Month: September 2016

Daily Market Update – September 13, 2016 (8:30 AM)

Yesterday had a very impressive recovery from what was looking as if it was going to be a big opening plunge for the markets.

With 3 Federal reserve Governors speaking, the market improved with each, as there was an increasingly dovish tone, particularly with the final pronouncement.

That came from someone who doesn’t take center stage very often and her dovish words really sent the market much, much higher.

Obviously, the market’s reaction is similar to those who like the idea of nuclear power plants, but not in their backyard.

The market has said that it liokes the idea of a small interest rate increase, but now right now, please.

This morning’s futures are again pointing much lower, but there is now a blackout period for the Federal Reserve members.

They can’t say anything in public until after next Wednesday’s FOMC meeting.

I did make one trade yesterday, going back to that old friend Marathon Oil.

The energy sector, like stocks, had a nice reversal yesterday.

They’ll need the same thing today, because the futures has them down sharply, as well.

I still hold out some hope for selling calls on uncovered positions, but my real hope for the week is to have some assignments and some rollovers.

I’d love the idea of adding to cash reserves right now, just as I like the idea of generating some more revenue to go along with all of this week’s ex-dividend positions.

My guess is that today won’t be the day to do much of anything.

And like last week, I wonder if there will be much opportunity for the rest of this week, as everyone will be focused on the following week’s FOMC.

Including me, I think.

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Daily Market Update – September 12, 2016 (Close)

The close to last week’s trading came as a surprise to everyone except those who have the uncanny ability to look backward.

Since market moves are really driven by professional traders, it appears that the only people who saw Friday’s nearly 400 point decline coming were those who were casual traders and they were able to leave the losses to the pros.

I certainly didn’t see any reason for the decline to come on Friday.

In fact, it’s hard to say that there’s any good reason for the market to make a strong statement in either direction, particularly as the last few years have shown that fundamentals aren’t very important.

It’s all been about investor psychology and at the moment there’s really no clue as to how the market would behave when an interest rate increase becomes reality.

e know how it reacts when it feels as if one is right around the corner, though.

The latest thinking is that despite seeming to accept such an increase, the market feels much more comfortable with it coming in December, rather than next week.

I suppose that would give everyone a few months of cheap money to get their houses in order.

I suppose.

Today, then, served to show just how much unease there is, as the futures were sharply lower today and then came the talking head Federal Reserve Governors.

With lots of ex-dividend positions last week and some rollover activity, in addition to a new trade, I had more to keep me interested than I thought would be the case.

This week, there are also a lot of ex-dividend positions, but also a fair number in need of rollover, as the monthly cycle comes to its end.

As I look at the number expiring, it’s still far less than I would have expected at a monthly expiration in any of the past 5 years, but still enough to offer some opportunities to trade.

Increasingly, there has been reason to look at some longer term expirations, even as volatility has remained so low.

Friday’s plunge and this morning’s weak opening do increase volatility, but there’s quite a ways to go until that level even returns to its historical lows.

With some money to spend this week, I wouldn’t mind doing so, but am going to remain cautious.

Some of the price plunges on Friday and perhaps some more today may make it more difficult to resist, but with the big unknown coming from next week’s FOMC meeting, it may just be best to remain tight fisted.

Then, returning back to those three Federal Reserve Governors speaking today, they did just what was expected of them.

They alternated between adding fuel to the fire and uttering a soothing word or two.

The way the market reversed itself and erased more than 50% of Friday’s nearly 400 point decline when the dove spoke, gives you some indication of how much this market doesn’t want a rate increase now.

Otherwise, it still appears as if the whole world may be a little nervous about central banks becoming less accommodative and cheap money disappearing.

It’s hard to know whether that’s the tale wagging the dog or the other way around, but the next 10 days
wi
ll be interesting.

Today certainly was an interesting one, but with a black out period beginning tomorrow for those Federal Reserve Governors, we’ll just have to find something else to get us into a frenzy.

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Daily Market Update – September 12, 2016 (8:30 AM)

The close to last week’s trading came as a surprise to everyone except those who have the uncanny ability to look backward.

Since market moves are really driven by professional traders, it appears that the only people who saw Friday’s nearly 400 point decline coming were those who were casual traders and they were able to leave the losses to the pros.

