Author: TheAcsMan

Daily Market Update – September 21, 2016 (7:30 AM)

The Japanese stock market was barely 2% higher this morning as the Bank of Japan announced a change in monetary policy that was reminiscent of what the Federal reserve did a number of years ago as it focused on the yield curve.

All of that is far too complex for me to understand, but somehow the decision in Japan eases the way for the FOMC to do something, as the US would no longer stand to be the only major economy to be in a position to preside over increasing rates.

But still, as this morning is set to begin, no one is then expecting the FOMC to announce an increase in rates this afternoon.

Maybe that’s why stock futures are guardedly higher this morning.

But the Bank of Japan’s decision really does open the door for the FOMC to make a decision to raise rates today seem far more logical and with much less market related risk.

It’s just not expected.

At this point, there still would be some reason to welcome an interest rate increase, if only to get all of this focus to come to its end and to get us to focus on what matters.

It seems as if it has been a very, very long time since we have focused on those things that are important.

regardless of what the decision will be today and what specific words will be used in the statement, before you know it, someone will realize that there are now only 9 days left to come to some budget agreement or face another government shut down.

It’s inconceivable that would happen, but that has to be where we will get mis-directed next.

For now, we will still put our focus onto the news coming at 2 PM and then figure out how much reverse psychology will be in store for all of us at the moment of the news release and then immediately after, not to mention over the next few days.

The market wants to party, but it will need news of no increase and no overly hawkish words or perceived threats in the ensuing statement.

Daily Market Update – September 20, 2016 (Close)

This could still be a big week, but there’s again really no telling in which direction things might go.

That was made pretty clear yesterday when a large gain evaporated, almost came back and then evaporated again.

Today the gains lost weren’t as big, but the market again just had no direction.

All eyes are on central banks these days and most are focused on our FOMC.

The prevailing thought is that there will be no rate hike announced tomorrow, but the wording in the statement release could and does often move markets more than the decision, itself.

What is also curious is that everyone believes that a decision to increase rates was going to be announced in either September or December, without regard to the fact that there are some intervening months.

The FOMC made it clear earlier in the year that their decision wasn’t necessarily going to be tied to a scheduled meeting.

But there is also another scheduled meeting before December and it happens to come about 2 weeks before the election, so things could get interesting.

I surprised myself by making a trade yesterday and using some of that cash that was obviously burning a hole in my pocket.

However, I used the monthly option and that means that I still have no positions expiring this week and only a single ex-dividend position.

That leaves me hungering for some income opportunities.

That hunger certainly didn’t get requited today.

To get any satisfaction for those hunger pangs, it would likely take a sharp move higher on Wednesday, as the FOMC presumably decides to do nothing and doesn’t sound very hawkish afterward.

I think it would take both of those to happen to get the market to celebrate.

For now, I’ll just do what any sane person would do and not roll the dice any further until the FOMC places its cards on the table.

How’s that for the mixed metaphor that has been this entire interest rate season?

Daily Market Update – September 20, 2016 (8:30 AM)

This could still be a big week, but there’s again really no telling in which direction things might go.

That was made pretty clear yesterday when a large gain evaporated, almost came back and then evaporated again.

All eyes are on central banks these days and most are focused on our FOMC.

The prevailing thought ios that there will be no rate hike announced tomorrow, but the wording in the statement release could and does often move markets more than the decision, itself.

What is also curious is that everyone believes that a decision to increase rates was going to be announced in either September or December, without regard to the fact that there are some intervening months.

The FOMC made it clear earlier in the year that their decision wasn’t necessarily going to be tied to a scheduled meeting.

But there is also another scheduled meeting before December and it happens to come about 2 weeks before the election, so things could get interesting.

I surprised myself by making a trade yesterday and using some of that cash that was obviously burning a hole in my pocket.

However, I used the monthly option and that means that I still have no positions expiring this week and only a single ex-dividend position.

That leaves me hungering for some income opportunities.

To get any, it would likely take a sharp move higher on Wednesday, as the FOMC presumably decides to do nothing and doesn’t sound very hawkish afterward.

I think it would take both of those to happen to get the market to celebrate.

For now, I’ll just do what any sane person would do and not roll the dice any further until the FOMC places its cards on the table.

How’s that for the mixed metaphor that has been this entire interest rate season?

Daily Market Update – September 19, 2016 (Close)

This could be a big week, but there’s really no telling in which direction things might go.

It’s also possible that this past week already brought all of the wavering we could summon, as markets went back and forth on nothing at all.

This week, at least we have a central focus.

That’s Wednesday’s FOMC Statement release.

“Will they or won’t they?” is what’s on everyone’s minds, with guessing as to the immediate response being the second thing on everyone’s minds.

Since the FOMC is not likely to want to be perceived as being reactive in implementation of fiscal policy, there shouldn’t be too much surprise if they do raise rates this week.

Based on how markets have reacted whenever anyone of importance said anything resembling a hawkish stance, we could reasonably guess that an increase this week would result in a large sell-off.

But who knows?

The more things seem obvious, the less obvious they turn out to be.

Today was certainly a day when nothing was obvious, as the market gave up some nice gains and did so even after the market attempted to recover the first round of losses.

With 3 assignments last week, I had more cash than I’ve had for a while and I was not very anxious to spend it.

