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Daily Market Update – May 20, 2015 (8:30 AM)
Yesterday, the US market didn’t match the enthusiasm seen in overseas markets. We were greeted with the news yesterday morning that Wal-Mart was disappointing on earnings, while Home Depot had turned in a good quarter. Those bits of information then served to lead people to try and explain what it meant when the lower end on the retail spectrum struggled, yet when the source for home improvement projects and construction was doing well. Now that all of those analyses have been done and all of those opinions have been delivered, the morning comes the news that Target did better than expected and Lowes did not. So rather than Tuesday’s results being some reflection of how various segments of the US economy are doing and how various demographic classes are doing, this morning’s results may suggest that it’s just a question of how one company is doing as compared to another company. Sometimes results don’t necessarily belie anything more deep than the numbers. If looking for more deep meaning, that may come as FOMC Minutes are released later today. While those documents shouldn’t directly move markets, after all, we already know the policy outcomes from those meetings, they can give more insight into the nuanced words used in the various speeches and presentations made by FOMC Governors as they do on a regular basis. Yesterday’s market flatness looks as if it is extending into another day. That makes it a little more challenging to reach those assignments or rollovers that I had my heart set on. However, last week, at this same time, there wasn’t too much reason for optimism, but you just never know where one single day will take you. This morning’s flat futures trading could end up with just about any kind of market opening that can be imagined, so there’s not too much reason to give up hope of anything worthwhile happening today or during the following 2 days. As the market still stays around that 2120 level on the S&P 500 that technicians believe is a critical level, there’s not too much reason to get overly committed in one direction or another. While it can be a launching point to go much higher, it can also be the resistance point that leads to some kind of overdue correction, as even the mini-corrections that we had been seeing for the past few years, are now due. For now the market seems equivocal and so am I. At this point of the week as the monthly option cycle is just beginning and as we get ready for a holiday shortened week to follow, my sights are set on trying to generate some income this week and having some cash reserves left in order to take advantage of any opportunities that may present next week.
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