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Daily Market Update – April 13, 2016 (Close) This morning’s early futures trading, before JP Morgan Chase released its earnings report to really get the season underway was still nicely higher. The DJIA futures were flirting with another triple digit gain following yesterday’s 170+ point move. This morning, the futures were higher even as oil futures were a little bit lower. Yesterday stocks followed oil higher on the report that both Saudi Arabia and Russia were going to agree to oil production cutbacks at the end of the week. That rumor first started more than a month ago and was more than rumor. It was true, until Iran messed up everyone’s strategy by not agreeing to go along with the shared burden of reducing production in an attempt to drive prices higher. That shouldn’t have come as too much of a surprise to anyone, but it was. Instead, when rational thought finally set in, the strong gains gave way to strong losses. We’ll see how the intent this time around will work out, but so far this morning and then throughout the entire day, the market was accepting it on face value and adding on to gains, The gains for the week could end up being considerable if oil continues its climb higher in anticipation of a real agreement. Today, the market certainly added to the gains, even as oil wasn’t a participant. Yesterday’s gain came after the market gave up the entirety of a similar sized gain, and this morning’s early trading gave some sign that maybe it was representing some real pent up buying fever. With low expectations JP Morgan Chase reported earnings this morning and set the tone for the rest of the day. The market gapped higher and never threatened to erase the early gain. Despite JP Morgan giving less than a rosy outlook for what awaits, it still beat lowered expectations and for today, that was all that mattered. Generally, if the financial sector does poorly, so too does the rest of the market. If the financials do well, the market doesn’t necessarily follow along, but at this still early stage of economic expansion, good news for big banks should be good news for most everyone. I don’t know which direction the market may take, but I hope that it does continue higher, just not in these kind of leaps and bounds. At a time when we may be returning to an era when 10% moves are not uncommon, these large daily moves make it easier to see those large cumulative moves. We’ve already had 3 of those in the past 6 months and more could be in store. I’m still open to the idea of adding positions, but now would likely be looking at the following week for expiration. Otherwise, it would just be nice to make a trade or two. Fortunately, one did get made today, providing a little bit of coverage to an existing positions. We need more of those and maybe then some more places to put cash reserves, but i may want to wait until we see what Saudi Arabia and Russia really decide to do. |
