Daily Market Update – August 17, 2015 (Close)
After a less than compelling week for either side last week, the market was getting ready to start with a little more ambivalence to begin this week.
Unlike last Monday which zoomed higher on what was perceived as good news from both the EU and the lack of bad news from China, this Monday looked as if it was going to begin with no real news of any kind.
What there wasn’t is more bad news from China, but that may still remain a day to day thing for a while.
There will be more retail earnings reports this week that could give the FOMC more reason to consider an interest rate hike in the coming month, although the data pointing toward an inflationary environment has been less than convincing.
That became even more evident as the usually relatively inconsequential New York State Manufacturing Index was fairly week and sent the market tumbling prior to the open. That carried through to past the opening bell, but was reversed by the equally relatively inconsequential Housing Market Index and so a mere 30 minutes into the session it all turned around.
It doesn’t seem too likely that this week’s remaining retail sales earnings reports will do much to paint a picture of growing consumer discretionary spending, so it doesn’t seem as if that’s going to be the missing key for any market advance this week.
We’ll just probably have to look elsewhere, as even the continuing fall in energy prices isn’t turning out to be that key.
With a minimum of cash to start the week, there’s not too much likelihood of spending any to open new positions, although I am willing to dip into personal; funds to create a margin account that I would owe to myself. I had actually tried to get a dividend trade in on Cablevision and then it followed along with the rest of the market and went higher, so that went unrequited.
As I mentioned the previous week that willingness to add additional funds is definitely not an endorsement of taking out a margin loan to buy or add stocks at this time. If anything, my preference would really be to build up cash reserves, but I haven’t been able to do that very well.
With a fair number of positions set to expire this week as the August monthly cycle comes to its end, a few of those are not going to be assigned unless some amazing things happen. Those represented positions that in the throes of a sharp climb higher had longer term options written on them and the time has come for those contracts to expire, but the promise of those higher and sustained moves never came.
If those opportunities were to arise again, I wouldn’t mind doing the same thing all over again. The extra few cents makes the waiting a little bit easier, but the waiting is getting longer and longer, as those cycles are getting stretched more and more on so many stocks, which is another reflection of how skewed the market has become as the indexes are reflecting the robust health of a small number of stocks while so many others are flailing.
Otherwise, it is, as have been so many recent weeks, one of hoping to see some assignments and if that fails, at least some rollovers.
That was exactly the situation last week, but last week the stocks that looked as if they had a good chance for assignment ended up being fortunate to get rolled over. Hopefully this week those positions will be the source of new cash to begin the September 2015 cycle, which itself is already fairly well populated with expiring positions during its final week.
The week will be getting off to a start that won’t probably amount to much more than watching as most prices and price moves are fairly tentative. If anything, however, the past 2 months have shown that kind of tentative behavior can easily be altered as the market remains undecided as to whether to breach support or breach resistance.
Now sitting at only about 2% below the all time highs and about 2% above an important support level, you can easily understand why things could easily go either way as very few investors are wedded to their beliefs in the direction the market will take and would be likely to abandon their beliefs in an instant.
WIth those lower highs and higher lows mounting, it does appear that something significant is in the making, but only time will tell if that’s the case and then more importantly in what direction.
I’m strapped in and awaiting that outcome.