Daily Market Update – July 27, 2016 (7:30 AM)
Yesterday was one of those days that optimists could point at and say that as the market was hovering around its all time highs, and was able to again close well off from its intra-day lows, shows consolidation and strength.
That could be the case, as Monday was the same, despite ending up with a loss.
That was also the case as the market was reacting to the actual “Brexit” voting.
For me it was just another in a long series of 2016 days without any trading, but with those complaints tempered by a look at the bottom line which has a number of positions clawing back from their disappointing behavior in 2015.
As the record high level of the markets gets increasingly precarious, even as a base may slowly be forming, there is also increasing desire to either want to exit some positions, even if ROIs may not be anything to brag about, or at least secure some additional ROI by selling calls, collecting dividends and waiting out some actual profit on the underlying shares.
For too many positions that has been a frustratingly low proposition. The moves higher in individual positions that are still underwater are greeted by a mix of greed and hope on my part.
In those cases, even being able to close out some of those positions at a breakeven would secure a very good 2016, but still wouldn’t necessarily create an environment of more trading opportunities.
At these levels there may be more energy in positions that haven’t kept up the pace but may become attractive to others looking for the rare undiscovered gems among other positions thought to be too pricey.
Did I mention hope?
Additionally, with a portfolio still overweight energy positions, the recent decline in oil prices hasn’t taken a toll on the bottom line.
As analysts are calling for about another 10% decline in the price of oil after having already had a 10% drop in just a couple of weeks, I look at it as portending a move higher, sooner rather than later.
That’s pretty much how things work out.
Usually the siren calls come right before the inflection.
If that’s the case, I expect continued outperformance.
So I’m happy to sit and await today’s FOMC Statement release and Friday’s GDP.
With only a handful of positions set to expire this week and 2 of them energy positions, I hope that some stability returns this week and along with it some trading, too.