to that point that companies may find reason to start getting more optimistic as they provide guidance.

If looking for a catalyst to move higher, it has been a long time since fundamentals were responsible.

Otherwise, though, there’s really nothing else on the horizon that could give the market a reason to break old highs.

Again, I don’t expect to do much trading this week, especially after 2 trades this morning, but would gladly take any additional opportunities that might come along, especially if they helped to put some existing positions to work.

Daily Market Update – October 3, 2016 (7:30 AM)

Last week saw 5 days with triple digit moves, yet the market itself only ended with a net 0.2% gain.

There was, clearly, no theme last and no pattern.

This week will come to an end with a release of the Employment SItuation Report and there may be significant reason for the market to feel that it must react in a big way.

There was some hint last week that the market, although it had previously indicated that it would accept the idea of a December rate hike, wasn’t all that interested in really doing so.

The first bit of data to support the idea of an improving consumer led economy, the GDP, wasn’t well accepted, as it showed some surging consumer participation.

So this week’s Employment SItuation Report, if indicating a strong number or having upward revisions to the past, could be a real test.

With some cash freed up last week, I have money to spend, but just like the market, which is pointing toward a flat open this morning to stop the week, I’m pretty tentative, at best.

With only 2 ex-dividend positions for the week and no positions set to expire, I wouldn’t mind finding a place to park some money, but am going to remain cautious.

At least in words, if not deeds.

With the start of the new quarter, we begin earnings season next week and we may finally get to that point that companies may find reason to start getting more optimistic as they provide guidance.

If looking for a catalyst to move higher, it has been a long time since fundamentals were responsible.

Otherwise, though, there’s really nothing else on the horizon that could give the market a reason to break old highs.

Again, I don’t expect to do much trading this week, but would gladly take any opportunities that might come along, especially if they helped to put some existing positions to work.

Daily Market Update – September 30, 2016 (7:30 AM)

The Week in Review will be posted by 10 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments: none

Rollovers: Best Buy

Expirations:   MRO puts

The following were ex-dividend this week:    CY (9/27 $0.11), DOW (9/28 $0.46)

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

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Daily Market Update – September 29, 2016 (7:30 AM)

Yesterday marked the fourth consecutive triple digit move.

After oil having made a large move lower on Tuesday and markets not following suit, yesterday was a completely different story.

For the most part the market completely ignored Janet Yellen’s appearance before Congress and instead it did nothing until an OPEC agreement came along to cut production.

At that moment, just as oil prices started their climb, the market went back to its pattern all through 2016, of simply following oil.

It did it again and rallied to that fourth consecutive triple digit move, once again taking the market higher.

The moves yesterday and on Tuesday higher erased the downward moves the prior 2 trading days.

That leaves the market ready to begin the morning with a GDP release and then the stream of Federal Reserve members coming through the day.

The week originally had 12 such appearances, but that had gone up to 17, with 6 of those, including Janet Yellen happening today.

So, it may be understandable why the futures markets are completely flat this morning.

It may be interesting to watch the numbers through the day at 8:30, 8:45, 10:00, 10:15, 1:30 and then seeing what further talks at 4:30 and 7:15  may do for tomorrow.

Originally this week, Janet Yellen was scheduled to be the last speaker from the Federal reserve, but that’s no longer the case, as today’s schedule has really been shuffled around and a speaker has now appeared on Friday, as well.

But it may be a busy day as the battle of words and thoughts gets underway.

There’s probably nothing to do but to try and not become collateral damage.

Daily Market Update – September 28, 2016 Close)

Yesterday marked the third consecutive triple digit move.

Even though at these levels a simple triple digit move doesn’t mean as much as it once did, they are still relative anomalies.

Yesterday was also another day where there wasn’t much reason for that triple digit move, unless you believe that the previous two moves lower just created an over-sold condition and that the market had no recourse but to bounce back.

That , of course, ignores past instances where more than 2 days of large losses have been followed by a third, maybe even a fourth day of large losses.

This morning, there was again nothing to really give markets an excuse for a large move.

The difference, at least early in the morning was that maybe today could have been the day that the market may actually not have made any big moves.

Logically, that could have been the case for today and tomorrow, as we waited for the GDP to be released on Friday.

Yesterday’s common sense, that is, the market not following oil lower, as there was word that there would not likely be a production cut, didn’t hold today.

In fact, the market turned higher, even as it was lulled to sleep with Janet Yellen’s congressional testimony, precisely when an agreement was reached to cut oil production.

Sure, it makes no sense for the market to respond positively to what kind only be bad news, but maybe any inflation is good inflation.

With a couple of positions set to expire this week, at this point I want to see them add to cash reserves.

That means assignment of the short calls and expiration of the short puts.

