Author: TheAcsMan

Daily Market Update – August 22, 2016 (8:30 AM)

There isn’t too much on tap for this week, what with summer winding down.

Although there will be a GDP release to end the week, the real news may come along with that summer ending tradition in Jackson Hole, Wyoming as the Kansas City Federal Reserve Bank holds its annual monetary policy symposium.

That means that people will be listening to every word and every nuance to get some idea of when the FOMC may finally decide to raise rates.

If you listened to Stanley Fischer, the Vice-Chairman of the Federal Reserve, he indicated that the FOMC had pretty much all of the data it needed to do so.

In that case many will be looking for words of validation over the 2 days of the meeting which Janet Yellen skipped last year.

That meeting was a yawner, but it may be different this year, as Janet Yellen is scheduled to give a big speech and there may even be some wonder as to whether she is open to another term.

This week looks as if it will be getting off to a quiet start, continuing the pattern o0f the past few weeks.

Markets are still within easy reach of surpassing the all time high, which itself was more than 2% above the previously recognized high.

That’s something that has only happened 4 times in history, so this really is a pretty remarkable time.

This week may not be so remarkable, though.

I have some more cash available after the expiration of puts and that looks as if it may be joined by cash from the assignment of a single lot of calls.

While I wouldn’t mind having some additional opportunities to generate income, I like the idea of collecting more cash in the event that we realize that there hasn’t been too much of a reason to have gotten to these new highs.

Beyond that, there’s also that pesky “sell on the news” phenomenon.

Still, while collecting more cash, I wouldn’t mind if this week does bring some more strength, if only to have the opportunity to finally sell some calls on positions that have been tantalizingly close the past few weeks and that have been begging for the opportunity to generate some income.

With no ex-dividend positions this week and no rollovers, the only prospects for generating cash this week are to either spend down some of the cash reserve or sell calls on uncovered positions.

I’d prefer the latter, but may be willing to take the former, especially if there is some profit taking early in the week.

Otherwise, I do like some of the earnings related positions highlighted this week, but as the caveat in the weekly article pointed out, I’m only likely to bite in the event of some significant drops after earnings and may be then more inclined to do traditional covered call trades, rather than selling puts, in the event that there is going to be an ex-dividend date near at hand.

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Daily Market Update – August 19, 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: none

Rollovers: none

Expirations:   FAST, MRO (Puts)

The following were ex-dividend this week:   MRO )8/15 $0.05), HFC (8/19 $0.33)

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

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Daily Market Update – August 18, 2016 (Close)

The futures were again pointing to a flat open this morning.

I think I said that yesterday, as well, and could easily have said the same thing just about every morning for the past 7 weeks.

Still, if you look at the net result of the past 7 weeks it’s fairly considerable.

For anyone who remembers, that’s the way it was back in 2007, as well.

There was nothing of great significance going on, only a slow move higher and higher until reaching a top in October 2007.

I’m not even thinking of drawing a parallel and couldn’t even begin to imagine what could be the equivalent catalyst to make things crumble.

Instead, I just want to have an idea of what of insignificance is right around the corner and to which the market will react in one way or another.

Other than interest rates and the price of oil, the world, at least from the view of economists is pretty serene right now.

That’s not to say that it’s all good, just that it’s balmy and quiet out there.

This looks like another week of no trades, but at least there may be an opportunity to get some principal back with the expiration of some short puts on Marathon Oil.

I would still like to keep that position going, though, but if it does finally expire because I’m unable to wring another weekly 1% ROI or more out of it, I would welcome the opportunity to do it again and again.

Otherwise, it may just be more sitting around and wondering alongside everyone else just what is going on.

I was hoping, as the day began yesterday, that a couple of positions were in line to have some calls sold upon them, but they moved a bit out of contention yesterday and the situation remained unchanged today, as did the market for all intents and purposes.

We’ll see what tomorrow brings, but even as the week is still shaping up to be a good one on the basis of net asset value, I do want to generate more income than has been the case this week and do want more and more of those positions being put to work.

