Category: Daily Market Update

Daily Market Update – July 15,  2015  (Close)

It looked as if the US stock market would be in a state of suspended animation until the question and answer period of Janet Yellen’s mandated Congressional testimony was to begin today.

The formal statement that she would be reading had already been released in the morning and the futures remained flat and completely unimpressed.

They ended up staying that way as both the DJIA and the S&P 500 were virtually unchanged for the day.

No one would have expected any bombshells to be contained in the prepared text anyway and for the most part, other than at her very first press conference as Chairman of the Federal Reserve, Janet Yellen has been very capable of measuring her words and not saying something that she neither meant nor meant to divulge.

Yesterday, flat was a good place to start the day as the market was able to find some reason to move forward and end the day just 1.5% away from its all time highs. It’s hard to believe that barely a week ago it seemed as if we were looking down the barrel of a gun. The market was already down 5% and right at a technical level of support on the S&P 500. That was all happening as the Chinese situation was seeming to unravel and the Greeks were technically in default on their loans and without any life preserver in sight.

Funny how quickly things can change.

For now all things are quiet on the overseas fronts and all we have to think about are earnings and whatever additional bits of information Janet Yellen may discide to parse out for us to digest tomorrow.

So far, as she’s had the opportunity to appear before Congress the questions have, for the most part been more gentle than had greeted her predecessors, so she has likely had a little easier time formulating answres that wouldn’t set off fireworks of any kind because of any slip ups or mis-statements on her part. For the most part this testimony has been the sort of place where elected officials could ask questions in order to capture sound bites to be used in the re-election campaigns that would help to make them look as if they were on top of things and against big government and pro-capitalism.

The most egregeous and long winded questions, as well as the ones who would consistently interrupt the answers would typically come from those who obviously were the least qualified to ask any questions of an esteemed economist.

That was definitely the case today as there were some long winbded statements that could have used Alex Trebeck to point out that a question is generally supposed to be in the form of a question.

Her testimony continues tomorrow, but it’s usually the first day that is more likely to see some fireworks. Of course, tomorrow we may be greeted by some kind of curveball coming from an expected vote by the Greek Parliament, but it’s unlikely that they’ll set the situation back to where it had been just 2 weeks ago. As with so many other things that we’ve seen, it’s better to take a deal or make a decision, even if it only means delaying the real decision that has to be made.

The rioting in the streets that is going on before the vote is likely just for show and probably won’t have any impact on anything.

As it is, this is shaping up to be a very quiet trading week, although there are still some potential trades that I might like to make, although at this point they would likely be considering the use of options expiring next week.

For now, I would be content watching the market go higher and challenge those all time highs in preperation for maybe being able to do something next week, instead.

Daily Market Update – July 15,  2015  (9:00 AM)

It looks as if the US stock market will be in a state of suspended animation until the question and answer period of Janet Yellen’s mandated Congressional testimony begins today.

The formal statement that she will be reading has already been released and the futures remains flat.

No one would have expected any bombshells to be contained in the prepared text anyway and for the most part, other than at her very first press conference as Chairman of the Federal Reserve, Janet Yellen has been very capable of measuring her words and not saying something that she neither meant nor meant to divulge.

Yesterday, flat was a good place to start the day as the market was able to find some reason to move forward and end the day just 1.5% away from its all time highs. It’s hard to believe that barely a week ago it seemed as if we were looking down the barrel of a gun. The market was already down 5% and right at a technical level of support on the S&P 500. That was all happening as the Chinese situation was seeming to unravel and the Greeks were technically in default on their loans and without any life preserver in sight.

Funny how quickly things can change.

For now all things are quiet on the overseas fronts and all we have to think about are earnings and whatever bits of information Janet Yellen may discide to parse out for us to digest.

So far, as she’s had the opportunity to appear before Congress the questions have, for the most part been more gentle than had greeted her predecessors, so she has likely had a little easier time formulating answres that wouldn’t set off fireworks of any kind because of any slip ups or mis-statements on her part. FOr the most part this testimony has been the sort of place where elected officials could ask questions in order to capture sound bites to be used in the re-election campaigns that would help to make them look as if they were on top of things and against big government and pro-capitalism.

