Author: TheAcsMan

Daily Market Update – May 22, 2015  (9:30 AM)

The Week in Review will be posted by 6 PM tonight and the Weekend Update will be posted by Noon on Monday.

The following trade outcomes are possible today:

Assignments:   none

Rollovers:  GDX, TWTR (puts)

Expirations:   KMI, UAL

The following were ex-dividend this week: MRO (5/17 $0.21), CVC (5/20 $0.15), MAT (5/20 $0.38)

The following are ex-dividend next week: LXK (5/27 $0.36), RIG (5/27 $0.15)

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

Daily Market Update – May 21, 2015  (Close)

The market seems to be reflecting the fact that the biggest story of the week is that it marked the final episode of the David Letterman era on late night television.

This morning is another in a series of quiet early morning starts in a week that doesn’t have very much news, although there may be some spillover as the concept of official government GDP numbers having been wrong begins to really sink in.

The quiet mornings of the past week have also been reflected in this week’s personal trading activity. The market hasn’t done too much to make tomorrow look as if it will be overly active one on a personal level, as the weakness has made those rollovers and assignments look less and less likely.

Yesterday’s release of the FOMC minutes gave the impression that interest rate hikes were not going to be likely in June, as the members of the FOMC repeatedly emphasized their dependence on data.

This week is likely to continue being a quiet one, unless some more news related to the quality of economic data comes in.

While the reading of those minutes gave stock market bulls some reason to believe that the rally could continue, the reality is that all of those words that were being said were all being said in the context of believing the data that was in front of them.

Any further insight into what the data really is, especially if it does indicate more substantial growth than the disappointing numbers we had been receiving, could easily get the FOMC to take an action that is completely counter to what they had been intending.

You certainly couldn’t blame them for that.

If so, that would certainly put the brakes on any continuing climb beyond 2120 on the S&P 500.

With next week being a holiday shortened week I’m still undecided as to what tactic to take. Much of that indecision is based upon not knowing whether the week’s final 2 days would bring any opportunity to create income or see cash reserves get replenished, as those prospects were seemingly less likely before Thursday’s session got underway.

I would have loved to have seen some nice, albeit totally unexpected advance today to be able to get those expiring positions into better condition for either rollovers or assignments, but it really didn’t require that kind of move to at least get some trades done today.

Although the early pre-open trading wasn’t giving any indication of that being the case, there was at least still some hope for some of the positions to be put into action before Friday’s final bell. Today offered some chance for rolling over a few positions taking some advantage of their price stability today and to close out the single new position opened this week.

That created some income and brought the cash reserves to where the week started. That makes it a little easier to deal with tomorrow’s market, regardless of what direction it takes.

If conventional wisdom holds, there’s not much reason to overl
y commit to the long side ahead of a long weekend, but at least the ability to secure today’s trades makes it less of a hostage situation.

Still, while not committing to long positions over a long weekend is the logical expectation, there hasn’t been too much of that over the past couple of years, as some of the best Friday’s have come either going into long weekends or weekends of great uncertainty.

So I’ll remain hopeful and watchful as the hours tick down to Friday’s closing bell.

Daily Market Update – May 21, 2015  (9:15 AM)

The market seems to be reflecting the fact that the biggest story of the week is that it marked the final episode of the David Letterman era on late night television.

This morning is another in a series of quiet early morning starts in a week that doesn’t have very much news, although there may be some spillover as the concept of official government GDP numbers having been wrong begins to really sink in.

The quiet mornings of the past week have also been reflected in this week’s personal trading activity. The market hasn’t done too much to make tomorrow look as if it will be overly active one on a personal level, as the weakness has made those rollovers and assignments look less and less likely.

Yesterday’s release of the FOMC minutes gave the impression that interest rate hikes were not going to be likely in June, as the members of the FOMC repeatedly emphasized their dependence on data.

This week is likely to continue being a quiet one, unless some more news related to the quality of economic data comes in.

While the reading of those minutes gave stock market bulls some reason to believe that the rally could continue, the reality is that all of those words that were being said were all being said in the context of believing the data that was in front of them.