Both are possible, but I wouldn’t necessarily be upset if that’s not the case, as long as there is some reasonable opportunity to keep those positions alive and generating revenue.

When we get to the mid-week, I already start thinking about what the next week may hold, but this week, as it often is when there’s a big economic release on a Friday, such as with the GDP and the Employment Situation Report, I suspend those thoughts and await what Friday will bring.

I had wanted to see some pullback this week, but now would like to see some good GDP news, in the belief that will spur buying, as investors come to grips with an increasing likelihood of a rate increase in December.

As long as that increase doesn’t come as a surprise sometime sooner, I think that a flow of good economic news heading into the December FOMC meeting, particularly if also coupled with positive guidance as the next earnings season begins in a couple of weeks, could send us toward and beyond market highs.

I don’t have a kidney stone at the moment, but that’s one ride I’d like to go on as we head into 2017.

Daily Market Update – September 28, 2016 (7:30 AM)

Yesterday marked the third consecutive triple digit move.

Even though at these levels a simple triple digit move doesn’t mean as much as it once did, they are still relative anomalies.

Yesterday was also another day where there wasn’t much reason for that triple digit move, unless you believe that the previous two moves lower just created an over-sold condition and that the market had no recourse but to bounce back.

That , of course, ignores past instances where more than 2 days of large losses have been followed by a third, maybe even a fourth day of large losses.

This morning, there is again nothing to really give markets an excuse for a large move.

The difference may be that today the market may actually not make any big moves.

That may end up being the case for today and tomorrow, as we wait for the GDP to be released on Friday.

With a couple of positions set to expire this week, at this point I want to see them add to cash reserves.

That means assignment of the short calls and expiration of the short puts.

Both are possible, but I wouldn’t necessarily be upset if that’s not the case, as long as there is some reasonable opportunity to keep those positions alive and generating revenue.

When we get to the mid-week, I already start thinking about what the next week may hold, but this week, as it often is when there’s a big economic release on a Friday, such as with the GDP and the Employment Situation Report, I suspend those thoughts and await what Friday will bring.

I had wanted to see some pullback this week, but now would like to see some good GDP news, in the belief that will spur buying, as investors come to grips with an increasing likelihood of a rate increase in December.

As long as that increase doesn’t come as a surprise sometime sooner, I think that a flow of good economic news heading into the December FOMC meeting, particularly if also coupled with positive guidance as the next earnings season begins in a couple of weeks, could send us toward and beyond market highs.

I don’t have a kidney stone at the moment, but that’s one ride I’d like to go on as we head into 2017.

Daily Market Update – September 27, 2016 (Close)

Markets looked as if they were going to open on the calm side this morning after posting two consecutive triple digit losses for the first time since the Brexit vote.

There wasn’t much of a reason for either of the past two declining days, just as there’s not too much reason for any significant moves for the rest of the week, except perhaps Friday.

Of course, when there’s no reason, there’s reason to suspect just the opposite and that was again the case today, but this time in a different direction.

Today, it looked as if the markets may have taken their cue from Asian markets, but the buying accelerated as oil began falling, on news that it wasn’t too likely that anyone could agree on production cut backs.

That, at least, was nice to see.

Finally, a normal response to a supply side glut of oil.

With that done, maybe the market will gravitate toward calmness until Friday. That’s when the GDP is released and a surprising number could really move markets that are now expecting that there will be an interest rate increase in December. That would probably require some positive economic news and the GDP is a good place to start, especially if there are some upward revisions.

In the meantime, there are still lots of Federal reserve members set to speak this week and any of them has the power to move markets, even if only for a few hours until a counter-position is voiced.

With a purchase of shares yesterday that happened to be ex-dividend today, I don’t expect to be spending much more money this week, unless it looks as if I will be able to realize some new cash from those positions whose short option contracts expire this week.

There’s little reason to expect any sustained move higher while we await December, but with earnings about to start again in 2 weeks, it will be interesting to see whether or not companies are seeing anything hopeful ahead.

Any optimistic guidance would be welcomed enthusiastically by markets, as it has been a really long time since companies have pointed toward better times ahead.

With corporate earnings less buoyed by buybacks, sooner or later investors are going to demand earnings that are actually real earnings and those investors are very likely to reward real earnings improvements.

You would think that if the FOMC projects that the economy should be able to warrant a small increase in interest rates that there would be some good corporate earnings news ahead, as well.

But that still remains to be seen and I think that may still be another quarter into the future before companies start going out on a limb and say that the future looks better.

Daily Market Update – September 27, 2016 (7:30 AM)

Markets look as if they’re going to open on the calm side this morning after posting two consecutive triple digit losses for the first time since the Brexit vote.