The most egregeous and long winded questions, as well as the ones who would consistently interrupt the answers would typically come from those who obviously were the least qualified to ask any questions of an esteemed economist.

Her testimony continues tomorrow, but it’s usually the first day thta is more likely to see some fireworks. Of course, tomorrow we may be greeted by some kind of curveball coming from an expected vote by the Greek Parliament, but it’s unlikely that they’ll set the situation back to where it had been just 2 weeks ago. As with so many other things that we’ve seen, it’s better to take a deal or make a decision, even if it only means delaying the real decision that has to be made.

This is shaping up to be a very quiet trading week, although there are still some potential trades that I might like to make, although at this point they would likely be considering the use of options expiring next week.

For now, I would be content watching the market go higher and challenge those all time highs in preperation for maybe being able to do something next week, instead.

Daily Market Update – July 14,  2015  (Close)

It looks as if the US stock market places greater value on a possible solution to the Greek debt crisis than it does to the agreement between the US and other nations with Iran over its nuclear programs.

Yesterday’s news from the EU and Greece helped to deliver a 200 point gain to the DJIA, while this morning’s news regarding the agreement with Iran had the futures trading virtually unchanged and left the market trading in a fauirly sedate fashion throughout the day.

Still, given the back and forth and the big give and take kind of moves over the past few weeks, even a flat day coming immediately after a 200 point climb could be considered a sort of victory, as the market has quickly gone from an intra-day 5% decline from its all time highs to now being less than 2% below those highs.

All during the course of the past week.

With news of the Iran deal greeting traders this morning and yesterday evening’s news of a proposed Chinese buyout of Micron Technolgies, bank earnings beginning today and tomorrow’s Congressional testimony from Janet Yellen, there’s enough going on to give markets plenty to ponder and digest.

Today it was neither ecstasy nor fear that dominated the market. Instead, it just cautiously moved higher after a tentative start to the day.

The initial earnings coming from the financial sector this morning were pointing in the right direction, although the financial sector’s performance  doesn’t necessarily mean much for the rest of the market. When banks are thriving and their earnings reflect those good times, the rest of the market can go in either direction. It’s when the financial sector releases earnings that are disappointing that you can reasonably well predict that everyone else will be following along in the same path.

So the early indication this morning at least offered some hope for things to come as companies may be in a position to report better than expected revenues thanks to a better than expected currency exchange rate. Additionally, with news of this morning’s Iran deal comes new pressure on the price of oil, which has already been under renewed pressure over the past 2 weeks.

Higher revenues and lower costs is a good way to see share prices move higher, especially if neither was really expected.

That combination could easily push the markets to new highs, especially if the efforts in China put a temporary lid on the sharp downward pressures that have been building in that market.

With a little bit of money to spend and a desire to see some additional income generated this week, I’m not resistant to trying to add any new positions this week, but would still continue to prefer some further advances and any possibility of rollovers or assignments of this week’s positions, although only one of the three may be in a position for either.

With what may be a pause, I’d be more inclined to spend that money, although you do have to be aware that lately there hasn’t been any kind of pattern in the overall market, other than there’s been no pattern. While the market may be taking a pause today, there’s as much reason to believe that the next move, maybe tomorrow’s move, can be much higher as it can be much lower.

As we await more earnings, perhaps Yellen’s testimony over two days beginning tomorrow can provide some optimism to send prices higher. The history of the Humphrey-Hawkings mandated testimony is that greater moves tend to come during the first day of testimony and Janet Yellen has been very much of a calming voice for markets, in general.

Hopefully, there will be a stream of good news for the rest of the week, or at least an absence of anything bad and maybe that will allow us to focus on some earnings fundamentals for a change.

Daily Market Update – July 14,  2015  (8:00 AM)

It looks as if the US stock market places greater value on a possible solution to the Greek debt crisis than it does to the agreement between the US and other nations with Iran over its nuclear programs.

Yesterday’s news from the EU and Greece helped to deliver a 200 point gain to the DJIA, while this morning’s news regarding the agreement with Iran has the futures trading virtually unchanged.

