Category: Daily Market Update

Daily Market Update – July 19, 2016 (7:30 AM)

Yesterday the market traded in a very tight range after hitting high after high last week.

But still, it was yet another new record closing high to start the week.

Earnings continued coming in and at least they haven’t been stinking up the place.

As opposed to previous quarters when expectations were very low, this quarter the expectations have been for some better performance, but so far what has helped is that there hasn’t been much in the way of disappointing guidance, particularly from overseas operations or businesses.

The earnings march continues today and for the next 3 weeks or so and really finds itself culminating with retailers reporting.

None of what happens between now and next week’s FOMC Statement release is likely to have the ability to move the needle on interest rates, but at least there’s been a slow down in mediocrity.

With the opening of a new position yesterday, I still have some cash that I’m willing to spend this week, but I’m still not ready to make too much of a commitment at these levels.

I don’t mind playing the same game week after week with a single oil position, but too many stocks have gone up to feel very comfortable about opening other new positions until the market digests some of these gains.

Maybe the way this run higher is going to do that is by simply slowing the rate of rise down, but that’s not a very common way of doing things.

Markets tend to not know moderation as so much of the moves are fueled by speculation, fear and whatever other emotions can be harnessed at any moment in time.

With 2 positions set to expire this week in the same company, I wouldn’t mind being able to close one of them out with an assignment and despite upcoming earnings in Marathon Oil, I wouldn’t mind re-opening a position in the event of assignment of shares or the expiration of the short puts.

In the meantime, I’ll hope to continue watching some climb in asset value as 2016 continues to be a good year, despite having had so few trades.

As there are moves higher, I do hope to sell more calls on uncovered position, but am a little torn between selling shorter term options and the hope for assignment or going longer term to boost the ROI in the hope that I won’t miss the opportunity to have the assignments happen at some future date.

Daily Market Update – July 18, 2016 (Close)

There’s very little economic news this week as were getting ready to see whether all of last week’s multiple new highs would have legs.

The following week we do have an FOMC Statement release, but at this point, no one is yet talking about the possibility of an increase in the same way as was the case in the 2 weeks preceding the June 2016 meeting.

That may change, but it’s not too clear where the change would be coming from at this point.

In the meantime there are no shortage of earnings reports this week and it will be interesting to see if some of the positive tone set by the financials will continue this week or whether anyone will dare to get pessimistic because of Brexit.

So far, this week’s important earnings haven’t put a damper on things and the last time I looked, Netflix was about as important as Facebook in the big picture.

Today, despite trading in a very narrow range all day long, did manage to add to the gains of last week and inched us a bit more high.

With a number of assignments last week I do have more freed up cash to use than has been the case for quite some time, but sitting at all time highs it isn’t easy to just plow it right back into the market.

With one expiring position and one ex-dividend position, I would like to generate some more income on the week, so my inclination is to spend some of that money.

And I did that today in the same way as has been the case in about 7 of the past weeks over the past 3 months, or so.

Since I wouldn’t mind just repeating the trade that has worked for the past months, I was anxious to take advantage of some decline in the price of oil this morning, but otherwise, I didn’t expect to go on anything resembling a spending spree.

When at new highs it’s really anyone’s guess as to whether there will be a breakout even higher or saner minds take over and take profits.

Human nature often misses the opportunity to take profits because of that basic optimism that leads to greed.

I’m as greedy as the next person, but I do like to book profits, whether they’re in the form of share appreciation or lots of dividends and option premiums.

With money in hand and with futures pointing to a quiet morning, l took my cue from whatever it was that was to unfold and had no other great expectations for the morning or maybe not even for the week.

I certainly don’t mind accumulating some cash, but do mind the possibility of missing any developing or further developing opportunities.

Hopefully today’s trade will find a way of adding to that revenue for at least this week and maybe beyond.

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

There’s very little economic news this week as we get ready to see whether all of last week’s multiple new highs have legs.

The following week we do have an FOMC Statement release, but at this point, no one is yet talking about the possibility of an increase in the same way as was the case in the 2 weeks preceding the June 2016 meeting.

In the meantime there are no shortage of earnings reports this week and it will be interesting to see if some of the positive tone set by the financials will continue this week or whether anyone will dare to get pessimistic because of Brexit.

With a number of assignments last week I have more freed up cash to use than has been the case for quite some time, but sitting at all time highs it isn’t easy to just plow it right back into the market.

With one expiring position and one ex-dividend position, I would like to generate some more income on the week, so my inclination is to spend some of that money.

I wouldn’t mind just repeating the trade that has worked for the past month or two if there is some decline in the price of oil this morning, but otherwise, I don’t expect to go on anything resembling a spending spree.

