Daily Market Update – November 4, 2014 (Close)
Yesterday was one of those rare days when the market did what you would have reasonably expected from it, although that isn’t the case as often as should be the case.
There was really no news, maybe a little bit of a hangover from the latter half of last week and no real reason for the market to do anything, at all.
And that’s exactly what yesterday was like. There was almost no movement within a pretty tight trading range. For all of the excitement about Friday’s announcement by the Bank of Japan, there was absolutely no carry over through the weekend and it’s unlikely that we will ever see the benefit of Japan’s Quantitative Easing as it creates, perhaps, a more appealing competitor to our own equity markets.
There wasn’t much reason to think that today would have been any different and the futures markets were indicating that it should be another quiet day, but those indications are very often not very accurate when the futures trading is listless.
The trading range today did turn out to be bigger than yesterday, but there really wasn’t too much real movement. The overall market, probably due to its bigger energy representation, which was absolutely hammered today, greatly lagged the DJIA, but still wasn’t terribly off.
The real excitement may begin tomorrow as election results come in and we may find out whether control of the Senate moves over from one party to another, although there may be a delay if run-off elections become necessary in a key state or two. Still, that result is so widely expected that there shouldn’t be too much of a reaction as one form of balance and gridlock is traded for another form of balance and gridlock.
Most people, and I suspect most investors won’t care too much about the mid-term elections and what impact they may have on policy and the economy. What it known with great certainty is that the moment those results are in the winners will already be planning their re-elections and the losers will already be mapping out strategies for 2016, when it really counts.
Tomorrow morning also brings the ADP Employment Report which sometimes has the ability to presage the really important Employment Situation Report on Friday.
In-between will possibly be some news from the ECB which could signal an EU intention to initiate Quantitative Easing, although expected, may still come as a surprise and give markets another boost.
So the latter half of the week may have reasons for the market to show some reaction and hopefully it will be in a positive direction, as it has now been a full day since having set another record closing high.
But with a couple of opening transactions already made this week and cash at its lowest point in years, I would like to simply see what most everyone wants to see with those holdings.
With volatility again at such a low level after only a couple of weeks of flirting with some more normal levels each passing day makes the sale of a weekly option less appealing, so yesterday would have been a very nice day for a market surge, especially when there’s no intention or desire to add new positions.
That didn’t happen and it didn’t look, from initial appearances, as if it would happen today, although individual opportunities could always appear, but lately, in the absence of earnings news, there has been little to no substantive movement in individual names on a daily basis. Moves have been fairly muted, especially on the upside.
Today was simply a day of waiting for tomorrow.