Author: TheAcsMan

Daily Market Update – October 30,  2015  (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:  MS, STX (puts)

Rollovers:  F

Expirations:  none

The following were ex-dividend this week:  MS (10/28 $0.15), F (10/28 $0.15), WY (10/28 $0.31), KMI (10/29 $0.51)

The following are ex-dividend next week:  INTC (11/4 $0.24)

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

Daily Market Update – October 29,  2015  (Close)

Yesterday’s stock market movements were pretty surprising.

The strength ahead of the 2 PM FOMC Statement release itself was surprising, as the pattern for nearly a year had been strength on the days leading up to the release date, particularly the day before.

This week it seemed as if all of the buying had happened in the last two days of the previous week and tentativeness had taken hold on Monday and Tuesday.

But for some reason the optimism came back and the turned on a dime at 2 PM.

At that point the market fell over 100 points as the FOMC came out with a more hawkish tone, even though it left interest rates unchanged.

It laid out the kind of thresholds that it would take as justification for a rate hike and each of the bullet points seemed as if they could be easily met by the time of the next FOMC meeting in December.

Maybe it was that relative degree of certainty and removing any reference to the uncertainty in international markets,such as China, which then gave investors some confidence.

Because just as quickly a the market turned lower at 2 PM it jumped higher about 15 minutes later, as the market made up about double what it had lost.

This morning’s pre-opening trading has some of those gains being given back, but most people would be happy with the idea of taking 3 steps back for 4 steps forward, especially if that kind of back-filling could be dome on a regular basis.

Yesterday’s gain now leaves the S&P 500 at only a 2% or so deficit from its all time high achieved in the summer, having made up about 10% of that deficit in less than a month.

That kind of rapid climb higher really does need some kind of back-filling to leave it in a reasonably stable condition and any givebacks over the next few weeks might not be the worst thing in the world.

With the FOMC now out of the way, today’s GDP may give some insight into what retail earnings are going to look like, but I would put more faith in the latter, despite the ease with which the bottom lines are manipulated.

The key to look for as the national big box retailers are getting ready to report their earnings is to look at their top line revenue numbers. Any increase in those  numbers is going to be a reflection of increased consumer spending, which itself represents about 70% of the GDP.

It’s that kind of consumer activity that would probably be the best indicator of a growing economy and the best reason for the FOMC to consider lightly tapping on the brakes.

For today my focus was restricted to this week’s expiring positions and trying to be in a position to be able to spend some money next week to open some other new positions.

It won’t be any different tomorrow.

With only a single expiring position next week, it would certainly be nice to have an opportunity to either open new positions or at least get to rollover this week’s expiring positions, in order to create the week’s income stream.

Daily Market Update – October 29,  2015  (7:30 AM)

Yesterday’s stock market movements were pretty surprising.

The strength ahead of the 2 PM FOMC Statement release itself was surprising, as the pattern for nearly a year had been strength on the days leading up to the release date, particularly the day before.

This week it seemed as if all of the buying had happened in the last two days of the previous week and tentativeness had taken hold on Monday and Tuesday.

But for some reason the optimism came back and the turned on a dime at 2 PM.

At that point the market fell over 100 points as the FOMC came out with a more hawkish tone, even though it left interest rates unchanged.

It laid out the kind of thresholds that it would take as justification for a rate hike and each of the bullet points seemed as if they could be easily met by the time of the next FOMC meeting in December.

Maybe it was that relative degree of certainty and removing any reference to the uncertainty in international markets,such as China, which then gave investors some confidence.

Because just as quickly a the market turned lower at 2 PM it jumped higher about 15 minutes later, as the market made up about double what it had lost.

This morning’s pre-opening trading has some of those gains being given back, but most people would be happy with the idea of taking 3 steps back for 4 steps forward, especially if that kind of back-filling could be dome on a regular basis.

