Daily MArket Update – March 28, 2014 (Close)

 

 

Daily Market Update – March 28, 2014 (Close)

The Week in Review is now posted and the Weekend Update will be posted by noon on Sunday.

 

 

 

 

 

 

 

 

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Daily Market Update – March 28, 2014

 

 

Daily Market Update – March 28, 2014 (7:30 AM)

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

 

Today’s possible outcomes include:

 

Assignment:

Rollover:  COP, MOS, TGT, VZ

Expiration:  AIG, C, FDO, FDO, WFM

 

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

 

 

 

 

 

 

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Daily Market Update – March 27, 2014 (Close)

 

 

Daily Market Update – March 27, 2014 (Close)

Interesting day today that ended up being much busier than I would have expected and in a good way, despite a market that basically did nothing all day.

With the day starting off with the discovery that my Walter Energy puts were assigned to me early. it wasn’t exactly a good start to the day, but I was still focused on news from the day before.

It’s not often that I end the day and then begin the new one being upset about things, but I’m still seething about yesterday afternoon’s news that Citigroup failed its banking stress test.

It’s not that I have a large position in Citigroup. It’s just a position, really no different from others in terms of overall proportion. I usually have either one, two or three lots of any stock and generally fairly well balanced, other than for speculative kind of positions, which are under-represented.

In this case, I have two lots of shares and was expecting that one would be assigned this Friday.

That seems much less likely right now.

That wasn’t supposed to happen and  I doubt that any apologists will step forward with anything to say other than it was pretty inexcusable, given that they had the precise guidelines of what needed to be done.

It was bad enough that nearly everybody else passed the test and started to immediately announce share buy backs and raised dividends. But what was really bad was that this stress test was the equivalent of an open book test.

How do you fail one of those?

While unwritten, there was a sort of social contract between investors that these “too big too fail banks” would pass their imposed stress tests and get back to their usual dividends and efforts to keep stock prices higher, through buy backs. In turn, investors bought shares.

Vikram Pandit, the previous CEO of CItigroup, was said to have been fired after not passing the previous stress test and criticized for not having been a “banking guy,” as he came from the hedge fund world.

His replacement, Michael Corbat, was known as a no nonsense guy with a reputation of delivering troubled banks to health.

Maybe not so much this time, although there’s still 30 days to appeal the decision.

Or, there’s always next time.

I probably wouldn’t advise using that in their next ad campaign.

This morning doesn’t hold much promise for moving the market higher and Citigroup isn’t helping things.

With less positions looking as if they may be assigned this week keeping some of the cash back may have been an unintended positive thing, as there is also suddenly less of a positive aura around the market.

It seems to simply be looking for direction.

I’m content to let it try and find its way and sit back while it goes through those efforts. At least in a couple of weeks an entirely new earnings season will be ready to begin and then we’ll have something a little more tangible to be basing decisions upon, rather than the vacuum of the past few days.

As it would turn out there really wasn’t much in the way of self-discovery today, but at least there were plenty of opportunities to generate some revenue through rollovers and outright call sales. That also makes for a less hectic day tomorrow and provides more opportunity to think about next week and the week after.

Hopefully, some of you have been following along and making the DOH trades and the less adevnturous, “mini-DOH” version trades. Sometimes they are a little bit of a nail biter kind of trade, because you really don’t want to see positions get assigned at a strike lower than the entry level, but bya and large, those premiums will and do add up. For me, at least, it’s worth the added anxiety.

Besides, I could use a few more gray hairs.

 

 

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Daily Market Update – March 27, 2014

 

  

 

Daily Market Update – March 27, 2014 (9:30 AM)

It’s not often that I end the day being upset about things, but I’m still seething about yesterday afternoon’s news that Citigroup failed its banking stress test.

It’s not that I have a large position in Citigroup. It’s just a position, really no different from others in terms of overall proportion. I usually have either one, two or three lots of any stock and generally fairly well balanced, other than for speculative kind of positions, which are under-represented.

In this case, I have two lots of shares and was expecting that one would be assigned this Friday.

That seems much less likely right now.

That wasn’t supposed to happen and  I doubt that any apologists will step forward with anything to say other than it was pretty inexcusable, given that they had the precise guidelines of what needed to be done.

It was bad enough that nearly everybody else passed the test and started to immediately announce share buy backs and raised dividends. But what was really bad was that this stress test was the equivalent of an open book test.

