Daily Market Update – August 7, 2014 (Close)
Following yesterday’s flat trading and flat finish, the morning was awaiting word regarding the ECB’s refinance rate.
With that remaining unchanged, which came as no surprise, the pre-market just continued along the same flat line as it then awaited some word from the ECB president.
In the past he has had a way of moving markets, exactly the same way that the Chairman of the Federal Reserve can move markets, so while the futures were continuing to go no where special after the rate announcement, they could easily have quickly changed direction about 30 minutes later as Draghi began to speak.
The difference has been that when Draghi has spoken his words have largely been the kind that have reassured and rallied markets.
Today he didn’t, nor did he say anything that created any sense of confidence or any sense of anything.
That alone was enough to disappoint those looking for anything to get out of the current state of stupor and passivity.
Even though we’re not even down 4% from the S&P 500’s high levels, as the morning was set to begin, we could use some of that kind of rally, especially heading into the close of the week when it would especially nice to see some likely assignments.
Unfortunately, today wasn’t going to be the day for that. Even though the market started on a positive note once the bell rang, it fairly quickly deteriorated and really had nothing of a positive tone as the day worked toward the close.
Unlike the past few weeks in which trading started fairly slowly and then picked up steam in the final two days resulting in a nice combination of rollovers, new covers and assignments, I just didn’t see a repeat of that pattern in the making for this week and have little reason to expect that Friday will be the day to rescue all.
While flat and down markets are still my favorite environment, it’s a lot better when the rollovers and new covered positions can be established. Even if the stocks are going no where themselves, at least their derivative cousins can do something of value.
So far, this week?
Not so much.
Although there aren’t too many positions set to expire this week, as compared to some recent weeks past, there is still at least some opportunity to see some assigned and some rolled over, as long as the last two days don’t really do anything terribly stupid.
Today didn’t really help in that regard, although early in the session there was at least some opportunity for one rollover and one newly covered position.
While the past few weeks were able to withstand some weak trading days to end the week and still see those revenue producing trades accomplished, this week doesn’t have very much of a cushion, so it would have be en nice to see just a quiet end to a week of headless wandering and then have the chance to start anew next week.
Instead, today dug the hole a little bit deeper.
However, despite that apparently sounding negativity, and certainly without wanting to jinx anything, as the market does trade in a flat manner or even trading downward, the portfolio path is again trending toward out-performance as compared to the S&P 500 as today’s session was getting ready to start.
Without having crunched the numbers at the close, I’m hoping that’s still the case.
But that kind of out-performance isn’t unusual as the premiums are typically the factor that provides the additional performance,
However, while out-performance is always the goal, it’s nice to also couple that with actual increasing portfolio value, as well.
Hopefully those will both continue for the final day of the week although some opportunity to make the trades would really help and make hope unnecessary.