Author: TheAcsMan

Daily Market Update – June 6, 2016 (Close)

Everyone wanted to know what Janet Yellen was going so say today after Friday’s real shocker of an Employment Situation Report.

As the market did so frequently last week, in fact, in 3 of its 4 trading days, it recovered from steep losses. It did so also in response to that news on Friday, but it really leaves many to wonder what’s next.

What most firmly believe is that an interest rate hike next week is not next.

What we might have reasonably expected to hear today was some dancing around the news and whether the economy may in fact be prone to a recession or whether the Federal Reserve Chairman believes that the economy is strong enough to warrant an interest rate increase.

Guess what?

What we heard was a lot of hedging, which is a investor’s way of saying “dancing around.”

It could have been pretty interesting this afternoon, but the market took the less than clear Yellen-speak as representing the best of all worlds. 

She basically said that the economy was on track, but that there may not be enough to warrant an interest rate hike just yet.

Ahead of that speech and follow up period for questions, the market’s futures trading were understandably pretty flat, just as the previous week ended exactly unchanged, even as volatility dropped another 10%.

With a little more money to spend, I wasn’t that eager to do so, but am still very willing, even after not having spent any today.

Instead it was watching the market show some optimism and not minding seeing existing positions move higher, especially energy and commodities.

With lots of ex-dividend positions this week and the monthly cycle coming to its end next week, I just want to have some predictable stream of income and those may be sufficient to keep me happy, especially if there can be a few more days like today with existing holdings continuing to out-perform the broader market.

I still wouldn’t completely rule out taking a plunge, though.

Once again, I wouldn’t mind rolling over the single expiring position this week, even if it is in the money.

When volatility is high, either in general or for a specific stock, that is often not a bad thing to do as the accumulating enhanced premiums give you a larger and larger cushion.

If the stock is already deeply in the money, that amount is just further cushion.

Otherwise, I don’t expect too much action this week either. Willing or not, it does take more than that to pull the trigger when it’s really not very clear what the sentiment is right now.

It’s hard to tell whether the market is happy that there is a lower chance of a rate hike or whether it will come to its senses and realize that a rate hike would have meant that the economy looked to be headed in the right direction.

After Friday’s Employment Situation Report and downward revisions to previous months, it may be harder to come to the conclusion that things are moving in the right direction, even as the unemployment rate is dropping.

Along with increasing gas prices and slowed job growth, what reason is there to be happy?

At least Janet Yellen didn’t burst anyone’s hopes and dreams today, as she said little of substance, bu
t
why would there have been too much expectation for her to really say anything substantive ahead of next week’s meeting?

So many questions, yet so few answers.

Daily Market Update – June 6, 2016 (8:00 AM)

Everyone wants to know what Janet Yellen is going so say today after Friday’s real shocker of an Employment Situation Report.

As the market did so frequently last week, in fact, in 3 of its 4 trading days, it recovered from steep losses. It did so also in response to that news on Friday, but it really leaves many to wonder what’s next.

What most firm;y believe is that an interest rate hike next week is not next.

What we may hear today is some dancing around the news and whether the economy may in fact be prone to a recession or whether the Federal Reserve Chairman believes that the economy is strong enough to warrant an interest rate increase.

It should be pretty interesting this afternoon.

Ahead of that speech and follow up period for questions, the market’s futures trading is understandably pretty flat, just as the previous week ended exactly unchanged, even as volatility dropped another 10%.

With a little more money to spend, I’m not that eager to do so, but am still very willing.

With lots of ex-dividend positions this week and the monthly cycle coming to its end next week, I just want to have some predictable stream of income and those may be sufficient.

I still wouldn’t completely rule out taking a plunge, though.

Once again, I wouldn’t mind rolling over the single expiring position this week, even if it is in the money.

When volatility is high, either in general or for a specific stock, that is often not a bad thing to do as the accumulating enhanced premiums give you a larger and larger cushion.

If the stock is already deeply in the money, that amount is just further cushion.

Otherwise, I don’t expect too much action this week either. Willing or not, it does take more than that to pull the trigger when it’s really not very clear what the sentiment is right now.

It’s hard to tell whether the market is happy that there is a lower chance of a rate hike or whether it will come to its senses and realize that a rate hike would have meant that the economy looked to be headed in the right direction.

After Friday’s Employment Situation Report and downward revisions to previous months, it may be harder to come to the conclusion that things are moving in the right direction, even as the unemployment rate is dropping.

