Month: June 2015

Daily Market Update – June 19, 2015  (8:00 AM)

The Week in Review will be posted by 6 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments:  ANF, BAC, TWTR (puts)

Rollovers: KSS

Expirations:  BNO, BP, CHK, GDX ($23), KO, MAT

The following were ex-dividend this week:  LVS (6/18 $0.60)

The follwing is ex-diivdend next week: DOW (6/28 $0.42).

Trades, if any, will be qattempted to be made prior to 3:30 PM EDT

Daily Market Update – June 18, 2015  (Close)

Yesterday couldn’t really be labeled as a disappointment.

With the market having gone higher on Tuesday and erasing all of Monday’s losses and with lots of anticipation about even the slightest changes in the wording of the FOMC’s Statement release, anything was possible.

The fact that there was to be a Chairman’s press conference following the statement release was probably a source of some comfort as boih Ben Bernanke and Janet Yellen have been able to bring some optimism to light, regardless of the sentiment perceived to have been in the statement itself.

This time was a little different, though, but still not disappointing.

The market had already moved reasonably higher prior to the press conference and maintained that level all through the conference. It was only in the final thirty minutes of trading, after the conclusion of the question and answer period that the market gave up some of those modest gains.

During that conference, as one of my subscribers said, Yellen should have changed her name to Wallenda, as she did the best tightrope walking act ever.

Yellenda.

I like the sound of that.

She did indeed do a great job of not really answering questions, but she did make it clear that the data would lead the FOMC into action, unlike the “robotic” increases seen in an early Federal Reserve.

So that brings us to today and tomorrow.

With the pre-open futures again up modestly, there was still some hope for some assignments and maybe even some rollovers.

Not only was there a rollover, but an uncovered position actually had calls sold on it, although both reflected the really low volatility thought to reflect the market over the next few months.

As this morning was getting ready to begin, it was extraordinarily unlikely that I’d be adding any new positions this week, particularly since there were no interesting dividend plays today, tomorrow or on Monday of next week. I much rather preferred to see a couple of those assignments that appear to be possible and build up cash reserves, even if only slightly, than spend any money at the moment.

More importantly was being able to add to the pitiful income stream of late, but that would have required some more nice gains this week.

Who knew that they would come today? Even in the context of some negative news from overseas.

At the moment I’d be happy to meet or exceed the market’s performance for the week, but would still be a little greedy and like to add some income into that mix. After the past 2 weeks of having lots of ex-dividend positions, this week’s single position doesn’t make up for the lack of premium income.

Hopefully some of the optimism that may have been expressed by Janet Yellen ye
sterday, that makes it seem as if a rate increase won’t occur for another 3 months may be enough to at least keep us at this level as we head into earnings all over again in about 3 weeks. WIth today’s gain that seems more likely, even though tomorrow’s challenge could be a quadruple witching, as well as just not wanting to be long going into a weekend that may bring some adverse ECB/IMF/Greek news.

Otherwise, today’s party wasn’t even the least bit upset by Oracle’s poor earnings and attempts to spin the news into something good at the expense of its competitors. Even though Oracle reported yesterday and blamed currency exchange for its woes of the first quarter, those reporting the second quarter’s results, beginning early in July, may have a very different story to tell, as USD/Euro parity hasn’t occured, as expected.

That should only add to top line and bottom lines and should be good for us all.

But first, we have to get to that point. Today was a nice step forward and tomorrow could be another toward at least keeping us above the water line.

Daily Market Update – June 18, 2015  (9:00 AM)

Yesterday couldn’t really be labeled as a disappointment.

With the market having gone higher on Tuesday and erasing all of Monday’s losses and with lots of anticipation about even the slightest changes in the wording of the FOMC‘s Statement release, anything was possible.

The fact that there was to be a Chairman’s press conference following the statement release was probably a source of some comfort as boih Ben Bernanke and Janet Yellen have been able to bring some optimism to light, regardless of the sentiment perceived to have been in the statement itself.

This time was a little different, though, but still not disappointing.

The market had already moved reasonably higher prior to the press conference and maintained that level all through the conference. It was only in the final thirty minutes of trading, after the conclusion of the question and answer period that the market gave up some of those modest gains.

During that conference, as one of my subscribers said, Yellen should have changed her name to Wallenda, as she did the best tightrope walking act ever.

Yellenda.

I like the sound of that.

She did indeed do a great job of not really answering questions, but she did make it clear that the data would lead the FOMC into action, unlike the “robotic” increases seen in an early Federal Reserve.

SO that brings us to today and tomorrow.

With the pre-open futures again up modestly, there’s still some hope for some assignments and maybe even some rollovers.

It’s extraordinarily unlikely that I’ll be adding any new positions this week, particularly since there are no interesting dividend plays today, tomorrow or on Monday of next week. I’d much prefer to see a couple of those assignments that appear to be possible and build up cash reserves, even if only slightly, than spend any money at the moment.