How do you fail one of those?

While unwritten, there was a sort of social contract between investors that these “too big too fail banks” would pass their imposed stress tests and get back to their usual dividends and efforts to keep stock prices higher, through buy backs. In turn, investors bought shares.

Vikram Pandit, the previous CEO of CItigroup, was said to have been fired after not passing the previous stress test and criticized for not having been a “banking guy,” as he came from the hedge fund world.

His replacement, Michael Corbat, was known as a no nonsense guy with a reputation of delivering troubled banks to health.

Maybe not so much this time, although there’s still 30 days to appeal the decision.

Or, there’s always next time.

I probably wouldn’t advise using that in their next ad campaign.

This morning doesn’t hold much promise for moving the market higher and Citigroup isn’t helping things.

With less positions looking as if they may be assigned this week ke
eping some of the cash back may have been an unintended positive thing, as there is also suddenly less of a positive aura around the market.

It seems to simply be looking for direction.

I’m content to let it try and find its way and sit back while it goes through those efforts. At least in a couple of weeks an entirely new earnings season will be ready to begin and then we’ll have something a little more tangible to be basing decisions upon, rather than the vacuum of the past few days.

 

 

 

  

 

 

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Daily Market Update – March 26, 2014 (Close)

 

  

 

Daily Market Update – March 26, 2014 (Close)

Another day of no news and another day of an upward pointing market to get us started. Who knew that the market would later decide otherwise in the absence of any reason to have reversed direction?

With little in store for the rest of the week there wasn’t too much reason to think that this pattern of upward movement wouldn’t just continue, particularly since next week is another Employment Situation Report and that has had a long standing record of being the conclusion to positive market weeks.

It’s that kind of confidence and certainty that can get you into trouble.

This week has so far been a mildly positive one on all counts, but I would take “mildly positive” week after week, as opposed to some of the alternating and unpredictable big moves that can come our way.It certainly hasn’t been a very exciting week, but excitement can be over-rated. While I like to trade, all of that excitement is long in the past and forgotten once I look at the changing bottom line at the end of each day and especially at the end of each week.

The bottom line trumps everything. I can always use that bottom line to help get the excitement I crave in other ways.

The manner in which the market behaved today didn’t do much to bring a solution to the lack of market related excitement, but it did help erase some bottom line related excitement.

At the mid-way point for the week I wasn’t actively looking for or expecting any new purchases, although as next week’s expiring options become available for more positions starting tomorrow and still having cash to spend, the story may have been expected to shift a bit, but it never really did, as I just couldn’t get much of a level of comfort with today’s trading.

In the meantime any opportunities to find additional cover would have been appreciated, but they never really materialized. While I continue to want to create additional streams, even at the expense of greater maintenance need for positions, such as Cisco, which was the object of a “mini-DOH” trade, yesterday, thre market just didn’t offer the opportunity. Those come best when shares are trading into price strength, rather than retreating from strength..

Fortunately, there’s still a couple of more days for traders to come to their senses and try to understand why they drove up those shares by about 3.5% on a day when there was no news for a stock that tends to trade with very low volatility except in the absence of news, such as earnings.

As with the DOH trade of Target about a month ago which suddenly shot up beyond the strike and is now looking as if it is coming to an end after some rollovers, the extra maintenance may turn out to be worth an additional 1.5% or so, while waiting for its return to its original strike price.

Today, as has been the case for the past week or two, most of the attention was focused on today’s IPO, this time of the maker of the fad game, Candy Crush. With mos
t of its revenues based on a single game and a valuation in excess of $7 billion, it’s hard to keep a straight face as the market is set to embrace the debut.

In what can’t be a good sign, despite the vain and pitiful attempt to spin it as good news, trading opened at almost 10% below the IPO price.

That valuation is one thing, but the announcement of Facebook’s purchase of “Oculus” the maker of a virtual reality head piece for $2 billion, just a couple of months after a second round of funding valued it at about $250 million, is an attention getter.

Maybe, just maybe, that was partly responsible for Facebook’s terrible day today and helped spread it through to other momentum stocks, as there may be people wondering whether the market is getting a little too ahead of itself and reminding some of an ear of sock puppets.

For some reason, and I may not be justified in thinking this, I’m reminded of the movie line “Be afraid. Be very afraid.”

  

 

 

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