Category Archives: Daily Market Update

Daily Market Update – April 17, 2014 (8:30 AM)

As a reminder, the markets are closed on Good Friday, so today will be the weekly expiration, as well as the end of the April 2014 option cycle..

The Week in Review will be posted by 6 PM on Friday, April 18, 2014 and the Weekend Update will be posted by noon on Sunday.

Today’s possible iutcomes include:

Assignments:  CHK, MET

Rollovers:  BBY, BMY, COH, FDO ($60), LOW

Expiration:  DRI, FDO ($65), PM, RIG

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



Daily Market Update – April 16, 2014 (Close)

For most of the day yesterday it seemed as if the feeling of confidence that Monday’s close engendered was wasted. If your eyes have gotten to the point that it identifies almost everything on the basis of the relative amounts of red and green contained in the image you know that everything seemed dreary yesterday, particularly on the east coast and that included the New York Stock Exchange

But then, without the slightest cue or catalyst, the market simply reversed itself in the final 90 minutes and had a second successive strong close.

Sometimes it’s not just the net change for the day but it’s also the character of that change and the dynamics of how we arrived at the finish line. Yesterday was yet another day to inspire confidence in the overall market and maybe just another signal that this market just can’t get much beyond a 5% drop and just can’t do so for very long.

Not that anyone should let their guard down, but this morning’s pre-open market looks like it will be extending yesterday’s strong close. The fact that after a few days of nearly 80 degree weather there is some snow and frost on the ground outside my window is in no way a metaphor for what may happen in today’s market, although these rapid changes certainly get your attention and make you more cautious about planting the season’s vegetables or planting some new positions.

Today, as it would finally turn out was completely different from the two days preceding it. The market pointed higher from before the open and never wavered.

So far the way this week has developed as unlikely a scenario as you could imagine, especially considering the previous week and how that ended. The only suggestion that things were not as dire as they appeared was that despite nothing but bad news and mounting uncertainty on Friday, the market didn’t pile on at the close when there were renewed concerns about troops amassing on the Ukraine border and sell orders amassing at the close.

Still, the predominant evidence and the predominant thinking was that this time the market was going to get serious about approaching that 10% level so that most people could agree that we’ve finally had a correction.

Maybe, and it’s still early, the lesson to be learned is that the consensus is often short sighted. Or at lest it shows that we think we know what the catalysts are or will be, but we just don’t.

If Ukraine was going to be a near term catalyst last week it would be even more so after yesterday, but that’s just not the case, unless someone wants to claim that the market considers any armed confrontation in the area as a positive catalyst.

You just know that someone will do that, citing a version of “sell on the rumor and buy on the news” when it comes to rumors of bad news.

For certain, so far this earnings season hasn’t done anything to add to the concern. While there’s been nothing really stellar yet, neither has there been a developing forward looking theme that paints a negative picture. So while awaiting some kind of disaster on the Russian front or some really unexpected bad Chinese economic news, there’s not to much reason to suspect that the market will now change what it has done so often in the past two years.

When faced with a downturn in prices it has just used that slightly lower level to spring to higher levels.

What may be different is that in the not too distant past we had seen many 5-10% downward moves and considered them to be a normal part of the market cycle. Now, everyone gets a minor sense of panic when the market falls 2% and strategies are immediately changed, as are behaviors that used to be reserved just for the periodic larger falls.

Maybe what’s called for is a re-definition of what constitutes a “correction.”  Maybe our minds don’t think in relative terms at all. Maybe we think in absolutes and a 5% drop when the DJIA is at 16000 seems much worse than a 5% drop at 12000.

While I had hoped that the market would use today as another opportunity to head higher, I’ve become resigned to this likely being the slowest week in years for opening new positions, although only one more is needed to tie that record and there’s still tomorrow.

Although I like to continually see positions rotate in and out of the portfolio, it’s only because I like to see positions generating fresh revenue. With cash reserves sitting at what I consider to be a minimum to really take advantage of a more classic “correction,” my hopes continue to be centered on seeing more new covered positions created and some rollovers to build up that cash level to start off the new monthly cycle on Monday.

Ultimately a sideways moving market depends much more on those rollovers than on opening new positions. It is also ultimately an easier market in which to outperform and manage positions, as well, as there are usually fewer total positions to clutter the landscape.

