Month: May 2016

Daily Market Update – May 24, 2016 (Close)

For the next few weeks we are likely to hear more and more about how the data coming in will or won’t support FOMC action to raise interest rates.

The torrent began last week and has continued through this past weekend and the beginning of this trading week.

However, that torrent hasn’t been on the back of any data, but more on the backs of the utterances of various Federal Reserve Governors.

Whether they are getting everyone prepared for a June 2016 increase or simply giving traders enough time to digest the news so that there won’t be any great upheaval in markets for either a June or a July increase is subject to speculation.

But there’s probably no sense in denying that the Federal Reserve members think about a lot more things than they ever used to, include foreign markets and the US stock market.

Purists will say that the focus of the Federal reserve should be purely upon their mandates and not get blurred by other factors, but the reality is that everything matters, including politics and public opinion.

It does seem that the FOMC is playing more and more of a game while taking temperatures of various constituencies and stakeholders.

Yesterday the market was faced with declining oil and the increasing likelihood that interest rates were going to increase, perhaps as early as next month.

To its credit, the market did well to end the day absolutely flat, especially when you realize that it was never really in the hole.

This morning the futures were pointing a little bit higher as a few more consumer related earnings reports come in for the week.

The big ticket item, though, will come on Friday as the GDP is released, but it may not end up being as important as today’s New Home Sales.

That report hasn’t been all that important lately, but it really came in strongly today, especially at the higher end of the market.

That sent the market soaring, just like it used to in the old days.

After the close some more decent technology earnings may help the market tomorrow,

After that everyone will be waiting for the GDP and its revisions to see whether the FOMC really has anything to support all of the newly found hawkish tone. Today’s New Hosing data does support the idea, though.

I had been expecting that this was going to be a very quiet week for me, although I still wasn’t opposed to spending down some of my limited cash.

And so I did in the hunt for a dividend and then rolled the position over to either get more premium in exchange for the dividend or more premium and the dividend.

We’ll see how that works out tomorrow morning, but I’d be happy for an early assignment, although I don’t think it too likely.

With next week being a holiday shortened trading week and only a single position set to expire, I still wouldn’t mind adding something and perhaps using the June 3rd expiration date to get some additional premium for the effort.

Otherwise, it may just be a case of sitting and listening and trying to figure out how the market will interpret any kind of news.

I think it’s time to take news on its face value and to stop playing the various games.

Both FOMC members and traders need to grow up.

Daily Market Update – May 24, 2016 (8:00 AM)

For the next few weeks we are likely to hear more and more about how the data coming in will or won’t support FOMC action to raise interest rates.

The torrent began last week and has continued through this past weekend and the beginning of this trading week.

However, that torrent hasn’t been on the back of any data, but more on the backs of the utterances of various Federal Reserve Governors.

Whether they are getting everyone prepared for a June 2016 increase or simply giving traders enough time to digest the news so that there won’t be any great upheaval in markets for either a June or a July increase is subject to speculation.

But there’s probably no sense in denying that the Federal Reserve members think about a lot more things than they ever used to, include foreign markets and the US stock market.

Purists will say that the focus of the Federal reserve should be purely upon their mandates and not get blurred by other factors, but the reality is that everything matters, including politics and public opinion.

It does seem that the FOMC is playing more and more of a game while taking temperatures of various constituencies and stakeholders.

Yesterday the market was faced with declining oil and the increasing likelihood that interest rates were going to increase, perhaps as early as next month.

To its credit, the market did well to end the day absolutely flat, especially when you realize that it was never really in the hole.

This morning the futures are pointing a little bit higher as a few more consumer related earnings reports come in for the week.

The big ticket item, though, will come on Friday as the GDP is released.

Everyone will be watching it and its revisions to see whether the FOMC really has anything to support all of the newly found hawkish tone.

I expect that this is going to be a very quiet week for me, although I still am not opposed to spending down some of my limited cash.