Still, given the back and forth and the big give and take kind of moves over the past few weeks, even a flat day coming immediately after a 200 point climb could be considered a sort of victory, as the market has quickly gone from an intra-day 5% decline from its all time highs to now being less than 2% below those highs.

All during the course of the past week.

With news of the Iran deal greeting traders this morning and yesterday evening’s news of a proposed Chinese buyout of Micron Technolgies, bank earnings beginning today and tomorrow’s Congressional testimony from Janet Yellen, there’s enough going on to give markets plenty to ponder and digest.

The initial earnings coming from the financial sector this morning are pointing in the right direction, although the financial sector’s performance  doesn’t necessarily mean much for the rest of the market. When banks are thriving and their earnings reflect those good times, the rest of the market can go in either direction. It’s when the financial sector releases earnings that are disappointing that you can reasonably well predict that everyone else will be following along in the same path.

So the early indication this morning at least offers some hope for things to come as companies may be in a position to report better than expected revenues thanks to a better than expected currency exchange rate. Additionally, with news of this morning’s Iran deal comes new pressure on the price of oil, which has already been under renewed pressure over the past 2 weeks.

Higher revenues and lower costs is a good way to see share prices move higher, especially if neither was really expected.

That combination could easily push the markets to new highs, especially if the efforts in China put a temporary lid on the sharp downward pressures that have been building in that market.

With a little bit of money to spend and a desire to see some additional income generated thius week, I’m not resistant to trying to add any new positions this week, but would still continue to prefer some further advances and any possibility of rollovers or assignments of this week’s positions, although only one of the three may be in a position for either.

With what may be a pause, I’d be more inclined to spend that money, although you do have to be aware that lately there hasn’t been any kind of pattern in the overall market, other than there’s been no pattern. While the market may be taking a pause today, there’s as much reason to believe that the next move, maybe tomorrow’s move, can be much higher as it can be much lower.

As we await more earnings, perhaps Yellen’s testimony over two days beginning tomorrow can provide some optimism to send prices higher. The histroy of the Humphrey=Hawkings mandated testimony is that greater moves tend to come during the first day of testimony and Janet Yellen has been very much of a calming voice for markets, in general.

Hopefully, there will be a stream of good news for the rest of the week, or at least an absence of anything bad and maybe that will allow us to focus on some earnings fundamentals for a change.

Daily Market Update – July 13,  2015  (Close)

It’s always nice to wake up to start the week and seeing some nice gains.

Just to clarify that, sometimes you don’t want to see gains to start the week, though.

Like this week.

Although it’s nice waking up and finding out that you’re now worth more, sometimes you also understand that when you’re worth less there may be more opportunity ahead.

While it is good news that there seems to be an agreement on Greece’s debt, it would have been nice to see a market decline to begin the week to give some opportunity to add some new positions at bargain prices, as was the case last week.

It’s especially nice when those declines are sharp and very transitory. While that was the case last week, the moves were so pronounced and so diametric that it was especially good to be able to get out of those new positions unscathed and with some decent profits to show for it, even as the market ended up perfectly flat for the week.

With that Greek debt agreement appearing to be in place, although there are some suggestions that it’s an illusory one and the Chnese market, while not surging, having moved nicely higher, you might have expected more of an advance than we were seeing in our futures.

Happily, once the market started trading for real it had the same point of view..

A 125 move higher in the DJIA futures seemed absolutely tame by recent standards and it dis make me wonder how much staying power the market would have once the deal is dissected and once focus is cast on the next issue on the horizon. You can expect that there may be some of these ECB debt crisises to come along, although some countries, such as Spain have gotten their economies into better shape since the last crisis sweeping the EU a few years ago.

But today wasn’t the day for second guessing, even if the Greek deal isn’t entirely done yet, nor is it clearly one that will ensure that Greece can get itself onto more sound footing.

Since I don’t have too many positions set to expire this week as the July 2015 option cycle comes to its close, this would have been as good a week as any, for some decline and an opportunity to consider new positions, but I’m not about to complain about another 200 move higher.

