Daily Market Update – June 30, 2014 (9:00 AM)
A 3 1/2 day trading week that ends with the Employment Situation Report as many of the big boys head out to the Hamptons early to start the summer can make for a quiet trading week.
In volume, but not necessarily in outcome.
Other than some surprise that might be contained in the monthly numbers reported Thursday morning, there really isn’t much that should move markets, but you can never tell what kind of anomalous moves can be found during light volume trading.
While last week seems as if the market was already on vacation this week it definitely becomes reality and my expectation isn’t to be doing too much trading.
Coming off a forgettable week I would love to see a return to the ability to sell calls on existing positions rather than aggressively adding new positions. With only a handful of positions expiring this week and with premiums reflecting a much shorter week it may be challenging to find any opportunities that will expire this week. That may result in adding on to the list of positions set to expire next week, as that same challenge was present last week when looking for rollovers.
With sufficient cash to start the week I don’t mind bringing the level down to about 20%. That would mean 5 to 6 trades, but I just don’t believe that will end up being the case.
One thing that I would like to see, but have now been waiting a while, is any kind of market commitment toward direction. That could be a higher or a lower direction, but at least a short term path.
This morning’s pre-open futures aren’t helping to give much of an indication as moderation continues to be the theme. As so often has been the case lately, the early indication is for a slightly negative opening and most often that has gotten into the habit of leading to a meandering day.
With weeks as short as this one just about the only way to capture a reasonable premium on a weekly trade is to be able to make it fairly early in the week’s opening session, as the remaining time until expiration ticks away very quickly.
With some nice dividends this week it may simply be a good time to add to some of those positions, such as in JP Morgan and Bristol Myers, particularly as they tradeoff from their recent highs and their sectors may be in line for the next rotation, as that has continually been the market’s character as it reaches new highs but its component pieces aren’t always following along as you would normally expect.
That might make it a very easy kind of week.
But as usual, it’s not terribly often that a plan really goes as envisioned.
While clarity is always a nice thing to have I don’t think that vision will in any way be advanced this week.
Hopefully, there will at least be opportunity to generate some income, with or without much in the way of new purchases.