Category: Daily Market Update

Daily Market Update – May , 2015  (9:30 AM)

Yesterday, was as it should have been, a fairly quiet day, even though it did spend a bit of time in the triple digit gain arena.

Other than this week’s Employment Situation Report coming on Friday, there’s not too much to drive markets, as earnings reports are also now going to begin slowing down.It ended the day with a much more moderated gain and that looks as it will be the polar opposite to this morning, as the futures are setting up for a moderately lower day.

Again, there’s no news that should play much of a hand in shaping the day’s trading. Other than tomorrow’s ADP report, which is just a precursor to Friday’s Employment Situation Report, there’s nothing on the docket.

Even after a period of time when there was a quiet period on FOMC speeches, it’s a pretty quiet week on that end, as well.

At some point, especially if it continues heading in its recent direction, someone is going to take note of where bond traders have been taking the rate on the 10 Year Treasury. It’s still below that recent 2.3% high point from a couple of months ago, but it has gone about 15% higher in just a week. AS it moves higher not only does it create more pressure in other interest sensitive areas, but it may finally start offering some competition for whatever uncommitted investment dollars are out there.

However, if you listen to the people at TD Ameritrade, it doesn’t seem as if there is that much un-invested money sitting in accounts, at least not for individual investors. On top of that, margin debt is at an all time high.

Take those bits of information together and you have less of a catalyst for upward move in stocks and the prospects that any move into bonds would have to come at the expense of money already invested in stocks.

So the burden of proof is definitely on the bulls, maybe even more than usual.

With a couple of purchases yesterday, I think that i am done for the week. Not that I have the cash reserves to go on, but the rest of the week will likely be spent looking for any opportunity to generate some additional revenue. As always, the includes the need to keep fingers crossed and to hope for any of a few different outcomes.

Most of all, I would love to see those prayers answered with some assignments.Those are still looking a little bleak, so I may be willing to actually let the Market Vectors Gold Miners ETF go, rather than rolling if it is in the money, as I’ve been doing repeatedly over the past few months.

With today’s negative opening looming and not really in the market for any bargains, I’m just hopeful to see some isolated bumps in individual positions and would again gladly take any opportunity to generate some revenue from any uncovered positions.

Daily Market Update – May 4, 2015  (Close)

Other than this week’s Employment Situation Report coming on Friday, there’s not too much to drive markets, as earnings reports are also now going to begin slowing down.

The week should be a fairly boring one as far as inputs go, but you never know what the output is going to look like. At least last week had the kind of news events that could be expected to shake markets. This week, we will have to wait until Friday for events, but the shaking could still come at any time while markets teeter at their tops.

Today, despite flirting at some higher levels, it was still a fairly boring day, but at least some opportunities were there to be had.

Last week was somewhat rescued by Friday’s performance and the week ended with only a small loss, but still left the S&P 500 within about 0.4% of its all time high.

Close enough to be easily eclipsed today, e-ven with a fairly mediocre close.

Whatever the large moves were last week and there were those in both directions, there was little news or reason to account for the swings, other than by its very nature, swings move in opposite directions.

While the market has maintained its levels near those highs and actually built on them just a little, the prevailing question remains where the catalyst is coming from.

That’s always an ever-present question, but sometimes it’s harder to see answers. now is one of those times that it’s hard to see an answer.

In the longer term, that is the next earnings season, the catalyst might be the fact that we’ve been set up to have lowered expectations, but the bottom line could change for the better if the dollar weakens a little and top line revenues are enhanced.

But until that point it may be a mystery as to what leads us to the next level higher. Usually, it has to be the promise of growth and the latest promise of growth coming from lower oil prices hasn’t materialized, while in the meantime those prices have now begun edging higher.

The Employment Situation Report could give some reason to think that economic expansion is taking hold at a greater pace, but the past month was a disappointment. Since we’re pretty much assigned to interest rates going higher, a large number on new jobs creation shouldn’t frighten anyone away, but there aren’t too many indications that a really large number is in store for this month’s report.

