Month: July 2016

Daily Market Update – July 25, 2016 (7:30 AM)

Ordinarily, any week with both an FOMC Statement release and the release of the latest GDP data could be expected to be a game changer.

No one is expecting that this week and neither am I, but that could be a mistake.

The FOMC, when it last raised interest rates in December 2016 didn’t exactly have the most overt data on its side. At the moment, the data isn’t great, but it may be heading in a more positive direction than last time.

The FOMC has made it clear that a rate hike need not be tied to a scheduled monthly meeting and August is an off month.

That raises the possibility that there could be a rate hike this month or any time between Wednesday and the regularly scheduled meeting in September.

A hike now would take lots by surprise and would likely not be viewed in a positive way, at least in the short term.

With lots of itchy trigger fingers as the market is sitting at all time highs, there could be lots of reason to sell and take profits.

That’s especially true if you think about the facts.

One fact that may be germane is that in all of its history, the market had only gone on to add 2% or more to an all time closing high on 3 occasions.

You might want to do some quick math to see where we currently sit.

I sit with only 2 expiring positions this week and both in the same position, but on opposite sides of the coin.

One short call and one short put and with earnings in that position being reported next week.

While I wouldn’t mind spending some money this week to supplement the 3 ex-dividend positions, I think that I’d like to see an assignment of the short call and an expiration of the short put.

If not, then the next tactic is to roll those over, likely beyond the next week, but being mindful of an upcoming ex-dividend date, as well.

The futures aren’t doing very much this morning and as much as I might want to supplement the week’s income, I’m reluctant to stick my neck out too far, still sitting at such lofty levels.

I will likely again be a passive watcher as the morning gets underway and weigh the options.

I’d prefer to miss out on some further gains than to get sucked in at this point.

T

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MONDAY:   The week looks as if it might get off to a quiet start as an FOMC Statement release is ahead, as is the GDP. No one expects much from either, but that could lead to a summer surprise

TUESDAY:   A rare down day yesterday, although off from its lows, looks as if it will be followed by a day opening flat, as the FOMC convenes and investors have no expectations for policy alteration.

WEDNESDAY:  The FOMC Statement is released this afternoon as the week thus far is one looking for direction, even as earnings have been better than expected and haven’t been painting a negative picture for months ahead.

THURSDAY:  Another flat day may await as we also await tomorrow’s GDP. At the same time, investors are betting that it’s less than even money that we even get a single rate hike in 2016 at this point, although there’s lots of data to come and Friday could be the start of an upward pointing stream

FRIDAY:.  For now, the futures are looking as if it will be another flat day, but the GDP still awaits, so anything may yet happen







Daily Market Update – July 22, 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:   none

Rollovers:   MRO puts

Expiration:   none

The following were ex-dividend this week:   FAST (7/22 $0.30)

The following are ex-dividend next week:   F (7/26 $0.15), MS (7/27 $0.20), KMI (7/28 $0.125).

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

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Daily Market Update – July 21, 2016 (Close)

Yesterday the market made it 9 straight days with new all time closing highs, at least on the DJIA.

This morning the futures were pointing to a respite, but that likely meant little if past history would serve as any kind of guide.

When it comes to these kind of things, it usually does, but not today.

Today, the futures had it right and if anything, under-estimated the lack of enthusiasm remaining after those 9 consecutive winning days..

While you can easily rationalize a large move higher or a large move lower, even as earnings are coming in that may suggest otherwise, the best of all market days would bring some stability right now.

Today’s decline, particularly as it recovered somewhat from its lows, may be a good first step toward stability.

Whether a market takes a dive or surges, the next step that makes most everyone feel better is when the market takes a rest and either slows its selling or slows its buying.

It usually takes more than a day to create a resting point that you can actually consider as representing price support.

While it may be nice to see a respite in buying, that respite may not be an indication to start adding new positions, though.

While developing support is a good thing, there are those sitting on gains who look at those very brief stops as being the time to lock in some profits. The longer those respites continue and the more clear it becomes that the respite is creating some price support, the more inclined investors may be to start adding positions.

Unless of course emotion overtakes rational thought.

Again, if past history is a guide…….

For now, I just look forward to the end of the trading week and a hope that earnings continue to be positive.

