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Daily Market Update – April 15, 2014 (9:15 AM) Yesterday was a really interesting day in the market. I didn’t get too much done but I did enjoy most of the day as that old adage about a rising tide played true. After a month or more of disappointing fizzled rallies to start the day the one from yesterday seemed to be the real thing until the final 90 minutes of trading. It seemed sort of cruel to watch paper gains disappear after putting a nearly a full day but given how the market has been going lately it should have been expected. At least if the deterioration of gains started after only an hour of trading you didn’t feel as if you had that much invested on an emotional level. But to go nearly the whole day and then watch everything disappear is really deflating. What wasn’t expected was the reversal rally that occurred in the final 30 minutes that restored the market to its highs for the day. That bounce really went against every logical scenario that anyone could have envisioned. While there was reason to believe that Citigroup’s earnings helped the market get the week off to a good start, there was plenty of reason to believe that some would take the opportunity to take some cash off the table. What there was little reason to believe was that there would be strong and sustained buying going into the close of trading. Regardless of how you look at things its hard to come up with an interpretation that’s anything other than optimistic. Who in their right mind would rush in to save a market that had a failed effort to break out of its downward trajectory? The fact that it actually happened that way is what made it such an interesting day. Triple digit gains and losses are a dime a dozen but that late recovery of early gains was really a thing of beauty and rarity. Even if the pre-open futures aren’t showing much in the way of follow through to the strong close it has to leave an encouraging feeling among those invested or thinking of investing. I’d like to take some of that encouragement and apply it toward the rest of this holiday shortened week, but I still feel a need to stay on course and hope to secure premiums from existing positions this week instead of depleting cash even further. My confidence could be supremely restored if I could see a nice assortment of assignments and rollovers on Thursday and toward that end some continuance of yesterday’s strength, even if muted, would be very nice. While I’m not averse to adding new positions this week it may end up being among those very quiet weeks. With a fair number of expiring positions this week I really would prefer to have any remaining new positions expire at some other time. That may mean looking for new positions later in the week for those that will have their April 25, 2014 options appear only later in the week. Also, with just a 4 day week, which is now down to 3 days, those premiums are somewhat lower, so there is reason to consider a slightly longer term contract. For now I’d be happy just adding to the bottom line and letting the tide keep doing its thing as we all try to figure out where exactly the market is getting its cues. If you haven’t been confused, you just haven’t been paying attention. That may put you at an advantage.
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