Month: December 2016

Daily Market Update –  December 16, 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: HFC, IP

Rollovers: None

Expirations:   AGQ, ANF

The following were ex-dividend this week:    M (12/13 $0.38), BBBY (12/14 $0.125)  

The following are ex-dividend next week:  LVS (12/19 $0.72)

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

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Daily Market Update –  December 15, 2016 (Close)

It was the morning after the annual FOMC increase in interest rates and all was calm.

Yesterday the FOMC sowed quite a bit of confusion and it wasn’t helped too much by Janet Yellen during her press conference.

Still, the decline was orderly and fairly inconsequential, especially when you consider the trajectory since the election.

What you can be certain of is that the FOMC and its members didn’t gain any new fans who are going to become our next President.

This morning, though, the futures were fairly flat and there wasn’t too much excitement.

Commodities continued to be weak, as bond yields have moved higher.

After all, why take risk when you can start getting a reasonably good rate of return on paper products?

We’ll see how long that lasts.

Today, what lasted was the return to buying stocks, even though the close was well off of the day’s highs.

I was happy to be able to roll over a couple of positions yesterday and am now hoping to see some assignments tomorrow as we end the December 2016 option cycle.

I still have cash to spend and am stilling willing to do so this week, even tomorrow, but would be stunned if I did, although some of those commodity declines are looking appealing.

What I did do, and that continues a recent trend, has been to finally start putting some of those still well below cost commodity positions to work through the sale of calls.

As I mentioned last week, sometimes a little too much maintenance and watching necessary to recommend to subscribers, but I’ve had a hard time resisting these bounces in commodities.

As good as 2016 has been, I could easily spend 2017 making these kind of very lucrative trades all day long.

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Daily Market Update –  December 15, 2016 (7:30 AM)

It is now the morning after the annual FOMC increase in its interest rate hike and all is calm.

Yesterday the FOMC sowed quite a bit of confusion and it wasn’t helped too much by Janet Yellen during her press conference.

Still, the decline was orderly and fairly inconsequential, especially when you consider the trajectory since the election.

What you can be certain of is that the FOMC and its members didn’t gain any new fans who are going to become our next President.

This morning, though, the futures are fairly flat and there isn’t too much excitement.

Commodities continue to be weak, as bond yields have moved higher.

Why take risk when you can start getting a reasonably good rate of return on paper products?

We’ll see how long that lasts.

I was happy to be able to roll over a couple of positions yesterday and am now hoping to see some assignments tomorrow as we end the December 2016 option cycle.

I still have cash to spend and am stilling willing to do so this week, but would be stunned if I did, although some of those commodity declines are looking appealing.

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Daily Market Update –  December 14, 2016 (Close)

The FOMC Statement release came this afternoon and we all knew what was going to happen.

That was, unless of course, the FOMC decided to show that it still means something and isn’t just an assembly of intellectuals incapable of action.

In that event, the FOMC would have, of course, raised the interest rate to at least match what natural market forces have done, but they would taken it a step further and go beyond the o.25% increase that is being factored in by everyone.

But we all also pretty much knew that wasn’t going to happen, because the last thing intellectuals want is to unleash a bully and you know who that would be.

And do, it didn’t happen.

What did happen was an example of what happens when the leaders are more the followers and when they sow seeds of uncertainty and confusion.

This morning the futures wee taking a little bit of a break after another strong gain that put the DJIA within easy reach of 20,000.

20,000!!!!

But as the FOMC  announced their 0.25% rate the market really didn’t quite know what to do.

Should it celebrate or agonize, or should it freeze?

It took the Chairman’s press conference to answer that question, but the answer was that there was too much uncertainty about what was ahead and that no one had really factored in a Trump Presidency.

More importantly, there was the suggestion that instead of the 2 hikes most expected in 2017, there might be room for 3 hikes.

Of course, we expected 4 hikes in 2016 and here we are.

Last year at this time when the FOMC raised rates it may have been the fear of even more rate hikes that cut the celebration short and gave us a real correction.

That correction was a quick one and short lived, but unless there was really something totally unexpected coming from today’s statement release or a slip of the tongue afterward in the press conference, it would have been hard to see that same response in the coming weeks.

We can all see the economic signs on the road, although the question may now be how quickly will things heat up if the bluster is for real.

I remain ready to spend some cash, but not feeling compelled to do so.

I hope that the rally in commodities continues after taking a day or 2 or 3 off and I hope to see 2017 get off to the kind of start that just perpetuates 2016.

I was happy to take advantage of some of that commodity confusion and rollover both positions set to expire this week. 

The kind of confusion that creates opportunity is good and at this point, I still like having cash in hand and opportunities to spend it on.

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Daily Market Update –  December 13, 2016 (Close)

The FOMC began its 2 day meeting today and we all know what is going to happen.

That is, unless of course, the FOMC decides to be proactive and not simply reactive.

If that would be the case, look out for a barrage of vitriol laced Tweets from President-Elect Trump.

It’s not very likely that the FOMC would announce anything greater than a 0.25% rate hike, but if it does, all will break loose.

No one wants that, which may be exactly why that should be what is done.

With all of the discussion of infrastructure building and the likelihood of increased demand for oil, coupled with everything else going on in the economy, someone, somewhere is going to be thinking about inflation in the way we used to think about it.

Besides, the FOMC is really late to the game as the natural market forces were there first.

I don’t expect it to be a factor in what I do this week, but I’m actually happy to have my cash level as high as it is at the moment.

I may still have some interest in spending some money before the week is over, but not too much.

I’d be much happier finding something to do with all of those positions expiring this week.

I’ll leave the rest up to the smart people in the FOMC meeting over the next day.

What really surprised me, though, is that even after today’s nice move higher, I still don’t totally dismiss the idea of spending some money tomorrow.

After the FOMC Statement release and then sometime during the ensuing press conference, we may really get some idea as to whether this time around may be very different from the last time we did this a year ago.

I think it will be, yet still want to have that cash beneath me for now.

There will still be plenty of time to chase markets.

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