One earnings report that i found fascinating this morning was from eBay, which gave very positive guidance.

What made that fascinating was that just about every analyst following eBay had said that in the event of a vote to leave the EU, eBay would be one of those companies that would suffer along with the JP Morgans of the world.

eBay and JP Morgan?

As a result, eBay’s shares were trading lower immediately after the “Brexit” vote.

Now, just a couple of weeks later, they are trading much higher and the company says something completely the opposite of what the analysts had expressed.

Go figure.

I’ve given up trying to figure those things out. I’m still not certain what kind of voodoo analysts practice and why there is acceptance when utterances are made and buy/sell recommendations, along with price targets are given.

I often wonder whether those utterances are simply an opportunity to either push an existing position and to execute a short term strategy.

But as long as my assets are appreciating, I can put the cynic in me into a period of  respite, as well..

We’ll see how long that lasts.

Daily Market Update – July 21, 2016 (7:30 AM)

Yesterday the market made it 9 straight days with new all time closing highs, at least on the DJIA.

This morning the futures are pointing to a respite, but that likely means little.

While you can easily rationalize a large move higher or a large move lower, even as earnings are coming in that may suggest otherwise, the best of all market days would bring some stability right now.

Whether a market takes a dive or surges, the next step that makes most everyone feel better is when the market takes a rest and either slows its selling or slows its buying.

It usually takes more than a day to create a resting point that you can actually consider as representing price support.

While it may be nice to see a respite in buying, that respite may not be an indication to start adding new positions.

While developing support is a good thing, there are those sitting on gains who look at those very brief stops as being the time to lock in some profits. The longer those respites continue and the more clear it becomes that the respite is creating some price support, the more inclined investors may be to start adding positions.

For now, I just look forward to the end of the trading week and a hope that earnings continue to be positive.

One earnings report that i found fascinating this morning was from eBay, which gave very positive guidance.

What made that fascinating is that just about every analyst following eBay had said that in the event of a vote to leave the EU, eBay would be one of those companies that would suffer.

As a result, eBay’s shares were trading lower.

Now, just a couple of weeks later, they are trading much higher and the company says something completely the opposite of what the analysts had expressed.

Go figure.

I’ve given up trying to figure those things out. I’m still not certain what kind of voodoo analysts practice and why there is acceptance when utterances are made and buy/sell recommendations, along with price targets are given.

I often wonder whether those utterances are simply an opportunity to either push an existing position and to execute a short term strategy.

But as long as my assets are appreciating, I can put the cynic in me into a period of  respite, as well..

Daily Market Update – July 20, 2016 (Close)

Yesterday the market was mixed, but the DJIA hit another new closing high.

Today the market wasn’t mixed, but there was a definite spread between the S&P 500 and the DJIA.

But one thing that made this day the same as most any other day of the past 2 weeks is that there was the occasion of yet another new high.

So there was that.

This morning, maybe on the heels of Microsoft’s nice earnings report, the market looked as if it’s set to resume the broader climb higher.

It did, but just not as enthusiastically as you might expect when technology is doing well.

With pretty good numbers from the financial sector, and a good start with the technology sector, you might have expected more excitement, but already being at the top may have taken some of that excitement down a notch.

I was happy to have made some trades yesterday, including again rolling over the position in Marathon Oil, even as there still remained a number of days until the expiration date left to go.

With their earnings coming up soon I may finally be interested in getting out of that position, but I think those earnings may be better than expected, so there may be reason to continue doing that trade.

Also having an opportunity to sell some calls on an uncovered position and using an expiration date before its upcoming earnings gives an opportunity to get out of a long held position and raise some cash.

With those trades done and with the market possibly looking to continue higher, I’m going to be looking for more opportunity to sell calls on uncovered positions.

Today, though wasn’t the day for it, although I do have some in mind and am getting anxious to finally do something with some of those non-performers.

As long as the market is moving higher, that may be a far better opportunity than trying to locate bargains.

The rest of the week may simply be more of what 2016 has been like, even as I like the performance.

What I don’t like is the inactivity in my accounts and the paucity of trades.