Yesterday’s gain now leaves the S&P 500 at only a 2% or so deficit from its all time high achieved in the summer, having made up about 10% of that deficit in less than a month.

That kind of rapid climb higher really does need some kind of back-filling to leave it in a reasonably stable condition and any givebacks over the next few weeks might not be the worst thing in the world.

With the FOMC now out of the way, today’s GDP may give some insight into what retail earnings are going to look like, but I would put more faith in the latter, despite the ease with which the bottom lines are manipulated.

The key to look for as the national big box retailers are getting ready to report their earnings is to look at their top line revenue numbers. Any increase in those  numbers is going to be a reflection of increased consumer spending, which itself represents about 70% of the GDP.

It’s that kind of consumer activity that would probably be the best indicator of a growing economy and the best reason for the FOMC to consider lightly tapping on the brakes.

FOr the rest of the week my focus will most likely be restricted to this week’s expiring positions and trying to be in a position to be able to spend some money next week to open some other new positions.

With only a single expiring position next week, it would certainly be nice to have an opportunity to either open new positions or at least get to rollover this week’s expiring positions, in order to create the week’s income stream.

Daily Market Update – October 28,  2015  (Close)

Following Monday’s pretty unexciting day, yesterday wasn’t very different.

This morning’s pre-opening futures trading in advance of this afternoon’s FOMC Statement release isn’t looking any differently either, as the gains of last week are still being digested and may have given traders a reason to not do their anticipatory and celebratory buying on Monday and Tuesday, ahead of the FOMC.

No one expected the FOMC to announce a rate cute, although just a month ago, prior to the last Employment Situation Report, most of those people were getting prepared for an October rate increase and were beginning to see that increase as being a positive thing.

That all changed a month ago and the rate increase was again being viewed as a negative for markets. Those employment numbers made most traders believe that an imminent rate increase was going to be less likely.

As long as markets are still practicing that kind of mentality, you would be left to believe that at some point they would have to express their disappointment when the FOMC finally decides to act. Ultimately, though, the realization has to again be that the longer the FOMC doesn’t act, the more negative of a picture that has to be painting about the health of the nation’s economy.

That disappointment could also be expressed if the FOMC simply changed some of the nuanced wording that it uses to accompany their brief policy decision statement. Any wording that suggested that the rate increase is really coming soon, or even any expression of disappointment in the slow rate of the recovery having precluded an interest rate increase to date, could have brought out the sellers.

Or at least so I would have thought.

Those sellers have been on a break for the past 4 weeks as buyers have taken center stage and almost completely set aside the correction that had occurred.

Tomorrow will be the GDP release, and regardless of the FOMC’s decision today, especially if it offers nothing new in policy nor in content, could get people back in heightened expectation mode for an increase at the following FOMC meeting.

That game has been going on for the entirety of Janet Yellen’s tenure and it never seems to get old.

As the day developed though, it went from a nice gain heading into the FOMC Statement and then plummeted 143 points in 18 minutes immediately after the statement’s release. only to erase that loss and then add on 210 points to finish the day just slightly less than 200 points higher.

I guess traders didn’t follow my logic and respond negatively to the idea that rates could go up in December.

With a couple of new positions opened this week and a decent number of ex-dividend positions for the week, I didn’t expect to be parting with too much more money, although I did still have some interest in Seagate Technology ahead of their earnings this week and their ex-dividend date next week.

Otherwise it’s going to likely be a situation of awaiting the FOMC’s decision and hoping to get some assignments, or at the very least some rollovers of those scant 2 positions expiring this week and finally couldn’t resist expressing that interest in a tangible way.

Now that today is done, we can set our sights on the upcoming earnings from retailers and perhaps finally get some idea of what may be going on with the real drivers of the economy. A strong showing in retail could demonstrate that consumers are back and finally give some reason to look forward to 2016, not in fear of that rate increase, but rather in anticipation of growing corporate revenues for a change.