With next week being a holiday shortened trading week and only a single position set to expire, I wouldn’t mind adding something and perhaps using the June 3rd expiration date to get some additional premium for the effort.

Otherwise, it may just be a case of sitting and listening and trying to figure out how the market will interpret any kind of news.

I think it’s time to take news on its face value and to stop playing the various games.

Both FOMC members and traders need to grow up.

Daily Market Update – May 23, 2016 (Close)

This week began with far fewer earnings reports to give us much to think about, but it does have lots of Federal Reserve Governors with little to do, other than to give speeches and make appearances.

In all likelihood they will continue to add to the belief that an interest rate hike could happen in June, but they could just simply be setting the table for a July increase. Yesterday and today, though, they really seemed to be taunting investors, saying that the rate hike could come before it was obvious that it was warranted.

That sounds just like the case back in the final months of 2015 and we’re still waiting for the obvious to make itself known.

Meanwhile, even as earnings reports are slowing down, there will be a GDP release on Friday and it comes just as the market gets ready for a 3 day holiday weekend,

So what could possibly go wrong as the June 2016 option cycle gets ready to begin?

Let’s see.

Federal Reserve Governors talking like hawks coupled with a stronger than expected GDP after a couple of months of disappointing figures could easily put the market in a bad mood.

That is, as long as they still think that early signs of economic expansion is really bad news.

With the retailers having given their own disappointing news, it is a little difficult to see just where the expansion is coming from if the consumer isn’t participating.

With continued reassurance that the FOMC will be led by data you might think that a June rate hike would be unlikely, but now, for those who deal in odds, the talk is that there is now a 30% chance of a June rate hike.

That changed from less than 5% barely a week ago and that was this morning before more hawkish words hit the news feed.

So as more uncertainty is here to start the week, I have some money to spend after a couple of assignments on Friday.

With 2 ex-dividend positions this week, each with 2 lots of shares, I would still like to see a chance of generating some more income, but there isn’t very much to give some confidence, unless the market does decide to interpret the likelihood of that interest rate hike as being good news.

At the same time, if oil continues to move higher, but because of contracting supply, you would also have to believe that the market would take that as a negative, but that hasn’t been the case in 2016, so it still remains anyone’s guess how the market will balance competing and conflicting factors.

There are a number of positions that I do find attractive heading into this week, but I’m not entirely convinced that i do want to spend the money unless seeing some sign of a rational market.

That may be a tall order.

Today there was no reason to buy into either side of any argument as the market traded in a very narrow range and finished the day virtually unfinished.

Considering a little bit of weakness in oil, maybe the final close was a bullish sign or maybe not.

Daily Market Update – May 23, 2016 (8:15 AM)

This week begins with far fewer earnings reports to give us much to think about, but it does have lots of Federal Reserve Governors with little to do, other than to give speeches and make appearances.

In all likelihood they will add to the belief that an interest rate hike could happen in June, but they could just simply be setting the table for a July increase.

Meanwhile, even as earnings reports are slowing down, there will be a GDP release on Friday and it comes just as the market gets ready for a 3 day holiday weekend,

So what could possibly go wrong as the June 2016 option cycle gets ready to begin.

Let’s see.

Federal Reserve Governors talking like hawks coupled with a stronger than expected GDP after a couple of months of disappointing figures could easily put the market in a bad mood.

That is, as long as they still think that early signs of economic expansion is really bad news.

With the retailers having given their own disappointing news, it is a little difficult to see just where the expansion is coming from if the consumer isn’t participating.

With continued reassurance that the FOMC will be led by data you might think that a June rate hike would be unlikely, but now, for those who deal in odds, the talk is that there is now a 30% chance of a June rate hike.

That changed from less than 5% barely a week ago.

I have some money to spend after a couple of assignments on Friday.

With 2 ex-dividend positions this week, each with 2 lots of shares, I would still like to see a chance of generating some more income, but there isn’t very much to give some confidence, unless the market does decide to interpret the likelihood of that interest rate hike as being good news.

