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Daily Market Update – March 7, 2016 (9:00 AM) It will be very interesting to see what this week brings. The story of 2016 has really been just how closely the stock market and the price of oil have been correlated. With oil now having some life breathed into it, even if the reason for its re-birth isn’t clear, the market has moved higher. This morning came news that the average price of gas had moved higher by $0.07 in the past 2 weeks. At some point, those celebrating the resurgence of oil are going to ask themselves how is that good news if there’s scant evidence that it’s an expanding economy that’s shifting the supply – demand relationship. That’s a reasonable question to be asked, but as long as the energy sector is showing some life, I’m more than happy to see that question being delayed. I could get used to seeing more paper profits, or to be more accurate, less paper losses. The opportunity to sell calls on uncovered positions is really all that I would like to see at this point as a means of generating additional income without having to dip into cash reserves. Without a fundamental basis to believe that economic growth awaits or some other catalyst is out there, it’s hard to justify spending much money, especially after the run higher in the past 3 weeks. With the S&P 500 opening the week at 2000, it’s only 5.5% below its all time high, but the run higher has been too swift to feel comfortable about. While next week has an FOMC Statement release and a Chairman’s press conference, there’s nothing of much significance this week to really move markets. That is, unless, oil still holds court. Futures are pointing to a slightly lower open to begin the week. With another week of having a lot of ex-dividend positions I don’t feel the need to spend money, but I’d still like to generate some more income, so I’ll be looking for the opportunity to do so, as 2016 has been an incredibly quiet year so far for any new positions to have been opened. Maybe this week will mark a change, but I’m not convinced of that. I’d be happy to have repeats of any of the last 3 weeks when I barely lifted a finger to pound out a buy or sell order. . . |
