Daily Market Update – February 4, 2016




Daily Market Update – February 4, 2016 (Close)

Yesterday looked like it was going to be just another of those terrible days where the market decided after having tried for a couple of days to break away from oil, to just keep following it lower.

It did and then it didn’t.

No, it still followed oil. That didn’t change, just the direction of oil changed and in a big way.

So too did the market change in a big way.

Closing nearly 200 points higher, or any kind of triple digit move for that matter, is no big deal in 2016.

What was a big deal was actually getting a chance to make a couple of trades.

In both cases, the opportunity to sell calls on some uncovered positions happened before the market turned higher and they were trades that I was hoping to make the day before.

What was especially good was that the premiums were still reflecting some decent volatility and I was able to use some longer term expirations and at strike prices representing some potential gain on those shares.

This morning the futures were again pointing mildly higher, just as they did yesterday.

Maybe not so coincidentally, West Texas Intermediate was doing the same thing.

While I definitely liked yesterday’s action and chance to actually do something, I was still hoping to see the market think on its own and break the association with oil.

In the meantime, I would have gladly taken another day of gains and am still anxious to see what the reaction will be to tomorrow’s Employment Situation Report.

With news of increase jobless claims, the market seemed to be put at ease, even though the broader market did rise anywhere near what the DJIA had done. Still, there was another opportunity to sell some calls today, making a even more happy as there has also been some catch up gains, after having lagged an already poor market.

With today’s reaction to the jobless claims it will really be interesting to see tomorrow’s reaction. Any kind of surprising number could lead to any kind of over-reaction, so I do have a seat belt prepared, but fingers are still crossed.