Category: Daily Market Update

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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Daily Market Update – September 15, 2016 (7:30 AM)

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 looks as if it may be much of the same as we draw 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.
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 today, I’d gladly take them, rather than waiting for the added uncertainty that tomorrow might bring.

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Daily Market Update – September 14, 2016 (Close)

Yesterday wasted Monday’s great recovery, as investors once again showed just how much they don’t like the idea of an interest rate hike next week.

There was nothing redeeming about yesterday’s trading and there was really no news to have supported the kind of reaction the market had.

We’re now in the quiet period one week ahead of the FOMC meeting, where members seem divided as does opinion.

While everyone is focused on deciding whether the interest rate hike will come in September or December, what is forgotten is that the FOMC has said that such an increase could come at a time other than a regularly scheduled meeting.

That would really take people by surprise, but it would get us over this really insignificant decision by the FOMC, at least as far as investing goes.

A 0.25% increase in rates isn’t likely to divert too much money away into some other kind of investment, as offering a better reward for risk.

Meanwhile, an increasing interest rate environment would reflect a growing economy and stock prices are traditionally based on earnings, so that can’t be a bad thing.

Investors must have spent the day mulling all of this over, because it certainly didn’t spend the day making trades.

There wasn’t too much movement today, but for a little while it did look as if the market might just eke out a gain.

It didn’t.

With a number of positions expiring this week, I still hope that there’s some rebound over the next few days so that those positions can be in play for either rollover or assignment.

Either would suit me just fine at this point.

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Daily Market Update – September 14, 2016 (7:30 AM)

Yesterday wasted Monday’s great recovery, as investors once again showed just how much they don’t like the idea of an interest rate hike next week.

There was nothing redeeming about yesterday’s trading and there was really no news to have supported the kind of reaction the market had.

We’re now in the quiet period one week ahead of the FOMC meeting, where members seem divided as does opinion.

While everyone is focused on deciding whether the interest rate hike will come in September or December, what is forgotten is that the FOMC has said that such an increase could come at a time other than a regularly scheduled meeting.

That would really take people by surprise, but it would get us over this really insignificant decision by the FOMC, at least as far as investing goes.

A 0.25% increase in rates isn’t likely to divert too much money away into some other kind of investment, as offering a better reward for risk.

Meanwhile, an increasing interest rate environment would reflect a growing economy and stock prices are traditionally based on earnings, so that can’t be a bad thing.

With a number of positions expiring this week, I hope that there’s some rebound over the next few days so that those positions can be in play for either rollover or assignment.

Either would suit me just fine at this point.

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Daily Market Update – September 13, 2016 (Close)

Yesterday had a very impressive recovery from what was looking as if it was going to be a big opening plunge for the markets.

With 3 Federal reserve Governors speaking, the market improved with each, as there was an increasingly dovish tone, particularly with the final pronouncement.

That came from someone who doesn’t take center stage very often and her dovish words really sent the market much, much higher.

Obviously, the market’s reaction is similar to those who like the idea of nuclear power plants, but not in their backyard.

The market has said that it likes the idea of a small interest rate increase, but now right now, please.

This morning’s futures were again pointing much lower, but there is now a blackout period for the Federal Reserve members and despite yesterday’s hero reinforcing her beliefs today, the market wasn’t buying it or anything else today.

Now, Federal reserve Governors and Presidents can’t say anything in public until after next Wednesday’s FOMC meeting.

Today was another sell off on interest rate fears and it brought us right back to where Friday had left us.

I did make one trade yesterday, going back to that old friend Marathon Oil, but oil continued its deep slide today.

The energy sector, like stocks, had a nice reversal yesterday, but it didn’t last very long, as it started that way as soon as eyes were being opened and it never got any better, unlike yesterday.

I still hold out some hope for selling calls on uncovered positions, but my real hope for the week is to have some assignments and some rollovers.

I’d love the idea of adding to cash reserves right now, just as I like the idea of generating some more revenue to go along with all of this week’s ex-dividend positions.

My guess was that today wouldn’t be the day to do much of anything.

Being right about that brings no solace, though.

And like last week, I wonder if there will be much opportunity for the rest of this week, as everyone will be focused on the following week’s FOMC.

Including me, I think.

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Daily Market Update – September 13, 2016 (8:30 AM)

Yesterday had a very impressive recovery from what was looking as if it was going to be a big opening plunge for the markets.

With 3 Federal reserve Governors speaking, the market improved with each, as there was an increasingly dovish tone, particularly with the final pronouncement.

That came from someone who doesn’t take center stage very often and her dovish words really sent the market much, much higher.

Obviously, the market’s reaction is similar to those who like the idea of nuclear power plants, but not in their backyard.

The market has said that it liokes the idea of a small interest rate increase, but now right now, please.

This morning’s futures are again pointing much lower, but there is now a blackout period for the Federal Reserve members.

They can’t say anything in public until after next Wednesday’s FOMC meeting.

I did make one trade yesterday, going back to that old friend Marathon Oil.

The energy sector, like stocks, had a nice reversal yesterday.

They’ll need the same thing today, because the futures has them down sharply, as well.

I still hold out some hope for selling calls on uncovered positions, but my real hope for the week is to have some assignments and some rollovers.

I’d love the idea of adding to cash reserves right now, just as I like the idea of generating some more revenue to go along with all of this week’s ex-dividend positions.

My guess is that today won’t be the day to do much of anything.

And like last week, I wonder if there will be much opportunity for the rest of this week, as everyone will be focused on the following week’s FOMC.

Including me, I think.

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