Along with increasing gas prices and slowed job growth, what reason is there to be happy?

Daily Market Update – June 3, 2016 (7:00 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 *, MRO *

Rollovers:   none

Expirations:   none

** Even if in the money and bound for assignment, it is possible that I may decide to rollover these positions

The following were ex-dividend this week:  MOS (5/31 $0.275), ANF (6/1 $0.20), BAC (6/1 $0.05), COH (6/1 $0.34)

The following will be ex-dividend next week:   BBY (6/10 $0.28), HPQ (6/6 $0.12),KSS (6/6 $0.50), NEM (6/7 $0.025), GM (6/8 $0.38), WY (6/8 $0.31)

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

Daily Market Update – June 2, 2016 (7:00 AM)

Tomorrow is the day that many have been waiting for.

It seems that for about the past year or so, every upcoming Employment Situation Report is given the same label.

Each one is referred to as the most important Employment Situation Report since the previous one.

Every now and then there may be some truth to the hyperbole.

My guess is that if tomorrow’s number comes in strong, investors will rally the market, maybe even approaching or exceeding the previous high on the S&P 500.

That would be a real affirmation of the way the market has seemed to come to accept the prospect of a rate hike coming with the June 2016 FOMC meeting.

After that, it’s anyone’s guess what happens when the FOMC finally does make a decision.

Will it be a repeat of December?

But what if the FOMC delays a decision even if the numbers are good or what if the numbers don’t seem to support an increase in just a couple of weeks?

Then it’s really a guessing game.

In that case, the market may simply go back to what it has done for most of 2016 and just follow oil, although the correlation has been getting weaker lately.

Between now and the FOMC Statement there will be a number of Federal Reserve Governors speaking their minds, including the most important one of all, but they have all been sending such mixed messages that’s it’s really hard to know whether the various members of the Federal Reserve are truly expressing their opinions or just sending test balloons out.

That’s what happens when the Federal reserve gets too concerned about stock markets and loses focus and maybe its ability to have an objective approach to analysis and action.

For me, my analysis is that mere mortals can’t know what is even reasonable probability of occurring and my actions show how ambivalent and uncertain I am.

The market, though, as measured by Volatility, seems very certain, as volatility is so very low.

That usually means the market is heading for a surprise.

Just like after December’s decision, maybe.

I’m just about this week’s ex-dividend positions and perhaps an opportunity to get either assignments or rollovers of both positions expiring this week.

Two positions is still a paltry number, but anything in play is either a means for more income production or more for building up cash reserves, so I’m hoping some rational thought holds up until this week comes to its end.

Daily Market Update – June 1, 2016 (Close)

Yesterday looked like it was a week day, but it really wasn’t that bad.

Today it looked like it might get bad, but it didn’t.

With an eye on Volatility this week, as a possible trading vehicle ahead of the FOMC announcement in a couple of weeks, you would have seen the story being told yesterday, but not so much today.

The VIX is usually higher as the market goes lower, but even as the DJIA closed down nearly 90 points yesterday, the VIX ended the day lower.

That’s because the S&P 500 was only very slightly lower and the NASDAQ was higher.

The market actually performed reasonably well yesterday, other than for a handful of DJIA stocks.

It showed in the VIX.

There wasn’t much else really going on yesterday and it seemed as if it might just be more of the same today as the futures were unfolding, but then it started turning negative.

Then it did turn out to be more of the same as the market actually climbed back about the same amount that it did the prior day.

This morning’s futures were lower, but not by very much, as we waited for some potentially important news on Friday as the Employment Situation Report is released.

A strong number, indicating lots of new jobs being created and a decrease in the unemployment rate, could mean another test for traders.

We would find out whether traders are still at ease with the idea of an interest rate increase, or whether they breathe a collective sigh if the numbers aren’t that great.

Logic would tell you that the market should really embrace anything that seems to be reflective of an improving economy.

Given where markets stand, it is pretty amazing just how high they are without the real strong push from the economy. Those rising oil prices may not be from an improving world wide economic picture, so it’s a little puzzling why the stock market continues to embrace those higher prices.

It has been a long time, but we’re either still waiting for a real rebound or we have to get used to the idea that there may be a new paradigm at hand, or maybe the real coming of the old paradigm that never happened.

We may have just been experiencing lots of mini-soft landings over the many months since 2009, as we’ve gently nudged higher and higher and the economy has gently become better and better.

