Daily Market Update – February 16, 2016 (7:00 AM)
Well, maybe it was a good thing to have had a day off yesterday to honor those dead Presidents who are very unlikely to find themselves replacing a non-President on the $10 bill.
While we were celebrating Presidents Day, the Nikkei and Shanghai indexes were having a real party.
The Nikkei rose a wild 7% over the weekend, although that came after having lost a near amount earlier in the week.
Our own futures were up strongly yesterday while awaiting the real thing this morning.
Instead of bursting the bubble of a rally that wanted to exist, this morning also came word that OPEC has agreed on an oil production freeze and that sent those futures higher, as well.
AS goes oil, so has gone the US stock market, although there should be a big caveat with that OPEC agreement.
It was done without Iran and Venezuela in attendance and the OPEC agreement calls for all members to abide.
So, it may not be very likely that there will actually be a reduction in production, particularly as Iran has already announced that it would be happy to abide by the resolution for a freeze.
Oh, one thing that came along with that agreement was a further caveat that they would do so once they got back to their own pre-embargo levels of production.
So that increase in the oil futures may be overly optimistic if it’s actually predicated on some kind of cooperative spirit coming out of OPEC.
Last Friday’s close and potentially another strong day today come along at a good time.
While I have some positions set to expire this week, most aren’t going to be candidates for rollover, following an extended downward move by the market.
If, however, any of those do show some marked strength during the week, there may be reason to continue to consider some longer term option sales, as I’ve been doing for a few months, including with some of those positions expiring this week.
Otherwise, my one new position opened last week did come as a surprise, considering how quiet 2016 has been in that regard.
I don’t know if it will be joined by any other new purchases this week, as I would much rather go along for a ride higher with the market and maybe get some opportunity to sell calls on uncovered positions as has been the case the past two weeks.
There isn’t too much economic news this week, although there are a number of Federal reserve Governors scheduled to give speeches, so there may be some knee jerk reactions to the interpretations given to the words that will be used during the course of the week.
If the past is any indication, those interpretations will go back and forth as one Governor is construed as having said something dovish, while the next was a hawk.
So as has been the case for 2016, I’ll probably sit and watch and hope for an occasional opportunity to do something to make some income this week.