I suppose that I can get over that lack of trading as long as the bottom line increases and as long as there is sufficient weekly income to keep me afloat, but it’s a little difficult to accomplish the latter if the number of trades isn’t up to my expectations.

With earnings being relatively good, thus far, and Microsoft getting the very important technology sector off to its own good start, there’s reason to be optimistic about the bottom line, even as the prospect of getting good option premiums declined along with market volatility.

The bottom line?

The bottom line matters more, but only if you secure the profits and don’t let them slip away, unless you are using those positions for the generation of recurrent income at the same time and are able to capitalize on the ups and downs.

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

Yesterday the market was mixed, but the DJIA hit another new closing high.

This morning, maybe on the heels of Microsoft’s nice earnings report, the market looks as if it’s set to resume the broader climb higher.

I was happy to have made some trades yesterday, including again rolling over the position in Marathon Oil, even as there still remained a number of days until the expiration date left to go.

With their earnings coming up soon I may finally be interested in getting out of that position, but I think those earnings may be better than expected, so there may be reason to continue doing that trade.

Also having an opportunity to sell some calls on an uncovered position and using an expiration date before its upcoming earnings gives an opportunity to get out of a long held position and raise some cash.

With those trades done and with the market possibly looking to continue higher, I’m going to be looking for more opportunity to sell calls on uncovered positions.

As long as the market is moving higher, that may be a far better opportunity than trying to locate bargains.

The rest of the week may simply be more of what 2016 has been like, even as I like the performance.

What I don’t like is the inactivity in my accounts and the paucity of trades.

I suppose that I can get over that lack of trading as long as the bottom line increases and as long as there is sufficient weekly income to keep me afloat, but it’s a little difficult to accomplish the latter if the number of trades isn’t up to my expectations.

With earnings being relatively good, thus far, and Microsoft getting the very important technology sector off to its own good start, there’s reason to be optimistic about the bottom line, even as the prospect of getting good option premiums declined along with market volatility.

The bottom line?

The bottom line matters more, but only if you secure the profits and don’t let them slip away, unless you are using those positions for the generation of recurrent income at the same time and are able to capitalize on the ups and downs.

Daily Market Update – July 19, 2016 (Close)

Yesterday the market traded in a very tight range after hitting high after high last week.

But still, it was yet another new record closing high to start the week.

Earnings continued coming in and at least they haven’t been stinking up the place.

Today, those earnings didn’t exactly smell like roses, but they still didn’t stink.

So the market finished mixed today with the DJIA hitting another new high, while the S&P 500 gave up a little bit of ground.

As opposed to previous quarters when expectations were very low, this quarter the expectations have been for some better performance, but so far what has helped is that there hasn’t been much in the way of disappointing guidance, particularly from overseas operations or businesses.

The earnings march continued today and for the next 3 weeks or so and really finds itself culminating with retailers reporting.

None of what happens between now and next week’s FOMC Statement release is likely to have the ability to move the needle on interest rates, but at least there’s been a slow down in mediocrity.

With the opening of a new position yesterday, I still have some cash that I’m willing to spend this week, but I’m still not ready to make too much of a commitment at these levels.

I don’t mind playing the same game week after week with a single oil position, but too many stocks have gone up to feel very comfortable about opening other new positions until the market digests some of these gains.

Maybe the way this run higher is going to do that is by simply slowing the rate of rise down, but that’s not a very common way of doing things.

Markets tend to not know moderation as so much of the moves are fueled by speculation, fear and whatever other emotions can be harnessed at any moment in time.

With 2 positions set to expire this week in the same company, I wouldn’t mind being able to close one of them out with an assignment and despite upcoming earnings in Marathon Oil, I wouldn’t mind re-opening a position in the event of assignment of shares or the expiration of the short puts.

In the meantime, I’ll hope to continue watching some climb in asset value as 2016 continues to be a good year, despite having had so few trades.

It was nice, though, to have an opportunity to do another early in the week rollover of Marathon Oil and to sell some calls on the uncovered Hewlett Packard position.

I’d like more.

As there are moves higher, I do hope to sell more calls on uncovered position, but am a little torn between selling shorter term options and the hope for assignment or going longer term to boost the ROI in the hope that I won’t miss the opportunity to have the assignments happen at some future date.

But honestly?

I’ll take anything.