Category: Daily Market Update

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

Daily Market Update – May 31, 2016 (8:15 AM)

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.

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 don’t have any great hopes of selling any calls on uncovered positions today, but that would still be something that would make 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.

Daily Market Update – May 27, 2016 (8:15 AM)

The Week in Review will be posted by 10 PM and the Weekend Update will be posted by Monday at Noon.

The following trade outcomes are possible today:

Assignments:  none

Rollovers:    none

Expirations:   none

The following were ex- dividend this week:   HFC (5/25 $0.33), IP (5/25  $0.44)

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

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

Daily Market Update – May 26, 2016 (Close)

After two big days of gains, the June 2016 option cycle is off to a good start and it didn’t give anything up today as some traders are getting ready to begin summer.

There’s till a long way to go until the cycle ends and I would certainly like to see the few positions that I have that do expire at that time actually get assigned, there’s one potential obstacle.

That obstacle is the FOMC Meeting announcement that occurs 2 days before the monthly expiration.

SInce many have given credit to investors coming to grips with a rate increase being announced  at that time, there could be some price to be paid if whatever does happen gets construed negatively.

Between now and then we will get plenty of economic news, although the very latest numbers suddenly seem to be the kind that would justify an increase.

That will especially be the case if this week’s GDP is stronger and we have some upward revisions, and next week’s Employment Situation Report is the same.

The latter report could really be the key if there are also some upward revisions to the recent month’s disappointing numbers.

About 6 months ago we went through this same thing and investors finally started to embrace the likelihood of a small rate increase.

That embrace was pretty fickle once the increase was announced and it took a few months for the market to get back on stride after having a 19% decline.

Whether the FOMC helped to slow down a heating up economy by a pre-emptive increase last time, or simply jumped the gun and misread the data, will be subject to interpretation. The same may be the case in just a few weeks.

This morning’s futures were flat, but that’s not too surprising after the past 2 days and the big news that could come our way tomorrow. What’s surprising, to me, at least, is that no one really seemed to be interested in taking profits before tomorrow’s GDP and then a long weekend, to boot.

With earnings not being horrible over the past week and oil holding steady, things haven’t conspired against investors even as interest rates may be going higher.

With earnings just about done and the embrace in place, we may simply be back to tracking oil prices for a while and today oil really did nothing of interest.

I just hope that the moves, whether oil or stocks higher, continues, so long as stocks follow oil in that direction, regardless of whether it makes sense or not.

Daily Market Update – May 26, 2016 (7:30 AM)

After two big days of gains, the June 2016 option cycle is off to a good start.

There’s till a long way to go until the cycle ends and I would certainly like to see the few positions that I have that do expire at that time actually get assigned, there’s one potential obstacle.

That obstacle is the FOMC Meeting announcement that occurs 2 days before the monthly expiration.

SInce many have given credit to investors coming to grips with a rate increase being announced  at that time, there could be some price to be paid if whatever does happen gets construed negatively.

Between now and then we will get plenty of economic news, although the very latest numbers suddenly seem to be the kind that would justify an increase.

That will especially be the case if this week’s GDP is stronger and we have some upward revisions, and next week’s Employment Situation Report is the same.

The latter report could really be the key if there are also some upward revisions to the recent month’s disappointing numbers.

About 6 months ago we went through this same thing and investors finally started to embrace the likelihood of a small rate increase.

That embrace was pretty fickle once the increase was announced and it took a few months for the market to get back on stride after having a 19% decline.

Whether the FOMC helped to slow down a heating up economy by a pre-emptive increase last time, or simply jumped the gun and misread the data, will be subject to interpretation. The same may be the case in just a few weeks.

This morning’s futures are flat, but that’s not too surprising after the past 2 days and the big news that could come our way tomorrow.

With earnings not being horrible over the past week and oil holding steady, things haven’t conspired against investors even as interest rates may be going higher.

With earnings just about done and the embrace in place, we may simply be back to tracking oil prices for a while.

I just hope that the move higher continues, regardless of whether it makes sense or not.

Daily Market Update – May 25, 2016 (Cloe)

No one expected yesterdays New Home Sales surprise to the upside.

Neither did anyone expect that the New Home Sales Report would have much significance, as it has mostly been a yawner for the past few years.

In addition to some really strong numbers, with an increase of about 20% over expectations, the avarage price for a new home was significantly higher and was more in the range of the higher end home builders.

That’s either good or bad, depending on your perspective.

If you’re Bernie Sanders, it may be reflective of the skew in society, in that the increase didn’t represent first time home buyers joining in on the “American Dream,” but rather it was those already living the dream who were moving forward and leaving others further and further behind.

Others see it as good news and showing more consumer participation in the economy which will filter down to things like home furnishings, appliances and all of those other things that are part and parcel of owning a new home.

This morning the futures were cautiously higher following that large gain yesterday and there is some more good earnings news from after the close yesterday to perhaps support some of those gains.

That caution was thrown to the wind on some good EU news that may have averted another in a series of annual Greek crises. Add to the more strength in oil and accepting that higher interest rates don’t have to be bad and you gad a really good day.

I’m just happy to have actually made a trade this weekend even rolling it over in order to capture the dividend.

Going along for the ride was good, too.

With that trade done, there may not be much else to do for the rest of the week, although I’ll be on the lookout for any trading opportunities, especially if it means getting some income out of non-performing positions.

With next week being a shortened trading week there may not be too much to do then either, but at least next week has a couple of expiring positions and a decent number of ex-dividend positions that will generate some income to make it worth getting out of bed while we await what the FOMC will do and keep watching the price of oil move higher into the summer.