More importantly is being able to add to the pitiful income stream of late, but that will require some more nice gains this week.

At the moment I’d be happy to meet or exceed the market’s performance for the week, but would still be a little greedy and like to add some income into that mix. After the past 2 weeks of having lots of ex-dividend positions, this week’s single position doesn’t make up for the lack of premium income.

Hopefully some of the optimism that may have been expressed by Janet Yellen yesterday, that makes it seem as if a rate increase won’t occur for another 3 months may be enough to at least keep us at this level as we head into earnings all over again in about 3 weeks.

< p>Even though Oracle reported yesterday and blamed currency exchange for its woes of the first quarter, those reporting teh second quarter’s results, beginning early in July, may have a very different story to tell, as USD/Euro parity hasn’t occured, as expected.

That should only add to top line and bottom lines and should be good for us all.

But first, we have to get to that point. Today and tomorrow could be a step toward at least keeping us above the water line.

Daily Market Update – June 17, 2015  (Close)

“What the market taketh, the market giveth“, although it could just as easily be “what the market giveth, the market taketh.”

Yesterday it was the former, almost tick for tick erasing the performance from the day before. Not only in the amount of the change, but also in the quality of the trading. Neither day had much in the way of uncertainty associated with it, although Monday had a greater range.

This morning, as the FOMC got ready for the second day of its meeting and about 5 hours in advance of its statement release, all was quiet in the futures, sending no signal as to what anyone believes will be coming from the FOMC.

Some 30 minutes after the release was to be made would also come the last Chairman’s press conference until September, when many had already believed the first interest rate increase will happen and now have even more reason to believe so.

Regardless of what new ideas of words may have been introduced in today’s statement, if there was to be no change in the interest rate, you can bet that there would be plenty of questions directed toward Janet Yellen focusing on the timing and her assessment of the changing pattern of economic growth.

As it would turn out, there was no change, and there was plenty of time for questions.

What Janet Yellen did, she did masterfully, as she skirted those questions that sought any kind of detail or that tried to pin her down.

With almost every of these press conferences Yellen has been able to push markets higher. She didn’t really do that today, and I hadn’t been expecting her to do so, but at least she didn’t torpedo the mild gains that ensued from the FOMC Statement release.

As expected, and she made it pretty clear, if rates aren’t raised today the only things that could be said is that those rate rises are coming soon.

I thought that if that was to be the case,  rather than being relieved at that news and getting on with life, traders would take that as a short term negative.

But they didn’t.

Maybe they were able to remember that most of them expected a rate increase as early as June. So when not introduced today, it would just represent another month or more of the gift that the Federal Reserve has been giving the stock market. Now it looks as if it may be another 3 months.

That should be a cause for celebration, as should the actual raising of interest rates, when it does eventually come.

While waiting for today’s scheduled events, there was also the continuing matter of Greece, which may account for some of the back and forth having been seen in the market the past couple of weeks.

Also waiting have been some trades.

After being close to desired prices on a few trades on Monday, I was really hopeful that they would have happened on Tuesday, especially as the market headed higher.

But nothing.

I would have liked like the chance to rollover any position that makes sense to do so before the FOMC Statement release in order to avoid any potential plunge, but it just didn’t happen that way, yet again.

With the delay in an increase in interest rates for now, there was some bounce back in gold, so at least that gave a chance to rollover one of the Gold Miners ETF positions, yet again.

However, as we now near the end of the monthly option cycle, I may end up making fewer trades than may be possible because I don’t really want to take on the cost of the transaction, including buying back an option position that almost certainly would have expired worthless. With volatility so low the relative cost of buying back some of those positions is just too high compared to the new premium received, unless that premium is boosted by an upcoming earnings release.

While there’s always hope to extricate myself from some of the expiring positions this week, the clock is now really ticking. It would be especially nice to see some real follow through with another day of gains and most of all, for those gains to hold until the books are finally closed on this month’s options.

Daily Market Update – June 17, 2015  (8:45 AM)

“What the market taketh, the market giveth“, although it could just as easily be “what the market giveth, the market taketh.”

Yesterday it was the former, almost tick for tick erasing the performance from the day before. Not only in the amount of the change, but also in the quality of the trading. Neither day had much in the way of uncertainty associated with it, although Monday had a greater range.

This morning, as the FOMC gets ready for the second day of its meeting and about 5 hours in advance of its statement release, all is quiet in the futures, sending no signal as to what anyone believes will be coming from the FOMC.

Some 30 minutes after the release is made will come the last Chairman’s press conference until September, when many now believe the first interest rate increase will happen.