Hopefully that form of spring cleaning can start this week and this frost will be short lived

Daily Market Update – April 16, 2014 (9:30 AM)

For most of the day yesterday it seemed as if the feeling of confidence that Monday’s close engendered was wasted. If your eyes have gotten to the point that it identifies almost everything on the basis of the relative amounts of red and green contained in the image you know that everything seemed dreary yesterday, particularly on the east coast and that included the New York Stock Exchange

But then, without the slightest cue or catalyst, the market simply reversed itself in the final 90 minutes and had a second successive strong close.

Sometimes it’s not just the net change for the day but it’s also the character of that change and the dynamics of how we arrived at the finish line. Yesterday was yet another day to inspire confidence in the overall market and maybe just another signal that this market just can’t get much beyond a 5% drop and just can’t do so for very long.

Not that anyone should let their guard down, but this morning’s pre-open market looks like it will be extending yesterday’s strong close. The fact that after a few days of nearly 80 degree weather there is some snow and frost on the ground outside my window is in no way a metaphor for what may happen in today’s market, although these rapid changes certainly get your attention and make you more cautious about planting the season;’s vegetables or planting some new positions.

So far the way this week is developing is as unlikely a scenario as you could imagine, especially considering the previous week and how that ended. The only suggestion that things were not as dire as they appeared was that despite nothing but bad news and mounting uncertainty on Friday, the market didn’t pile on at the close when there were renewed concerns about troops amassing on the Ukraine border and sell orders amassing at the close.

Still, the predominant evidence and the predominant thinking was that this time the market was going to get serious about approaching that 10% level so that most people could agree that we’ve finally had a correction.

Maybe, and it’s still early, the lesson to be learned is that the consensus is often short sighted.

For certain, so far this earnings season hasn’t done anything to add to the concern. While there’s been nothing really stellar yet, neither has there been a developing forward looking theme that paints a negative picture. So while awaiting some kind of disaster on the Russian front or some really unexpected bad Chinese economic news, there’s not to much reason to suspect that the market will nowhan what it has done so often in the past two years.

When faced with a downturn in prices it has just used that slightly lower level to spring to higher levels.

What may be different is that in the not too distant past we had seen many 5-10% downward moves and considered them to be a normal part of the market cycle. Now, everyone gets a minor sense of panic when the market falls 2% and strategies are immediately changed, as are behaviors that used to be reserved just for the periodic larger falls.

Maybe what’s called for is a re-definition of what constitutes a “correction.”

While the market hopefully uses today as another opportunity to head higher, I’m resigned to this likely being the slowest week in years for opening new positions, although only one more is needed to tie that record.

Although I like to continually see positions rotate in and out of the portfolio, it’s only because I like to see positions generating fresh revenue. With cash reserves sitting at what I consider to be a minimum to really take advantage of a more classic “correction,” my hopes continue to be centered on seeing more new covered positions created and some rollovers to build up that cash level to start off the new monthly cycle on Monday.

Ultimately a sideways moving market depends much more on those rollovers than on opening new positions. It is also ultimately an easier market in which to outperform and manage positions, as well, as there are usually fewer total positions to clutter the landscape.

Hopefully that form of spring cleaning can start this week and this frost will be short lived

Daily Market Update – April 15, 2014 (Close)

Yesterday was a really interesting day in the market. Today turned out to be every bit as interesting.

I didn’t get too much done yesterday but I did enjoy most of the day as that old adage about a rising tide played true.

Today most of the day wasn’t very enjoyable and I still didn’t do very much, but that rising tide came back in.

After a month or more of disappointing fizzled rallies to start the day the one from yesterday seemed to be the real thing until the final 90 minutes of trading. Today the same 90 minute theme was at play and in the same direction as yesterday’s

It seemed sort of cruel to watch paper gains disappear after putting in nearly a full day but given how the market has been going lately it should have been expected. At least if the deterioration of gains started after only an hour of trading you didn’t feel as if you had that much invested on an emotional level. But to go nearly the whole day and then watch everything disappear is really deflating.

What wasn’t expected was the reversal rally that occurred in the final 30 minutes that restored the market to its highs for the day. That bounce really went against every logical scenario that anyone could have envisioned.

While there was reason to believe that Citigroup’s earnings helped the market get the week off to a good start, there was plenty of reason to believe that some would take the opportunity to take some cash off the table. What there was little reason to believe was that there would be strong and sustained buying going into the close of trading.

Regardless of how you look at things its hard to come up with an interpretation that’s anything other than optimistic. Who in their right mind would rush in to save a market that had a failed effort to break out of its downward trajectory?

