Category: Daily Market Update

Daily Market Update – October 1,  2015  (9:00 AM)

What the market has given or taken on one day hasn’t necessarily been the way the market acted the next day.

Sometimes that was a good thing and sometimes it wasn’t very good.

Today it might be a victory if the market could simply do as the futures are suggesting and just trade in an ambivalent way, following yesterday’s strong gain that happened to come after a one day breathing spell in the aftermath of Monday’s 300+ point loss.

That’s just the way things have been going as following the large plunge in August that took the market into correction territory, it’s just been a series of back and forth kind of days with very little net movement when all has been said and done.

Taking a little bit of a break today might also be a good thing considering that there’s not too much reason to want to stick your neck out too much ahead of tomorrow’s Employment Situation Report and would allow some opportunity to simply digest the gains from yesterday.

The shifting sands created by large moves in alternating directions just give no foundation for predictable movement and create an environment that’s really nothing different from a coin toss.

This week’s Employment SItuation Report may be the kind of data that could create some sort of foundation or break an existing one day. It may be more important than usual this month and could serve as some real fuel if it rekindles expectations of an interest rate hike or it could real dampen hopes for any reason for renewed buying.

Despite yesterday’s gain the S&P 500 is still slightly in correction territory and continues to straddle the line. Once the Employment Situation Report is out of the way next week begins another earnings season, that seems to have snuck up quickly and may begin to give some more tangible evidence of an improving economy and maybe the long awaited evidence of an oil dividend.

With a number of positions expiring tomorrow and none yet for next week, I would be equally happy with assignments or rollovers, but may want to take some pre-emptive measures for any positions that could become out of reach for either of those outcomes in the event of a strong downdraft tomorrow.

As long as volatility is keeping forward week premiums relatively higher than expiring week premiums there may be reason to take those pre-emptive steps and look for rollover opportunities today, rather than taking the risk of being taken out of contention tomorrow.

As is usually the case, it would be nice to have a mix of everything. New positions opened, rollovers, assignments, new call sales and dividends and there is still that chance this week, especially if  there’s some good news forthcoming tomorrow and today doesn’t end up being a day that gives back yesterday’s gains.

Daily Market Update – September 30,  2015  (Close)

It’s not really clear what accounted for the morning’s futures pointing to an almost 200 point gain.

It could be that Asia was strong overnight, but that has been a very inconsistent indicator for about the last month. While the early part of our market’s decline definitely followed that in Asia, the uncertainty there has seemingly now been factored into our own thinking and largely discounted at this point, although you just never know what may come next from that part of the world, for better or worse.

Whatever it is that created this morning’s early rise, it wasn’t based upon any news, so it’s likely that it’s just more of the same going back and forth that we’ve seen ever since that breakdown between our markets an China, in particular. Since the, which includes the plunge that took us to our first 10% correction in years, there has been a continuing series of waves taking us up and down and in large moves.

Most of those moves have offset one another, although the net result has still had a negative bias and following Monday’s 300+ point decline everyone was running back to their charts to see where the next levels of support happened to be, just in case the next shoe were to drop.

Yesterday was the kind of day that today, by all rights should have been. There’s really not any news to account for any kind of large move, but of course, that didn’t stop Monday from happening and it didn’t stop today from happening either.

With the Employment Situation Report looming on Friday and the prospects that it may offer another in a lengthening series of strong results, comes the idea that maybe the FOMC will finally raise rates. That could have accounted for some of the early enthusiasm this morning just as it likely accounted for the early week strength that was quickly reversed two weeks ago when the FOMC disappointed most everyone by not announcing what had been widely expected.

With both Janet Yellen and Stanley Fischer scheduled to speak this week there may be some hints of what’s to come, but because the FOMC hasn’t been exactly straight forward, those hints will have to be very heavy handed if the market is going to take the bait.

With a couple of recent familiar faces having been this week’s new purchase positions, I was more than happy to see this morning’s strength and hoped that there’s still going to be some more continuation of it, or at least that the market settles in at around these levels as the week will come to its end.