When at new highs it’s really anyone’s guess as to whether there will be a breakout even higher or saner minds take over and take profits.

Human nature often misses the opportunity to take profits because of that basic optimism that leads to greed.

I’m as greedy as the next person, but I do like to book profits, whether they’re in the form of share appreciation or lots of dividends and option premiums.

With money in hand and with futures pointing to a quiet morning, I’ll take my cue from whatever it is that unfolds and have no other great expectations for the morning or maybe not even for the week.

I certainly don’t mind accumulating some cash, but do mind the possibility of missing any developing or further developing opportunities.

Daily Market Update – July 15, 2016 (8:45 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:  CSCO, CY

Rollovers:   IP

Expirations:  M, MRO (puts), WY

The following were ex-dividend this week:  none

The following are ex-dividend next week:  FAST (7/22 $0.30)

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

Daily Market Update – July 14, 2016 (Close)

This morning’s futures trading was suggesting that maybe a blowout could be in the cards.

It wasn’t really a blowout kind of day today, but the day’s gains just added more and more to the new closing record.

I would have liked more than a single day’s respite before continuing the climb higher, as would most technicians, although who’s going to say no to more gains, unless you’re just out and out short on stocks.

Although if you’re buying stocks now and there is a blowout in store, as long as you can recognize that those blowouts don’t usually end well for those climbing aboard, then the blowout can be a good thing.

As long as you jump off soon enough.

Even as the morning’s gains were pared by almost half heading into the opening bell, the DJIA futures were pointing another 100 points higher and by the close it did even better than that.

The decline in the increase came as the Bank of England didn’t lower interest rates, however, it did hint that it would introduce some more easing in August.

In the meantime, the preliminary numbers from JP Morgan were good, although there has not yet been the opportunity to hear their forecasts of a British-less European Union.

For my part, heading into the close of the option cycle, the gains are good.

With some gains today I wanted to look at any opportunity of selling calls on uncovered positions, particularly as earnings loomed, but was just happy to sit and watch.

I wouldn’t mind extending ownership of those positions through the use of longer term options to avoid any earnings risk and to perhaps get another dividend or two out of some of those positions.

In the meantime, there are still some more Federal Reserve Governors set to speak, although the market hasn’t been paying too much attention.

That may be a good thing and maybe would drive them back a bit into the shadows, but that’s not likely to happen once you’ve gotten a taste of the attention.

Daily Market Update – July 14, 2016 (8:00 AM)

This morning’s futures trading was suggesting that maybe a blowout could be in the cards.

I would have liked more than a single day’s respite before continuing the climb higher, as would most technicians.

Although if you’re buying stocks now and there is a blowout in store, as long as you can recognize that those blowouts don’t usually end well for those climbing aboard, then the blowout can be a good thing.

As long as you jump off soon enough.

Even as the morning’s gains were pared by almost half heading into the opening bell, the DJIA futures were pointing another 100 points higher.

The decline in the increase came as the Bank of England didn’t lower interest rates, however, it did hint that it would introduce some more easing in August.

In the meantime, the preliminary numbers from JP Morgan were good, although there has not yet been the opportunity to hear their forecasts of a British-less European Union.

For my part, heading into the close of the option cycle, the gains are good.

With some gains today I may want to look at any opportunity of selling calls on uncovered positions, particularly as earnings loom.

I wouldn’t mind extending ownership of those positions through the use of longer term options to avoid any earnings risk and to perhaps get another dividend or two out of some of those positions.

In the meantime, there are still some more Federal Reserve Governors set to speak, although the market hasn’t been paying too much attention.

That may be a good thing and maybe would drive them back a bit into the shadows, but that’s not likely to happen once you’ve gotten a taste of the attention.

MONDAY:   This morning’s futures are telling us that we are in store for a new all time record high, but we have to have it tested first. Sometimes it takes a couple of those tests to really mark a new high and to go well beyond

TUESDAY:   After breaking the all time record high yesterday, it looks as if the market isn’t interested in testing the old high and instead looks to move even higher. Sometimes when it seems that there are absolutely no good reasons to head in any particular direction, that is the only direction that makes sense.

WEDNESDAY:  More all time record highs, but today may be the time for a healthy break in the action

THURSDAY:  Yesterday’s pause looks like it’s giving way to another step toward a breakout as the monthly option cycle comes to an end tomorrow

FRIDAY:.  







Daily Market Update – July 13, 2016 (7:30 AM)

This morning’s futures trading is finally suggesting that it’s time to take a rest from the strong climb that has been underway for about 10 trading sessions.

