Category Archives: Daily Market Update

Daily Market Update – September 22, 2016 (Close)

The market moved about 160 points higher yesterday as the FOMC announced that there wouldn’t be an interest rate increase.

At least right now.

The market, did as it had done other times, it seemed to accept the fact that there wouild be an interest rate ahead, as the FOMC hinted very strongly that there was room and time for such a hike still in 2016.

Actually, it didn’t do any of that until Chairman Yellen’s press conference.

Up until that point traders were trying to figure out what to do and actually reversed their initial knee jerk reaction which had returned the market to its opening highs and took it to its intra-day lows.

The Chairman’s words were the ones that soothed, as the market went higher as she recited her prepared text and then continued during the question and answer period and continued right until the closing bell.

Investors also got some good news from the Bank of Japan, which basically admitted that a negative interest rate environment had not been working.

For some here in the United States, there was still a fear that negative interest rates could have become the Federal Reserve’s next weapon.

So the market celebrated and there may be as many as 3 more months ahead, but it has been clear that whenever the market believes that there might be a chance of an interest rate increase in the near term, it doesn’t like the idea.

With the FOMC strongly suggesting that there was still time for an interest rate increase in 2016, we’ll see what happens as we draw near.

While most interpret that to mean December, there is nothing sacred to prevent an increase from being implemented before then.

That would likely get investors upset, even if the underlying economy was in good enough health to support that increase.

In the meantime all eyes will be focused on whatever economic reports might justify that increase.

Best of all, however, would be some cheery guidance coming from companies as earnings season starts all over again in about 3 weeks.

I suspect that there will be little for me to do for the rest of this week, with no expiring positions to think about.

Maybe another residual rally tomorrow, just as we had today, may give some opportunity for call sales on uncovered positions, but as has been the case for much of 2016, I’m happy just going for the ride and catching any opportunity that might come along.

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Daily Market Update – September 22, 2016 (7:30 AM)

The market moved about 160 points higher yesterday as the FOMC announced that there wouldn’t be an interest rate increase.

At least right now.

The market, did as it had done other times, it seemed to accept the fact that there wouild be an interest rate ahead, as the FOMC hinted very strongly that there was room and time for such a hike still in 2016.

Actually, it didn’t do any of that until Chairman Yellen’s press conference.

Up until that point traders were trying to figure out what to do and actually reversed their initial knee jerk reaction which had returned the market to its opening highs and took it to its intra-day lows.

The Chairman’s words were the ones that soothed, as the market went higher as she recited her prepared text and then continued during the question and answer period and continued right until the closing bell.

Investors also got some good news from the Bank of Japan, which basically admitted that a negative interest rate environment had not been working.

For some here in the United States, there was still a fear that negative interest rates could have become the Federal Reserve’s next weapon.

So the market celebrated and there may be as many as 3 more months ahead, but it has been clear that whenever the market believes that there might be a chance of an interest rate increase in the near term, it doesn’t like the idea.

With the FOMC strongly suggesting that there was still time for an interest rate increase in 2016, we’ll see what happens as we draw near.

While most interpret that to mean December, there is nothing sacred to prevent an increase from being implemented before then.

That would likely get investors upset, even if the underlying economy was in good enough health to support that increase.

In the meantime all eyes will be focused on whatever economic reports might justify that increase.

Best of all, however, would be some cheery guidance coming from companies as earnings season starts all over again in about 3 weeks.

I suspect that there will be little for me to do for the rest of this week, with no expiring positions to think about.

Maybe any residual rally today or tomorrow may give some opportunity for call sales on uncovered positions, but as has been the case for much of 2016, I’m happy just going for the ride and catching any opportunity that might come along.

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Daily Market Update – September 21, 2016 (Close)

The Japanese stock market was barely 2% higher this morning as the Bank of Japan announced a change in monetary policy that was reminiscent of what the Federal reserve did a number of years ago as it focused on the yield curve.

All of that is far too complex for me to understand, but somehow the decision in Japan eases the way for the FOMC to do something, as the US would no longer stand to be the only major economy to be in a position to preside over increasing rates.

But still, as this morning was set to begin, no one was then expecting the FOMC to announce an increase in rates this afternoon.

Maybe that’s why stock futures were guardedly higher this morning.

But the Bank of Japan’s decision really does open the door for the FOMC to make a decision to raise rates today seem far more logical and with much less market related risk.

It’s just not expected.