With the morning’s sustained market strength I wouldn’t mind it if this became a week of adding some paper gains and maybe getting to see an assignment or two, although the latter is less likely.

My expectation, even with earnings season really beginning to get in gear this week with the financials reporting and Janet Yellen giving her required 2 day Congressional testimony on Wednesday and Thursday, is that it will be a slow trading week.

I expect to be doing a fair amount of watching, although I would be willing to spend down some of the small cash reserve. While I’d be willing, I’m not as willing as I was last week at this same time watching a decline in the making that made it all seem more inviting.

While I always like to see some action so that I can get some income generating trades executed, those have been fewer these past few weeks. When dividends are there t
o pick up the slack there’s a little less concern, but this is a week without much in the way of meaningful dividends, so not making those trades is more than just an annoyance.

Hopefully that annoyance will be offset by being able to wake up a few more mornings this week being a little bit richer and maybe even getting some more opportunities to sell calls on some uncoivered positions

Daily Market Update – July 13,  2015  (8:00 AM)

It’s always nice to wake up to start the week and seeing some nice gains.

Just to clarify that, sometimes you don’t want to see gains to start the week, though.

Like this week.

Although it’s nice waking up and finding out that you’re now worth more, sometimes you also understand that when you’re worth less there may be more opportunity ahead.

While it is good news that there seems to be an agreement on Greece’s debt, it would have been nice to see a market decline to begin the week to give some opportunity to add some new positions at bargain prices, as was the case last week.

It’s especially nice when those declines are sharp and very transitory. While that was the case last week, the moves were so pronounced and so diametric that it was especially good to be able to get out of those new positions unscathed and with some decent profits to show for it, even as the market ended up perfectly flat for the week.

With that Greek debt agreement appearing to be in place, although there are some suggestions that it’s an illusory one and the Chnese market, while not surging, having moved nicely higher, you might have expected more of an advance than we’re seeing in our futures, though.

A 125 move higher in the DJIA futures seems absolutely tame by recent standards and it does make me wonder how much staying power it will have once the deal is dissected and once focus is cast on the next issue on the horizon, as you can expect that there may be some of these ECB debt crisises to come along, although some countries, such as Spain have gotten their economies into better shape since the last crisis sweeping the EU a few years ago

Since I don’t have too many positions set to expire this week as the July 2015 option cycle comes to its close, this would have been as good a week as any, for some decline and an opportunity to consider new positions.

However, with the morning’s market strength I wouldn’t mind it if this became a week of adding some paper gains and maybe getting to see an assignment or two, although the latter is less likely.

My expectation, even with earnings season really beginning to get in gear this week with the financials reporting and Janet Yellen giving her required 2 day Congressional testimony on Wednesday and Thursday, is that it will be a slow trading week.

I expect to be doing a fair amount of watching, although I would be willing to spend down some of the small cash reserve. While I’d be willing, I’m not as willing as I was last week at this same time watching a decline in the making that made it all seem more inviting.

While I always like to see some action so that I can get some income generating trades executed, those have been fewer these past few weeks. When dividends are there to pick up the slack there’s a little less concern, but this is a week without much in the way of meaningful dividends, so not making those trades is more than just an annoyance.

Hopefully that annoyance will be offset by being able to wake up a few more mornings this week being a little bit richer

Daily Market Update – July 10,  2015  (8:00 AM)

The Week in Review will be posted by 6 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments:  ANF

Rollovers:  BAC

Expirations:   none

The following was ex-dividend last week:  GPS (7/6 $0.23)

The follwing will be ex-dividend next week FCX (7/13 $0.05)

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

Daily Market Update – July 9,  2015  (Close)

Remember that 300 point turnaround on Tuesday?

It was pretty much a forgotten thing after yesterday’s 250 point loss.

As if that wasn’t enough to eclipse the memory of the turnaround, the shutdown in trading at the NYSE for almost 4 hours will be talked about for a long time. Triple digit gains, losses and turarounds come and go, but these kind of trading halts all have a life of their own and persist  for archivists and novice historians alike.

