Daily Market Update – January 11, 2016




Daily Market Update -January 11, 2016 (9:00 AM)

Last week it was a story of Saudi Arabia and Iran not playing too nicely with one another.

It was also a story of North Korea perhaps setting off a Hydrogen bomb.

But mostly it was the same old story that we had first started seeing and hearing about the Chinese stock markets back in June and July of last year.

Eventually, the meltdown of the Shanghai market about 6 months ago probably led to our precipitous decline and first real market 10% correction in years.

This week, the second week of 2016, begins with a continuation of weakness in China, but after two 7% declines last week, last night’s 5% decline seems fairly trivial.

Maybe that’s what our early futures traders thought, as well, but that early strength was really muted, as oil also continued its steep decline.

Without any real hint of a bounce last week, other than a little final hour buying on two of those trading days, the market fell about 6% and is actually fairly close to another of those 10% corrections from the high reached just barely a month ago, at which point the market had nearly recovered everything lost in August 2015.

With the dual punch of China and continued weakness in oil, it’s hard to imagine what could take markets meaningfully higher, other than some really spectacular earnings news.

Since no one is really expecting that, if it does occur, especially if the banking sector gets things started nicely, the move higher could be very swift.

It’s still probably not too likely, though.

With this being the final week of the January 2016 option and having a lot of positions set to expire that were knocked down hard last week along with everyone else, I would love to have the opportunity to roll those over.

But, that may be difficult.

With volatility high, however, there may be reason to then look at capitalizing at that phenomenon by again considering some longer term expiration dates.

Ultimately, any additional income is better than no additional income, even if it may mean waiting and waiting.

It’s a little bit easier to do that if there are dividends while waiting, as most of this week’s scheduled expiring stocks have, but still, it’s a frustrating predicament.

With a little bit of cash to spend, I don’t feel any particular need to make the pile even smaller, unless something really looks spectacular, but there have been many head fakes along the way over the past 6 months.

The likelihood is that I will focus on either dividends or the same recurrent trades in companies that have been the case for the past 4 months or so, as they are also, buy and large, lower from where their most recent sequence of purchases began.

In a market like this I don’t mind serial purchasing of the same positions, but sometimes the market takes those stocks more than ever imagined down a path that you never imagined.