At this point, there still would be some reason to welcome an interest rate increase, if only to get all of this focus to come to its end and to get us to focus on what matters.

It seems as if it has been a very, very long time since we have focused on those things that are important.

Regardless of what the decision would be today and what specific words would be used in the statement, before you know it, someone will realize that there are now only 9 days left to come to some budget agreement or face another government shut down.

It’s inconceivable that would happen, but that has to be where we will get mis-directed next.

Today, markets were happy that there was, in fact, no interest rate increase today and once again didn’t mind the strong suggestion that there would be one before 2016 comes to its end.

Daily Market Update – September 21, 2016 (7:30 AM)

The Japanese stock market was barely 2% higher this morning as the Bank of Japan announced a change in monetary policy that was reminiscent of what the Federal reserve did a number of years ago as it focused on the yield curve.

All of that is far too complex for me to understand, but somehow the decision in Japan eases the way for the FOMC to do something, as the US would no longer stand to be the only major economy to be in a position to preside over increasing rates.

But still, as this morning is set to begin, no one is then expecting the FOMC to announce an increase in rates this afternoon.

Maybe that’s why stock futures are guardedly higher this morning.

But the Bank of Japan’s decision really does open the door for the FOMC to make a decision to raise rates today seem far more logical and with much less market related risk.

It’s just not expected.

At this point, there still would be some reason to welcome an interest rate increase, if only to get all of this focus to come to its end and to get us to focus on what matters.

It seems as if it has been a very, very long time since we have focused on those things that are important.

regardless of what the decision will be today and what specific words will be used in the statement, before you know it, someone will realize that there are now only 9 days left to come to some budget agreement or face another government shut down.

It’s inconceivable that would happen, but that has to be where we will get mis-directed next.

For now, we will still put our focus onto the news coming at 2 PM and then figure out how much reverse psychology will be in store for all of us at the moment of the news release and then immediately after, not to mention over the next few days.

The market wants to party, but it will need news of no increase and no overly hawkish words or perceived threats in the ensuing statement.

Daily Market Update – September 20, 2016 (Close)

This could still be a big week, but there’s again really no telling in which direction things might go.

That was made pretty clear yesterday when a large gain evaporated, almost came back and then evaporated again.

Today the gains lost weren’t as big, but the market again just had no direction.

All eyes are on central banks these days and most are focused on our FOMC.

The prevailing thought is that there will be no rate hike announced tomorrow, but the wording in the statement release could and does often move markets more than the decision, itself.

What is also curious is that everyone believes that a decision to increase rates was going to be announced in either September or December, without regard to the fact that there are some intervening months.

The FOMC made it clear earlier in the year that their decision wasn’t necessarily going to be tied to a scheduled meeting.

But there is also another scheduled meeting before December and it happens to come about 2 weeks before the election, so things could get interesting.

I surprised myself by making a trade yesterday and using some of that cash that was obviously burning a hole in my pocket.

However, I used the monthly option and that means that I still have no positions expiring this week and only a single ex-dividend position.

That leaves me hungering for some income opportunities.

That hunger certainly didn’t get requited today.

To get any satisfaction for those hunger pangs, it would likely take a sharp move higher on Wednesday, as the FOMC presumably decides to do nothing and doesn’t sound very hawkish afterward.

I think it would take both of those to happen to get the market to celebrate.

For now, I’ll just do what any sane person would do and not roll the dice any further until the FOMC places its cards on the table.

How’s that for the mixed metaphor that has been this entire interest rate season?

Daily Market Update – September 20, 2016 (8:30 AM)

This could still be a big week, but there’s again really no telling in which direction things might go.

That was made pretty clear yesterday when a large gain evaporated, almost came back and then evaporated again.

All eyes are on central banks these days and most are focused on our FOMC.

The prevailing thought ios that there will be no rate hike announced tomorrow, but the wording in the statement release could and does often move markets more than the decision, itself.

What is also curious is that everyone believes that a decision to increase rates was going to be announced in either September or December, without regard to the fact that there are some intervening months.

The FOMC made it clear earlier in the year that their decision wasn’t necessarily going to be tied to a scheduled meeting.

But there is also another scheduled meeting before December and it happens to come about 2 weeks before the election, so things could get interesting.

I surprised myself by making a trade yesterday and using some of that cash that was obviously burning a hole in my pocket.

However, I used the monthly option and that means that I still have no positions expiring this week and only a single ex-dividend position.

That leaves me hungering for some income opportunities.