Any further insight into what the data really is, especially if it does indicate more substantial growth than the disappointing numbers we had been receiving, could easily get the FOMC to take an action that is completely counter to what they had been intending.

You certainly couldn’t blame them for that.

If so, that would certainly put the brakes on any continuing climb beyond 2120 on the S&P 500.

With next week being a holiday shortened week I’m still undecided as to what tactic to take. Much of that indecision is based upon not knowing whether the next 2 days will bring any opportunity to create income or see cash reserves get replenished, as those prospects are seemingly less likely.

I would love to see some nice, albeit totally unexpected advance today to be able to get those expiring positions into better condition for either rollovers or assignments.

Although the early pre-open trading isn’t giving any indication of that being the case, there is at least still some hope for some of the positions to be put into action before Friday’s final bell.

But if conventional wisdom holds, there’s not much reason to overly commit to the long side ahead of a long weekend.

That’s the logical expectation, but there hasn’t been too much of that over the past couple of years, as some of the best Friday’s have come either going into long weekends or weekends of great uncertainty.

So I’ll remain hopeful and watchful as the hours tick down to Friday’s closing bell.

Daily Market Update – May 20, 2015  (Close)

Yesterday, the US market didn’t match the enthusiasm seen in overseas markets.

We were greeted with the news yesterday morning that Wal-Mart was disappointing on earnings, while Home Depot had turned in a good quarter.

Those bits of information then served to lead people to try and explain what it meant when the lower end on the retail spectrum struggled, yet when the source for home improvement projects and construction was doing well.

Now that all of those analyses have been done and all of those opinions have been delivered, the morning comes the news that Target did better than expected and Lowes did not.

So rather than Tuesday’s results being some reflection of how various segments of the US economy are doing and how various demographic classes are doing, this morning’s results may suggest that it’s just a question of how one company is doing as compared to another company.

Sometimes results don’t necessarily belie anything more deep than the numbers.

If looking for more deep meaning, that might have come as FOMC Minutes were to be released later in today’s session..

While those documents shouldn’t directly move markets, after all, we already know the policy outcomes from those meetings, they can give more insight into the nuanced words used in the various speeches and presentations made by FOMC Governors as they do on a regular basis.

What we ended up learning when the minutes were finally released was that it was unlikely that interest rates would be increased at the next meeting in just a few weeks.

That wasn’t the kind of surprise that anyone was looking for, so the market yawned at the news, but would certainly do otherwise if caught off guard next month.

Yesterday’s market flatness looked as if it was extending into another day and today did nothing at any point in the day to cast doubt. That makes it a little more challenging to reach those assignments or rollovers that I had my heart set on.

However, last week, at this same time, there wasn’t too much reason for optimism, but you just never know where one single day will take you. This morning’s flat futures trading could end up with just about any kind of market opening that can be imagined, so there’s not too much reason to give up hope of anything worthwhile happening today or during the following 2 days.

If not today, then maybe tomorrow has to be the mantra.

As the market still stays around that 2120 level on the S&P 500 that technicians believe is a critical level, there’s not too much reason to get overly committed in one direction or another. While it can be a launching point to go much higher, it can also be the resistance point that leads to some kind of overdue correction, as even the mini-corrections that we had been seeing for the past few years, are now due.

For now the market seems equivocal and so am I.

At this point of the week as the monthly option cycle is just beginning and as we get ready for a holiday shortened week to follow, my sights are set on trying to generate some income this week and having some cash reserves left in order to take advantage of any opportunities that may present next week.

Daily Market Update – May 20, 2015  (8:30 AM)

Yesterday, the US market didn’t match the enthusiasm seen in overseas markets.

We were greeted with the news yesterday morning that Wal-Mart was disappointing on earnings, while Home Depot had turned in a good quarter.

Those bits of information then served to lead people to try and explain what it meant when the lower end on the retail spectrum struggled, yet when the source for home improvement projects and construction was doing well.

Now that all of those analyses have been done and all of those opinions have been delivered, the morning comes the news that Target did better than expected and Lowes did not.