With no assignments last week, but having had the good fortune of being able to make the rollover trades necessary, it was possible to create the week’s income stream. That was thanks to Friday’s recovery. But as a result of no cash recycling, I didn’t expect to be in the market to add many new positions this week, so I was a little surprised by actually adding 2 positions. I was also surprised that one of them was for next week’s expiration, since that reduced the chance of recycling money this week in order to be positioned to do something new the following week as the May 2015 option cycle will come to its close.

My hope is that there continues to be some opportunity to sell calls on existing uncovered positions and slowly attack that unwanted pile and see the market add to Friday’s gains so that the handful of positions expiring this week are at least
in position to be rolled over. Today, was just a teeny step in that direction, but every teeny bit is also welcome.

Ultimately, it’s whatever it takes to make the week’s income and hopefully have some more money at the bottom line for the efforts.

Daily Market Update – May 4, 2015  (8:30 AM)

Other than this week’s Employment Situation Report coming on Friday, there’s not too much to drive markets, as earnings reports are also now going to begin slowing down.

The week should be a fairly boring one as far as inputs go, but you never know what the output is going to look like. At least last week had the kind of news events that could be expected to shake markets. This week, we will have to wait until Friday for events, but the shaking could still come at any time while markets teeter at their tops.

Last week was somewhat rescued by Friday’s performance and the week ended with only a small loss, but still left the S&P 500 within about 0.4% of its all time high. Whatever the large moves were last week and there were those in both directions, there was little news or reason to account for the swings, other than by its very nature, swings move in opposite directions.

While the market has maintained its levels near those highs and actually built on them just a little, the prevailing question remains where the catalyst is coming from.

That’s always an ever-present question, but sometimes it’s harder to see answers. now is one of those times that it’s hard to see an answer.

In the longer term, that is the next earnings season, the catalyst might be the fact that we’ve been set up to have lowered expectations, but the bottom line could change for the better if the dollar weakens a little and top line revenues are enhanced.

But until that point it may be a mystery as to what leads us to the next level higher. Usually, it has to be the promise of growth and the latest promise of growth coming from lower oil prices hasn’t materialized, while in the meantime those prices have now begun edging higher.

The Employment Situation Report could give some reason to think that economic expansion is taking hold at a greater pace, but the past month was a disappointment. Since we’re pretty much assigned to interest rates going higher, a large number on new jobs creation shouldn’t frighten anyone away, but there aren’t too many indications that a really large number is in store for this month’s report.

With no assignments last week, but having had the good fortune of being able to make the rollover trades necessary, it was possible to create the week’s income stream. That was thanks to Friday’s recovery. But as a result of no cash recycling, I don’t expect to be in the market to add many new positions this week. Any new purchases are likely to look at expirations this week so that there is at least some chance of recycling money in order to be positioned to do something new the following week as the May 2015 option cycle will come to its close.

My hope is that there continues to be some opportunity to sell calls on existing uncovered positions and slowly attack that unwanted pile and see the market add to Friday’s gains so that the handful of positions expiring this week are at least in position to be rolled over.

Ultimately, it’s whatever it takes to make the week’s income and hopefully have some more money at the bottom line for the efforts.

Daily Market Update – April 30, 2015  (Close)

Mid-week, just like mid-town, was a busy place to be yesterday.

In addition to all of the earnings reports coming in and the continued focus on the manner in which the Twitter earnings were released and its aftermath, there were also the GDP Report and the FOMC Statement release to be digested.

The Twitter earnings, while fascinating in the manner in which they were prematurely released, was a non-event. Twitter won’t ever be a stock that actually moves markets, as even its continued existence as a standalone company is called into question, as its leadership runs from crisis of faith to crisis of faith.

On the other hand, the GDP Report and the FOMC Statement are meaningful, even if they don’t act as stimuli for change.

Not yesterday, though.