The fact that it actually happened that way is what made it such an interesting day. Triple digit gains and losses are a dime a dozen but that late recovery of early gains was really a thing of beauty and rarity.

Even if the pre-open futures weren‘t showing much in the way of follow through to the strong close it had to leave an encouraging feeling among those invested or thinking of investing. Unfortunately, that positive feeling didn’t linger, but it did return.

I’d like to take some of that encouragement and continue to apply it toward the rest of this holiday shortened week, but I still feel a need to stay on course and hope to secure premiums from existing positions this week instead of depleting cash even further.

Adding two to that list was nice, but still short of where I’s like to be.

My confidence could be supremely restored if I could see a nice assortment of assignments and rollovers on Thursday and toward that end some continuance of yesterday’s strength, even if muted, would be very nice.

While I’m not averse to adding new positions this week it may end up being among those very quiet weeks. With a fair number of expiring positions this week I really would prefer to have any remaining new positions expire at some other time. That may mean looking for new positions later in the week for those that will have their April 25, 2014 options appear only later in the week.

Also, with just a 4 day week, which is now down to 3 days, those premiums are somewhat lower, so there is reason to consider a slightly longer term contract.

For now I’d be happy just adding to the bottom line and letting the tide keep doing its thing as we all try to figure out where exactly the market is getting its cues.

If you haven’t been confused, you just haven’t been paying attention.

That may put you at an advantage. Trying to over-think what we’re seeing isn’t a very good strategy. Hopefully there are two more days of some strength remaining and maybe even some renewed confidence to start the next monthly cycle.

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

Yesterday was a really interesting day in the market.

I didn’t get too much done but I did enjoy most of the day as that old adage about a rising tide played true.

After a month or more of disappointing fizzled rallies to start the day the one from yesterday seemed to be the real thing until the final 90 minutes of trading.

It seemed sort of cruel to watch paper gains disappear after putting a nearly a full day but given how the market has been going lately it should have been expected. At least if the deterioration of gains started after only an hour of trading you didn’t feel as if you had that much invested on an emotional level. But to go nearly the whole day and then watch everything disappear is really deflating.

What wasn’t expected was the reversal rally that occurred in the final 30 minutes that restored the market to its highs for the day. That bounce really went against every logical scenario that anyone could have envisioned.

While there was reason to believe that Citigroup’s earnings helped the market get the week off to a good start, there was plenty of reason to believe that some would take the opportunity to take some cash off the table. What there was little reason to believe was that there would be strong and sustained buying going into the close of trading.

Regardless of how you look at things its hard to come up with an interpretation that’s anything other than optimistic. Who in their right mind would rush in to save a market that had a failed effort to break out of its downward trajectory?

The fact that it actually happened that way is what made it such an interesting day. Triple digit gains and losses are a dime a dozen but that late recovery of early gains was really a thing of beauty and rarity.

Even if the pre-open futures aren’t showing much in the way of follow through to the strong close it has to leave an encouraging feeling among those invested or thinking of investing.

I’d like to take some of that encouragement and apply it toward the rest of this holiday shortened week, but I still feel a need to stay on course and hope to secure premiums from existing positions this week instead of depleting cash even further.

My confidence could be supremely restored if I could see a nice assortment of assignments and rollovers on Thursday and toward that end some continuance of yesterday’s strength, even if muted, would be very nice.

While I’m not averse to adding new positions this week it may end up being among those very quiet weeks. With a fair number of expiring positions this week I really would prefer to have any remaining new positions expire at some other time. That may mean looking for new positions later in the week for those that will have their April 25, 2014 options appear only later in the week.

Also, with just a 4 day week, which is now down to 3 days, those premiums are somewhat lower, so there is reason to consider a slightly longer term contract.

For now I’d be happy just adding to the bottom line and letting the tide keep doing its thing as we all try to figure out where exactly the market is getting its cues.

If you haven’t been confused, you just haven’t been paying attention.

That may put you at an advantage.

Daily Market Update – April 14, 2014 (Close)

There was lots of nervousness over the weekend as concerns centered on Russian intentions over eastern Ukraine.

Since that was clearly an identified risk factor during Friday’s trading no one would have blamed traders for really accelerating the selling that was already a follow through to Thursday’s sell-off.

But it didn’t happen that way despite a very large order imbalance that should have driven the market even lower at the close of trading.