Daily Market Update – October 28,  2015  (7:00 AM)

Following Monday’s pretty unexciting day, yesterday wasn’t very different.

This morning’s pre-opening futures trading in advance of this afternoon’s FOMC Statement release isn’t looking any differently either, as the gains of last week are still being digested and may have given traders a reason to not do their anticipatory and celebratory buying on Monday and Tuesday, ahead of the FOMC.

No one expects the FOMC to announce a rate cute, although just a month ago, prior to the last Employment Situation Report, most of those people were getting prepared for an October rate increase and were beginning to see that increase as being a positive thing.

That all changed a month ago and the rate increase was again being viewed as a negative for markets. Those employment numbers made most traders believe that an imminent rate increase was going to be less likely.

As long as markets are still practicing that kind of mentality, you would be left to believe that at some point they would have to express their disappointment when the FOMC finally decides to act. Ultimately, though, the realization has to again be that the longer the FOMC doesn’t act, the more negative of a picture that has o be painting about the health of the nation’s economy.

That disappointment could also be expressed if the FOMC simply changes some of the nuanced wording that it uses to accompany their brief policy decision statement. Any wording that suggests that the rate increase is really coming soon, or even any expression of disappointment in the slow rate of the recovery having precluded an interest rate increase to date, could bring out the sellers.

They’ve been on a break for the past 4 weeks as buyers have taken center stage and almost completely set aside the correction that had occurred.

Tomorrow will be the GDP release, and regardless of the FOMC’s decision today, especially if it offers nothing new in policy nor in content, could get people back in heightened expectation mode for an increase at the following FOMC meeting.

That game has been going on for the entirety of Janet Yellen’s tenure and it never seems to get old.

With a couple of new positions opened this week and a decent number of ex-dividend positions for the week, I don’t expect to be parting with too much more money, although I may still have some interest in Seagate Technology ahead of their earnings this week and their ex-dividend date next week.

Otherwise it’s going to likely be a situation of awaiting the FOMC’s decision and hoping to get some assignments, or at the very least some rollovers of those scant 2 positions expiring this week.

When today is done, we can set our sights on the upcoming earnings from retailers and perhaps finally get some idea of what may be going on with the real drivers of the economy. A strong showing in retail could demonstrate that consumers are back and finally give some reason to look forward to 2016, not in fear of that rate increase, but rather in anticipation of growing corporate revenues for a change.

Daily Market Update – October 27,  2015  (Close)

Yesterday wasn’t very exciting and this morning looked as if it might not be any different.

What is different is that in the past few months the days preceding the FOMC meeting had been really strong market days. That’s in contrast to the situation during the final 1-2 years of the Bernanke tenure as Chairman of the Federal Reserve, when there was lots of uncertainty in advance of the FOMC Statement release and very little stomach for committing to buying stocks until the FOMC Statement would be released and would eliminate that uncertainty.

Back then, the real reactions took place after the 2 PM release, although weakness going into the release was more likely to be seen than has recently been the case.

That changed when traders began to realize that the economy’s bad news would continue to be good news for them. Now, they seem to flip flop on the meaning of anything.

At the moment, the feeling is that no news is good news.

But this week it seems that all of the party euphoria feeling and willingness to spend money all happened last Thursday and Friday when a slew of good news all hit.

Of the good news, 2 of those 3 items spoke to continuing easy money in the EU and China.

While it’s not likely that the FOMC will announce an interest rate increase tomorrow, they could really throw some ice water on last week’s rally, and perhaps the entirety of the recovery seen in October, by simply suggesting that conditions in the economy are bringing us significantly closer to the day of reckoning.

On Thursday the GDP is released and national retailers begin their turn for reporting earnings soon.

The last GDP was stronger than expected and another month’s worth of that kind of data, especially if there are also upward revisions, could upset traders, who really have no reason to be upset.

While I did spend a little bit of money yesterday, I still hade willingness to spend more, but would have really still liked to have seen some additional weakness heading into tomorrow’s FOMC Statement release.