At the same time, if oil continues to move higher, but because of contracting supply, you would also have to believe that the market would take that as a negative, but that hasn’t been the case in 2016, so it still remains anyone’s guess how the market will balance competing and conflicting factors.

There are a number of positions that I do find attractive heading into this week, but I’m not entirely convinced that i do want to spend the money unless seeing some sign of a rational market.

That may be a tall order.

Daily Market Update – May 20, 2016 (7:30 AM)

The Week in Review will be posted by 10 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments:  CY, HPE

Rollovers:  CSCO

Expirations:  BBBY, M, STX

The following were rolled over earleir in the week:  MRO (6/3), BBY (8/19).

Shares likely to be assigned may still be rolled over if forward volatility or a dividend makes that an attractive action.

The following were ex-dividend this week:

The following will be ex-dividend next week:  HFC (5/25 $0.33), IP (5/25 $0.44)

Trades, if any, will be attempted to be made prior to 3:30 PM

Daily Market Update – May 19, 2016 (Close)

After another 2 days of big moves in opposite directions, yesterday ended the day flat, although it did have its moments.

This morning the futures are moderately lower, despite some decent earnings news from 2 of the DJIA members.

The other day when Home Depot reported good numbers and traded up sharply in the pre-opening session, those gains faded very quickly along with the rest of the market.

With that as a recent backdrop and more and more betting that the FOMC may now actually make an interest rate move at their June 2016 meeting, anything can happen.

For my part, I’m not really looking ahead.

I just wanted to be able to get something done today or tomorrow, as I still had a number of positions expiring along with the end of the May 2016 option cycle.

Yesterday, I was actually happy to rollover the Marathon Oil position, even though it was in the money, as I do like getting the elevated premium and would continue to do it over and over again if the opportunities continue to arise.

Today, I was happy being able to rollover the out of the money Fastenal position, even as it required going out to August, continuing a pattern that began in 2015.

While the market was somewhat lower this morning, I was looking at doing the same with some other positions set to expire, as was done with Marathon Oil yesterday,even if there’s a chance for assignment.

Locking in on winners may be an easier approach than looking to select some new ones as uncertainty still reigns.

What we didn’t have today was much in the way of winners, although the market cut its losses in half and actually had some good earnings from 2 DJIA components, which explained its ability to outperform the S&P 500 by 50% on the day.

Despite being so close to market all time highs, very few people are talking as if they’re at or near personal all time highs, so trying to out think or out wit this market has proven fairly fruitless other than for those that have really been at the right place at the right time.

There’s nothing wrong with being lucky and the age old saying about being smart or being lucky may really have application in this market.

I hope there’s some good luck left over tomorrow and some trades or some assignments to go along with that luck.

Daily Market Update – May 19, 2016 (7:30 AM)

After another 2 days of big moves in opposite directions, yesterday ended the day flat, although it did have its moments.

This morning the futures are moderately lower, despite some decent earnings news from 2 of the DJIA members.

The other day when Home Depot reported good numbers and traded up sharply in the pre-opening session, those gains faded very quickly along with the rest of the market.

With that as a recent backdrop and more and more betting that the FOMC may now actually make an interest rate move at their June 2016 meeting, anything can happen.

For my part, I’m not really looking ahead.

I just want to be able to get something done today or tomorrow, as I still have a number of positions expiring along with the end of the May 2016 option cycle.

I was actually happy to rollover the Marathon Oil position, even though it was in the money, as I do like getting the elevated premium and would continue to do it over and over again if the opportunities continue to arise.

While the market is somewhat lower this morning, I may look at doing the same with some other positions set to expire, even if there’s a chance for assignment.

Locking in on winners may be an easier approach than looking to select some new ones as uncertainty still reigns.

Despite being so close to market all time highs, very few people are talking as if they’re at or near personal all time highs, so trying to out think or out wit this market has proven fairly fruitless other than for those that have really been at the right place at the right time.

There’s nothing wrong with being lucky and the age old saying about being smart or being lucky may really have application in this market.