To get any, it would likely take a sharp move higher on Wednesday, as the FOMC presumably decides to do nothing and doesn’t sound very hawkish afterward.

I think it would take both of those to happen to get the market to celebrate.

For now, I’ll just do what any sane person would do and not roll the dice any further until the FOMC places its cards on the table.

How’s that for the mixed metaphor that has been this entire interest rate season?

Daily Market Update – September 19, 2016 (Close)

This could be a big week, but there’s really no telling in which direction things might go.

It’s also possible that this past week already brought all of the wavering we could summon, as markets went back and forth on nothing at all.

This week, at least we have a central focus.

That’s Wednesday’s FOMC Statement release.

“Will they or won’t they?” is what’s on everyone’s minds, with guessing as to the immediate response being the second thing on everyone’s minds.

Since the FOMC is not likely to want to be perceived as being reactive in implementation of fiscal policy, there shouldn’t be too much surprise if they do raise rates this week.

Based on how markets have reacted whenever anyone of importance said anything resembling a hawkish stance, we could reasonably guess that an increase this week would result in a large sell-off.

But who knows?

The more things seem obvious, the less obvious they turn out to be.

Today was certainly a day when nothing was obvious, as the market gave up some nice gains and did so even after the market attempted to recover the first round of losses.

With 3 assignments last week, I had more cash than I’ve had for a while and I was not very anxious to spend it.

But I did spend some of it.

While I wouldn’t begrudge a nice move higher, at this point, I’d rather find some newly created bargains to purchase with that cash.

Alternatively, if the market does move higher, I wouldn’t mind selling some more call contracts, but I also wouldn’t mind some more positions getting closer to their strike prices and perhaps becoming potential assignments, as well.

That’s a change in tone for me.

While I’m always expecting some kind of sell-off, that hasn’t kept me from deploying cash, nor has it prompted me to raise cash.

This time may be a little bit different, as I really wouldn’t mind having more cash on hand. Of course, I didn’t really pay attention to wait I really wouldn’t mind.

I certainly wouldn’t want to stay  that way and I certainly would want to put cash to work, but at some point, unless the economy shows some reason to justify an increase in interest rates, there has to be some fallout, particularly if oil does start to move higher.

That would especially be the case if OPEC could ever get its act together and cause the price of oil to rise because of a decrease in supply.

For now, I’ll be glued to the screen until the mid-point of this week as the FOMC Statement is finally released.

This morning, markets were somewhat positive. You would have thought that they would be tentative, but logically, you would have thought that to be the case last week, too.

Ultimately, the market was tentative, as it ended unchanged.

I ended up with less cash, but hedged my bet by using a monthly option when a weekly was available.

Right now, hedging you bets or hiding underneath a table is about the best anyone can do.

Daily Market Update – September 19, 2016 (7:30 AM)

This could be a big week, but there’s really no telling in which direction things might go.

It’s also possible that this past week already brought all of the wavering we could summon, as markets went back and forth on nothing at all.

This week, at least we have a central focus.

That’s Wednesday’s FOMC Statement release.

“Will they or won’t they?” is what’s on everyone’s minds, with guessing as to the immediate response being the second thing on everyone’s minds.

Since the FOMC is not likely to want to be perceived as being reactive in implementation of fiscal policy, there shouldn’t be too much surprise if they do raise rates this week.

Based on how markets have reacted whenever anyone of importance said anything resembling a hawkish stance, we could reasonably guess that an increase this week would result in a large sell-off.

But who knows?

The more things seem obvious, the less obvious they turn out to be.

With 3 assignments last week, I have more cash than I’ve had for a while and I’m not very anxious to spend it.

While I wouldn’t begrudge a nice move higher, at this point, I’d rather find some newly created bargains to purchase with that cash.

Alternatively, if the market does move higher, I wouldn’t mind selling some more call contracts, but I also wouldn’t mind some more positions getting closer to their strike prices and perhaps becoming potential assignments, as well.

That’s a change in tone for me.

While I’m always expecting some kind of sell-off, that hasn’t kept me from deploying cash, nor has it prompted me to raise cash.

This time may be a little bit different, as I really wouldn’t mind having more cash on hand.

I certainly wouldn’t want to stay  that way and I certainly would want to put cash to work, but at some point, unless the economy shows some reason to justify an increase in interest rates, there has to be some fallout, particularly if oil does start to move higher.

That would especially be the case if OPEC could ever get its act together and cause the price of oil to rise because of a decrease in supply.