Regardless of what new ideas of words may be introduced in today’s statement, if there’s no change in the interest rate, you can bet that there will be plenty of questions directed toward Janet Yellen focusing on the timing and her assessment of the chnaging pattern of economic growth.

With almost every of these press conferences Yellen has been able to push markets higher. Today, I’m not certain that will be the case.

If rates aren’t raised today the only things that she could say or infer, is that they’re coming soon.

The likelihood is that rather than being relieved at that news and getting on with life, traders would take that as a short term negative.

Instead, they should remember that most of them expected a rate increase as early as June. So if not introduced today, it would just represent another month or more of the gift that the Federal Reserve has been giving the stock market.

That should be a cause for celebration, as should the actual raising of interest rates, when it does eventually come.

While waiting for today’s scheduled events, there’s also the continuing matter of Greece, which may account for some of the back and forth having been seen in the market the past couple of weeks.

Alos waiting have been some trades.

After being close to desired prices on a few trades on Monday, I was really hopeful that they would have happened on Tuesday, especially as the market headed higher.

But nothing.

I’d still like the chance to rollover any position that makes sense to do so before the FOMC Statement release in order to avoid any potential plunge. In some cases
, however, I don’t really want to take on the cost of the transaction, including buying back an option position that almost certainly would have expired worthless. With volatility so low the relative cost of buying back that position is just too high compared to the new premium received, unless that premium is boosted by an upcoming earnings release.

Today, then, may be the equivalent of two days of trading.

Whatever happens before 2 PM and whatever happens afterward. That afterward component may also be two different sessions depending on the press conference.

While I’d like to be busy trading today, the pre-open futures just aren’t adding to yesterday’s nice showing in a significant way, although they’re not taking away from those gains either.

So there’s always that hope.

Daily Market Update – June 16, 2015  (Close)

Yesterday was another in a series of days to feel negatively about the market.

Although the focus has very recently been on Greece and the back and forth it has been having with both the ECB and the IMF, that focus will shift pretty fast as the FOMC Statement is released tomorrow.

That shift may have already happened as the market erased all of yesterday’s loss and traded just as yesterday did, only in the opposite direction.

Yesterday was a pretty bad day, even as it closed nearly 50% below the day’s lows. At least this morning there was no evidence of any further crumbling ahead of the opening bell. There was also no evidence of the market deciding to get optimistic ahead of tomorrow’s release.

The fact that the market didn’t pile on the losses during the futures session could alone have been seen as a victory of sorts, as there’s been very little reason for optimism lately. The complete reversal once trading started is another victory, at least in kind, if not really meaningful. Those occasional triple digit gains, such as last week, when it looked as if there might be some kind of agreement on the Greek issue, are just blips that have no meaning.

If they do have meaning it would only be if we are still in a bull market. That’s because the types of really large moves higher that we have been seeing the past few months after some large losses, usually only happen after bear markets.

While we’re probably still in that bull market, it’s really hard to know except years after the fact, as certain market moves can be seen as preludes only in hindsight.

With the market now again only 2.5% off from its all time highs the feeling is far more negative than a mere 2.5% should warrant, although some will have a sense of optimism after today’s gains. That’s because over the past few years we have had these kinds of declines on a very regular basis and simply moved higher from there. Today could have been more of the same, just as easily as it could have been a bull day in a long term bear market.

While this may not be any different and while most of the previous declines likely had some of the feeling that the big one was coming, it’s difficult to see where the next bit of optimism is going to come from, even with today’s optimism.

Where it may arise is from the feeling that a burden has finally been lifted once interest rates are finally raised.

There may be some hint of that to come tomorrow and that could result in a relief rally, but the amount of data coming in to support the interest rate increase hasn’t been very overwhelming. We may be seeing the beginning of a trend, but it does seem to be very early in the process to make the jump and pull that trigger.

Still, it would be a good thing for that decision to be finally made.

With yesterday’s weakness in the market and an unwillingness to put additional money on the line, I had a few rollover trades placed, but none could get executed. I was hoping that the very mild decline being seen this morning wouldn’t be too much of a barrier to getting something done this week, but even the strong broad move didn’t help to get any done today. Making some rollover trades ahead of the FOMC Statement release may be a good thing if the response by the market isn’t going to be welcoming, but those opportunities are becoming sparse as the market has been so tentative lately.

With some more possibility of an agreement ahead among Greece, t
he ECB and the IMF, there’s always that chance that markets will be lifted, as I don’t think there’s any further near term downside risk. Most probably expect no resolution and may even be already discounting a Greek exit from the EU.

With no good news having been digested by the markets in a while, any remotely good news may become exaggerated.

If so, I hope that comes before the week’s end and best of all would be additive to any good news we might react to from the FOMC.

I’d like to get out of the June 2015 option cycle and into the July cycle as unscathed as possible and with cash to show for it, but that may be a hard fought battle at the moment.