This week will continue to be one heavy with earnings and this morning those earnings are continuing to be mixed.

The really big news on earnings would come after the close of trading today when Apple reported earnings, as it was going to be really anyone’s guess how they would report, as it would be anyone’s guess how the market would react.

What was clear was that Apple has stopped being a market leader or market barometer and this week it’s option premiums were actually not very enticing, given what seems to be more uncertainty than in the recent past.

The real surprise was that after earnings Apple was trading nearly unchanged, although a lot can still happen between this afternoon’s post-close trading and tomorrow’s opening bell.

For today, I envisioned another fairly quiet trading day, although I had an interest in capturing Ford’s dividend, as it reported earnings this morning and was ex-dividend tomorrow. With all of its weakness today, I couldn’t resist the desire to grab that dividend.

Otherwise, the rest of this week may just be a case of sitting back and joining traders and not do any more trading while we all wait for tomorrow’s FOMC.

Daily Market Update – October 27,  2015  (7:30 AM)

Yesterday wasn’t very exciting and this morning looks as if it may be no different.

What is different is that in the past few months the days preceding the FOMC meeting had been really strong market days. That’s in contrast to the situation during the final 1-2 years of the Bernanke tenure as Chairman of the Federal Reserve, when there was lots of uncertainty in advance of the FOMC Statement release and very little stomach for committing to buying stocks.

Back then, the real reactions took place after the 2 PM release, although weakness going into the release was more likely to be seen.

That changed when traders began to realize that the economy’s bad news would continue to be good news for them. Now, they seem to flip flop on the meaning of anything.

At the moment, the feeling is that no news is good news.

But this week it seems that all of the party euphoria feeling and willingness to spend money all happened last Thursday and Friday when a slew of good news all hit.

Of the good news, 2 of those 3 items spoke to continuing easy money in the EU and China.

While it’s not likely that the FOMC will announce an interest rate increase today, they could really throw some ice water on last week’s rally, and perhaps the entirety of the recovery seen in October, by simply suggesting that conditions in the economy are bringing us significantly closer to the day of reckoning.

On Thursday the GDP is released and national retailers begin their turn for reporting earnings soon.

The last GDP was stronger than expected and another month’s worth of that kind of data, especially if there are also upward revisions, could upset traders, who really have no reason to be upset.

While I did spend a little bit of money yesterday, I do have willingness to spend more, but would really still like to see some additional weakness heading into tomorrow’s FOMC Statement release.

This week will continue to be one heavy with earnings and this morning those earnings are continuing to be mixed.

The really big news on earnings will come after the close of trading today when Apple reports and it’s really anyone’s guess how they will report, as it is anyone’s guess how the market will react.

What is clear is that Apple has stopped being a market leader or market barometer and this week it’s option premiums were actually not very enticing, given what seems to be more uncertainty than in the recent past.

For today, I envision another fairly quiet trading day, although there may be some interest in capturing Ford’s dividend, as it reported earnings this morning and is ex-dividend tomorrow.

Otherwise, it may just be a case of sitting back and joining traders and not do any trading while we all wait for tomorrow.

Daily Market Update – October 26,  2015  (Close)

The final 2 days of last week put a real nail in Volatility’s coffin for now, as it got to see daylight for only a very short time.

I had enjoyed its brief return and wouldn’t mind seeing an encore, especially after having had some assignments last week and cash in hand for re-investment, if the prices are right.

With still lots more earnings reports to come, it’s hard to imagine that this week will provide the same kind of fertile ground for the market as was the case last week.

Last week we had gifts from the ECB and the People’s Bank of China, in addition to really great earnings from a trio of companies that could conceivably reflect what’s going on in a big portion of the economy.

But other than those three, albeit very important companies, there hasn’t been too much to get excited about.