If so, there could at least be some chance to see some assignments or some rollovers.

If so, especially if there are assignments of those same familiar faces, I wouldn’t mind the continuing opportunity to consider purchasing them again and again, which is the definite advantage of having a market of stocks that is really undecided about where it wants to go. As long as the volatility can remain at these or higher levels, there can be lots of advantage in not thinking too creatively, but rather just doing the same thing, and with the very same stocks,  over and over again.

At least today did bring some opportunity to sell some calls on a couple of uncovered positions utilizing some longer term options in the hope that time will bring some more recovery. But if not, or if insufficient, at least some more premiums and dividends are collected along the way to add up and make the waiting period a little bit easier.

With just 2 days remaining for this week, it is like a number of recent previous weeks. There’s no telling where we go from here as the indications are all over the place and still do nothing to instill confidence.

In just 2 weeks earnings start anew and I’m fairly optimistic about earnings this coming quarter, just as I was the last time around.

Hopefully, though, this time around it will work out as planned and won’t be a series of earnings disappointments that coincided with the beginnings of China’s meltdown.

Daily Market Update – September 30,  2015  (8:15 AM)

It’s not really clear what might account for the morning’s futures pointing to an almost 200 point gain.

It could be that Asia was strong overnight, but that has been a very inconsistent indicator for about the last month. While the early part of our market’s decline definitely followed that in Asia, the uncertainty there has seemingly now been factored into our own thinking and largely discounted at this point, although you just never know what may come next from that part of the world, for better or worse.

Whatever it is that’s creating this morning’s early rise, it isn’t based upon any news, so it’s likely that it’s just more of the same going back and forth that we’ve seen ever since that breakdown between our markets an China, in particular. Since the, which includes the plunge that took us to our first 10% correction in years, there has been a continuing series of waves taking us up and down and in large moves.

Most of those moves have offset one another, although the net result has still had a negative bias and following Monday’s 300+ point decline everyone was running back to their charts to see where the next levels of support happened to be, just in case the next shoe were to drop.

Yesterday was the kind of day that today, by all rights should be. There’s really not any news to account for any kind of large move, but of course, that didn’t stop Monday from happening and it may not stop today from happening.

With the Employment Situation Report looming on Friday and the prospects that it may offer another in a lengthening series of strong results, comes the idea that maybe the FOMC will finally raise rates. That could be accounting for some of the early enthusiasm this morning just as it likely accounted for the early week strentgh that was quickly reversed two weeks ago when the FOMC disappointed most everyone by not announcing what had been widely expected.

With both Janet Yellen and Stanley Fischer scheduled to speak this week there may be some hints of what’s to come, but because the FOMC hasn’t been exactly straight forward, those hints will have to be very heavy handed if the market is going to take the bait.

With a couple of recent familiar faces having been this week’s new purchase positions, I’m more than happy to see this morning’s strength and just hope that there’s some continuation of it, or at least that the market settles in at around these levels as the week will come to its end.

If so, there could at least be some chance to see some assignments or some rollovers.

If so, especially if there are assignments of those same familiar faces, I wouldn’t mind the continuing opportunity to consider purchasing them again and again, which is the definite advantage of having a market of stocks that is really undecided about where it wants to go. As long as the volatility can remain at these or higher levels, there can be lots of advantage in not thinking too creatively, but rather just doing the same thing, and with the very same stocks,  over and over again.

Daily Market Update – September 29,  2015  (Close)

If you are a fan of disappointment, your joy of yesterday wasn’t getting any less this morning.

Yesterday’s 300+ point loss didn’t have much of a basis for it, but it was amusing to hear so many talk about how the market was expressing a fear of an upcoming interest rate hike.

It really makes you wonder whether there is a collective deficit in short term memory or maybe those with airtime believe that the audience is either not listening or they are the ones suffering from short term memory issues.