Daily Market Update – May 25, 2016 (7:30 AM)

No one expected yesterday;s New Home Sales surprise to the upside.

Neither did anyone expect that the New Home Sales Report would have much significance, as it has mostly been a yawner for the past few years.

In addition to some really strong numbers, with an increase of about 20% over expectations, the avarage price for a new home was significantly higher and was more in the range of the higher end home builders.

That’s either good or bad, depending on your perspective.

If you’re Bernie Sanders, it may be reflective of the skew in society, in that the increase didn’t represent first time home buyers joining in on the “American Dream,” but rather it was those already living the dream who were moving forward and leaving others further and further behind.

Others see it as good news and showing more consumer participation in the economy which will filter down to things like home furnishings, appliances and all of those other things that are part and parcel of owning a new home.

This morning the futures are cautiously higher following that large gain yesterday and there is some more good earnings news from after the close yesterday to perhaps support some of those gains.

I’m just happy to have actually made a trade and even rolling it over in order to capture the dividend.

With that done, there may not be much else to do for the rest of the week, although I’ll be on the lookout for any trading opportunities, especially if it means getting some income out of non-performing positions.

With next week being a shortened trading week there may not be too much to do then either, but at least next week has a couple of expiring positions and a decent number of ex-dividend positions that will generate some income to make it worth getting out of bed while we await what the FOMC will do and keep watching the price of oil move higher into the summer.

Daily Market Update – May 24, 2016 (Close)

For the next few weeks we are likely to hear more and more about how the data coming in will or won’t support FOMC action to raise interest rates.

The torrent began last week and has continued through this past weekend and the beginning of this trading week.

However, that torrent hasn’t been on the back of any data, but more on the backs of the utterances of various Federal Reserve Governors.

Whether they are getting everyone prepared for a June 2016 increase or simply giving traders enough time to digest the news so that there won’t be any great upheaval in markets for either a June or a July increase is subject to speculation.

But there’s probably no sense in denying that the Federal Reserve members think about a lot more things than they ever used to, include foreign markets and the US stock market.

Purists will say that the focus of the Federal reserve should be purely upon their mandates and not get blurred by other factors, but the reality is that everything matters, including politics and public opinion.

It does seem that the FOMC is playing more and more of a game while taking temperatures of various constituencies and stakeholders.

Yesterday the market was faced with declining oil and the increasing likelihood that interest rates were going to increase, perhaps as early as next month.

To its credit, the market did well to end the day absolutely flat, especially when you realize that it was never really in the hole.

This morning the futures were pointing a little bit higher as a few more consumer related earnings reports come in for the week.

The big ticket item, though, will come on Friday as the GDP is released, but it may not end up being as important as today’s New Home Sales.

That report hasn’t been all that important lately, but it really came in strongly today, especially at the higher end of the market.

That sent the market soaring, just like it used to in the old days.

After the close some more decent technology earnings may help the market tomorrow,

After that everyone will be waiting for the GDP and its revisions to see whether the FOMC really has anything to support all of the newly found hawkish tone. Today’s New Hosing data does support the idea, though.

I had been expecting that this was going to be a very quiet week for me, although I still wasn’t opposed to spending down some of my limited cash.

And so I did in the hunt for a dividend and then rolled the position over to either get more premium in exchange for the dividend or more premium and the dividend.

We’ll see how that works out tomorrow morning, but I’d be happy for an early assignment, although I don’t think it too likely.

With next week being a holiday shortened trading week and only a single position set to expire, I still wouldn’t mind adding something and perhaps using the June 3rd expiration date to get some additional premium for the effort.

Otherwise, it may just be a case of sitting and listening and trying to figure out how the market will interpret any kind of news.

I think it’s time to take news on its face value and to stop playing the various games.

Both FOMC members and traders need to grow up.

Daily Market Update – May 24, 2016 (8:00 AM)

For the next few weeks we are likely to hear more and more about how the data coming in will or won’t support FOMC action to raise interest rates.

The torrent began last week and has continued through this past weekend and the beginning of this trading week.

However, that torrent hasn’t been on the back of any data, but more on the backs of the utterances of various Federal Reserve Governors.

Whether they are getting everyone prepared for a June 2016 increase or simply giving traders enough time to digest the news so that there won’t be any great upheaval in markets for either a June or a July increase is subject to speculation.

But there’s probably no sense in denying that the Federal Reserve members think about a lot more things than they ever used to, include foreign markets and the US stock market.

Purists will say that the focus of the Federal reserve should be purely upon their mandates and not get blurred by other factors, but the reality is that everything matters, including politics and public opinion.

It does seem that the FOMC is playing more and more of a game while taking temperatures of various constituencies and stakeholders.

Yesterday the market was faced with declining oil and the increasing likelihood that interest rates were going to increase, perhaps as early as next month.

To its credit, the market did well to end the day absolutely flat, especially when you realize that it was never really in the hole.

This morning the futures are pointing a little bit higher as a few more consumer related earnings reports come in for the week.

The big ticket item, though, will come on Friday as the GDP is released.

Everyone will be watching it and its revisions to see whether the FOMC really has anything to support all of the newly found hawkish tone.

I expect that this is going to be a very quiet week for me, although I still am not opposed to spending down some of my limited cash.

With next week being a holiday shortened trading week and only a single position set to expire, I wouldn’t mind adding something and perhaps using the June 3rd expiration date to get some additional premium for the effort.

Otherwise, it may just be a case of sitting and listening and trying to figure out how the market will interpret any kind of news.

I think it’s time to take news on its face value and to stop playing the various games.

Both FOMC members and traders need to grow up.