Category: Daily Market Update

Daily Market Update -January 7, 2015 (Close)

Looking at the futures this morning in yet another free fall, this may be the worst start to a new year that I can recall.

I’m certain that if someone hasn’t already looked back at the data, they will do so by the end of the week.

With China down another 7% overnight and closing the market after just 29 minutes of trading and oil futures plummeting some more this morning, as well, it’s a double hit on our market, as the S&P futures are down more than 2% and just adding to their abysmal state for the week.

They ended up the day down 2.4%, although there was an attempt in the late morning to make things right. It was valiant, but a failure.

To add to worries, there’s now second guessing about the FOMC’s decision to increase interest rates and what could they possibly do in the event of a sudden turn down in the US, at this point.

There’s not too much doubt that some serious economic expansion would have been necessary to give the FOMC the chance to reload its tools and keep their inventory at high enough levels to use, if needed.

It’s not necessarily a good idea to project a crisis on the basis of just a few days of trading, but the situation in China was bound to happen, as the strict restrictions they put on trading was coming to its end and you can bottle up and contain things for only so long.

When China went through its market crisis back in July and August of 2015, we definitely felt it here and finally went into our own first real correction in more than 3 years.

With China again seeming to be in a position to wag the US, we may be held hostage to some degree by what policy decisions they may make.

Just like the FOMC, they may be running out of tools on their side of the Pacific, as well.

At this point we are probably going to be wondering what the Chinese government will do next and how much it may attempt to actually throttle free markets.

While prices are looking better and better, there hasn’t been too much of a rush to pick up seeming bargains. The buying seen during the final hour of trading on Monday and Wednesday may have been very poorly timed, so it’s not too likely that there will be eager people looking to commit to what they think is a bargain, only to find it much more of one the following day.

That includes me.

While I like to buy on market weakness, I’ve had a somewhat uneasy feeling for about a month and haven’t jumped in at some signs of early in the week weakness as often as I might have previously.

For now, there has to be some evidence of stability creeping in and some demonstration that perhaps a bottom has been made.

That certainly didn’t come today.

With what may be another big drop in the DJIA and S&P 500 the chartists will be furiously looking for where the next level of support may be, as one after another gets obliterated.

I’m just going to stay tuned for now.

Tomorrow will sadly be a day to watch positions expire and very little chance of being able to do much to milk some more premiums out of the system.

Daily Market Update -January 7, 2015 (7:30 AM)

Looking at the futures this morning in yet another free fall, this may be the worst start to a new year that I can recall.

I’m certain that if someone hasn’t already looked back at the data, they will do so by the end of the week.

With China down another 7% overnight and closing the market after just 29 minutes of trading and oil futures plummeting some more this morning, as well, it’s a double hit on our market, as the S&P futures are down more than 2% and just adding to their abysmal state for the week.

To add to worries, there’s now second guessing about the FOMC’s decision to increase interest rates and what could they possibly do in the event of a sudden turn down in the US, at this point.

There’s not too much doubt that some serious economic expansion would have been necessary to give the FOMC the chance to reload its tools and keep their inventory at high enough levels to use, if needed.

It’s not necessarily a good idea to project a crisis on the basis of just a few days of trading, but the situation in China was bound to happen, as the strict restrictions they put on trading was coming to its end and you can bottle up and contain things for only so long.

When China went through its market crisis back in July and August of 2015, we definitely felt it here and finally went into our own first real correction in more than 3 years.

With China again seeming to be in a position to wag the US, we may be held hostage to some degree by what policy decisions they may make.

Just like the FOMC, they may be running out of tools on their side of the Pacific, as well.

At this point we are probably going to be wondering what the Chinese government will do next and how much it may attempt to actually throttle free markets.

While prices are looking better and better, there hasn’t been too much of a rush to pick up seeming bargains. The buying seen during the final hour of trading on Monday and Wednesday may have been very poorly timed, so it’s not too likely that there will be eager people looking to commit to what they think is a bargain, only to find it much more of one the following day.

That includes me.

While I like to buy on market weakness, I’ve had a somewhat uneasy feeling for about a month and haven’t jumped in at some signs of early in the week weakness as often as I might have previously.

For now, there has to be some evidence of stability creeping in and some demonstration that perhaps a bottom has been made.

