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Daily Market Update – December 29, 2015 (Close) There are now just 2 days left in trading for 2015 and it’s no easier to tell by the numbers that we weren’t still in 2014. Yesterday the market did a reasonable job at not digging the hole any deeper and even though it ended the day a little more in the red, it left itself still within easy reach of a breakven for the year. This morning’s futures indicated a decent move higher, but it’s still all so illusory, even though the market did end up with a really nice gain today to leave the S&P 500 up 1% for the year. Mind you it was up 1.1% on the day. The market’s gains this year have been so concentrated. I don’t recall ever having seen a year when the indexes didn’t do at least some justice to what was going on within them. Although 2011 finished at dead flat for the year, it was a year of 2 halves, where the second half completely erased the first half’s gains. You wouldn’t have known that by only looking at the year end data, but at least in 2011 everything was treated equally. That wasn’t remotely the situation this year. The performances are so incredibly skewed, but it’s really hard to imagine that such a skew could continue, although there’s also little in the air to believe that energy and materials are ready for some kind of a meaningful rebound, either. So as the next few days seek to put the year in the red or the black column, most everyone knows that it was decidedly in the red. With a purchase yesterday to replace the same shares lost to assignment last week, I wouldn’t mind continuing to be able to do the same, over and over again, in 2016. The very best of a covered option strategy is when you can do that over and over again thing with a relatively small number of stocks going in and out of rotation in your portfolio. By and large, that’s been the case for the past 3 months as the new positions have been relatively few and the individual stocks themselves have been even fewer. On the one hand, that can be pretty boring, but on the other hand, it can be very exhilarating and I’m the kind who finds it to be the latter. In this case it was a re-purchase to capture a nice dividend and if assigned at the end of the week, I wouldn’t mind the opportunity to do it all over again. With futures up nicely this morning, I’d b happy to go along for the ride and take whatever opportunity may come out of the year end buying, if it can be sustained. That’s a big if, because this year hasn’t really been known for much in the way of consistency. With only a couple of positions set to expire this week, at least there were a number of ex-dividend positions to generate some cash, but I don’t expect to be spending anything else this week, at least not for a weekly option, at this point. I might consider draining cash reserves a little, but would likely look at next week or totally bypass the option cycle’s end and head into the February 2016 option cycle. For today it was just as expected. I sat and watched, while hoping that some would alert get triggered or some Hail Mary trade would get executed. Sounds like tomorrow may be the same. |
