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Daily Market Update – November 16, 2016 (7:30 AM) Here we are at mid-week and the earnings reports are going to begin slowing down considerably as the option cycle comes to its end. For the most part retailers have been good and their guidances haven’t been dour. With the bond market doing its work for it and employment closing in on that level referred to as “structural unemployment,” it seems a pretty safe bet that the FOMC will do what it did last December. Now the question will be whether it does what it was expected to do in 2016, once 2017 opens its doors for business. At this point, I think we may finally get it, though. Inflation, especially in its early stages is a good thing and low oil prices are a good thing. That combination should be wonderful and I think that if the latter can continue to stay in the $50 range, 2017 will be a very good year for stock markets, as the past 2 years have been simply treading water. You probably also havve to factor in the early days of a Trump Presidency in which some of the uncertainty right now may disappear and we may learn about those policy decisions that could help business and the business cycle. That’s all fine, but I just want to finish the November 2016 option cycle and do something with the 8 different positions that are coming up for expiration in a few days. At this point I expect that there will be a mix of assignments, rollovers and expirations. Unlike the past year, I’m not too concerned about the expirations. Even in a low volatility environment, I think that there will be upside price movement and opportunity to sell calls on those positions. It’s all about continuing patience. Ultimately, you would like to see every position you own out-performing the index for the holding period in question and you want to see your net assets showing a gain better than the index or a loss less than the index for the time period in question. For me, 2016 has been a good one, just like 2015 was not. I’m more optimistic about 2017’s prospects both for the market and for personal fortunes, but let’s get through November and December, first. . . . |