I suppose that could be taken as some sort of positive sign, but I’m more focused on personal issues.

Because what also didn’t happen was assignments of shares to help re-supply cash reserves.

When assignments occur I feel emboldened and anxious to recycle that cash and put it to work making more cash. While emboldened on the one hand, I’m also cautious about dipping deeper into reserves when the assignments are fewer than expected.

They couldn’t possibly have been any fewer than this past week, thanks to about a 400 point drop to end the week.

Maybe this week will be different?

While Citigroup, which shamefully couldn’t pass the regulator’s stress tests just a couple of weeks ago has started the pre-market off on a positive note, with what appear to be genuinely good earnings, it will be a matter of wait and see.

I want the market to be able to prove itself worthy of opening new positions, but I think that if it does, I would be much happier being able to sell calls on existing positions. I would rather generate the week’s income stream in that manner instead of by buying new positions, even if there appear to be some bargains after last week’s indiscriminate and somewhat irrational rise and then fall.

As the market does open it will be interesting to see where the volatility moves and whether there is any enhancement of forward week option premiums. If I had the opportunity to find cover for existing positions my preference would be to go out into forward weeks, but a beggar shouldn’t be a chooser. I would happily take what I could get.

As with past weeks I’ll likely watch during the first hour to see whether the Citigroup bump has any legs, as early optimism has frequently given way to an excuse to sell and close positions often after the first hour of trading.

Today, and you can look at this as a positive or a negative, it took until the final hour to reverse what had been a gain of Janet Yellen proportions. But if you are looking for positive or negative signals, the rebound back in the final 30 minutes after losing almost all of the gain has to be some kind of a positive sign. It’s actually hard to remember the last time anything like that had happened.

Usually these surprises leave you poorer.

Someone was optimistic. Whether that lasts until tomorrow may be questionable, but yu have to start and take a stance somewhere.

For those who believe that late last week’s selling was related to raising money from last year’s capital gains in order to meet tax payments, the expectation would be that markets would begin climbing higher as those money raising sales are completed. Of course, it really has to be new money that drives a market higher. It can’t simply be recycling. So if people had to sell stocks to pay their taxes it’s not too likely that on the day after those taxes are paid that they would suddenly have new funds to infuse into the markets.

If the markets do reverse this quick 4% drop it will simply be because the drop itself had neither rational, technical, nor a fundamental basis. It wasn’t even based on fear or uncertainty, so there’s every bit as much reason for it to return to advancing as there is for it continuing to go lower.

Today it just decided to do both. That’s all.

Daily Market Update – April 14, 2014 (9:15 AM)

There was lots of nervousness over the weekend as concerns centered on Russian intentions over eastern Ukraine.

Since that was clearly an identified risk factor during Friday’s trading no one would have blamed traders for really accelerating the selling that was already a follow through to Thursday’s sell-off.

But it didn’t happen that way despite a very large order imbalance that should have driven the market even lower at the close of trading.

I suppose that could be taken as some sort of positive sign, but I’m more focused on personal issues.

Because what also didn’t happen was assignments of shares to help re-supply cash reserves.

When assignments occur I feel emboldened and anxious to recycle that cash and put it to work making more cash. While emboldened on the one hand, I’m also cautious about dipping deeper into reserves when the assignments are fewer than expected.

They couldn’t possibly have been any fewer than this past week, thanks to about a 400 point drop to end the week.

Maybe this week will be different?

While Citigroup, which shamefully couldn’t pass the regulator’s stress tests just a couple of weeks ago has started the pre-market off on a positive note, with what appear to be genuinely good earnings, it will be a matter of wait and see.

I want the market to be able to prove itself worthy of opening new positions, but I think that if it does, I would be much happier being able to sell calls on existing positions. I would rather generate the week’s income stream in that manner instead of by buying new positions, even if there appear to be some bargains after last week’s indiscriminate and somewhat irrational rise and then fall.

As the market does open it will be interesting to see where the volatility moves and whether there is any enhancement of forward week option premiums. If I had the opportunity to find cover for existing positions my preference would be to go out into forward weeks, but a beggar shouldn’t be a chooser. I would happily take what I could get.

As with past weeks I’ll likely watch during the first hour to see whether the Citigroup bump has any legs, as early optimism has frequently given way to an excuse to sell and close positions.