You may be able to add yesterday to the White Bronco chase and other events over the years that somehow leave an indelible mark on memories.

With the issues at United Airlines yesterday and reports of the Wall Street Journal’s web site being down, had to set off alarms even in non-conspiracy oriented people. Coincidences occur all the time, but it’s hard to totally dismiss the idea that concerted efforts could be behind a string of unexpected software crashes.

This morning it appeared as if coincidence is the diagnosis and we move on. What was shown, for those who may be plotting to crash the NYSE system is like a heart attack patient who is fortunate enough to have had or to develop good collateral circulation, helping to keep vital tissue perfused and alive, it’s ood to be diversified. In this case it’s the existence of multiple other exchanges that created collateral circluation and kept the enterprise going, even as the NYSE was out for the count.

To the market’s credit, in the face of a large decline already in the making because of the Chinese drag, the market didn’t add on in any palpable way to that loss and create an avalanche of selling.

Today was a new day and we’re back to the reality that lately has been a case of 4 steps back and 3 steps forward. This morning’s futures looked as if it is trying to play a game of catch-up and add another one of those forward steps top the mix. For the briefest of times it actually did erase the entirety of yesterday’s loss, but that wasn’t to last.

Still, it was a decent day, although not as much catch up as was needed or wanted.

While last week the real news was Greece, this week it is clearly all about China.

Yesterday’s market followed a plunge in China as their feeble attempts at manipulating markets by suppressing them failed to impress anyone, nor to solve the underlying problem of widespread use of leverage and a building bubble.

This morning we woke up to the market in China having moved about 6% higher.

The least we could have done with that kind of a move was to give it a nod and maybe consider taking that step forward. At least some step forward, even if much smaller than needed, was something.

And it’s a good thing.

With yesterday’s decline the S&P 500 was about 4.5% off its last high point. That puts it right in the mini-correction neighborhood.

But where the real test may be is that the S&P 500 ended the day yesterday within a breath of its
support level. A simple additional 20 point drop in the DJIA could have been enough to get technicians really concerned or could have triggered algorithmic programs, most likely with sell orders.

So the rebound in Shanghai came at a good time.

Maybe the ensuing rally here in the states may be enough, if it can continue, to put what few positions are set to expire this week and the next week into contention for either rollover or assignment and maybe get things back on track.

Unfortunately, just as there was a good 300 point turnaround the other day, today’s turnaround was nearly 220 points and not in the right direction, even while ending the day higher.

Who knows what tomorrow will bring to end this week. With reports of a final, or near final decision to be made in the Greek debt crisis by tomorrow morning there could be reason for markets to celebrate or head for the hills.

Daily Market Update – July 9,  2015  (8:00 AM)

Remember that 300 point turnaround on Tuesday?

It was pretty much a forgotten thing after yesterday’s 250 point loss.

As if that wasn’t enough to eclipse the memory of the turnaround, the shutdown in trading at the NYSE for almost 4 hours will be talked about for a long time. Triple digit gains, losses and turarounds come and go, but these kind of trading halts all have a life of their own and persist  for archivists and novice historians alike.

You may be able to add yesterday to the White Bronco chase and other events over the years that somehow leave an indelible mark on memories.

With the issues at United Airlines yesterday and reports of the Wall Street Journal’s web site being down, had to set off alarms even in non-conspiracy oriented people. Coincidences occur all the time, but it’s hard to totally dismiss the idea that concerted efforts could be behind a string of unexpected software crashes.

This morning it appears as if coincidence is the diagnosis and we move on. What was shown, for those who may be plotting to crash the NYSE system is like a heart attack patient who is fortunate enough to have had or to develop good collateral circulation, helping to keep vital tissue perfused and alive. In this case it’s the existence of multiple other exchanges that created collateral circluation and kept the enterprise going, even as the NYSE was out for the count.

To the market’s credit, in the face of a large decline already in the making because of the Chinese drag, the market didn’t add on in any palpable way to that loss and create an avalanche of selling.

Today is a new day and we’re back to the reality that lately, it has been a case of 4 steps back and 3 steps forward. This morning’s futures looks as if it is trying to play a game of catch-up and add another one of those forward steps top the mix.