I certainly didn’t see any reason for the decline to come on Friday.

In fact, it’s hard to say that there’s any good reason for the market to make a strong statement in either direction, particularly as the last few years have shown that fundamentals aren’t very important.

It’s all been about investor psychology and at the moment there’s really no clue as to how the market would behave when an interest rate increase becomes reality.

The latest thinking is that despite seeming to accept such an increase, the market feels much more comfortable with it coming in December, rather than next week.

I suppose that would give everyone a few months of cheap money to get their houses in order.

I suppose.

With lots of ex-dividend positions last week and some rollover activity, in addition to a new trade, I had more to keep me interested than I thought would be the case.

This week, there are also a lot of ex-dividend positions, but also a fair number in need of rollover, as the monthly cycle comes to its end.

As I look at the number expiring, it’s still far less than I would have expected at a monthly expiration in any of the past 5 years, but still enough to offer some opportunities to trade.

Increasingly, there has been reason to look at some longer term expirations, even as volatility has remained so low.

Friday’s plunge and this morning’s weak opening do increase volatility, but there’s quite a ways to go until that level even returns to its historical lows.

With some money to spend this week, I wouldn’t mind doing so, but am going to remain cautious.

Some of the price plunges on Friday and perhaps some more today may make it more difficult to resist, but with the big unknown coming from next week’s FOMC meeting, it may just be best to remain tight fisted.

There are also three Federal Reserve GOvernors speaking today, so there will either be fuel added to the fire or perhaps a soothing word or two.

Otherwise, it appears as if the whole world may be a little nervous about central banks becoming less accommodative and cheap money disappearing.

It’s hard to know whether that’s the tale wagging the dog or the other way around, but the next 10 days will be interesting.

.

Daily Market Update – September 9, 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: MRO

Rollovers: ANF

Expirations:   none

The following were ex-dividend this week:    BBY (9/9 $0.28), GM (9/7 $0.38), GME (9/7 $0.37), MOS (9/6 $0.275), WY (9/7 $0.31), COH (9/8 $0.33)

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

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Daily Market Update – September 8, 2016 (Close)

It didn’t take too long to make a trade yesterday, but there’s wasn’t much reason to think that today would be any different.

The trade yesterday wasn’t really expected, either, as the market nor the stock had any particular movement.

That’s just been the  pattern for the past month, although some individual stocks have had some eye popping moves, mostly on the heels of earnings.

The market, though, has been mostly stuck in quicksand.

It doesn’t look as if there’s too much reason for that to change for what remains of this week and maybe not too much reason next week, as most are looking another week into the future, as the FOMC convenes.

This morning came a lone voice who not only doubted a rate increase in September, but also doubted one in December.

Most everyone else fully expects one to come at least by September.

If that lonely guy is right, I suspect that the market will quit its celebrating the continuance of cheap money and finally start what’s wrong with the money making machine that’s supposed to be our economy.

If rates don’t move higher in September, there may still be some partying ahead, but at some point someone is going to start asking the questions that are really long overdue.

That same person might ask aloud why the stock market has reacted positively when oil has moved higher.

Those two questions are a bad combination if anyone stops to think about it.

With trading volume still so low, there is time to think about those things.

This morning the futures were again flat and some may be scratching their heads to ask questions, but it doesn’t seem likely that anything severe is in the immediate works.

At this point, I’ll be happy if I can get my 2 expiring positions to either contribute to my weekly income flow or contribute to cash reserves.

One of each might be especially nice.

I did try to roll one of those positions over, but no luck. The other, barring a big decline tomorrow, will at least be returning some money to the cash pile

NOTE:  For those owning shares of EMC, the Dell deal closed yesterday and EMC no longer exists as a company.

In return, you received $24.05 per share in cash and you will see a new holding, Dell Technologies, Class V (DVMT).

You received 0.11146 shares of the new DVMT for each share of EMC. DVMT is a “tracking stock” for the 80% of shares of VMWare that were owned by EMC.

The tracking shares were priced at $48, so the value for each share received was about $5.35, meaning that the price paid by Dell for each share of EMC was $29.40.

That’s pretty straightforward.