From the Brexit lows, the climb has been pretty steep, but this morning everything is at the flat line as we still have lots more to hear from members of the Federal reserve, who are on a whirlwind talking spree this week.

So far, they haven’t said much.

With 2 nice gains to start the week the July 2016 option cycle comes to its end in just 3 trading sessions.

Yesterday was one of those rare days that just about every sector was higher and some were nicely higher.

As we get closer to the end of the monthly option cycle we will have the real beginning of the earnings season to contend with.

That now starts with JP Morgan, rather than Alcoa, which has already reported.

JP Morgan may hold the key for everyone else based on how it projects the Brexit vote to impact it’s businesses in the coming years.

For its part, whether out of social consciousness or maybe great business results, JP Morgan announced a large salary increase for its lowest paid earners, up to about 60%.

Maybe that’s a prelude to what may be very good current operations, but investors are more likely to focus on future prospects, particularly how they may be impacted by the British vote.

For my part, it’s likely to be more sitting around.

I did try to rollover the Marathon Oil short call position expiring this Friday, just as I considered closing the short put position.

I’m still of the mind to keep the call position open, even if assignment is in the cards, as I wouldn’t mind creating that 1% weekly annuity and may look for some more opportunity today.

Daily Market Update – July 12, 2016 (Close)

This morning’s futures trading was telling us to expect that the all time closing and intra-day highs on the S&P 500 were safe.

That’s pretty unusual behavior not to want to test those old highs, but the predominant wave of opinion was so strongly that of finding no justification for the market to go higher that there was probably no option to do anything than to go higher.

This morning’s futures were looking to do just that, but with some degree of moderation.

That moderation gave way as the day did, as well and the S&P 500 closed at almost their highs for the day.

Ultimately, if new highs are going to be sustained it’s far more likely to happen if the path comes through moderate moves higher, rather than a breakout.

Today may not have been a breakout, but if you add the last 3 days together, we are certainly getting there.

With earnings now about to get into gear in a couple of days, despite some early earnings having started at yesterday’s close, the question will become just how much of a dampening effect might come from Brexit related guidance, especially from the financial sector.

The financial sector really kicks things off on Thursday and we get some idea.

Rarely does a weak financial sector at the time of earnings put the market into a happy place.

So there may be a battle ahead for the hearts and minds of investors.

For my part, I just want to leave the July 2016 option cycle in a few days with some assignments and some rollovers.

I’m not thinking very much in terms of what awaits, but rather what is in the here and now.

With the chance of some of those assignments and rollovers and sufficient uncovered positions, I wouldn’t mind a breakout and would certainly take any opportunity to sell calls on those uncovered positions in the belief that any breakout would be only a blip.

For that reason, I might consider longer term call options on those uncovered positions and adding some dollars to the “at cost” strike levels.

In theory, that sounds good, but first we need that breakout.

With earnings ahead and the FOMC to follow in a couple of weeks, there may be lots to give the market something to think about and maybe lots to make it move in either direction.

I just want to be ready and not flatfooted as 2017 is not too far around the corner at this point.

Daily Market Update – July 12, 2016 (Open)

This morning’s futures trading was telling us to expect that the all time closing and intra-day highs on the S&P 500 were safe.

That’s pretty unusual behavior not to want to test those old highs, but the predominant wave of opinion was so strongly that of finding no justification for the market to go higher that there was probably no option to do anything than to go higher.

This morning’s futures are looking to do just that, but with some degree of moderation.

Ultimately, if new highs are going to be sustained it’s far more likely to happen if the path comes through moderate moves higher, rather than a breakout.

With earnings now about to get into gear in a couple of days, despite some early earnings having started at yesterday’s close, the question will become just how much of a dampening effect might come from Brexit related guidance, especially from the financial sector.

The financial sector really kicks things off on Thursday and we get some idea.

Rarely does a weak financial sector at the time of earnings put the market into a happy place.

So there may be a battle ahead for the hearts and minds of investors.

For my part, I just want to leave the July 2016 option cycle in a few days with some assignments and some rollovers.

I’m not thinking very much in terms of what awaits, but rather what is in the here and now.

With the chance of some of those assignments and rollovers and sufficient uncovered positions, I wouldn’t mind a breakout and would certainly take any opportunity to sell calls on those uncovered positions in the belief that any breakout would be only a blip.

For that reason, I might consider longer term call options on those uncovered positions and adding some dollars to the “at cost” strike levels.

In theory, that sounds good, but first we need that breakout.

With earnings ahead and the FOMC to follow in a couple of weeks, there may be lots to give the market something to think about and maybe lots to make it move in either direction.

I just want to be ready and not flatfooted as 2017 is not too far around the corner at this point.