Daily Market Update – July 26, 2016 (7:30 AM)
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 doesn’t seem to be any follow through brewing, but then again, not much of anything is brewing as markets are flat.
The impetus may again be coming from oil, which was weak yesterday and is weak again today as oil is now well below its near term high and comfortably below the $50 level.
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 would be more willing to do so today if there were some further price declines, but if not, I’d be more than happy to be able to do as was the case yesterday.
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 is for another quiet day on the personal level as it looks as there is little reason for the market to be anything but busy today and there may not be much reason for trading swings to pick up as the week progresses, unless the FOMC pulls a surprise or the GDP stuns.
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.