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Daily Market Update – June 21, 2016 (Close) Yesterday was a day when almost everything came together in a positive way, including rising oil prices not putting downward pressure on stocks. Basically, it was a kind of fantasy land and people were gladly buying, even though about 50% of the earlier gains in the US were lost and even at their peak they didn’t match gains in European markets. The rest of the week has lots of talk, a big vote and not too much else. Janet Yellen gives 2 days of mandatory congressional testimony and Stanley Fischer, he co-Chairman, who has been oddly quiet of late, also speaks. Of course, the real big event is likely to be the vote on whether Great Britain should leave the European Union. Based on recent polling, there seems to be a sudden shift against leaving and markets were finding reason to cheer. Today they had reason to be circumspect as more polls hit the fan. For our part, Janet Yellen said nothing today. As yesterday’s reaction drove volatility lower, I hope that the reasons to cheer continue, as I don’t mind seeing my net asset value play some catch up, as oil and commodities make up a small bit of their immense lost ground. I did make an opening trade yesterday and that may be it for the week. That position goes ex-dividend early next week and I wouldn’t mind losing it to early assignment and [pocketing the entire month’s worth of premium for only 6 days of holding. That would be nice, but trying to predict a week out is as useless as trying to predict today. Ahead of Janet Yellen’s first day in front of Congress, the futures are again pointing higher, as there appears to be no one really thinking that the good news will stop, even as there’s really no good news. What the market has been reacting to is a continued pause in interest rates and status quo in the European Union. I suppose the absence of bad news is good news, although the continued pause in interest rates may reflect some actual bad news. Following some real hedging inspired spin by Janet Yellen her past 2 appearances and again today, it will be interesting to see how she is questioned tomorrow. It can’t be easy to say nothing, but it must be even harder to play both sides of the room and try to end up balancing things out. I hope that there continues to be some strength only so that I can see asset value climb and maybe get a chance to sell some new cover on positions adding nothing to my personal wealth. Otherwise, I’m just tuned in and am prepared for a personally passive week. |
