Daily Market Update – November 20, 2014 (Close)




Daily Market Update – November 20, 2014 (Close)

Yesterday’s FOMC Statement release turned out to be a non-event and was so for the second consecutive month.

Most every month there is some discussion of the nuances contained in the statement and the differences between it and the previous month. Adjectives and adverbs are dissected for their meaning and importance and algorithms pore over the frequency the keywords are used and make instantaneous trading decisions based on words, often without context being a factor.

This time around there wasn’t very much to talk about and there wasn’t very much for algorithms to ponder.

Maybe that reflects some adult like behavior in that a reasonable response was the outcome of not being faced with any surprises. The lack of any new information contained in the statement normally would be irrelevant to traders and the markets would respond wildly, most recently higher, after the initial knee-jerk reaction.

This time there was no knee-jerk, nor was there a delayed reaction.

While the day after the FOMC is frequently a day for significant movement, often opposite the movements of the previous day, it doesn’t appear as if today will require much in the way of correction, as there wasn’t any kind of an over-response yesterday.

Instead, the market simply looks as if today will begin with a moderately lower opening, but with no real cause to account for the weakness.

By the time the day would come to an end it was at least sporting a move that was double that of the daily moves of much of the past week. having moved 0.2% higher on the day.

Given the past week’s malaise, it would be nice to see any kind of movement and any kind of expression of sentiment to take the market decidedly in any direction. Although the streak of 5 consecutive days of not having moved more than 0.1% is now over, there hasn’t been much of a difference between the days that added to that record and the days that snapped the record.

Today may have been double that 0.1% threshold, but it sure didn‘t feel twice as active.

While there was a chance that today could have been a breakout as the pre-open futures were unfolding, the fact that there was no reason for a sell-off or a buying spree probably fell on newly rational ears. With  6 upcoming speeches by Federal Reserve Governors that could shed some additional light on what is really going on in the closed meeting room that guides the nation’s economic policy, there’s still some chance for some surprises.

But I doubt that anything substantive is going to come from any of those speeches, particularly as the market doesn’t seem overly nervous, although individual stocks are often very tentative and quickly cast out for the slightest disappointments, as the market continues to be one that is characterized by sector rotation and a general trend higher and higher.

For the rest of the week the challenge is to rollover, sometimes, avoid rollover, as in the case of DOH Trades, seek new cover and get assignments.

At least today offered some opportunity to get some additional cover on some laggards, but those premiums are still so woefully low that it’s hard to justify the risk – reward propositions.

For now, at least, the initial concern that a real adverse reaction to the FOMC would diminish chances of assignment aren’t as keen, but it would still be nice to finish the week wit
hout any surprises and be able to set up the December 2014 cycle with enough cash in hand to be able to take advantage of anything that may come along.