While last week the real news was Greece, this week it is clearly all about China.

Yesterday’s market followed a plunge in China as their feeble attempts at manipulating markets by suppressing them failed to impress anyone, nor to solve the underlying problem of widespread use of leverage and a building bubble.

This morning we woke up to the market in China having moved about 6% higher.

The least we could do woith that kind of a move is to give it a nod and maybe consider taking that step forward.

With yesterday’s decline the S&P 500 was about 4.5% off its last high point. That puts it right in the mini-correction neighborhood.

But where the real test may be is that the S&P 500 ended the day yesterday within a breath of its support level. A simple additional 20 point drop in the DJIA could have been enough to get technicians really concerned or could have triggered algorithmic programs, most likely with sell orders.

So the rebound in Shanghai comes at a good time.

Maybe the ensuing rally here in the states may be enough, if it can continue,
to put what few positions are set to expire this week and the next week into contention for either rollover or assignment and maybe get things back on track.

Daily Market Update – July 8,  2015  (Close)

You had to be impressed with yesterday’s 300 point turnaround on the DJIA.

Fortunately, that turnaround was in the right direction, because we weren’t heading in the right direction this morning, as there were very large sell-offs in China overnight and those sell-offs spread to other Asian markets, even as European markets seem to be moving higher this morning.

The Chinese sell-off can’t be too much of a surprise, as lots of evidence shows that when there are attempts to manipulate markets those efforts tend to fall flat after a day or so. Generally, that is the situation seen during currency crises, when central banks move in to prop up their currencies, only to find that they can stem the tide for the briefest of moments. The only thing that can really correct the situation is time and following the natural cycle of ups and downs that characterize every market that has underlying value.

Ultimately, the force of markets isn’t very different from the forces of nature. Good luck trying to rein either in and showing them who’s the real boss.

Like most of these kind of events, they will pass, but it’s always of question of how long it will take and how we can withstand the pressures.

In the case of China, they aren’t very new to this capitalism game called the stock market and the speculative frenzy and heavy use of margin may have a depressing impact on their econopmy for quite a while, as debt is a heavy burden to lift.

You also have to wonder whether the Chinese government will know what to do, not that any government, including our own, has any kind of certainty over what to do when there is a bursting of a bubble. The fear is that the CHinese government will over-react and try to show the markets that they are the boss in a very heavy handed way.

The other question is how a Chinese stock market sell off will impact US markets.

This morning, the obvious impact wa the one manifesting itself, as the futures were trading down triple digits, but that very first question applies here, too. 

Just how long will that impact persist, particularly since US markets can benefit from perceived weakness elsewhere.

While our futures were down triple digits this morning, it’s another of these much weaker sessions that are actually improved over where the futures had been trading, so there was always some hope for moderation to sneak into the market.

But what was a surprise was the NYSE outage for what seemed like lots longer than 3 1/2 hours.

Depending on how you want to skew your bias, the fact that the market didn’t panic as news of a software problem with United Airlines, the Wall Street Journal’sweb site being down and the NYSE halting trades, is good.

The fact that the market did deteriorate from where the futures had been indicating is not good, but it could have been much worse if the conspiracy people could have taken charge.

There’s still time for moderation, but it will have to wait until tomorrow.

Some of that moderation can begin tonight, as earnings season begins. While it’s not very much of a barometer anymore, there’s no question that some good numbers from Alcoa could give markets some hope of an economy that is moving forward, although there has to be some concern for what a Chinese slowdown may do to the prospects of future revenues.

Some more moderation could come if the EU and Greece begin acting like adults, now that the deadline has passed and the referendum is history. Anything constructive on that end, short of a Greek exit from the EU should be of benefit to the markets, but like everything else, just for the briefest of moments.

Today, as expected, was a day for watching and wondering where it ends. Wednesdays are usually slow trading days and today was no exception. The added reason for all of that quiet and inactivity was an exception, though. 

The only hope is that the hole that may be dug today isn’t so deep as to materially jeopardize the few positions scheduled for expiration this week and next.