There wasn’t much of a reason for either of the past two declining days, just as there’s not too much reason for any significant moves for the rest of the week, except perhaps Friday.

That’s when the GDP is released and a surprising number could really move markets that are now expecting that there will be an interest rate increase in December. That would probably require some positive economic news and the GDP is a good place to start, especially if there are some upward revisions.

In the meantime, there are still lots of Federal reserve members set to speak this week and any of them has the power to move markets, even if only for a few hours until a counter-position is voiced.

With a purchase of shares yesterday that happened to be ex-dividend today, I don’t expect to be spending much more money this week, unless it looks as if I will be able to realize some new cash from those positions whose short option contracts expire this week.

There’s little reason to expect any sustained move higher while we await December, but with earnings about to start again in 2 weeks, it will be interesting to see whether or not companies are seeing anything hopeful ahead.

Any optimistic guidance would be welcomed enthusiastically by markets, as it has been a really long time since companies have pointed toward better times ahead.

With corporate earnings less buoyed by buybacks, sooner or later investors are going to demand earnings that are actually real earnings and those investors are very likely to reward real earnings improvements.

You would think that if the FOMC projects that the economy should be able to warrant a small increase in interest rates that there would be some good corporate earnings news ahead, as well.

But that still remains to be seen and I think that may still be another quarter into the future before companies start going out on a limb and say that the future looks better.

Daily Market Update – September 26, 2016 (Close)

There really isn’t very much happening this week.

Earnings are just about over and the FOMC Statement has now been released.

What we do have is the release of the GDP on Friday and that may offer the first bit of proof that perhaps an interest rate increase may be warranted.

But what we really have this week are 12 speeches by voting and non-voting members of the FOMC.

Each of those will believe that he or she holds proprietary rights to the truth, but the real truth is that only the final speaker, Janet Yellen, will matter.

The further truth, though, is that she may matter a little bit less, as everyone is just getting more vocal and of their own minds,

With 6 of the speeches coming from voting members and the majority of those coming from interest rate hawks, it may be an interesting week of back and forths as the speakers jockey for their spot in the sun.

Today, however, what really weighed upon markets were foreign banks, specifically news that Deutsche Bank may not be in line to get any help from the German government in the event that it is short on capital. That weighed heavily on our own banking stocks and it is hard for US markets to move ahead if the financial sector isn’t feeling up to it.

That explains some of what we saw today, as the market closed on its lows, never really making any sincere effort to do anything better than a triple digit loss.

I have a couple of ex-dividend positions this week and a couple of expiring positions and cash in my pocket.

I didn’t feel a great sense of urgency to spend any of that money, but I knew that i could easily get pulled in.

And I did, but mostly for more dividend.

At the moment, my hope is that the expiring positions end up adding to my cash reserve and making up for the decision to actually spend some money today.

I wouldn’t mind a little bit more of a sell-off this week, as long as those 2 positions can still continue to do something worthwhile.

Both were hit in today’s sell off, but not to the degree that the market was hit, so we’re still in the running for something.

I don’t expect to be doing much of anything this week other than watching the markets possibly gyrate as we wonder when the 0.25% hammer will finally come down on us.

0.25%.

That’s what potential panic is all based upon.

How strange this market continues to be.

Daily Market Update – September 26, 2016 (8:30 AM)

There really isn’t very much happening this week.

Earnings are just about over and the FOMC Statement has now been released.

What we do have is the release of the GDP on Friday and that may offer the first bit of proof that perhaps an interest rate increase may be warranted.

But what we really have this week are 12 speeches by voting and non-voting members of the FOMC.

Each of those will believe that he or she holds proprietary rights to the truth, but the real truth is that only the final speaker, Janet Yellen, will matter.

The further truth, though, is that she may matter a little bit less, as everyone is just getting more vocal and of their own minds,

With 6 of the speeches coming from voting members and the majority of those coming from interest rate hawks, it may be an interesting week of back and forths as the speakers jockey for their spot in the sun.

I have a couple of ex-dividend positions this week and a couple of expiring positions and cash in my pocket.

I don’t feel a great sense of urgency to spend any of that money, but I could easily get pulled in.

At the moment, my hope is that the expiring positions end up adding to my cash reserve.

I wouldn’t mind a little bit of a sell-off this week, as long as those 2 positions can still continue to do something worthwhile.

I don’t expect to be doing much of anything this week other than watching the markets possibly gyrate as we wonder when the 0.25% hammer will finally come down on us.

0.25%.

That’s what potential panic is all based upon.

How strange this market continues to be.

Daily Market Update – September 23, 2016 (7:30 AM)

The Week in Review will be posted by 10 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments: none

Rollovers: none

Expirations:   none

The following were ex-dividend this week:    LVS (9/20 $0.72)

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

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