For those who believe that the selling was related to raising money from last year’s capital gains in order to meet tax payments, the expectation would be that markets would begin climbing higher as those money raising sales are completed. Of course, it really has to be new money that drives a market higher. It can’t simply be recycling. So if people had to sell stocks to pay their taxes it’s not too likely that on the day after those taxes are paid that they would suddenly have new funds to infuse into the markets.

If the markets do reverse this quick 4% drop it will simply be because the drop itself had neither rational, technical, nor a fundamental basis. It wasn’t even based on fear or uncertainty, so there’s every bit as much reason for it to return to advancing as there is for it continuing to go lower.

MONDAY:   Early indications show no follow through to late last week, but no bounce back either. My primary goal this week is to raise cash through assignments, sell calls and be better positioned to start the May 2014 cycle, rather than opening too many new positions.

TUESDAY:     Great late recovery yesterday may be the story of the week. That has to inspire some confidence and even more confusion.

WEDNESDAY:  Another impressive previous day’s close, but this time there looks to be early follow through, hopefully enough to bring us closer to rollovers and assignments to round out a diminshed new position week.

THURSDAY:    An early end to the week may get off on a slightly negative note, but after a week of pleasant surprises, anything is possible to end this monthly option cycle.

FRIDAY: 







Daily Market Update – April 11, 2014 (Close)

The Week in Review is now posted and the Weekend Update will be posted by noon on Sunday.

Daily Market Update – April 11, 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 trade outcomes, in what may be a volatile session, include:

Assignment:  none

Rollover:  COH, LOW,

Expiration:  BMY, BMY, CMCSA, GPS, HFC, MET, MOS, SBUX, TGT

Daily Market Update – April 10, 2014 (Close)

What a day today turned out to be.

After yesterday’s really unexpected gain, that was simply a re-affirmation of what everyone should have already known, that Janet Yellen was more dove than hawk, it looked like today may be a day of rest.

Worries about low inflation seemed to be just the thing that the market wanted to hear and confirmed that the Federal Reserve would continue to be a friend. Of course, when you come to rely on someone or something so much you also set yourself up for disappointment. It’s sort of like the crash after a sugar high.

That’s what today was , as suddenly there were fears of higher interest rates.

Where is the logic or reasoning behind that? What could have possibly changed to drive the markets to wipe out a nerly 200 point gain the day before? Granted that gain may not have been warranted, but as most everyone’s mother used to say “two wrongs don’t make a right.”

But as with most days whatever signals may be sent early in the morning before the official bell rings may not have much bearing on what’s to come. Lately there has really been a dearth of substantive news and the markets have been reacting in fairly random ways, certainly not following any patterns or themes.

Add today to that list of days.

If you listen to the talking heads you can distinguish this recent period from others in the split between those thinking we’re going higher versus those believing that we’re bound to go in the opposite direction. Contrast that to times when there is a preponderance of opinion in one direction or another.

In the latter cases it often pays to be a contrarian, but when everyone seems to disagree about what happens next the market seems to make  geniuses out of everybody, depending on what day it is. Alternating ups and downs with much fury signifying nothing.

Following today’s sell off the preponderance of thoughts was that we are now heading for a long overdue correction.

Ultimately, if I could choose what kind of a market I would like to be trading in, this is the one. Markets that go up and down, just as individual stocks that go up and down, yet don’t advance or decline very much on a net basis are absolutely the best to be owning stocks if you actively manage them and capitalize on their  perceived value to others.

Hopefully you didn’t go down as much as the market did today and hopefully you are ahead for the year. This is the kind of market where that should be an achievable goal.

With more new purchases this week in quite a while I would like to see the week come to an end with either a lot of assignments or at least rollovers, but that’s not much different from any other week. After today’s session I’d be more than happy to just get rollovers, remembering that last week ended with a sell-off, as well, and I felt relieved to have gotten out of it with a nice combination of assignments and rollovers.

What was different about today as it began was that I was anxious to see the same thing happen again next week although I had still preferred to see myself better diversified in terms of contract expiration dates.

When the day settled out I find myself still anxious to do the same next week but uncertain just how much I’m willing to commit to new positions if there aren’t sufficient assignments tomorrow. It’s again a question of are these prices now opportunities or traps, but I sure would like to have some excess capital in hand to be in a position to find out for myself.

But that too will happen again as it seems that volatility has been experiencing some kind of cyclic pattern in the past couple of years having spikes, valleys, mini-spikes, valleys and spikes again over a 4 to 6 month span.

Just about a month ago we had one of those mini-spikes and have since descended into the valley.