So rather than Tuesday’s results being some reflection of how various segments of the US economy are doing and how various demographic classes are doing, this morning’s results may suggest that it’s just a question of how one company is doing as compared to another company.

Sometimes results don’t necessarily belie anything more deep than the numbers.

If looking for more deep meaning, that may come as FOMC Minutes are released later today.

While those documents shouldn’t directly move markets, after all, we already know the policy outcomes from those meetings, they can give more insight into the nuanced words used in the various speeches and presentations made by FOMC Governors as they do on a regular basis.

Yesterday’s market flatness looks as if it is extending into another day. That makes it a little more challenging to reach those assignments or rollovers that I had my heart set on.

However, last week, at this same time, there wasn’t too much reason for optimism, but you just never know where one single day will take you. This morning’s flat futures trading could end up with just about any kind of market opening that can be imagined, so there’s not too much reason to give up hope of anything worthwhile happening today or during the following 2 days.

As the market still stays around that 2120 level on the S&P 500 that technicians believe is a critical level, there’s not too much reason to get overly committed in one direction or another. While it can be a launching point to go much higher, it can also be the resistance point that leads to some kind of overdue correction, as even the mini-corrections that we had been seeing for the past few years, are now due.

For now the market seems equivocal and so am I.

At this point of the week as the monthly option cycle is just beginning and as we get ready for a holiday shortened week to follow, my sights are set on trying to generate some income this week and having some cash reserves left in order to take advantage of any opportunities that may present next week.

.

.

Daily Market Update – May 19, 2015  (Close)

With markets all around the world up strongly overnight and with our own markets hitting all time highs to start the week, the expectation has to be for a strong day today as trading begins in US markets.

While the pre-opening futures are higher, they are only modestly up, though, so that enthusiasm heard around the world isn’t necessarily making a big splash on our shores. Still, enthusiasm has a way of getting magnified or waning as you move further from the source, so it was only a case of waiting to see what may add to or detract to the mood felt everywhere else heading into this morning.

As it would turn out, it was a day for yet another new closing record in the DJIA, but not for the S&P 500, nor the NASDAQ.

That alone should tell you that whatever gain may have been see in the DJIA that it wasn’t very impressive.

And it wasn’t.

Early morning disappointing retail sales from Wal-Mart didn’t appear to be throwing cold water onto that early party, but maybe it was the beat at Home Depot that was offsetting yet another in a series of retail disappointments.

As the major national retailers are almost done with reporting their earnings the next shoe to drop, literally or figuratively, may be the more specialty retailers. Those earnings reports are now starting to come in and those, too, are looking like disappointments may be in store.

However, before getting too critical about any of that, there’s always the realization that we are sitting at all time highs and markets are setting up for the next earnings season with lowered expectations, but with currency exchange rates not as bad as had been expected and buy backs continuing and even expanded.

If looking for catalysts, those are a powerful one-two punch, but may have to wait for nearly another two months before they come into play.

In the interim it’s still likely to focus on expectations for interest rate increases and their timing.

Tomorrow;s release of FOMC Minutes may give some insights into the thought processes and who is influential in shaping that process. Identifying the key players then puts increasing focus on them and their words as the FOMC Governors make their rounds and give speeches, as they all do on a regular basis.

With just a single purchase yesterday, I would love to see it get assigned early after today’s close and would happily give up the dividend in order to see it wind up being a 2 day trade with a nearly 2% ROI. Normally, I would expect a high degree of likelihood of that being the case, even with nearly a full month of time remaining on the contract, since it is so deep in the money. However, with an upcoming shareholder’s meeting it is possible that some option buyers are expecting something of substance to occur, although there are no substantive items on the agenda.

Otherwise, I think I’d like to hold onto and preserve my cash reserves.

I might feel otherwise if believing that those pos
itions set to expire this week had a greater chance of themselves being assigned.

Right now, however, the more reasonable hope is that most get a chance to get rolled over, so I’m not counting on too much money getting recycled from new assignments.

