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Daily Market Update – April 20, 2015 (9:00 AM)
Last week ended on a really sour note, but luckily that didn’t get in the way of any assignments and rollovers that were being counted on as the week started. This morning the futures looks like it wants to regain some of what was lost but without any real foundation for justifying that attempt at a recovery. Since there wasn’t too much of a reason for the week ending loss either, it shouldn’t then be much of a surprise if reasons are thrown to the wind. This week has very little of substantive economic news and is even light on the non-consequential kind of news so there aren’t likely to be too many catalysts coming at us, although items like the Petroleum Status Report, New Homes Starts and Durable Goods may take on more importance than they often do with so little competition for attention. There’s also some speculation about European Union news and a Greek exit from the EU perhaps coming to a head this week, but it’s still difficult to envision how that would happen or be allowed to happen. But what the week does have is lots of earnings reports, as this week and next will mark the peak and crescendo of this earnings season. So far, the market has been taking less than stellar news with great stride and not punishing any company that’s following the path of under-delivering on already lowered expectations.Other than that little detour taken last Friday, the mediocre earnings that had been coming through were part of the formula that continued to send stocks higher. With more assignments occurring last Friday than during any other week of 2015, it’s nice to have some more cash available. That’s especially true when assignments don’t happen as those stocks have run away from their strikes. That Friday sell-off helped to rein in some of those prices and even put them back into range for re-purchase. With the May 2015 option cycle getting its start today, there are already positions set for expiration in each of the weeks of this monthly cycle. With some cash in hand I expect to be adding some new positions, but will probably focus on those with a weekly expiration. However, following that Friday sell-off and this morning’s indication of some kind of a rally, I’m not likely to rush in because there’s really not too much sense of where the needle will fall. I would have liked to have seen some continuation of Friday’s sell-off or at least some effort to digest those losses before snapping back. As the morning does get off to its start if the advance can hold, I would be especially happy if there’s more opportunity to sell calls on currently uncovered positions. Each of the last two weeks were good for that and that represents a way of generating income without having to put anything additional at risk. As always the best of weeks has its combination of assignments, rollovers and newly covered positions and at least with the market getting off to a reasonable start for the week, so far there aren’t any hopes and dreams being dashed
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