This morning’s feeble attempt at a bounce back from yesterday’s large loss grew even more feeble as the pre-futures were edging closer to the opening bell and they weren’t offering too much encouragement. The day, as it would turn out, did nothing to make you believe that anything would get better tomorrow or the next day.

The decline yesterday took the S&P 500 well below the 10% correction level and once again people are looking at charts to give their predictions of where the market may go next if continuing to test support. Today’s gain did nothing to make things better, other than sneak 0.1% closer to not being in correction.

With the S&P 500 now sitting at 1881 to start the morning, it looks as if there is some support at about 1865 and then again not until 1820. From there, the next real stop is at about 1750.

That 1750 level would not quite represent the 20% decline level which is what is standardly seen in a bear correction.

Putting that in DJIA terms, which my mind still reverts to, those represent levels that are about 110, 480 and 1050 points lower.

WIth a couple of purchases yesterday, I thought that I’d be inclined to just sit and watch today and even if more “bargains” appeared to be popping up. Tomorrow may be no different and it may be a good idea to see just where the market can and will find support. Sometimes you just want to see some proof or some validation before you continue to stick your neck out even more.

Sticking the neck out, however, hasn’t been a very risky thing to do, but the moves have been so sudden on almost everything these days that victory is quickly snatched away. Fortunately, though, it is a little easier to find some rollover opportunities, maybe using longer term options, as long as the decline isn’t too swift and too drastic.

That, however, has definitely not been a given in any sense of the word as many stocks have exhibited some really large moves in the absence of any news.

Of course, as is usually the case, although we won’t see verification until earnings start pouring in, the level of corporate buyback activity has probably fallen as prices have.

That’ the typical perverse nature of things. 

While you and I are more apt to want to buy something when it looks value priced, corporate buyback programs are notorious for being indifferent to price and usually buying shares when they are moving strongly higher.

It doesn’t really matter when it’s other people’s money and your bonus is in part predicated on share performance. Why spend free cash to buy shares to prop up price and create support when it still leaves shares at a net loss and of no value to your bonus situation?

So even with all of that corporate cash still sitting around and set aside for buybacks, there’s much less left because so much was used at much higher levels and there’s no real incentive to use much of it now. Instead, those CEOs will likely wait for a market rebound and start buying again when it appears as if their activity may help to push shares above a certain threshold level that puts more bonus dollars in their own pockets.

What a system. You have to love it.

Daily Market Update – September 29,  2015  (8:30 AM)

If you are a fan of disappointment, your joy of yesterday isn’t getting any less this morning.

Yesterday’s 300+ point loss didn’t have much of a basis for it, but it was amusing to hear so many talk about how the market was expressing a fear of an upcoming interest rate hike.

It really makes you wonder whether there is a collective deficit in short term memory or maybe those with airtime believe that the audience is either not listening or they are the ones suffering from short term memory issues.

This morning’s feeble attempt at a bounce back from yesterday’s large loss grew even more feeble as the pre-futures were edging closer to the opening bell and they weren’t offering too much encouragement.

The decline yesterday took the S&P 500 well below the 10% correction level and once again people are looking at charts to give their predictions of where the market may go next if continuing to test support.

With the S&P 500 now sitting at 1881 to start the morning, it looks as if there is some support at about 1865 and then again not until 1820. From there, the next real stop is at about 1750.

That 1750 level would not quite represent the 20% decline level which is what is standardly seen in a bear correction.

Putting that in DJIA terms, which my mind still reverts to, those represent levels that are about 110, 480 and 1050 points lower.

WIth a couple of purchases yesterday, I think that I’m going to be more inclined to just sit and watch today and even if more “bargains” appear to be popping up, it may be a good idea to see just where the market can and will find support. Sometimes you just want to see some proof or some validation before you continue to stick your neck out even more.

Sticking the neck out, however, hasn’t been a very risky thing to do, but the moves have been so sudden on almost everything these days that victory is quickly snatched away. Fortunately, though, it is a little easier to find some rollover opportunities, maybe using longer term options, as long as the decline isn’t too swift and too drastic.

