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Daily Market Update – April 25, 2016 (Close) There’s so much going on this week, that it may only make sense that the market might start the week taking a break to get things underway. In addition to lots and lots of systemically important earnings reports during the course of the week, there is an FOMC Statement release and the GDP release the following day. Add to that the continuing creep higher of oil and commodities and there shouldn’t be too much of a shortage of events that could catalyze movements in either direction. What we know so far from earnings is that it’s alright to have mediocre numbers, as long as those mediocre numbers at least had the decency to meet already lowered expectations. If there were even worse than what was expected or the company continued to guide lower for the next quarter, there was a whole world of hurt awaiting. Lots of stocks reporting earnings fell into that latter category last week and there were some really big movers. What there wasn’t much of were really big movers to the upside, even as the market did finish higher for the week. This week I do have some cash and am willing to dip into the smaller cash reserve than I would like to have. With 3 ex-dividend positions and one contract expiring this week there is already some income, but as is usually the case, I’d like more. There are some uncovered positions that may be ready to finally find some cover. For those, I’m not necessarily looking to make a killing, even as their holding periods may have been far too long. Mostly, I just want to either add to my cash reserve or have some other opportunity to generate regular income from dead money. I did get a small chance to do that today, happily selling calls on those Seagate Technology puts that were assigned last Friday. With its earnings coming up this week and a need to hold one’s breath over the dividend announcement, I elected to go out a few weeks, just in case the market reacted poorly to whatever news may come its way. While doing so and looking for other opportunities to nake money from dead positions, I’d at least like it to be the case that the position, once closed lost only in terms of opportunity. While even that is too much, it’s better than losing in the absolute. With some big events for the week occurring after we pass the mid-way mark, I’m not too keen on putting more at risk, but some of the earnings related trades have some appeal. There’s not too much reason, for example, to think that Facebook is going to be even more adversely impacted by the FOMC Statement or the GDP. You and I might be adversely impacted, and maybe advertisers will cut back a little, but is Twitter or Facebook really that sensitive to the kinds of events that investors try to game? We’ll findf out, although today oil was once again the reason markets went anywhere, whether related to oil or not. So if you’re still looking for reason and logic, you may need to go elsewhere. |
