Daily Market Update – February 10, 2015 (Close)
This morning there was the rare sight, at least for 2015, of the S&P 500 with a nice positive move in the pre-opening futures.
In general, the bigger the move the more staying power it has and the more likely it will set the tone for the day, but even then the unfolding events of the day will have their way.
Of course, sometimes there don’t have to be any events to cause significant reversals and that’s when everyone starts pointing to technical factors to explain the unexplainable.
Today there was no need for pointing toward anything in an attempt to get an explanation where none may have existed, but the market did stay true top its pre-opening trading, although it did take a little bit of a tortuous route to get there. It was in the final 2 hours that the market was able to reclaim some of the early advances that had been lost by mid-morning.
This morning the market was de-coupled from oil prices, which is really the way it should be and which is really the way logic would dictate that it would be. Logic, though, sometimes has no real place in things as the market fell or rose far more than it should have based on the size of the energy sector’s representation in the S&P 500.
While the market was showing a nice gain and with some more of those optimistic retail reports are coming in from smaller players like Aeropostale and The Gap, there is increasing reason to be hopeful that there will be some real dividend coming from the reduced cost of oil.
Whether that dividend does anything to move the stock market forward may be questionable, but at the very least it should push the economy forward and maybe some of that debate will come to an end. In the best of worlds the benefits top the economy would end up with better earnings data and stocks responding to profits, which is also the way it should be.
Meanwhile, this still remains a very quiet news week, but this morning brought the JOLT Survey which has, for the past few months been showing a trend that is one reflecting a positive shift in the workplace.
It has been showing that people with jobs have been willing to leave their jobs to look for, or take other jobs. More importantly those other jobs have been higher paying.
That paints a real picture of optimism. Rather than staying at a job someone doesn’t want due to the fear of how difficult it would be to find a new job, people are willing to take that chance in the recognition that there are more and better jobs out there.
The morning’s report continued that feeling of optimism among people in the workforce. Basically the boots on the ground have a better feeling about the future than do some indicators that may just need some time to catch up.
With a couple of new positions added yesterday, I still have room for a little more, but again would be much happier figuring out a different way to generate this week’s revenue stream. A nice move higher today could bring some of the opportunities to sell calls on uncovered positions, but yesterday’s weakness just moved the needle a little further away.
While I generally like the market moving back and forth, because it helps to create higher option premiums, the downside is that it’s harder to find sustained moves to bring some positions that are in need of finding cover back into a range where even a “DOH Trade” is a reasonable thing to do.
In the meantime, however, there could be a powerful catalyst one – two punch in the week or two ahead as the major retailers begin to report their earnings and hopefully shower us with good guidance. The second part of that punch would be some continuing stability in energy prices, especially if there’s any sign of demand picking up and not just as the result of decreasing supply.
For now, there are at least a few positions set to expire this week and a fair number for the week after to end the monthly cycle. That gives me something to do and think about, which is a nice change from last week.
Hopefully this week will restore some of the activity that can make even down days profitable and sometimes fun.
Despite not being able to make those new call sales today, it was still enjoyable letting the excess energy in the market spread itself in a broad way.
I’m not shy about going along for the ride.