That, however, has definitely not been a given in any sense of the word as many stocks have exhibited some really large moves in the absence of any news.

Of course, as is usually the case, although we won’t see verification until earnings start pouring in, the level of corporate buyback activity has probably fallen as prices have.

That’ the typical perverse nature of things. 

While you and I are more apt to want to buy something when it looks value priced, corporate buyback programs are notorious for being indifferent to price and usually buying shares when they are moving strongly higher.

It doesn’t really matter when it’s other people’s money and your bonus is in part predicated on share performance. Why spend free cash to buy shares to prop up price and create support when it still leaves shares at a net loss and of no value to your bonus situation?

So even with all of that corporate cash still sitting around and set aside for buybacks, there’s much less left because so much was used at much higher levels and there’s no real incentive to use much of it now. Instead, those CEOs will likely wait for a market rebound and start buying again when it appears as if their activity may help to push shares above a certain threshold level that puts more bonus dollars in their own pockets.

What a system. You have to love it.

Daily Market Update – September 28,  2015  (Close)

Last week’s mid-week swoon, more like a nose dive after a tepid attempt at a recovery from the previous week’s FOMC induced nose dive, wasn’t giving much indication of being reversed as we got set to start the week.

Last Friday’s gains were actually only very mild, at best, once you factored out the performance of Nike and suddenly that triple digit gain on the DJIA was barely 35 points, while the S&P 500 finished lower, in a much better reflection of what was going on for most stocks and most people.

What this week does have, though, is some catalysts that could move markets higher and possibly move them away from the 10% correction line that’s been straddled for the past month.

In addition to the usual collection of FOMC Governors speaking their minds during scheduled speeches, the two that matter the most, Janet Yellen and Stanley Fischer will be holding court.

But you wouldn’t have known that based on how the day went, especially since there was never any kind of visible effort to bargain hunt as prices went lower and lower.

Last Friday’s early rally, which ultimately gave up ground heading into the close, may have been related to a more hawkish tone taken by Janet Yellen the previous day following the market’s close. Most everyone will be looking for more of the same and some reason to believe that the FOMC believes that the economy is on a good enough forward moving path to finally tighten up a little on the cost of borrowing.

However, the market may be indicating that it is getting weary of just words and wants words to coincide with actions. In this case, that means finally getting the initial interest rate increase done and moving on with things.

Bill Dudley’s comments today that he was expecting an increase by year’s end did nothing to give traders reason to change direction and start picking up bargains.

While today was terrible, the week ends with the Employment Situation report and a strong number could really send the market higher if Yellen and Fischer precede Friday’s report with an indication that they’re really ready to move in a somewhat pre-emptive fashion on any evidence of a pattern of good economic news.

Until then, though, the market seems to be in a “show me” state of mind and just more so after the first day of the weeks has now been entered into the books.

With a couple of assignments last week and a small number of potential expirations this week, coupled with a few ex-dividend positions, there was some room to add some new positions for the week. But with some income already guaranteed and with at least a couple of the week’s expiring positions being within reach of either assignment or rollover, the need to spend money to create income isn’t as strong this week.

Still, one of the characteristics of these kinds of markets is that you can often re-do the same trades, as the newly opened positions in Bank of America and General Electric today may demonstrate.

With the DJIA right at the 10% correction line and the S&P 500 just a it better, at only a 9% decline from its July 2015 highs, the pre-opening futures were doing nothing to help either index create a safety cushion on the right side of that line and the depth to climb out of that hole simply got larger, but it was hard to resist going back to the well a 5th time in the past month for General Electric and a 3rd time for Bank of America.

While I’m not entirely resistant to adding some additional new positions this week, especially if also including some dividends, I doubt that I’ll be as active in doing so as was the case last week.

For now, there’s very little reason to put too much faith into where the FOMC will be going, even though it feels as if they can only go in one direction. The real issue has been a question of “when” they’ll get going and they keep confounding
everyone, particularly when you recall that most everyone was calling for that rate increase this past March and now many are thinking in terms of December.

