Daily Market Update – April 7, 2015




Daily Market Update – April 7, 2015  (8:45 AM)

Yesterday was as welcome of a reversal as you could have orchestrated.

While I mentioned yesterday morning that the gap between Friday’s futures trading and Monday’s open was the kind of day that could see a reversal once the filling in of the gap had been done, I didn’t expect it to happen so fast.

The reversal started almost immediately following the opening which had gapped down by more than 100 points and had returned the market to the flat line by 10 AM. That was the time that the ISM non-Manufacturing data was released and the market just kept climbing higher and higher. The ISM data got the credit, but the trend was already pretty clear before the data was released.

While the ISM could have added to the gain the likelihood is that some sane minds came to realize that the February job numbers, which were outrageously high and the March numbers, which were outrageously low, may not have been accurate reflections of what is really going on.

The market’s decline leading to an abysmal March all started with the February Employment Situation Report release and we were getting poised to do the same with the new report’s release of the March data.

It looks like it was serendipitous that markets were closed for 3 days and had a chance to let things cool down enough to let rational thought take over, although we will likely never learn that even the best of data is subject to revisions that can paint an entirely different picture. The revisions to February’s employment data may have made a big difference if reported as part of the original data and could have avoided us going through a lost month in the market.

This morning the market is very mildly higher and there’s not too much this week to spook or elate markets, other than the release of the FOMC meeting minutes tomorrow, which could provide some insights into the thoughts going on behind closed doors.

Otherwise this morning has a JOLT Survey, which hasn’t gotten anywhere near the attention that Janet Yellen believed it deserved, other than when she first mentioned how she believed that it was an important measure of the health and vibrancy of the labor market.

With little evidence of upward wage pressure it’s not too likely that the JOLT Survey will indicate the kind of optimism that Janet Yellen had referred to just a few months ago, when it seemed that people were willingly leaving their jobs to pursue better paying ones.

That was so yesterday.

With a single purchase yesterday and cash being at a bare minimum, I don’t anticipate adding many new positions this week. While I’d love to see a repeat of yesterday, the early indications aren’t looking as if that will be the magnitude of any climb higher. But I still am on the lookout for any opportunity to sell calls on any uncovered positions. Upcoming earnings may enhance some premiums, but they are still so very depressed by the low volatility that continues, despite the up and down climbs from day to day.

As with last week, while I’d love to see some assignments in order to free up some cash, I wouldn’t mind if the alternative was to be able to rollover whatever was otherwise scheduled for expiration this week.

I don’t really care how I generate the income objectives for the week, as long as it’s legal, but it’s always nice to have a mix of assignments, new calls and rollovers. As long as we can stay away from any of those sharp
daily declines, as we’ve had for much of 2015, this could be one of those overdue weeks.