Daily Market Update – June 16, 2015  (9:00 AM)


Yesterday was another in a series of days to feel negatively about the market.

Although the focus has very recently been on Greece and the back and forth it has been having with both the ECB and the IMF, that focus will shift pretty fast as the FOMC Statement is released tomorrow.

Yesterday was a pretty bad day, even as it closed nearly 50% below the day’s lows. At least this morning there’s no evidence of any further crumbling ahead of the opening bell.

That alone could be seen as a victory of sorts, as there’s been very little reason for optimism lately. Those occasional triple digit gains, such as last week, when it looked as if there might be some kind of agreement on the Greek issue, are just blips that have no meaning.

If they do have meaning it would only be if we are still in a bull market. That’s because the types of really large moves higher that we have been seeing the past few months after some large losses, usually only happen after bear markets.

With the market now only 3% off from its all time highs the feeling is far more negative than a mere 3% should warrant. Over the past few years we have had these kinds of declines on a very regular basis and simply moved higher from there.

While this may not be any different and while most of the previous declines likely had some of the feeling that the big one was coming, it’s difficult to see where the next bit of optimism is going to come from.

Where it may arise is from the feeling that a burden has finally been lifted once interest rates are finally raised.

There may be some hint of that to come tomorrow and that could result in a relief rally, but the amount of data coming in to support the interest rate increase hasn’t been very overwhelming. We may be seeing the beginning of a trend, but it does seem to be very early in the process to make the jump and pull that trigger.

Still, it would be a good thing for that decision to be finally made.

With yesterday’s weakness in the market and an unwillingness to put additional money on the line, I had a few rollover trades placed, but noe could get executed. Hopefully the very mild decline being seen this morning would be too much of a barrier to getting something done this week. Making some rollover trades ahead of the FOMC Statement release may be a good thing if the response by the market isn’t going to be welcoming, but those opportunities are becoming sparse as the market has been so tentative lately.

With some more possibility of an agreement ahead among Greece, the ECB and the IMF, there’s always that chance that markets will be lifted, as I don’t think there’s any further near term downside risk. Most probably expect no resolution and may even be already discounting a Greek exit from the EU.

With no good news having been digested by the markets in a while, any remotely good news may become exaggerated.

If so, I hope that comes before the week’s end and best of all would be additive to any good news we might react to from the FOMC.

I’d like to get out of the June 2015 option cycle and into the July cycle as unscathed as possible and with cash to show for it, but that may be a hard fought battle at the moment.