If the spike begins to return, as it now appears to be in the process of doing so,  there will be better opportunity to find forward week options more easily and also more opportunity to make DOH trades, which also are keyed to volatility. If that is to be the case that would also mean some market decline is ahead, as increased volatility is usually accompanied by a declining market.

It’s just an example of how you have to take the good and take the bad, as long as the net outcome is good.

On the flip side, if volatility has to be low, as long as the higher market moves aren’t happening without your participation it can just be nice going along for that ride.

But what fun is a ride without some volatility? Those roller coaster photos would never be very exciting if there was no plunge in the making.

I hope you’re having fun.

Daily Market Update – April 10, 2014 (8:30 AM)

After yesterday’s really unexpected gain, that was simply a re-affirmation of what everyone should have already known, that Janet Yellen was more dove than hawk, it looks like today may be a day of rest.

Worries about low inflation seemed to be just the thing that the market wanted to hear and confirmed that the Federal Reserve would continue to be a friend. Of course, when you come to rely on someone or something so much you also set yourself up for disappointment. It’s sort of like the crash after a sugar high.

But as with most days whatever signals may be sent early in the morning before the official bell rings may not have much bearing on what’s to come. Lately there has really been a dearth of substantive news and the markets have been reacting in fairly random ways, certainly not following any patterns or themes.

If you listen to the talking heads you can distinguish this recent period from others in the split between those thinking we’re going higher versus those believing that we’re bound to go in the opposite direction. Contrast that to times when there is a preponderance of opinion in one direction or another.

In the latter cases it often pays to be a contrarian, but when everyone seems to disagree about what happens next the market seems to make  geniuses out of everybody, depending on what day it is. Alternating ups and downs with much fury signifying nothing.

Ultimately, if I could choose what kind of a market I would like to be trading in, this is the one. Markets that go up and down, just as individual stocks that go up and down, yet don’t advance or decline very much on a net basis are absolutely the best to be owning stocks if you actively manage them and capitalize on their  perceived value to others.

With more new purchases this week in quite a while I would like to see the week come to an end with either a lot of assignments or at least rollovers, but that’s not much different from any other week.

What is different is that I’m anxious to see the same thing happen again next week although I’d still prefer to see myself better diversified in terms of contract expiration dates.

But that too will happen again as it seems that volatility has been experiencing some kind of cyclic pattern in the past couple of years having spikes, valleys, mini-spikes, valleys and spikes again over a 4 to 6 month span.

Just about a month ago we had one of those mini-spikes and have since descended into the valley.

If the spike begins to return there will be better opportunity to find forward week options more easily and also more opportunity to make DOH trades, which also are keyed to volatility. If that is to be the case that would also mean some market decline is ahead, as increased volatility is usually accompanied by a declining market.

It’s just an example of how you have to take the good and take the bad, as long as the net outcome is good.

On the flip side, if volatility has to be low, as long as the higher market moves aren’t happening without your participation it can just be nice going along for that ride.

But what fun is a ride without some volatility? Those roller coaster photos would never be very exciting if there was no plunge in the making.

Daily Market Update – April 9, 2014 (Close)

Another seemingly flat morning, which basically means nothing and that was certainly the case today and even more so in the latter half of the afternoon as the market closed at its impressive highs.

The late Mark Haines, of CNBC, used to observe that the pre-opening market tended to have very little in common with what occurred subsequently. He often would say that on mornings when there was a decided move in either direction and so often he was right.

Lately the pre-open hasn’t been much of a barometer, In fact, the first 90 minutes of trading haven’t been a very good indicator, either. For anyone looking for themes or patterns there haven’t been many lately, other than the poor predictive capability of the first hour of trading.

Maybe with Alcoa kicking off earnings season last night the consideration of basic fundamentals, especially earnings, will become the theme. The only thing is that was precisely the same kind of hope over the past couple of earnings seasons, as well, and that sort of thing only lasted a week or so. Once the financials were done with their reports the rest didn’t really matter.

Today’s early morning trading appeared fairly listless which isn’t altogether unusual, as this afternoon brings another FOMC minutes release. Most traders don’t really want to commit themselves in a significant way before any major announcement or event, especially if there’s any unknown component that may be released. So they sit and wait, maybe make a few incidental trades here and there, but mostly wait and then suddenly spring into action as the fastest of the systems runs its initial algorithm on the words themselves.