While I would still like to add to cash reserves, if the market can continue straddling this 10% correction line and punctuate its moves with large moves higher and lower, I’d continue being happy to try and make some trades with a very short term time frame on them and would continue looking for opportunity to lock into some longer term contracts for their enhanced premiums, for as long as they might last.

We got one of those big moves today, hopefully there will be some sort of offset in the other direction.

So, as with most weeks, the week began with an open mind awaiting some indication of direction and sentiment and a hope that any opportunities are real and not illusory.

We’ll see about that tomorrow.

Daily Market Update – September 28,  2015  (8:00 AM)

Last week’s mid-week swoon, more like a nose dive after a tepid attempt at a recovery from the previous week’s FOMC induced nose dive, isn’t giving much indication of being reversed as we get set to start the week.

Last Friday’s gains were actually only very mild, at best, once you factored out the performance of Nike and suddenly that triple digit gain on the DJIA was barely 35 points, while the S&P 500 finished lower, in a much better reflection of what was going on for most stocks and most people.

What this week does have, though, is some catalysts that could move markets higher and possibly move them away from the 10% correction line that’s been straddled for the past month.

In addition to the usual collection of FOMC Governors speaking their minds during scheduled speeches, the two that matter the most, Janet Yellen and Stanley Fischer will be holding court.

Last Friday’s early rally, which ultimately gave up ground heading into the close, may have been related to a more hawkish tone taken by Janet Yellen the previous day following the market’s close. Most everyone will be looking for more of the same and some reason to believe that the FOMC believes that the economy is on a good enough forward moving path to finally tighten up a little on the cost of borrowing.

However, the market may be indicating that it is getting weary of just words and wants words to coincide with actions. In this case, that means finally getting the initial interest rate increase done and moving on with things.

The week ends with the Employment Situation report and a strong number could really send the market higher if Yellen and Fischer precede Friday’s report with an indication that they’re really ready to move in a somewhat pre-emptive fashion on any evidence of a pattern of good economic news.

Until then, though, the market seems to be in a “show me” state of mind.

With a couple of assignments last week and a small number of potential expirations this week, coupled with a few ex-dividend positions, there is some room to add some new positions for the week. But with some income already guaranteed and with at least a couple of the week’s expiring positions being within reach of either assignment or rollover, the need to spend money to create income isn’t as strong this week.

With the DJIA right at the 10% correction line and the S&P 500 just a it better, at only a 9% decline from its July 2015 highs, the pre-opening futures are doing nothing to help either index create a safety cushion on the right side of that line.

While I’m not entirely resistant to adding some new positions this week, especially if also including some dividends, I doubt that I’ll be as active in doing so as was the case last week.

For now, there’s very little reason to put too much faith into where the FOMC will be going, even though it feels as if they can only go in one direction. The real issue has been a question of “when” they’ll get going and they keep confounding everyone, particularly when you recall that most everyone was calling for that rate increase this past March and now many are thinking in terms of December.

While I would still like to add to cash reserves, if the market can continue straddling this 10% correction line and punctuate its moves with large moves higher and lower, I’d continue being happy to try and make some trades with a very short term time frame on them and would continue looking for opportunity to lock into some longer term contracts for their enhanced premiums, for as long as they might last.

So, as with most weeks, the week begins with an open mind awaiting some indication of direction and sentiment and a hope that any opportunities are real and not illusory.

Daily Market Update – September 25,  2015  (8:00 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:  ANF

Rollovers:  BAC, GE

Expirations:  none

The following were ex-dividend this week:

The following will be ex-dividend next week:   CY (9/22 $0.11)

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

Daily Market Update – September 24,  2015  (Close)

Other than Monday’s minor blip higher, there hasn’t been much of a reprieve from the disappointment that hit mid-way through Janet Yellen’s press conference last Thursday afternoon.

