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Daily Market Update – December 7, 2015 (9:00 AM) Following a more than impressive 350+ point gain on Friday following some good economic news in the form of a healthy Empoyment Situation Report, the market basically indicated that it was ready to accept what will likely occur next week. That is, the FOMC, which has obviously been chomping at the bit, will announce the first interest rate hike in nearly a decade. When Janet Yellen says that she can’t wait for that first rate hike, you know that data driven or not, it’s going to be happening really soon. That positive response on Friday to the strong likelihood of an interest rate increase followed a week that was full of paradoxical activity during which time yoou would have had no idea of how the market would respond to anything. With all of the large climbs and falls, the market finished unchanged, but it clearly wasn’t liking what it was hearing until Friday morning, even though tehre really wasn’t anything bad being said earlier in the week. This week there’s not too much going on, although there is a JOLTS report, which Janet Yellen has indicated in the past is an important metric.She went so far as to say it was the most important metric, although it’s possible that the value or importance of various metrics will change as the economy itself changes. We’ll see whether it confirms what we all now expect to occur next week. With no assignments last week, I don’t have very much free cash, but will still be willing to borrow from myself, in a form of margin lending. If doing that, as I have done over the course of about the past 3 months, the real intention is to use the money on a trade that I think has a high chance of being opened and closed during the course of that single week. With a number of positions set to expire this week, part of the willingness to borrow from myself will be based on what I perceive also as the likelihood that some of the existing positions may have a chance of being assigned, as well. With that likelihood at least being possible, I’m not closing my mind to the idea of spending some money. However, I’d be very happy if this week was similar to last week, even if it didn’t include the new positions being added. With 6 ex-dividend positions again this week and the possibility of being able to have some rollovers or even assignments, my need for income generation isn’t being as strong as it might be on a week when there’s little going on with existing positions. As with most of the past few months, I’m more inclined to want to spend that money of the market begins the week with some weakness, but wouldn’t be talked out of spending any if the market trades in a flat manner. This morning’s futures look to be flat, so I’ll be on the lookout for any opportunities, but more and more those futures aren’t telling us very much about what the opening will even look like, much less the close. |