Maybe it’s just another of those signs of getting older, but it seems as if those monthly releases are coming much more quickly than at a monthly pace. Still, the one due today has gotten unusually little attention or mention.

While there wasn’t not likely to be much new in the release that hasn’t stopped knee jerk and delayed reactions alike as the words are parsed and interpreted for meanings that were never intended.

Today’s FOMC release was worth waiting for, but it did seem as if traders had some sense of, if not good news, then at least no news, as the market opened stronger than the futures would have indicated and built on those gains going into the release. Once the FOMC statement was released the markets just added further and didn’t waver or have any second thoughts, as they so frequently do.

While I didn’t expect much in the way of personal activity yesterday I expect even less today, although I wouldn’t mind any other opportunities to sell more call options on uncovered positions and begin looking forward to next week, which already marks the end of the monthly option cycle, which seems to also have come very quickly.

Because earnings reports are now a factor it would be nice to at least squeeze a few more cents out of positions while awaiting the news and using some forward weeks, whose premiums are enhanced a little by the uncertainty of earnings, to give some time cushion in the event of adverse reaction to the news ahead.

Looking forward to next week starts, as usual, with hoping for the rollover or assignment of as many positions as possible and once again, this week has too many positions with contracts set to expire.

As in recent past weeks the holdings aren’t terribly well diversified across the calendar so once again there’s a fair amount riding on the next couple of days. That’s not a position that I like being in and continue to be anxious to see a rise in volatility, as long as it waits until next Monday to begin in earnest.

Just to be clear, markets usually fall when volatility is rising, so let’s get through this week first and see those rollovers and assignments happen. Then the volatility can start to rise and bring with it better prices for all of that reserve cash to be put to use.

If only it was all that easy.

PS: For those interested in something a little different, take a look at “Playing Leapfrog with MolyCorp” which explores another put related strategy that seeks to limit risk and enhance reward, especially with risky kind of positions.

Daily Market Update – April 9, 2014 (8:30 AM)

Another seemingly flat morning, which basically means nothing.

The late Mark Haines, of CNBC, used to observe that the pre-opening market tended to have very little in common with what occurred subsequently. He often would say that on mornings when there was a decided move in either direction and so often he was right.

Lately the pre-open hasn’t been much of a barometer, In fact, the first 90 minutes of trading haven’t been a very good indicator, either. For anyone looking for themes or patterns there haven’t been many lately, other than the poor predictive capability of the first hour of trading.

Maybe with Alcoa kicking off earnings season last night the consideration of basic fundamentals, especially earnings, will become the theme. The only thing is that was precisely the same kind of hope over the past couple of earnings seasons, as well, and that sort of thing only lasted a week or so. Once the financials were done with their reports the rest didn’t really matter.

Today’s early morning trading appears fairly listless which isn’t altogether unusual, as this afternoon brings another FOMC minutes release. Most traders don’t really want to commit themselves in a significant way before any major announcement or event, especially if there’s any unknown component that may be released. So they sit and wait, maybe make a few incidental trades here and there, but mostly wait and then suddenly spring into action as the fastest of the systems runs its initial algorithm on the words themselves.

Maybe it’s just another of those signs of getting older, but it seems as if those monthly releases are coming much more quickly than at a monthly pace. Still, the one due today has gotten unusually little attention or mention.

While there’s not likely to be much new in the release that hasn’t stopped knee jerk and delayed reactions alike as the words are parsed and interpreted for meanings that were never intended.

While I didn’t expect much in the way of personal activity yesterday I expect even less today, although I wouldn’t mind any other opportunities to sell more call options on uncovered positions and begin looking forward to next week, which already marks the end of the monthly option cycle, which seems to also have come very quickly.

Looking forward to next week starts, as usual, with hoping for the rollover or assignment of as many positions as possible and once again, this week has too many positions with contracts set to expire.

As in recent past weeks the holdings aren’t terribly well diversified across the calendar so once again there’s a fair amount riding on the next couple of days. That’s not a position that I like being in and continue to be anxious to see a rise in volatility, as long as it waits until next Monday to begin in earnest.

Just to be clear, markets usually fall when volatility is rising, so let’s get through this week first and see those rollovers and assignments happen. Then the volatility can start to rise and bring with it better prices for all of that reserve cash to be put to use.

If only it was all that easy.

PS: For those interested in something a little different, take a look at “Playing Leapfrog with MolyCorp” which explores another put related strategy that seeks to limit risk and enhance reward, especially with risky kind of positions.