Daily Market Update – July 26, 2016 (Close)
Since the day or two after the Brexit vote, there have been very few attempts at a triple digit loss, much less an actual triple digit loss.
Yesterday was an attempt at one, but the market, just as it did during those Brexit lows, finished the day well off from its lows.
For optimists, that’s always a good sign and it definitely worked out that way more than a month ago, the last time there were any cumulative declines. Every day in the string of declines ended up well off from the intra-day lows.
This morning, there didn’t seem to be any follow through brewing, but then again, not much of anything was brewing as markets were flat.
The impetus may again be coming from oil, which was weak yesterday and was weak again today as oil was now well below its near term high and comfortably below the $50 level.
As it would turn out, and maybe it was coincidence, much like the near daily coincidences we saw for about the first 6 months of the year, but as oil turned around today and headed higher, the market did, as well.
And so, today, just like yesterday, the close well well off from its lows.
Again, a good sign, especially with some earnings news that hit after the closing bell that could have some carry through tomorrow.
As we await tomorrow’s FOMC Statement release and Friday’s GDP, even as earnings are now pouring in, oil may be returning as the principal story leading the market higher or lower.
I didn’t part with any cash yesterday and was willing to do so today if there were some further price declines, but they weren’t really there or large enough.
I’d have been happy for a repeat of Monday and would have taken any opportunity to sell some calls on uncovered positions, even if tying them up for a few months would be welcome.
After having some of those positions sitting and wallowing for months without generating any premiums, what’s another few months?
Slowly, the number of uncovered positions is being whittled down, but there are still far too many.
It will likely take some continued market moves higher and sustained ones. at that, to see the majority of those positions become performing ones, but I always remain as optimistic as those who look at the day’s trading action at the market’s close.
So my expectation was for another quiet day on the personal level as it looked as there was little reason for the market to be anything but busy today and there just wasn’t much reason for trading swings to pick up as the week progresses, unless the FOMC pulls a surprise or the GDP stuns.
Even Apple’s nice jump in the after hours may be nice, but not really the sort of thing to pull the market higher.
At this point, I think an FOMC surprise would send markets lower and a GDP surprise to the upside would send markets higher.
But, that would mean that there’s some role for logic and logic tells us that’s rarely the case.