FOMC Statement release would be this morning and afternoon, respectively, but the Twitter debacle last night may still keep people’s attention for a while.The GDP Report was, as expected, not very encouraging. It failed to reflect what most everyone has been waiting for over the past 6 months. Anyone who has been waiting for a consumer led expansion of the economy has had to put those hopes on hold.

While expecting nothing, the market got even less than that.

At least the FOMC didn’t add to the disappointment, as it basically said nothing, other than to remove all temporal references and to re-emphasize that it would be driven by data.

Today, in addition to more earnings, are also Jobless Claims and “Personal Income and Outlays” reports.

The latter may be the first in a series of data points that the FOMC may use when considering a June interest rate hike, which is the time that so many had predicted it would finally become a reality.

So far, it’s hard to see where the economic growth necessary to spur interest rate increases will come from, although the bond market did drive interest rates higher yesterday. While they are generally thought to understand macro-economic events better than stock traders, the bond market has been really volatile of late, so there’s no real reason to believe that they know anything more than the next guy at the moment.

As this morning’s reports were released Jobless claims were well reduced, but personal income and spending left something to be desired and the pre-opening markets were basically unchanged.

With yesterday’s weakness, the prospects of rollovers or assignments was made more distant and this morning’s pre-open futures didn’t appear as they will be helping the situation. But at least the morning’s news didn‘t drive them deeper into the red, so there was always hope as the next 2 days would unfold and more earnings are released and maybe an FOMC Governor or two say something during prepared remarks that might goose the market a little higher before Friday’s expirations roll around.

That was the hope, anyway.

Sounds great on paper, but that’s not the way it worked out as the market may have just realized that nothing is really there to give any one a reason to keep pushing the “buy” button.

With at least an opportunity to rollover shares of United Continental the day wasn’t a complete loss. Interestingly, while just about everything was lower today, those positions that are expiring tomorrow, while now further away from their strikes, didn’t suffer as badly as the overall market.

So there always some hope for tomorrows’s trading, although it is disappointing that April 2015 goes out on such a negative note and barely finished the month higher, in contrast to the way Aprils are usually expected to perform.

Daily Market Update – April 29, 2015  (Close)

I didn’t know what the outcome of the GDP Report and the FOMC Statement release would be this morning and afternoon, respectively, but the Twitter debacle last night may still keep people’s attention for a while.

Like most news, though, even the most highly significant economic news, it will be forgotten as soon as the next bit of news comes forward. But its CEO did nothing to instill confidence today, as the shares tumbled even further after his appearance on TV, despite having tried to claw back some of this morning’s additional losses prior to his appearance.

Twitter aside, there were two potentially very significant events and still more earnings to come today.

Those earnings reports will be slowing down significantly once this week is over. At that point every one will try to interpret what the meaning of the past earnings season had been and what the prospects are for the coming quarter.

For now, the theme appears to not be ready to change any time soon. The dollar is strong and oil prices, despite rallying higher, are still low.

While this quarter was characterized by higher EPS data, but on lower top line revenue, as long as corporate buy backs continue into the next quarter, there may be some offset for the adverse impact of a strong dollar.

What may be different the next quarter is that if low energy prices do continue we may see the kind of consumer led expansion of the GDP that we’ve been waiting for since the beginning of 2015.

This morning the expectation was for another set of disappointing GDP statistics, so it was just a question of seeing  whether those expectations were met and whether they  were already baked into markets.

we’ll see where that leads if materialized or where a surprise may lead if expansion is finally noted.The answers are, “yes, they were materialized, but no, they weren’t fully baked into markets.”

While never looking very strong, even in the pre-open futures, once the GDP data was released and really was disappointing, there never was much of a reason to go higher.

The ensuing FOMC Statement release did nothing either, although it really had no worthwhile news or change, other than to try and remove attention from the calendar and point more to an FOMC that would be data driven, rather than coerced by the passage of time.

