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Daily Market Update – April 21, 2016 (9:00 AM) Markets didn’t exactly march higher yesterday, but when you put the last week together, even those relatively small gains add to an impressive move higher. Even as earnings haven’t exactly been robust, no one is really doing too much complaining as the results are in line and perhaps even better than anyone’s expectations had been. There is a real strategy to the idea of under-promising and then living up to lowered expectations. The problem, though, is that markets usually don’t like the news of gloomy guidance when it’s originally offered and it then becomes a whole quarter until you can try to capitalize on those lowered expectations. So far, this quarter, even as the results are just really beginning to come through, the theme is intact. As the market continues to move higher, even by small bits and pieces over the past few days, we are now within about 1.5% of an all time closing high on the S&P 500. That’s not too shabby, especially when you consider that there really hasn’t been an iota of good news. The economy isn’t strong enough to warrant an increase in interest rates and oil is getting more expensive. Oil, is actually no about 75% higher than its low from earlier in the year, yet somehow markets have taken that as being good news, even as there’s no evidence that the increase in oil price is due to increasing demand. This morning may be ready to follow that trend, although as the futures are getting ready to give way to the market’s open, they are as flat as can be. With a new purchase this week and a couple of positions set to expire, I would still be open to opening a new position, but that’s probably not going to be too likely. Like last week, I wouldn’t mind being able to roll over even positions that may be in line to be assigned, if the rollover premium is 1% or more. Last week I didn’t get to do that, instead taking the assignment, but I’m still at the stage where I’d prefer to make money from existing positions rather than from laying out or recycling cash. We’ll see what today and tomorrow will hold. |