With what may be another big drop in the DJIA and S&P 500 the chartists will be furiously looking for where the next level of support may be, as one after another gets obliterated.

I’m just going to stay tuned for now.

MONDAY:   China, Saudi Arabia and Iran. 2016 wasn’t supposed to get off to this kind of a start

TUESDAY:   Asian markets moderated overnight, but US markets look as if they want to give back a big part of yesterday’s late session comeback. Strap on as 2016 continues.

WEDNESDAY:  News that North Korea has an H Bomb, coupled with decreasing iPhone orders added to record cash inflows into mutual funds give the market plenty of reasons to worry. I think the last of those three may be the worst of all.

THURSDAY:  Strap on again. China plummets overnight and taking Europe and US futures along the ride

FRIDAY:. 







Daily Market Update -January 5, 2015 (Close)

US markets did reasonably well yesterday, despite a 272 point loss in the DJIA, as everything is relative.

Shanghai and Europe would have probably been happy with only about a 1.5% loss, as the US cut its own loss by about 40% as the session headed toward the close.

This morning we awoke to news that losses definitely moderated in Shanghai, but our own futures looked as if they wanted to give back what little buying there was in the final hour of yesterday’s trading and by noon it looked as if that was really going to be the case.

While there were certainly lots of losers yesterday and they seemed to be better distributed on the first day of trading than was the case through any part of 2015, today the market did what it did yesterday, as well. It was able to erase a decent portion of the day’s losses. So much so that today the market actually finished a very little bit higher.

The basic rules are still murky, though.

Where there initially appeared to be some promise on the heels of a growing Saudi and Iranian conflict, the energy sector started to give up those early gains fairly quickly during yesterday’s session.

One year to the next are often so different when comparing them on the basis of the markets even as very little may change in the world.

If you’ve been holding your breath for energy prices to rebound, yesterday’s inability to do so, even in the face of what could be some really substantive news, has to be just more disappointment.

There have been so many occasions over the past 15 months that energy looked as if it could have been a bargain and you would have been wrong each of those times, unless you were very short term oriented.

Unfortunately, in 2015, that was true of lots of stocks.

Bargains may not have really been bargains and you do have to wonder at what point 2016 will turn that tide.

I took one chance yesterday with what i thought was a bargain.

It was, though, nothing more than trying to re-establish a position that had been held in succession on 4 occasions over a 5 week period in October and December, that simply looked to be back to a fair price.

Not necessarily a bargain price, but a fair one.

That may be the theme for 2016, or at least this early and unsettled part.

I’d like to have the opportunity to re-establish positions in those stocks that I’ve repeatedly owned over the last 3 to 4 months of 2015, when otherwise my opening of new positions had been very sparse.

For 2016, I wouldn’t mind repeatedly re-inventing the wheel and not looking to far a field for what could serve as an income stream.

For today  I didn’t expect to be doing much, other than looking for some opportunities to roll over positions that may expire this or next week, in addition to any of those recurring opportunities in some familiar stocks.

Since my expectations were low, I couldn’t be overly disappointed with the outcome of sitting and watching silently.

Tomorrow will probably be more of the same.

Most of December was spent watching the ticker and not making very many trades.

January may not be very different, but it’s far too early to tell, as there are still plenty of people who hold onto the myth of those January rallies.

You never know what myths can become real, but for now, I wouldn’t mind seeing some strength in energy and a continued irrational coupling of the market in a move higher with energy.

That would at least bring one different thing into 2016 and maybe some of those other a
reas that were hit so hard in 2015 could show some strength at the expense of the handful that thrived in 2015.

Daily Market Update -January 5, 2015 (7:30 AM)

US markets did reasonably well yesterday, despite a 272 point loss in the DJIA, as everything is relative.

Shanghai and Europe would have probably been happy with only about a 1.5% loss, as the US cut its own loss by about 40% as the session headed toward the close.

This morning we awoke to news that losses definitely moderated in Shanghai, but our own futures looked as if they wanted to give back what little buying there was in the final hour of yesterday’s trading.

There were certainly lots of losers yesterday and they seemed to be better distributed on the first day of trading than was the case through any part of 2015.

Where there initially appeared to be some promise on the heels of a growing Saudi and Iranian conflict, the energy sector started to give up those early gains fairly quickly during yesterday’s session.