With enough new positions opened this week to keep me happy and generating some weekly income, I’d like to see prices strengthen a little bit more to have a better opportunity to see those positions set to expire this week either be assigned or get rolled over.

Today wasn’t going to be that day, though. Luckily, there are still 2 more days to go.

While I didn’t expect to make any new position trades yesterday, but did so, my expectations were even lower today, as they are on most Wednesdays when focus really turns to managing existing positions to close out the week or be put into position for subsequent weeks.

No one was more surprised than me when I did sell Twitter puts.

With today’s big economic news there was even more reason to just be a casual observer at the ready to sell calls on existing positions, but that opportunity never arrived. Instead, I chose to put more cash at risk for a week that doesn’t now look as if there will be too many chances to get additional income from rollovers or to replenish cash from assignments.

Still, that could all change tomorrow.

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

I don’t know what the outcome of the GDP Report and the FOMC Statement release will be but the Twitter debacle last night may still keep people’s attention for a while.

Like most news, though, even the most highly significant economic news, it will be forgotten as soon as the next bit of news comes forward.

So today will have two potentially very significant events and still more earnings to come.

Those earnings reports will be slowing down significantly once this week is over. At that point every one will try to interpret what the meaning of the past earnings season had been and what the prospects are for the coming quarter.

For now, the theme appears to not be ready to change any time soon. The dollar is strong and oil prices, despite rallying higher, are still low.

While this quarter was characterized by higher EPS data, but on lower top line revenue, as long as corporate buy backs continue into the next quarter, there may be some offset for the adverse impact of a strong dollar.

What may be different the next quarter is that if low energy prices do continue we may see the kind of consumer led expansion of the GDP that we’ve been waiting for since the beginning of 2015.

This morning the expectation is for another set of disappointing GDP statistics, so we’ll see where that leads if materialized or where a surprise may lead if expansion is finally noted.

With enough new positions opened this week to keep me happy and generating some weekly income, I’d like to see prices strengthen a little bit more to have a better opportunity to see those positions set to expire this week either be assigned or get rolled over.

While I didn’t expect to make any new position trades yesterday, but did so, my expectations are even lower today, as they are on most Wednesdays when focus really turns to managing existing positions to close out the week or be put into position for subsequent weeks.

With today’s big economic news there’s even more reason to just be a casual observer at the ready to sell calls on existing positions if the opportunity arrives, but not to put more cash at risk.

Something always needs to be held back in the event that real opportunity appears in the event of anything that’s going to be construed as bad news, especially if it has some staying power, or leads to the next mini-correction.

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Daily Market Update – April 28, 2015  (Close)

Apple reported nice earnings yesterday and continued its assault on the $1 trillion market capitalization line, as it also approaches the $1,000/share level prior to its stock split.

The market cap of Apple is even more amazing when you consider how many shares have now been bought back and retired, no longer being counted toward that $1 trillion mark.

But unlike 2011 and much of 2012 when the S&P 500 could have been summarized simply on the basis of Apple’s moves, it is no longer the stock that moves markets up and down, just as IBM had been in an earlier era.

With the market in mild decline yesterday and with early indications of some mild decline continuing this morning, there doesn’t appear to be too much euphoria, even as Apple is pennies away from an all time high as the morning session is about to begin. The early DJIA numbers would be far weaker, though, if Apple and Merck, also having reported earnings, were not both up so strongly.

Interestingly, the day ended with a nice gain, but did so without the help of Apple, which ended up falling by about $2, which ended up shaving about 14 points off the DJIA.

As is often the case, news becomes stale quickly, especially as there’s more news coming and this week has plenty of more news coming, as earnings will keep pouring in all throughout the week.

With the FOMC meeting beginning today the last 2 months have gotten away from that strange habit of earlier months that saw unusual moves much higher on the day prior to the release. Today’s move higher after a large decline in the first hour wasn’t the typical higher move that had been seen in previous months prior to the FOMC Statement release.