The implication was that the economy just wasn’t strong enough to warrant an increase in interest rates and investors, who had only very, very recently come to realize that an interest rate increase was a good thing just did what they so frequently do.

They over-reacted and continue to be in hysterical mode.

At least that’s what this morning’s pre-open futures were indicating.

Even as China closed their trading day with some strength and even as the FOMC indicated that they were now keeping an eye of global events, the outlook by investors remains pessimistic.

That could change tomorrow as the GDP is released.

A strong number could do wonders toward changing the mood on the trading floor, as even the slightest move lower this morning would take the S&P 500 back into correction territory, from which it had been emerging and then relapsing for nearly the past month.

Today’s move was less than just “slight,” but was much better than it had been during its depths.

Otherwise, there’s lots of economic data between today and the next FOMC Statement release which comes at the every end of October. Besides the basic economic news there will have been nearly 3 weeks of earnings reports as the next earnings season begins in just a few weeks, as well.

Conceivably there could be enough news supporting the idea that our economy could support that interest rate increase and there’s no doubt that the FOMC members took note of how the market expressed itself as finally being ready for that increase.

The wild card may end up being what will be happening in the global picture, particularly in China. Lots can happen in the month until the next FOMC meeting and that’s now part of the equation, or so it seems.

This morning looked as if it would be one to sit and watch and just hope that the new positions opened and expiring this week don’t get dragged down along with the rest of the market and get taken too far along. It would be great to see those new positions get assigned tomorrow, but the environment has become very challenging and there’s really not to much reason for it.

The US economy and the US stock market remain the best in the world and this should be where money flows as the rest of the world demonstrates itself to be a less reliable place to park money.

While I had been waiting, as had so many, for a correction for a long time, it feels as if the next phase can and should only be higher despite what may be occurring in the rest of the world.

This week I put my money where my mouth is and hope that it wasn’t a mistake to have spoken up.

As has been the only hope that has worked out lately, there’s always tomorrow.

Daily Market Update – September 24,  2015  (8:00 AM)

Other than Monday’s minor blip higher, there hasn’t been much of a reprieve from the disappointment that hit mid-way through Janet Yellen’s press conference last Thursday afternoon.

The implication was that the economy just wasn’t strong enough to warrant an increase in interest rates and investors, who had only very, very recently come to realize that an interest rate increase was a good thing just did what they so frequently do.

They over-reacted and continue to be in hysterical mode.

At least that’s what this morning’s pre-open futures are indicating.

Even as China closed their trading day with some strength and even as the FOMC indicated that they were now keeping an eye of global events, the outlook by investors remains pessimistic.

That could change tomorrow as the GDP is released.

A strong number could do wonders toward changing the mood on the trading floor , as even the slightest move lower this morning would take the S&P 500 back into correction territory, from which it had been emerging and then relapsing for nearly the past month.

Otherwise, there’s lots of economic data between today and the next FOMC Statement release which comes at the every end of October. Besides the basic economic news there will have been nearly 3 weeks of earnings reports as the next earnings season begins in just a few weeks, as well.

Conceivably there could be enough news supporting the idea that our economy could support that interest rate increase and there’s no doubt that the FOMC members took note of how the market expressed itself as finally being ready for that increase.

The wild card may end up being what will be happening in the global picture, particularly in China. Lots can happen in the month until the next FOMC meeting and that’s now part of the equation, or so it seems.

This morning looks as if it will be one to sit and watch and just hope that the new positions opened and expiring this week don’t get dragged down along with the rest of the market and get taken too far along. It would be great to see those new positions get assigned tomorrow, but the environment has become very challenging and there’s really not to much reason for it.

The US economy and the US stock market remain the best in the world and this should be where money flows as the rest of the world demonstrates itself to be a less reliable place to park money.

While I had been waiting, as had so many, for a correction for a long time, it feels as if the next phase can and should only be higher despite what may be occurring in the rest of the world.

This week I put my money where my mouth is and hope that it wasn’t a mistake to have spoken up.