One year to the next are often so different when comparing them on the basis of the markets even as very little may change in the world.

If you’ve been holding your breath for energy prices to rebound, yesterday’s inability to do so, even in the face of what could be some really substantive news, has to be just more disappointment.

There have been so many occasions over the past 15 months that energy looked as if it could have been a bargain and you would have been wrong each of those times, unless you were very short term oriented.

Unfortunately, in 2015, that was true of lots of stocks.

Bargains may not have really been bargains and you do have to wonder at what point 2016 will turn that tide.

I took one chance yesterday with what i thought was a bargain.

It was, though, nothing more than trying to re-establish a position that had been held in succession on 4 occasions over a 5 week period in October and December, that simply looked to be back to a fair price.

Not necessarily a bargain price, but a fair one.

That may be the theme for 2016, or at least this early and unsettled part.

I’d like to have the opportunity to re-establish positions in those stocks that I’ve repeatedly owned over the last 3 to 4 months of 2015, when otherwise my opening of new positions had been very sparse.

For 2016, I wouldn’t mind repeatedly re-inventing the wheel and not looking to far a field for what could serve as an income stream.

For today  I don’t expect to be doing much, other than looking for some opportunities to roll over positions that may expire this or next week, in addition to any of those recurring opportunities in some familiar stocks.

Otherwise, it will probably be more of the same.

Most of December was spent watching the ticker and not making very many trades.

January may not be very different, but it’s far too early to tell, as there are still plenty of people who hold onto the myth of those January rallies.

You never know what myths can become real, but for now, I wouldn’t mind seeing some strength in energy and a continued irrational coupling of the market in a move higher with energy.

That would at least bring one different thing into 2016 and maybe some of those other areas that were hit so hard in 2015 could show some strength at the expense of the handful that thrived in 2015.

Daily Market Update -January 4, 2015 (Close)

They say that the first week of the New Year determines the first month and that the first month determines the outcome for the who year.

Hopefully that’s not going to be the case.

No one really expected to wake up on the first Monday of the New Year to news than Iran and Saudi Arabia were at each other’s throats even more.

If this was 2015, we might have expected that any rise in the price of oil coming from the uncertainty associated with conflict in that region, would have resulted in the US stock market moving higher.

But late last week it seemed as if some normalcy was beginning to return to that relationship and so this morning markets aren’t going up in response.

Maybe, though, they’re just not going down as low as they might ordinarily have done, given what happened overnight in the Shanghai market.

With that market down 7% on halted trading, the contagion spread to Europe this morning.

If our own futures market had followed Germany, instead of looking at a loss of 300 points, we would be about double that amount.

Germany itself was only down about 60% of what transpired in Shanghai, so maybe it is that oil spike that’s giving us some cushion as we got set to begin the day.

That seemed to work for a while, until oil inexplicably reversed course and the market went down more and more, although it did recover significantly from its nadir.

Considering that some of our own weaknesses in 2015 were related to earlier sharp declines in Shanghai, there may be very good reason for concern as the year gets underway.

With a little bit of cash and a few positions expiring this week, I wasn’t too anxious to go and chase the market in what could have been a bargain hunter’s delight.

I thought that I would much rather sit back and see if there was any truth to the contention that the year after a flat year is typically a good year.

You wouldn’t know that by the competing contention about the role of the first week of the year and the outcome of the rest of the year.

As the day does progressed, I was prepared to part with some money if there appeared to be some stability, and I surprised myself by doing so before the stability appeared, but I wasn’t reaching to deeply down the well for that money. I think that I was still be inclined to sit back and watch.

While in 2015 there were a number of days that large early losses were reversed during the course of the day, that’s not a typical pattern and very often a period of stability is followed by a second leg lower, so I wasn’t overly interested in testing the waters too much.

I’d rather not get caught in the second leg.

That wouldn’t be the most auspicious way to begin 2016.

While it may be a difficult first day and maybe a difficult first week, my eyes are going to be focused also on a fairly large number of positions that are set to expire next week as the January 2016 cycle comes to an end.

That coincides with the start of earnings season, so there may be lots of things to be thinking about as we try to sort out the international issues.

Daily Market Update -January 4, 2015 (9:00 AM)

They say that the first week of the New Year determines the first month and that the first month determines the outcome for the who year.

Hopefully that’s not going to be the case.

