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Daily Market Update – November 17, 2015 (8:30 AM)
Yesterday was a surprise, but for a change it was the good kind. It’s really hard to understand much when it comes to these recent moves. You’re not even seeing people who ordinarily are very quick to come up with reasons for whatever it is that’s happening coming forward with explanations. Normally, they’re more than happy to do so, right or wrong, because it brings greater TV exposure and that’s pretty priceless when you’re in the business of gaining customers (or subscribers). Yesterday, there was a pretty clear association between the price of oil and the market. What this past year has been, when it comes to that association is an anomaly. We were always used to seeing markets move in the direction opposite to that of oil’s movement, even when energy made up a larger portion of the S&P 500 and the DJIA. Now, good news for energy companies is taken as good news for the market. Continuing on yesterday’s closing theme; “Go Figure.” What was a little interesting this morning was that the pre-opening futures were very strong, but weakened after DJIA components Wal-Mart and Home Depot reported earnings. The unusual part is that both reported better than expected earnings numbers, you know, the kind that can easily be manipulated and their shares went considerably higher in the pre-opening session. So that could only mean that the broader markets were deteriorating more than those 2 were adding to that early rally. No matter, the futures haven’t been reflective of very much lately, anyway. With a single purchase yesterday, that may have been luckily timed to have occurred at that point that the market hadn’t yet decided to move higher, I remain cautious on the week and am not necessarily going to go with very much confidence into my cash reserve. What I would like is to simply see some positive action with those positions set to expire this week as the monthly contracts expire. My initial thoughts were that this week would be one of looking for more dividend yielders and selecting extended option expiration dates. Yesterday’s purchase was anything but. However, it represented what i actually enjoy doing the most, when it comes to stocks. That is to buy the same stock over and over again, as often as possible, week after week or expiration after expiration. Morgan Stanley is the latest to fill that bill, but up until recently, there haven’t been many of those the past 2 years. What sometimes occurs, especially as volatility climbs, is that there may also be advantage to not taking assignment on positions, but instead rolling them over, especially if there’s also a dividend to be captured. That’s more the case when you have adequate cash reserves, but it’s also a way to alter a portfolio a bit more to a buy and hold mentality and not have to continually hunt for new positions. This most recent market, and by that, I mean all of 2015, has been one where down beaten stocks, or those that seemed like bargains, took or have taken so very long to rebound. With that in mind, it’s nice if you can simply do the same stocks over and over again. To do so, it would be nice to also see another volatility spike, but then to simply see an increased volatility level maintained in a tight, but higher range. That used to be fairly common and reasonable to expect. Lately, not so much, but you don’t stop hoping. |