Still, there’s rarely a day when there’s not some opportunity to stray from the script. Sometimes it’s just a question of controlling those impulses and thinking about consequences or just thinking about a couple of steps ahead.

Sitting at all time highs the bulls would much rather have seen an explosive or decisive move higher above what had been resistance. So far, that’s not happening. Other bulls would take comfort in some kind of base being built at this level.

I’m agnostic on both of those and just want to be shown what is going on and not what may be going on. before thinking about straying from the script.

Today did nothing to demonstrate where the path was leading. Maybe that will have to wait until at least tomorrow.

.

Daily Market Update – May 19, 2015  (8:30 AM)

With markets all around the world up strongly overnight and with our own markets hitting all time highs to start the week, the expectation has to be for a strong day today as trading begins in US markets.

While the pre-opening futures are higher, they are only modestly up, though, so that enthusiasm heard around the world isn’t necessarily making a big splash on our shores. Still, enthusiasm has a way of getting magnified or waning as you move further from the source, so we’ll see what may add to or detract to the mood felt everywhere else heading into this morning.

Disappointing retail sales from Wal-Mart don’t appear to be throwing cold water onto that early party, but maybe the beat at Home Depot is offsetting yet another in a series of retail disappointments.

As the major national retailers are almost done with reporting their earnings the next shoe to drop, literally or figuratively, may be the more specialty retailers. Those earnings reports are now starting to come in and those, too, are looking like disappointments may be in store.

However, before getting too critical about any of that, there’s always the realization that we are sitting at all time highs and markets are setting up for the next earnings season with lowered expectations, but with currency exchange rates not as bad as had been expected and buy backs continuing and even expanded.

If looking for catalysts, those are a powerful one-two punch, but may have to wait for nearly another two months before they come into play.

In the interim it’s still likely to focus on expectations for interest rate increases and their timing.

Tomorrow;s release of FOMC Minutes may give some insights into the thought processes and who is influential in shaping that process. Identifying the key players then puts increasing focus on them and their words as the FOMC Governors make their rounds and give speeches, as they all do on a regular basis.

With just a single purchase yesterday, I would love to see it get assigned early after today’s close and would happily give up the dividend in order to see it wind up being a 2 day trade with a nearly 2% ROI. Normally, I would expect a high degree of likelihood of that being the case, even with nearly a full month of time relmaining on the contract, since it is so deep in the money. However, with an upcoming shareholder’s meeting it is possible that some option buyers are expecting something of substance to occur, although there are no substantive items on the agenda.

Otherwise, I think I’d like to hold onto and preserve my cash reserves.

I might feel otherwise if believing that those positions set to expire this week had a greater chance of themselves being assigned.

Right now, however, the more reasonable hope is that most get a chance to get rolled over, so I’m not counting on too much money getting recycled from new assignments.

Still, there’s rarely a day when there’s not some opportunity to stray from the script. Sometimes it’s just a question of controlling those impulses and thinking about consequences or just thinking about a couple of steps ahead.

Sitting at all time highs the bulls would much rather have seen an explosive or decisive move higher above what had been resistance. So far, that’s not happening. Other bulls would take comfort in some kind of base being built at this level.

I’m agnostic on both of those and just want to be shown what is going on and not what may be going on. before thinking about straying from the script.

.

Daily Market Update – May 18, 2015  (Close)

Closing at another new high and having some more cash to spend following some assignments creates some conflict.

Market technicians have been looking at the 2120 level on the S&P 500 as a “make it or break it” kind of level.

There’s nothing really newsworthy about that as the 2019 level had been the previous closing record high and there’s enough historical basis to realize that when  you get to those kind of levels it represents either a resistance point or a point of support.

Anyone’s guess is as good as anyone else’s as to whether the 2120 level leads us even higher or is a place to consolidate some gains, which is something that is about due right now, even if only on the basis of time.

Time has been the best indicator of where the market is going, as nearly every 2 months there has been a pause and some mini-correction taking place. The last of those was in March and here we are in May.

With much of the important earnings having now been reported, it’s going to be a fairly quiet week in that regard. However, there are some big retailers still to report this week, such as Wal-Mart and Home Depot which can say things about very different portions of the economy and can have an impact beyond their own shares.