No one really expected to wake up on the first Monday of the New Year to news than Iran and Saudi Arabia were at each other’s throats even more.

If this was 2015, we might have expected that any rise in the price of oil coming from the uncertainty associated with conflict in that region, would have resulted in the US stock market moving higher.

But late last week it seemed as if some normalcy was beginning to return to that relationship and so this morning markets aren’t going up in response.

Maybe, though, they’re just not going down as low as they might ordinarily have done, given what happened overnight in the Shanghai market.

With that market down 7% on halted trading, the contagion spread to Europe this morning.

If our own futures market had followed Germany, instead of looking at a loss of 300 points, we would be about double that amount.

Germany itself was only down about 60% of what transpired in Shanghai, so maybe it is that oil spike that’s giving us some cushion as we get set to begin the day.

Considering that some of our own weaknesses in 2015 were related to earlier sharp declines in Shanghai, there may be very good reason for concern as the year gets underway.

With a little bit of cash and a few positions expiring this week, I’m not too anxious to go and chase the market in what could be a bargain hunter’s delight.

I think that I would much rather sit back and see if there’s any truth to the contention that the year after a flat year is typically a good year.

You wouldn’t know that by the competing contention about the role of the first week of the year and the outcome of the rest of the year.

As the day does progress, if there appears to be some stability, I think that I would still be inclined to sit back and watch.

While in 2015 there were a number of days that large early losses were reversed during the course of the day, that’s not a typical pattern and very often a period of stability is followed by a second leg lower.

I’d rather not get caught in the second leg.

That wouldn’t be the most auspicious way to begin 2016.

While it may be a difficult first day and maybe a difficult first week, my eyes are going to be focused also on a fairly large number of positions that are set to expire next week as the January 2016 cycle comes to an end.

That coincides with the start of earnings season, so there may be lots of things to be thinking about as we try to sort out the international issues.

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

The Week in Review will be posted by 76 PM tonight and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments:  BBY ($31), PFE

Rollovers:  STX (puts)

Expirations:  BBY ($37)

The following were ex-dividend this week:      MAT (11/23 $0.38), ANF (11/27 $0.20), KO (11/27 $0.33)

The following will be ex-dividend next week:   HAL (12/1 $0.18), MOS (12/1 $0.28), BAC (12/2 $0.05), COH (12/2 $0.34), HFC (12/2 $0.33),  WMT (12/2 $0.49)

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

Daily Market Update – November 25,  2015  (Close)

Yesterday’s comeback by the market was an impressive one and yet another in an increasingly long series that has been demonstrating that the pre-opening futures aren’t doing a very good job of telling us where the market will be headed.

One thing that used to be fairly predictable was when those futures showed a large move.

In such cases you could feel reasonably certain that the same large move would continue into the regular trading session and typically characterize that session for the entire day.

These days, maybe it’s because 100 points isn’t what it used to be, but the predictive value, even when those moves are on the large side, just seems lower and lower.

While yesterday ended the day virtually unchanged, it had to make up significant ground to achieve that accomplishment.

In hindsight, that may have represented another buying opportunity, but with this being a short trading week and really not wanting to use any extended option expirations this week due to the desire to have an opportunity to recycle assigned cash for next week, there wasn’t much drive to open any additional new positions.

The greatest expectation was that today and then Friday, would both be on the quiet side, but you can never tell what kind of artifacts might show up in the event of someone with deep pockets in the face of light volume.

Today, though, wasn’t going to be that day, as the market barely budged at any point of the day.

For my part, my pockets aren’t very deep right now and would simply prefer to see some assignments to end the week and the chance to use that cash to open up some new replacement positions.

I expected that today would be very much like yesterday, although I would have certainly welcomed any other opportunities to either sell new call positions or rollover any of those with extended week expirations and do so early, in order to capitalize on any price strength or upcoming dividends.

But not today.

It was just more of sitting back in the La-Z-Boy and wondering when I’ll be asked to help out in preparations for holiday guests.

I don’t think many are staying over on Friday, but hopefully they will understand if I’m otherwise occupied on Friday, as I would like to be able to capitalize on potential rollovers if those assignments aren’t likely to happen.

Otherwise, if you do read the afternoon version of this, then best wishes once again to all for a Happy and Healthy Thanksgiving and be safe in your travels, if those are in your plans.