If you’re the kind that looks at bad earnings news as being the sort of thing that delays an interest rate hike you would be happy, so the news from that trio may put a damper on things a thought now turns to what the FOMC will do this week as it meets and releases its Statement on Wednesday.

More likely than the FOMC actually doing anything, though, is it saying something. It may take note of improving conditions in China and more likely, signs of a recovering consumer led economy in the United States.

Until then, though, we still have half of the trading week to figure out where things were going.

The rally of last week on Thursday and Friday have altered my position that we would see a rally heading into the FOMC Statement release, in anticipation of no real policy change coming from the FOMC.

This morning’s futures pointed to a much more tentative investing environment and that’s just what the day ended up being.

With a nice amount of cash raised from last week’s assignments, I still wouldn’t mind opening some new positions, after today’s single purchase, especially since there were none expiring this week and only 2 ex-dividend positions to generate income flow.

As in past weeks I’m mostly inclined to do so in the face of some declining prices. Lately the market has been good about doing that as the week has opened.

In the past few weeks even a flat opening may have seemed a little bit of an invitation, but following the rapid surges of last week, I think I want to see some more being given back before committing much in the way of new funds.

The S&P 500 is now barely 3% lower from its all time highs after having dropped almost 12 %.

That’s a pretty sizeable gain in less than a single month, so I may want to sit on cash a little bit more than has been the case the past few weeks.

With the market pointing toward a flat open to begin the week I’ll probably be more tentative than I usually like being, but I do like having some more cash in hand than has been the case for quite a while and don’t want to get deep in the hole again so quickly, particularly as a single word change in an otherwise dry tome put out by the FOMC can dash the entire party very quickly.

Daily Market Update – October 26,  2015  (7:00 AM)

The final 2 days of last week put a real nail in Volatility’s coffin for now, as it got to see daylight for only a very short time.

I had enjoyed its brief return and wouldn’t mind seeing an encore, especially after having had some assignments last week and cash in hand for re-investment, if the prices are right.

With still lots more earnings reports to come, it’s hard to imagine that this week will provide the same kind of fertile ground for the market as was the case last week.

Last week we had gifts from the ECB and the People’s Bank of China, in addition to really great earnings from a trio of companies that could conceivably reflect what’s going on in a big portion of the economy.

But other than those three, albeit very important companies, there hasn’t been too much to get excited about.

If you’re the kind that looks at bad earnings news as being the sort of thing that delays an interest rate hike you would be happy, so the news from that trio may put a damper on things a thought now turns to what the FOMC will do this week as it meets and releases its Statement on Wednesday.

More likely than the FOMC actually doing anything, though, is it saying something. It may take note of improving conditions in China and more likely, signs of a recovering consumer led economy in the United States.

Until then, though, we still have half of the trading week to figure out where things were going.

The rally of last week on Thursday and Friday have altered my position that we would see a rally heading into the FOMC Statement release, in anticipation of no real policy change coming from the FOMC.

This morning’s futures point to a much more tentative investing environment.

With a nice amount of cash raised from last week’s assignments, I wouldn’t mind opening some new positions, especially since there are none expiring this week and only 2 ex-dividend positions to generate income flow.

As in past weeks I’m mostly inclined to do so in the face of some declining prices. Lately the market has been good about doing that as the week has opened.

In the past few weeks even a flat opening may have seemed a little bit of an invitation, but following the rapid surges of last week, I think I want to see some more being given back before committing much in the way of new funds.

The S&P 500 is now barely 3% lower from its all time highs after having dropped almost 12 %.

That’s a pretty sizeable gain in less than a single month, so I may want to sit on cash a little bit more than has been the case the past few weeks.

With the market pointing toward a flat open to begin the week I’ll probably be more tentative than I usually like being, but I do like having some more cash in hand than has been the case for quite a while and don’t want to get deep in the hole again so quickly, particularly as a single word change in an otherwise dry tome put out by the FOMC can dash the entire party very quickly.