But I did spend some of it.

While I wouldn’t begrudge a nice move higher, at this point, I’d rather find some newly created bargains to purchase with that cash.

Alternatively, if the market does move higher, I wouldn’t mind selling some more call contracts, but I also wouldn’t mind some more positions getting closer to their strike prices and perhaps becoming potential assignments, as well.

That’s a change in tone for me.

While I’m always expecting some kind of sell-off, that hasn’t kept me from deploying cash, nor has it prompted me to raise cash.

This time may be a little bit different, as I really wouldn’t mind having more cash on hand. Of course, I didn’t really pay attention to wait I really wouldn’t mind.

I certainly wouldn’t want to stay  that way and I certainly would want to put cash to work, but at some point, unless the economy shows some reason to justify an increase in interest rates, there has to be some fallout, particularly if oil does start to move higher.

That would especially be the case if OPEC could ever get its act together and cause the price of oil to rise because of a decrease in supply.

For now, I’ll be glued to the screen until the mid-point of this week as the FOMC Statement is finally released.

This morning, markets were somewhat positive. You would have thought that they would be tentative, but logically, you would have thought that to be the case last week, too.

Ultimately, the market was tentative, as it ended unchanged.

I ended up with less cash, but hedged my bet by using a monthly option when a weekly was available.

Right now, hedging you bets or hiding underneat
h
a table is about the best anyone can do.

Daily Market Update – September 19, 2016 (7:30 AM)

This could be a big week, but there’s really no telling in which direction things might go.

It’s also possible that this past week already brought all of the wavering we could summon, as markets went back and forth on nothing at all.

This week, at least we have a central focus.

That’s Wednesday’s FOMC Statement release.

“Will they or won’t they?” is what’s on everyone’s minds, with guessing as to the immediate response being the second thing on everyone’s minds.

Since the FOMC is not likely to want to be perceived as being reactive in implementation of fiscal policy, there shouldn’t be too much surprise if they do raise rates this week.

Based on how markets have reacted whenever anyone of importance said anything resembling a hawkish stance, we could reasonably guess that an increase this week would result in a large sell-off.

But who knows?

The more things seem obvious, the less obvious they turn out to be.

With 3 assignments last week, I have more cash than I’ve had for a while and I’m not very anxious to spend it.

While I wouldn’t begrudge a nice move higher, at this point, I’d rather find some newly created bargains to purchase with that cash.

Alternatively, if the market does move higher, I wouldn’t mind selling some more call contracts, but I also wouldn’t mind some more positions getting closer to their strike prices and perhaps becoming potential assignments, as well.

That’s a change in tone for me.

While I’m always expecting some kind of sell-off, that hasn’t kept me from deploying cash, nor has it prompted me to raise cash.

This time may be a little bit different, as I really wouldn’t mind having more cash on hand.

I certainly wouldn’t want to stay  that way and I certainly would want to put cash to work, but at some point, unless the economy shows some reason to justify an increase in interest rates, there has to be some fallout, particularly if oil does start to move higher.

That would especially be the case if OPEC could ever get its act together and cause the price of oil to rise because of a decrease in supply.

For now, I’ll be glued to the screen until the mid-point of this week as the FOMC Statement is finally released.

This morning, markets are somewhat positive. You would think that they would be tentative, but logically, you would have thought that to be the case last week, too.

Daily Market Update – September 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: HPQ, IP, STX

Rollovers: MRO (puts)

Expirations:   DOW, GME

The following were ex-dividend this week:    HPQ (9/12 $0.12), M (9/13 $0.38), NEM (9/13 $0.025), BBBY (9/14 $0.125), JOY (9/15 $0.01)

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

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Daily Market Update – September 15, 2016 (Close)

Yesterday was the antithesis of the three previous trading days.

For a while it looked as if the market might end the day on a high note.

A small one, but a high note, nonetheless.

Instead, it retreated in the last hour or so, but still ended up with only a small change on the day.

Today looked as if it might be much of the same as we drew nearer and nearer next week’s FOMC meeting.

There really wasn’t too much reason after having had the back and forth large moves to end last week and begin this one, to do much of anything until we know what the FOMC’s decision will be.

At this point, it looks as if the market will react positively if interest rates aren’t changed and negatively if they are increased.

That doesn’t take into account what kind of language the FOMC might use.

For example, if they raised the interest rate, but said that it was unlikely that there would be another such increase in 2016, markets would probably celebrate.

Either way, there’s likely to be a knee-jerk reaction and then there’s likely to be some settling in as the news, whatever it happens to be, is digested.
But today, it became really, really clear that investors hate the idea of a rate increase next week, as some weaker than expected Retail Sales numbers sent the message that there wasn’t the kind of economic strength to support the increase.

I sure don’t want to see the reaction on Wednesday if there is an increase. 

I think the FOMC realizes that and is taking that it consideration, even though they shouldn’t.

At this point, I just want to get through this week and see something constructive happen with my expiring positions. 

If in a position to roll some over, I may look at going beyond next week’s expiration date.

At this point, I probably wouldn’t mind having more assignments in order to add to cash reserves, but wouldn’t turn down any opportunity to keep positions working by rolling them over.

If any of those opportunities present tomorrow, I’d gladly take them, rather than waiting for the added uncertainty that next week might bring.

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