Daily Market Update – May 11, 2016 (Close)
While Europe opened yesterday much higher and our own market ended the day right on its highs, with a 222 point gain on the DJIA, it was still oil that led the way there.
Oil was much higher yesterday and the market had some follow up to its relative strength on Monday, when it didn’t succumb to the sharp turnaround that sent oil lower.
There was really no substantive news, otherwise.
This morning the futures were mildly lower, as was oil, but that was all at risk change as retail earnings for the major national retailers really get underway today.
And change it did. In a really big way.
Expectations have kept going lower and that sector has been hit very hard in the past week on some bad numbers from two retailers whose fortunes had been going in opposite directions for quite some time.
Today the rumors really became reality, as Macy’s got it all going in the wrong direction.
Most believe that if Macy’s isn’t able to make a go of things, most other retailers aren’t going to be able to do much better in an increasingly competitive environment that only seems to benefit Amazon.
The pall cast by Macy’s today had a really wide reach.
I was expecting to be an onlooker today, as I didn’t expect to spend very much, if any money.
With only a single position set to expire, I may still be interested in seeing if that position could be sustained with a rollover, rather than letting it get assigned.
With a really high premium due to the overall volatility in the oil sector, it may be much easier to try and roll that position over and take the chances on a continued wild ride, while attempting to keep collecting an enriched premium.
It also happens to be the case that Marathon Oil, the single position in question, is ex-dividend next week.
Even though that dividend has been reduced, it still amounts to an additional $0.05 on an initial investment of less than $12, so that alone may be worthwhile.
Plus, it also gets me to do something and there haven’t been many of those opportunities in 2016.
Hopefully next week, as the May 2016 option cycle comes to an end, there will be some more of those opportunities as we head toward the second half of the year.