Daily Market Update – June 15, 2015  (Close)

If the morning’s pre-opening futures were going to be any indication, this week wasn’t going to be getting off to a good start.

With the DJIA down nearly 100 points some 90 minutes before the market’s open, there have been a couple of instances in the past month that such negative pre-openings reversed themselves very quickly as trading opened on the regular session, but that’s not usually the case.

Today wasn’t going to be one of those days.

This morning the pretext for the drop was some more disappointment concerning a Greek default.

Last week the large moves up and down were attributed to polar opposite news on the situation of an agreement between Greece and the ECB and IMF.

This morning the news wasn’t good, just as the last of the news last week wasn’t promising.

Ahead of this week’s FOMC Statement release, which also may weigh heavily on the market, even if only due to some change in wording, the market doesn’t appear to be well equipped to deal with any adversity.

While there’s always a chance that a rabbit will be pulled out of a hat and the Greek financial crisis can continue to be kicked down the road, there’s not too much prospect of good news coming from many quarters for now.

But with all of the negativity surrounding the market, the reality is that it was barely down even 2% from its highs as the morning was set to begin.

That’s still quite a distance from where a mini-correction would take us, which would be about another 2.5% lower after today’s final tally, which, maybe coincidentally, is where technicians would point out there is some support.

Most times I’m not overly anxious to see earnings season descend upon us, but right now that may be the only hope for a near term catalyst to move markets higher. Unfortunately, that’s still about 4 weeks away and until then we’ll have to continue to deal with interest rate hike fears and whatever dysfunction may come to us from Europe.

With so many positions set to expire this week and with very little time to recover from any FOMC induced sell off, I would like to look at any opportunity to better position anything that is due to expire this week. At the moment there is some chance for some assignments, but those opportunities may be fleeting if weakness persists or grows this week.

With just a little bit of cash added to the reserve from the single assignment last week and with a real desire to add to those reserves, I don’t expect to be looking for many, or any, new positions this week. After last week of not having added any new positions I would love to do something, but this may not be the right time to think about committing any new or existing funds, even if you have the money to spare.

Right now, even a new blue chip could be the same as a speculative position, being dragged down by market momentum.

This may be a good time to heed ages old advice and wait until seeing the whites of their eyes to get an idea of where market sentiment is going. For now it seems
to be going lower and it may be up to the FOMC to finally set us free from our fears or let earnings speak for themselves and do what is supposed to happen in an economy that’s getting better and better.

Daily Market Update – June 15, 2015  (8:45 AM)

If the morning’s pre-opening futures are going to be any indication, this week isn’t going to be getting off to a good start.

With the DJIA down nearly 100 points some 90 minutes before the market’s open, there have been a couple of instances in the past month that such negative pre-openings reversed themselves very quickly as trading opened on the regular session, but that’s not usually the case.

This morning the pretext for the drop is some more disappointment concerning a Greek default.

Last week the large moves up and down were attributed to polar opposite news on the situation of an agreement between Greece and the ECB and IMF.

This morning the news isn’t good, just as the last of the news last week wasn’t promising.

Ahead of this week’s FOMC Statement release, which also may weigh heavily on the market, even if only due to some change in wording, the market doesn’t appear to be well equipped to deal with an adversity.

While there’s always a chance that a rabbit will be pulled out of a hat and the Greek financial crisis can continue to be kicked down the road, there’s not too much prospect of good news coming from many quarters for now.

But with all of the negativity surrounding the market, the reality is that it’s barely down even 2% from its highs.

That’s still quite a distance from where a mini-correction would take us, which would be about another 3% lower, which, maybe coincidentally, is where technicians would point out there is some support.

Most times I’m not overly anxious to see earnings season descend upon us, but right now that may be the only hope for a near term catalyst to move markets higher. Unfortunately, that’s still about 4 weeks away and until then we’ll have to continue to deal with interest rate hike fears and whatever dysfunction may come to us from Europe.

With so many positions set to expire this week and with very little time to recover from any FOMC induced sell off, I would like to look at any opportunity to better position anything that is due to expire this week. At the moment there is some chance for some assignments, but those opportunities may be fleeting if weakness persists or grows this week.

With just a little bit of cash added to the reserve from the single assignment last week and with a real desire to add to those reserves, I don’t expect to be looking for many, or any, new positions this week. After last week of not having added any new positions I would love to do something, but this may not be the right time to think about committing any new or existing funds, even if you have the money to spare.

Right now, even a new blue chip could be the same as a speculative position, being dragged down by market momentum.

This may be a good time to heed ages old advice and wait until seeing the whites of their eyes to get an idea of where market sentiment is going. For now it seems to be going lower and it may be up to the FOMC to finally set us free from our fears or let earnings speak for themselves and do what is supposed to happen in an economy that’s getting better and better.