For now, I’ll be glued to the screen until the mid-point of this week as the FOMC Statement is finally released.

This morning, markets are somewhat positive. You would think that they would be tentative, but logically, you would have thought that to be the case last week, too.

Daily Market Update – September 16, 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: HPQ, IP, STX

Rollovers: MRO (puts)

Expirations:   DOW, GME

The following were ex-dividend this week:    HPQ (9/12 $0.12), M (9/13 $0.38), NEM (9/13 $0.025), BBBY (9/14 $0.125), JOY (9/15 $0.01)

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

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Daily Market Update – September 15, 2016 (Close)

Yesterday was the antithesis of the three previous trading days.

For a while it looked as if the market might end the day on a high note.

A small one, but a high note, nonetheless.

Instead, it retreated in the last hour or so, but still ended up with only a small change on the day.

Today looked as if it might be much of the same as we drew nearer and nearer next week’s FOMC meeting.

There really wasn’t too much reason after having had the back and forth large moves to end last week and begin this one, to do much of anything until we know what the FOMC’s decision will be.

At this point, it looks as if the market will react positively if interest rates aren’t changed and negatively if they are increased.

That doesn’t take into account what kind of language the FOMC might use.

For example, if they raised the interest rate, but said that it was unlikely that there would be another such increase in 2016, markets would probably celebrate.

Either way, there’s likely to be a knee-jerk reaction and then there’s likely to be some settling in as the news, whatever it happens to be, is digested.
But today, it became really, really clear that investors hate the idea of a rate increase next week, as some weaker than expected Retail Sales numbers sent the message that there wasn’t the kind of economic strength to support the increase.

I sure don’t want to see the reaction on Wednesday if there is an increase. 

I think the FOMC realizes that and is taking that it consideration, even though they shouldn’t.

At this point, I just want to get through this week and see something constructive happen with my expiring positions. 

If in a position to roll some over, I may look at going beyond next week’s expiration date.

At this point, I probably wouldn’t mind having more assignments in order to add to cash reserves, but wouldn’t turn down any opportunity to keep positions working by rolling them over.

If any of those opportunities present tomorrow, I’d gladly take them, rather than waiting for the added uncertainty that next week might bring.

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Daily Market Update – September 15, 2016 (7:30 AM)

Yesterday was the antithesis of the three previous trading days.

For a while it looked as if the market might end the day on a high note.

A small one, but a high note, nonetheless.

Instead, it retreated in the last hour or so, but still ended up with only a small change on the day.

Today looks as if it may be much of the same as we draw nearer and nearer next week’s FOMC meeting.

There really wasn’t too much reason after having had the back and forth large moves to end last week and begin this one, to do much of anything until we know what the FOMC’s decision will be.

At this point, it looks as if the market will react positively if interest rates aren’t changed and negatively if they are increased.

That doesn’t take into account what kind of language the FOMC might use.

For example, if they raised the interest rate, but said that it was unlikely that there would be another such increase in 2016, markets would probably celebrate.

Either way, there’s likely to be a knee-jerk reaction and then there’s likely to be some settling in as the news, whatever it happens to be, is digested.
At this point, I just want to get through this week and see something constructive happen with my expiring positions.

If in a position to roll some over, I may look at going beyond next week’s expiration date.

At this point, I probably wouldn’t mind having more assignments in order to add to cash reserves, but wouldn’t turn down any opportunity to keep positions working by rolling them over.

If any of those opportunities present today, I’d gladly take them, rather than waiting for the added uncertainty that tomorrow might bring.

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Daily Market Update – September 14, 2016 (Close)

Yesterday wasted Monday’s great recovery, as investors once again showed just how much they don’t like the idea of an interest rate hike next week.

There was nothing redeeming about yesterday’s trading and there was really no news to have supported the kind of reaction the market had.

We’re now in the quiet period one week ahead of the FOMC meeting, where members seem divided as does opinion.

While everyone is focused on deciding whether the interest rate hike will come in September or December, what is forgotten is that the FOMC has said that such an increase could come at a time other than a regularly scheduled meeting.

That would really take people by surprise, but it would get us over this really insignificant decision by the FOMC, at least as far as investing goes.

A 0.25% increase in rates isn’t likely to divert too much money away into some other kind of investment, as offering a better reward for risk.

Meanwhile, an increasing interest rate environment would reflect a growing economy and stock prices are traditionally based on earnings, so that can’t be a bad thing.