There are some more big earnings due this week, but once this week is over, there shouldn’t be too much to shake markets anymore until the next go around, at least from an earnings perspective.

When it will all be over, I think that this earnings season will be judged as being alright, but that doesn’t take into account the less than optimistic guidance just about everyone has served up.

In my mind, that sets us up for some strong moves in a few months as investors are surprised when companies report better than expected numbers, as there has to be something that is making FOMC members believe that an interest rate hike is going to be warranted before 2016 comes to a conclusion.

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Daily Market Update – August 18, 2016 (7:30 AM)

The futures were again pointing to a flat open this morning.

I think I said that yesterday, as well, and could easily have said the same thing just about every morning for the past 7 weeks.

Still, if you look at the net result of the past 7 weeks it’s fairly considerable.

For anyone who remembers, that’s the way it was back in 2007, as well.

There was nothing of great significance going on, only a slow move higher and higher until reaching a top in October 2007.

I’m not even thinking of drawing a parallel and couldn’t even begin to imagine what could be the equivalent catalyst to make things crumble.

Instead, I just want to have an idea of what of insignificance is right around the corner and to which the market will react in one way or another.

Other than interest rates and the price of oil, the world, at least from the view of economists is pretty serene right now.

That’s not to say that it’s all good, just that it’s balmy and quiet out there.

This looks like another week of no trades, but at least there may be an opportunity to get some principal back with the expiration of some short puts on Marathon Oil.

I would still like to keep that position going, though, but if it does finally expire because I’m unable to wring another weekly 1% ROI or more out of it, I would welcome the opportunity to do it again and again.

Otherwise, it may just be more sitting around and wondering alongside everyone else just what is going on.

I was hoping, as the day began yesterday, that a couple of positions were in line to have some calls sold upon them, but they moved a bit out of contention yesterday.

We’ll see what today brings, but even as the week is still shaping up to be a good one on the basis of net asset value, I do want to generate more income than has been the case this week and do want more and more of those positions being put to work.

There are some more big earnings due this week, but once this week is over, there shouldn’t be too much to shake markets anymore until the next go around, at least from an earnings perspective.

When it will all be over, I think that this earnings season will be judged as being alright, but that doesn’t take into account the less than optimistic guidance just about everyone has served up.

In my mind, that sets us up for some strong moves in a few months as investors are surprised when companies report better than expected numbers, as there has to be something that is making FOMC members believe that an interest rate hike is going to be warranted before 2016 comes to a conclusion.

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Daily Market Update – August 17, 2016 (Close)

The futures were again pointing to a flat open this morning.

That’s something that we should be getting used to, perhaps being a sign that the market is getting jittery about what is coming next.

The biggest reason to be worried is that maybe nothing is coming next.

If the economy continues as it has been going and there is no real evidence of the kind of growth that would justify even the smallest of interest rate increases, it’s going to be pretty hard to keep interest in buying sustained.

After hearing 2 of the Federal Reserve’s Presidents speak yesterday, ahead of today’s FOMC meeting minutes release, you would think that they’re seeing some kind of data or pattern that would justify a rate increase, but the market is getting far too many mixed signals.

Still, even with yesterday’s minor decline, it continues to be record high after record high.

We are even now at the point that this is only the 4th time in history that the market has gone up more than another 2% after surpassing its previous record closing high.

So this isn’t necessarily a unique period in time, but it is a pretty rare one.

At some point traders will wake up.

What we don’t know is whether they wake up to a realization that nothing has been warranted on the basis of fundamentals or whether they realized that as old as this bull market may now be, we’re still at the beginning.

It’s hard to believe that the latter will be the case, but as long as it’s surprises that you’re going to dismiss, you may as well dismiss everything that has already gotten us to where we are and whose reality has been validated.

As we were to come upon mid-week and the FOMC minutes were to be released, we did find reason for the market to wander from its flatness of the morning.

There were also some more earnings reports due and those were reason for an early market reaction, although yesterday’s news from Home Depot was met with a very muted response.