What’s not straightforward, yet, and the CBOE hasn’t shed too much light on things, is what kind of adjustment exists on DVMT options, as they are trading on an adjusted basis. 

At this moment, I don’t know what the “deliverable” is on a DVMT contract, The deliverable is how many shares must be delivered for each contract.

I’ll keep checking the CBOE for any update 

Daily Market Update – September 8, 2016 (7:30 AM)

It didn’t take too long to make a trade yesterday, but there’s not much reason to think that today would be any different.

The trade yesterday wasn’t really expected, either, as the market nor the stock had any particular movement.

That’s just been the  pattern for the past month, although some individual stocks have had some eye popping moves, mostly on the heels of earnings.

The market, though, has been mostly stuck in quicksand.

It doesn’t look as if there’s too much reason for that to change for what remains of this week and maybe not too much reason next week, as most are looking another week into the future, as the FOMC convenes.

This morning came a lone voice who not only doubted a rate increase in September, but also doubted one in December.

Most everyone else fully expects one to come at least by September.

If that lonely guy is right, I suspect that the market will quit its celebrating the continuance of cheap money and finally start what’s wrong with the money making machine that’s supposed to be our economy.

If rates don’t move higher in September, there may still be some partying ahead, but at some point someone is going to start asking the questions that are really long overdue.

That same person might ask aloud why the stock market has reacted positively when oil has moved higher.

Those two questions are a bad combination if anyone stops to think about it.

With trading volume still so low, there is time to think about those things.

This morning the futures are again flat and some may be scratching their heads to ask questions, but it doesn’t seem likely that anything severe is in the immediate works.

At this point, I’ll be happy if I can get my 2 expiring positions to either contribute to my weekly income flow or contribute to cash reserves.

One of each might be especially nice.

Daily Market Update – September 7, 2016 (Close)

Once the world fully expresses its outrage over the rumored loss of the phone jack in the new iPhone 7, which we learned this afternoon was reality and not rumor, we may have the chance to return to business, as normal.

It looked, though, as if the market was already set to do that, as the futures are trading unchanged.

Unchanged is the usual and today turned out to be the usual.

That comes after a small gain yesterday that made it look as if the day was actually filled with some activity, when it wasn’t.

Yesterday was another day of very narrow range and had very little going on, even as there were some buyout stories that could have given the market a boost.

But basically, the market didn’t care about too much yesterday and it really didn’t care about much of anything today, except for energy and for a change energy had no impact on the market.

There isn’t too much reason for the stock market to care about anything today or for the rest of the week, although like last week, there could easily be an outlier day that just as easily gets reversed the next day.

For now, nothing much matters until the FOMC meets.

In just 2 weeks we’ll find out whether they will be ahead of the seeable curve or whether even they can’t yet see where the curvature begins.

While i think it might be a good idea to not be ahead of the curve this time around, it’s a reasonable guarantee that no one on the FOMC would be of that belief.

So, we’ll find out in 2 weeks whether rates are nudging higher and just how markets will react, as they have made it pretty clear that while accepting an interest rate increase, they don’t want one now.

Either way, markets will get over it.

Yesterday, the odds of a September increase went lower, as there was some disappointing ISM news.

For the next 2 weeks every little piece of data will be looked at individually, whereas the data should be looked at in their totality.

The biggest pieces, Employment and GDP, are painting opposing pictures and defeating logic at every turn, so it may not be a bad idea to look more closely for any clues about what is really going on in the economy in some of the lesser indicators.

And then hope that you’re right.

The FOMC wasn’t in December 2015, but it’s hard to argue that anyone paid a price for that mis-read, even as the market had its first 10% correction in years.

That correction was only a blip, now that we can look back over the past 6 months.

I did try to get some trades in yesterday, but they were both rollovers and the trades went unrequited.

I had hoped to be able to have the chance to try again today and the opportunity did arise to rollover the Best Buy position that goes ex-dividend on Friday.

Now, after having secured some additional premium, I hope that the position does get assigned early.

Even though there are now just 2 trading days left to the week, I’m still not closing the door on any new positions, but with all of tho
se
ex-dividend positions, one rollover and possibly one assignment, it may again be time to head back to the beach.