Whatever confidence investors had about what would be contained in the FOMC Statement has vanished, as now it’s hard to know whether there is actually any news that could possibly be considered as being positive for the market in the near term.

The biggest fear, that of increasing interest rates coming sooner rather than later, could be assuaged if the GDP comes in weak tomorrow morning, as expected.

However, while those fears may be put on hold, a rational person would be concerned that the economy isn’t heating up enough to warrant even the slightest of interest rate increases.

Those rate increases usually come as corporate earnings are climbing strongly, but that’s not really the case at the moment. So if the FOMC is focused and hell bent on increasing rates, one has to wonder whether, in the face of lackluster profit growth, that interest rate increase might not be the straw that finally broke the camel’s back and created the correction that seems so long overdue.

I’m glad other people get paid to think about those sort of things. They are far too complex even for those people that know what they’re looking at, thinking about and creating policy.

With a couple of purchases yesterday, a rollover and the sale of a call on an uncovered position, I should maybe have given some thought to calling it a week, but it was hard to look the other way watching Lexmark take a hit following its earnings release.

But with cash available and some positions still within the realm of possibility of either being assigned or rolled over, I wouldn’t mind making even some more purchases.

While Lexmark seemed to fit the bill for the kind of compelling opportunity that I was looking for if trading in advance of the FOMC release, I don’t think tomorrow will offer anything similar, so I’ll be taking it in, would be my guess.until there’s a chance of gaining some clarity.

Daily Market Update – April 28, 2015  (9:00 AM)

Apple reported nice earnings yesterday and continued its assault on the $1 trillion market capitalization line, as it also approaches the $1,000/share level prior to its stock split.

The market cap of Apple is even more amazing when you consider how many shares have now been bought back and retired, no longer being counted toward that $1 trillion mark.

But unlike 2011 and much of 2012 when the S&P 500 could have been summarized simply on the basis of Apple’s moves, it is no longer the stock that moves markets up and down, just as IBM had been in an earlier era.

With the market in mild decline yesterday and with early indications of some mild decline continuing this morning, there doesn’t appear to be too much euphoria, even as Apple is pennies away from an all time high as the morning session is about to begin. The early DJIA numbers would be far weaker, though, if Apple and Merck, also having reported earnings, were not both up so stroingly.

As is often the case, news becomes stale quickly, especially as there’s more news coming and this week has plenty of more news coming, as earnings will keep pouring in all throughout the week.

With the FOMC meeting beginning today the last 2 months have gotten away from that strange habit of earlier months that saw unusual moves much higher on the day prior to the release.

Whatever confidence investors had about what would be contained in the FOMC Statement has vanished, as now it’s hard to know whether there is actually any news that could possibly be considered as being positive for the market in the near term.

The biggest fear, that of increasing interest rates coming sooner rather than later, could be assuaged if the GDP comes in weak tomorrow morning, as expected.

However, while those fears may be put on hold, a rational person would be concerned that the economy isn’t heating up enough to warrant even the slightest of interest rate increases.

Those rate increases usually come as corporate earnings are climbing strongly, but that’s not really the case at the moment. So if the FOMC is focused and hell bent on increasing rates, one has to wonder whether, in the face of lackluster profit growth, that interest rate increase might not be the straw that finally broke the camel’s back and created the correction that seems so long overdue.

I’m glad other people get paid to think about those sort of things. They are far too complex even for those people that know what they’re looking at, thinking about and creating policy.

With a couple of purchases yesterday, a rollover and the sale of a call on an uncovered position, I should maybe think about calling it a week.

But with cash available and some positions still within the realm of possibility of either being assigned or rolled over, I wouldn’t mind making some more purchases.

With the market appearing to open the morning with
a mildly negative tone, I’m not expecting many opportunities to do what I would really like to do and simply sell more calls on uncovered positions. While there’s still the possibility of adding positions, something would have to seem as a really strong buy to do so before tomorrow’s potentially big GDP and FOMC news.