Today, the response was less muted, but it was also shorter.

That’s because the market liked what it saw in those FOMC minutes, even as they said nothing.

My expectations for any action today were small, but there were a couple of potential trades to open short call positions on currently uncovered positions.

That alone would have given me a reason to think that this week was worthwhile, but I’ll still be asking that question as tomorrow comes around.

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Daily Market Update – August 17, 2016 (7:30 AM)

The futures are again pointing to a flat open this morning.

That’s something that we should be getting used to, perhaps being a sign that the market is getting jittery about what is coming next.

The biggest reason to be worried is that maybe nothing is coming next.

If the economy continues as it has been going and there is no real evidence of the kind of growth that would justify even the smallest of interest rate increases, it’s going to be pretty hard to keep interest in buying sustained.

After hearing 2 of the federal Reserve’s Presidents speak yesterday, ahead of today’s FOMC meeting minutes release, you would think that they’re seeing some kind of data or pattern that would justify a rate increase, but the market is getting far too many mixed signals.

Still, even with yesterday’s minor decline, it continues to be record high after record high.

We are even now at the point that this is only the 4th time in history that the market has gone up more than another 2% after surpassing its previous record closing high.

So this isn’t necessarily a unique period in time, but it is a pretty rare one.

At some point traders will wake up.

What we don’t know is whether they wake up to a realization that nothing has been warranted on the basis of fundamentals or whether they realized that as old as this bull market may now be, we’re still at the beginning.

It’s hard to believe that the latter will be the case, but as long as it’s surprises that you’re going to dismiss, you may as well dismiss everything that has already gotten us to where we are and whose reality has been validated.

As we come upon mid-week and the FOMC minutes are released, we may have reason for the market to wander from its flatness of the morning.

There are also some more earnings reports due and there may yet be reason for a market reaction, although yesterday’s news from Home Depot was met with a very muted response.

My expectations for any action today are small, but there are a couple of potential trades to open short call positions on currently uncovered positions.

That alone would give me a reason to think that this week was worthwhile.

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Daily Market Update – August 16, 2016 (Close)

The futures were pointing to a flat open this morning as the market finished yesterday off from its highs, but still managing to post all time closing highs once again in all three major indexes.

That grind higher has been continual ever since we got over the “Brexit” vote and learned to move the market higher even in the absence of news.

With retailer reports still coming in this week, the morning started with DJIA component Home Depot reaffirming guidance.

Based on the way the market received last week’s retail news in which retailers surged higher on basically flat earnings and downgraded guidance, you would think that there would be a push to go much higher this morning, at least in that one stock.

But that wasn’t the case today.

Not only for the market, but neither for Home Depot itself.

Maybe everyone always expects too much from them and have settled on lowered expectations for most everyone else.

It will be interesting to see how Wal-Mart is greeted this week as it has had lowered expectations for a while at this point.

In the meantime, with tomorrow being the release of the FOMC minutes it’s hard to know where the real push to go higher will come from easy as those who bet on those sort of things pushed up the likelihood of a September increase today and did so by 100%.

Now, the expected chance of such an increase is at 18%, following some words today from Federal reserve Presidents Dudley and Lockhart.

Other than the past 2 months Employment Statistics Reports, there really hasn’t been much news to validate the idea that the economy is expanding at a rate that might warrant the FOMC getting ready to roll out another rate hike, but at least one voting member expressed an opinion that one is likely.

For those that had good reason to expect multiple such rate increases in 2016, we are now facing the final 4 months of the year without having had a single one.

At the current record levels it’s hard to see anything other than disappointment as any kind of news comes in, given how the market has mostly been paradoxical in its responses over the past few years.

The only logical response at this point would be to drop that contrarian response to economic news and see the good as good and the bad, as bad.

I don’t know if that will start to happen this week.

After yesterday’s gain, but no real opportunity to do anything constructive, I don’t really know what the rest of the week will bring, other than having to watch two expiring positions.

I suppose I could do that from the beach.

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