Otherwise, there’s not too much going on, although there will be a release of previous FOMC Meeting Minutes, so that people can dissect some of the dynamics going on during those meetings, but that information should be far too dated to have any kind of impact.

What the week does have is a number of FOMC Governors speaking, including Stanley Fischer on Thursday and Janet Yellen on Friday.

While the market is likely to respond more to what Janet Yellen may say, I think the more interesting words may come from Fischer. That’s because he was widely perceived as an influential hawk on interest rates and he’s now looking at a data driven committee that doesn’t seem to have the data to suggest that there’s a reason to start increasing rates.

With more cash on hand after a few assignments last week and already having a number of positions set to expire this week and the market at a new high, I don’t have strong reason to look for spending opportunities.

I would like to be able to see chances to whittle down the number of uncovered positions, even if using some longer term expiration dates. While normally not too fond of those when volatility is so low, at the moment I also look at those longer time frames as offering some additional time to recover in the event of a near term decline in the market.

For some positions that have already been waiting quite a while and haven’t been generating much in the way of income, what’s another few months?

As the pre-opening futures were mildly lower as the week was about to begin, that’s was signal to just sit back and watch whether there are any waves and in what directions they may be going, before deciding to get too wet.

Today turned out to be mostly a day of calm. Somehow the market was able to slowly work its way higher and it began the week exactly the way it ended the previous week, by setting new all time closing highs.

Note: For
those purchasing shares of Cablevision, I decided to try and sell, what I hope will be deep in the money calls as shares are set to go ex-dividend on Wednesday. I’d like to see those shares get assigned early in order for the option buyer to capture the dividend.

In exchange, the trade, which would then only be of 2 day’s duration would have an ROI of about 1.9% and with little associated risk.

If it works out that way the only question remaining would be “why can’t there be more of those?”

Daily Market Update – May 18, 2015  (7:30 AM)

Closing at another new high and having some more cash to spend following some assignments creates some conflict.

Market technicians have been looking at the 2120 level on the S&P 500 as a “make it or break it” kind of level.

There’s nothing really newsworthy about that as the 2019 level had been the previous closing record high and there’s enough historical basis to realize that when  you get to those kind of levels it represents either a resistance point or a point of support.

Anyone’s guess is as good as anyone else’s as to whether the 2120 level leads us even higher or is a place to consolidate some gains, which is something that is about due right now, even if only on the basis of time.

Time has been the best indicator of where the market is going, as nearly every 2 months there has been a pause and some mini-correction taking place. The last of those was in March and here we are in May.

With much of the important earnings having now been reported, it’s going to be a fairly quiet week in that regard. However, there are some big retailers still to report this week, such as Wal-Mart and Home Depot which can say things about very different portions of the economy and can have an impact beyond their own shares.

Otherwise, there’s not too much going on, although there will be a release of previous FOMC Meeting Minutes, so that people can dissect some of the dynamics going on during those meetings, but that information should be far too dated to have any kind of impact.

What the week does have is a number of FOMC Governors speaking, including Stanley Fischer on Thursday and Janet Yellen on Friday.

While the market is likely to respond more to what Janet Yellen may say, I think the more interesting words may come from Fischer. That’s because he was widely perceived as an influential hawk on interest rates and he’s now looking at a data driven committee that doesn’t seem to have the data to suggest that there’s a reason to start increasing rates.

With more cash on hand after a few assignments last week and already having a number of positions set to expire this week and the market at a new high, I don’t have strong reason to look for spending opportunities.

I would like to be able to see chances to whittle down the number of uncovered positions, even if using some longer term expiration dates. While normally not too fond of those when volatility is so low, at the moment I also look at those longer time frames as offering some additional time to recover in the event of a near term decline in the market.

For some positions that have already been waiting quite a while and haven’t been generating much in the way of income, what’s another few months?

As the pre-opening futures is mildly lower as the week is about to begin, that’s a signal to just sit back and watch whether there are any waves and in what directions they may be going, before deciding to get too wet.