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Daily Market Update – October 4, 2016 (7:30 AM)
Last week saw 5 days with triple digit moves, yet the market itself only ended with a net 0.2% gain. This week looked as if it was going to pick up right where it had left off, not only by being a triple digit day, but in a reversal of course. At the sounding of yesterday’s closing bell the course was reversed, but the streak was broken. This morning’s futures give no indication of anything as the trading is muted, as we draw nearer and nearer Friday’s Employment Situation Report. The expectations for Friday are on the low side, only about 170,000 new jobs created, so a number with a 2 handle, especially if accompanied with an upward revision or two, could easily provoke a large reaction. My guess is that reaction would be a negative one, even though once cool heads prevailed it should be seen as being something very positive. The recent GDP release shows that something good is brewing in the economy and that would make it only a matter of short time until its reflected in both earnings and in guidance. Maybe not in that order, but with spending cuts going on any increase to the top line should result in better comparable statistics and that is what it’s all about. I went speculative yesterday with the sale of puts on a precious metal and was fortunate to get an opportunity to sell some calls on a long dormant position, that if ever assigned will still result in a nice return, thanks to the dividends and the accumulated premiums, even if one of the lots sold goes for $5 less than the purchase price. While I xstill have some cash to part with, my expectation, just as that expectation was breached yesterday, is to be cautious and await Friday’s news. There’s little else to capture attention this week other than any rallies that could give some additional opportunities to sell calls on dormant positions. That would make the week worthwhile.
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