Investors must have spent the day mulling all of this over, because it certainly didn’t spend the day making trades.

There wasn’t too much movement today, but for a little while it did look as if the market might just eke out a gain.

It didn’t.

With a number of positions expiring this week, I still hope that there’s some rebound over the next few days so that those positions can be in play for either rollover or assignment.

Either would suit me just fine at this point.

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Daily Market Update – September 14, 2016 (7:30 AM)

Yesterday wasted Monday’s great recovery, as investors once again showed just how much they don’t like the idea of an interest rate hike next week.

There was nothing redeeming about yesterday’s trading and there was really no news to have supported the kind of reaction the market had.

We’re now in the quiet period one week ahead of the FOMC meeting, where members seem divided as does opinion.

While everyone is focused on deciding whether the interest rate hike will come in September or December, what is forgotten is that the FOMC has said that such an increase could come at a time other than a regularly scheduled meeting.

That would really take people by surprise, but it would get us over this really insignificant decision by the FOMC, at least as far as investing goes.

A 0.25% increase in rates isn’t likely to divert too much money away into some other kind of investment, as offering a better reward for risk.

Meanwhile, an increasing interest rate environment would reflect a growing economy and stock prices are traditionally based on earnings, so that can’t be a bad thing.

With a number of positions expiring this week, I hope that there’s some rebound over the next few days so that those positions can be in play for either rollover or assignment.

Either would suit me just fine at this point.

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Daily Market Update – September 13, 2016 (Close)

Yesterday had a very impressive recovery from what was looking as if it was going to be a big opening plunge for the markets.

With 3 Federal reserve Governors speaking, the market improved with each, as there was an increasingly dovish tone, particularly with the final pronouncement.

That came from someone who doesn’t take center stage very often and her dovish words really sent the market much, much higher.

Obviously, the market’s reaction is similar to those who like the idea of nuclear power plants, but not in their backyard.

The market has said that it likes the idea of a small interest rate increase, but now right now, please.

This morning’s futures were again pointing much lower, but there is now a blackout period for the Federal Reserve members and despite yesterday’s hero reinforcing her beliefs today, the market wasn’t buying it or anything else today.

Now, Federal reserve Governors and Presidents can’t say anything in public until after next Wednesday’s FOMC meeting.

Today was another sell off on interest rate fears and it brought us right back to where Friday had left us.

I did make one trade yesterday, going back to that old friend Marathon Oil, but oil continued its deep slide today.

The energy sector, like stocks, had a nice reversal yesterday, but it didn’t last very long, as it started that way as soon as eyes were being opened and it never got any better, unlike yesterday.

I still hold out some hope for selling calls on uncovered positions, but my real hope for the week is to have some assignments and some rollovers.

I’d love the idea of adding to cash reserves right now, just as I like the idea of generating some more revenue to go along with all of this week’s ex-dividend positions.

My guess was that today wouldn’t be the day to do much of anything.

Being right about that brings no solace, though.

And like last week, I wonder if there will be much opportunity for the rest of this week, as everyone will be focused on the following week’s FOMC.

Including me, I think.

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Daily Market Update – September 13, 2016 (8:30 AM)

Yesterday had a very impressive recovery from what was looking as if it was going to be a big opening plunge for the markets.

With 3 Federal reserve Governors speaking, the market improved with each, as there was an increasingly dovish tone, particularly with the final pronouncement.

That came from someone who doesn’t take center stage very often and her dovish words really sent the market much, much higher.

Obviously, the market’s reaction is similar to those who like the idea of nuclear power plants, but not in their backyard.

The market has said that it liokes the idea of a small interest rate increase, but now right now, please.

This morning’s futures are again pointing much lower, but there is now a blackout period for the Federal Reserve members.

They can’t say anything in public until after next Wednesday’s FOMC meeting.

I did make one trade yesterday, going back to that old friend Marathon Oil.

The energy sector, like stocks, had a nice reversal yesterday.

They’ll need the same thing today, because the futures has them down sharply, as well.

I still hold out some hope for selling calls on uncovered positions, but my real hope for the week is to have some assignments and some rollovers.

I’d love the idea of adding to cash reserves right now, just as I like the idea of generating some more revenue to go along with all of this week’s ex-dividend positions.

My guess is that today won’t be the day to do much of anything.

And like last week, I wonder if there will be much opportunity for the rest of this week, as everyone will be focused on the following week’s FOMC.

Including me, I think.

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