We’re not used to that sort of thing, usually expecting extremes and extreme actions in response.

This week I’m not likely to have much action myself, other than perhaps to roll over a position or 2 or to see a position or two get assigned.

At this point, I’d be happy to roll them over, even if faced with assignment, as has been the case for the past month or so.

The rollovers seem like much easier money than hunting for a new position when looking for a place to park cash coming from assignments.

Maybe that’s being lazy, but I would rather rest in a pile of income than in a pile of cash being put at risk.

Daily Market Update – June 1, 2016 (8:15 AM)

Yesterday looked like it was a week day, but it really wasn’t that bad.

With an eye on Volatility this week, as a possible trading vehicle ahead of the FOMC announcement in a couple of weeks, you would have seen the story being told.

The VIX is usually higher as the market goes lower, but even as the DJIA closed down nearly 90 points, the VIX ended the day lower.

That’s because the S&P 500 was only very slightly lower and the NASDAQ was higher.

The market actually performed reasonably well yesterday, other than for a handful of DJIA stocks.

It showed in the VIX.

There wasn’t much else really going on yesterday and it may just be more of the same today.

This morning’s futures are lower, but not by very much, as we wait for some potentially important news on Friday as the Employment Situation Report is released.

A strong number, indicating lots of new jobs being created and a decrease in the unemployment rate, could mean another test for traders.

We would find out whether traders are still at ease with the idea of an interest rate increase, or whether they breathe a collective sigh if the numbers aren’t that great.

Logic would tell you that the market should really embrace anything that seems to be reflective of an improving economy.

Given where markets stand, it is pretty amazing just how high they are without the real strong push from the economy.

It has been a long time, but we’re either still waiting for a real rebound or we have to get used to the idea that there may be a new paradigm at hand, or maybe the real coming of the old paradigm that never happened.

We may have just been experiencing lots of mini-soft landings over the many months since 2009, as we’ve gently nudged higher and higher and the economy has gently become better and better.

We’re not used to that sort of thing, usually expecting extremes and extreme actions in response.

This week I’m not likely to have much action myself, other than perhaps to roll over a position or 2 or to see a position or two get assigned.

At this point, I’d be happy to roll them over, even if faced with assignment, as has been the case for the past month or so.

The rollovers seem like much easier money than hunting for a new position when looking for a place to park cash coming from assignments.

Maybe that’s being lazy, but I would rather rest in a pile of income than in a pile of cash being put at risk.

Daily Market Update – May 31, 2016 (Close)

This week it’s all about the consumer and the number of people who may be in better position to become better consumers.

By “better consumer,” no one really cares if they are more judicious in their use of money. Instead, a better consumer is one who spends more freely.

That’s what moves the economy.

Maybe that’s what the FOMC is seeing that has many believing that they will announce an interest rate hike in just a couple of weeks.

I don’t know if that will be the case. What I do know is that the FOMC seems to be playing more “head games” than ever before and seems to be floating more and more trial balloons.

We’ve not been accustomed to an FOMC that acts that way and it should be a little disconcerting.

But for now, the market likes what it believes is going on, just as it did in December, right before the FOMC raised rates.

Today, though, when it all ended, the market really didn’t know what it wanted, but it wasn’t as bad as it looked.

This week I have a little bit of money to spend, a decent number of ex-dividend positions and two stocks with call options expiring.

Those alone may be enough income for the week, but I still wouldn’t mind generating some more with the possibility of some new purchases.

In all likelihood, if doing so, I may look at an extended weekly or even monthly expiration, just to be able to get a little more premium than might be offered in a 4 day week.

With the futures pointing to a flat open, I didn’t have any great hopes of selling any calls on uncovered positions today, but that would still be something that would have made me happy, even if tying up the position with a longer time frame, as I’ve been doing now for more than 6 months.

While I think that there may be some downside ahead, regardless of what the FOMC decides in a few weeks, I have no real opinion about what the next few days or even weeks may hold.

Oil is still important, although the relationship between oil and stocks appears to be getting more and more tenuous.

Otherwise, the stronger the various consumer related measures are,as they get reported over this week and next, the more likely that the market will continue to embrace the notion of an upcoming interest rate increase.

For now, the hawks seem to be taking center stage and there has to be some belief that they see those signs of strength that mere mortals may not get to witness until the report embargoes are lifted.

I’ll be watching, but I don’t know how much acting I’ll be in a position to do as the week unfolds