Daily Market Update – January 29, 2015




Daily Market Update – January 29, 2015 (8:30 AM)

Yesterday was another example of how the pre-opening futures, if they’re not trading with a large move, don’t have much ability to predict what will happen during the real trading session.

Granted that yesterday was an FOMC Statement release day, but lately that too has stopped having much in the way of predictive capability, just as the day before an FOMC has stopped being a profoundly positive day.

For some reason, the market eventually decided that the eventual FOMC Statement was negative and people were talking about how Janet Yellen’s honeymoon was now over.

I’m not certain who they’re referring to, as I don’t know if the stock market has ever had that kind of relationship with a Federal Reserve Chairman, but after a period of not moving very much after yesterday’s release, the market eventually decided something was really rotten and the sell-off really accelerated having taken the DJIA from a nearly 100 point gain at the time of the announcement to a nearly 200 point loss.

That’s volatility and after a brief respite for a day or two, it’s asserting itself again, although still far below fun levels.

While I don’t trade or buy bonds of any kind, it was also hard to not notice how the Treasury market has been reacting lately, as volatility has definitely found its way into there, as well.

While most fears are related to an increase in interest rates and wondering when that would happen, the 10 Year Treasury fell to about 1.72% and the 30 Year hit all time low rate levels.

Considering that many believe that bond traders are the smart ones in the room you would then have to wonder what the stock market is worried about, as history does show that the bond market is pretty good at predicting Federal Reserve  actions and right now they’re not seeing any kind of imminent rate hike.

This morning, maybe helped by some decent earnings from Dow Chemical and others, the market is showing a little bit of a bounce in the pre-market trading, but after the past 2 days of losses, that so far has the S&P 500 down 2.4% for the week, a little bounce isn’t very much.

There are still 2 days to go this week, so I’m still hopeful that there will be some opportunity to see some assignments. While I was hoping to see all positions set to expire this week, at this point I wouldn’t mind some rollovers as the alternative and might look for any opportunity to do so today, although in general the longer you can wait to do so, the better, as long as the stock price doesn’t move too strongly against you.

Today may see some earnings related trading going on as there are some big movers this morning on their news, both good and bad, but it’s probably tomorrow’s GDP that many are waiting for to either confirm or invalidate the belief that the economy will heat up thanks to falli
ng energy prices.

Because of that uncertainty, and so far there hasn’t been too much indication of what seemed to be so obvious, there may be added reason to want to jump the gun and consider rollovers today rather than waiting until tomorrow when those opportunities may end up being more remote.