Daily Market Update – February 4, 2016 (7:30 AM)
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 are again pointing mildly higher, just as they did yesterday.
Maybe not so coincidentally, West Texas Intermediate is doing the same thing.
While I definitely liked yesterday’s action and chance to actually do something, I’d still like to see the market think on its own and break the association with oil.
In the meantime, I would take another day of gains and am anxious to see what the reaction will be to tomorrow’s Employment Situation Report.
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.