Daily Market Update – September 22, 2014 (8:00 AM)
After last week’s downpouring of anticipated news this week will be a snoozefest by comparison, but as we’ve seen over and over again, there isn’t necessarily a correlation between news and market movements.
A quiet week on the newsfront isn’t necessarily something that offers immunity from a market exploding higher or crumbling under its weight. There needn’t be a tangible reason for either of those occurrences, although we always look for the reasons as both a means of predicting and a means of explanation.
Too bad it never really seems to work that way. Even after all of the explanations in hindsight, they just don’t seem to have predictive value the next time around.
Certainly, the impact of news isn’t consistently a lasting one. We tend to forget and move on quickly, but are also subject to so many bits of news, each of which requires consideration, if not also action.
In a week such as last the news events were from such different directions, the FOMC and the Scotland independence referendum, and were so completely unrelated that it was entirely conceivable that their results could have whipsawed markets,
Instead, everything went as planned and their impacts were additive.
That has pretty much been the story of the past two years.
While there have been some disappointments, they’ve been very temporary in impact, while the greatest challenges have been the unpredicted and unpredictable, most often coming from geo-political issues around the world.
This week everything is quiet on the scheduled news front, other than for Friday’s GDP announcement and the world is relatively quiet, insofar as there’s little new expected to assault our humanity.
With markets at their familiar “new high” levels to begin this week, precious metals sinking even further and interest rates still under the FOMC’s thumb of “considerable time,” it just makes perfect sense that money would stay at work in equity markets.
It’s hard to argue with that logic, but it’s also hard to accept it when there is a realization that such logic is what most everyone in the world is thinking will be the only path to follow.
This morning the market looks as if it will get off to a tentative start.
With enough assignments from last week to fuel some buying this week I don’t have any great plans to abandon some caution, as I would still like to increase my cash reserves as this week comes to its end.
As the first week of the October 2014 cycle is set to begin and already having a number of positions set to expire this week, any new positions will be considered with both weekly and expanded weekly options, in order to continue the process of attempting to develop some diversification in contract expiration dates.
I would especially like to see some opportunities to sell contracts on those positions that just seemed to expensive to rollover last week and get those back to work. The more of those opportunities the less is the need to create new positions to generate income for the week, so I would welcome those opportunities over buying opportunities for now.